Generating Electricity With Biomass

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Generating Electricity with Biomass: Experience from Bangka Belitung Albert Maknawi Chief Operations Officer KENCANA Agri 24 October 2011 1


Group Overview

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Overview of Our Group’s Operation Plantation

Processing

CPO

Palm Oil Mills No. of Mills: 3 Total Production Capacity: 165 MT/hour

Fresh Fruit Bunches (FFB) Total Land bank 189,665 ha Nucleus: 174,691 ha Plasma: 14,974 ha Total Planted Area 50,154 ha Nucleus: 38,817 ha Plasma: 11,337 ha

Products

Total Annual Processing Capacity : 940,500 MT

Total Production Volume: • 87,239 MT (FY2009) • 94,154 MT (FY2010) • 57,667 MT (1H2011)

Supporting Business Bulking Terminal

Total capacity: 19,500 MT

Logistics

Renewable Waste (Empty Fruit Bunches, Liquid Waste, Kernel Shells, Fibre)

No of Vessels :4 Total Capacity: 8,300 MT

Kernel Crushing Plants

CPKO No. of Kernel Crushing Plants : 2 Total Production Capacity: 435 MT/day Total Annual Processing Capacity : 108,315 MT

Total Production Volume: • 20,258 MT (FY2009) • 16,513 MT (FY2010) • 6,396 MT (1H2011)

Palm Kernel Cake

Biomass Power Plant

1st Plant (2005) Location: Bangka Capacity: 6.0 MW 2nd Plant (2009) Location: Belitung Capacity: 7.5 MW

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Where We Are ‌ Estate Location

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Why Biomass Power plant?

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The Promise

Source: International Energy Agency (IEA) Energy Statistics 6


The Promise Bangka-Belitung short of Electricity. Bangka Belitung was then identified as area of electricity crisis by Ministry of Energy and Mineral Resources Free palm biomass and readily available

Palm Kernel Shell

Empty Fruit Bunch

100% diesel power plant means state electricity’s cost to generate 1 kWh > Rp. 2,000 Realization of zero waste Viable “Downstream” project 7


Renewable Quest

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Biomass Powerplants Listrindo Kencana, Tempilang – BANGKA Installed Capacity: 6MW Commisioned in 2008 Feedstock: Empty Fruit Bunch (EFB) and Palm Kernel Shell (PKS) Technology: Traveling grate biomass fired boiler supplying 35 tph steam @ 38 bar 450C to 6MW condensing turbine Registered as CDM project by UNFCCC on 8 December 2008 Envisioned as 2 x 6 MW power plant built in 2 phases First project in Indonesia to receive biomass PPA and first to provide electricity from biomass to national grid Bangka grid: 80MW Diesel powered Electricity rate: Rp. 766 / kWh

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Biomass Powerplants Belitung Energy, Mempaya – BELITUNG Installed capacity: 7.5 MW Feedstock: Empty Fruit Bunch (EFB) and Palm Kernel Shell Technology: Vibrating grate biomass fired boiler supplying 45 tph steam @ 38 bar 415C to 7.5MW fully condensing turbine Registered as CDM project by UNFCCC on 16 December 2010 Envisioned as 2 x 7.5 MW power plant built in 2 phases The first project to provide electricity from renewable sources to the Belitung electricity grid Belitung grid: 59MW Diesel powered Electricity rate: Rp.787/ kWh

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Lessons learnt

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External Perusahaan Listrik Negara: Lengthy Power Purchase Agreement; Powerplant had to be built while PPA process is on-going Fixed electricity price, variable feedstock cost Grid reliability Troubleshooting and coordination with PLN operators Licenses: Lack of understanding by local authority for PPA process and other required licenses Overlapping and contradicting regulations between Ministry, Government and PLN Local Community and Villagers: Socialization how the cooperative with PLN work

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Feedstock, Feedstock, Feedstock Cyclical supply of Palm Kernel Shell and Empty Fruit Bunch Inconsistent fuel quality Increasing competition from overseas Palm Kernel Shell buyers EFB and PKS composition strategy for different time of the day Fuel preparation means high parasitic consumption Higher maintenance compared to coal powerplant Continuous tweaking of equipment and setting means automation remains limited

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Financing

Financial institution lack of understanding in renewable sector Not many interested Less appetite for small projects Self Financing , refinancing later Strict financial covenants Demand for Long Term PPA

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Challenges and Possibilities

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Possibilities Better rates through a dedicated biomass pricing scheme from PLN and Ministry of Energy and Mineral Resources Securing biomass supply through provincial domestic obligation Domestic biomass pricing scheme so variable electricity price can be a reality More understanding of fuel characteristics for higher efficiency power plant. Integration of Palm Oil Mill steam requirement and Powerplant electricity requirement through a single Cogen Plant: Savings in fuel, lower operation cost and higher production of electricity Biogas plant from effluent pond to generate more electricity

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“Present technology is real, Biomass are abundant, prices and policies are set. Lets work together for a brighter and cleaner Indonesia!�

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Thank You

Albert Maknawi Chief Operations Officer KENCANA Agri amaknawi@kencanaagri.com 18


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