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Strengthening the palm oil biomass Renewable Energy industry in Malaysia

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  • Umar, Mohd Shaharin
  • Jennings, Philip
  • Urmee, Tania

Abstract

The palm oil industry contributes 85.5% of the total biomass production in Malaysia, hence offering great potential for large-scale power generation. Despite being a tool that was designed to steer renewable energy development, the Small Renewable Energy Power (SREP) scheme has failed to stimulate the growth of the industry. To assist the industry, a new Feed-in Tariff (FiT) regime was introduced in 2011 with an ambitious 2080 MW national renewable energy target by the year 2020. Palm oil biomass is projected to contribute 800 MW of grid-connected capacity towards this target, a huge step up from the 40 MW capacity reached during the SREP period. This study investigates whether the current downstream value chain mechanism under the new policy system is capable of supporting such a high capacity goal. The main objective of this study therefore is to evaluate the sustainability of components that constitute the value chain, including the availability of palm oil biomass supply, bio-energy conversion technology and the costs and alternatives to grid extension. In order to understand the industry problems, this study uses a mixed methodology approach involving a combination of market survey and regulators' interviews. The aggregated results from these techniques were later discussed by focus group experts representing both industry and government stakeholders before arriving at a final consensus. Potential future strategies deriving from this research include options to explore the potential use of less sought after large fibre and palm frond. Centralising a technology hub facility offers an alternative approach to encourage conversion to a low carbon technology at the existing mills. Smart-partnership collaboration for building a large-scale biomass plant is worth consideration as it lowers the business risks and enhances economies of scale. Finally, off-grid solutions involving decentralized generation would help to avoid further grid infrastructure investment.

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  • Umar, Mohd Shaharin & Jennings, Philip & Urmee, Tania, 2013. "Strengthening the palm oil biomass Renewable Energy industry in Malaysia," Renewable Energy, Elsevier, vol. 60(C), pages 107-115.
    • Handle: RePEc:eee:renene:v:60:y:2013:i:c:p:107-115
    DOI: 10.1016/j.renene.2013.04.010
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    3. Umar, Mohd Shaharin & Urmee, Tania & Jennings, Philip, 2018. "A policy framework and industry roadmap model for sustainable oil palm biomass electricity generation in Malaysia," Renewable Energy, Elsevier, vol. 128(PA), pages 275-284.
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    18. Awalludin, Mohd Fahmi & Sulaiman, Othman & Hashim, Rokiah & Nadhari, Wan Noor Aidawati Wan, 2015. "An overview of the oil palm industry in Malaysia and its waste utilization through thermochemical conversion, specifically via liquefaction," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 1469-1484.
    19. Nassef, Ahmed M. & Sayed, Enas T. & Rezk, Hegazy & Inayat, Abrar & Yousef, Bashria A.A. & Abdelkareem, Mohammad A. & Olabi, A.G., 2020. "Developing a fuzzy-model with particle swarm optimization-based for improving the conversion and gasification rate of palm kernel shell," Renewable Energy, Elsevier, vol. 166(C), pages 125-135.
    20. Norfadhilah Hamzah & Koji Tokimatsu & Kunio Yoshikawa, 2019. "Solid Fuel from Oil Palm Biomass Residues and Municipal Solid Waste by Hydrothermal Treatment for Electrical Power Generation in Malaysia: A Review," Sustainability, MDPI, vol. 11(4), pages 1-23, February.

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