Biomass to Energy Projects in Indonesia CDM & Sustainable Development January 25 –26, 2006 Shangri-la Hotel, Jakarta

1. Biomass to Energy Projects in IndonesiaCDM&Sustainable DevelopmentJanuary 25 –26, 2006Shangri-la Hotel, Jakarta -Indonesia Iwan Sutanto, PT. LUNTO BIOENERGI PRIMA E-mail : bioenergi@cbn.net.id

2. Indonesian Electricity Demand • Indonesia has a rapidly growing energy demand, • Demand growth is estimated to be 9% per year. • This is due to: • Population growth • Economic growth • Development of rural areas • Increased energy demand per capita

3. Prediction Electricity Demand Source : Directorate General of Electricity and Energy Utilization

4. Indonesian Electricity Supply • The Indonesian archipelago makes supply on one grid impossible. • Major islands have their own grids • distributed generation is spread throughout the smaller islands • Overall spare capacity was near 50%, but due to poor interconnection many areas are short of supply, and some are classed as “in crisis”

5. Energy sources In Indonesia electrical energy is predominantly supplied from Coal fire, Gas, Hydro power and diesel generation. • The water levels in the dam do not allow full generation in the dry season. • Removal of diesel subsidies makes generation from this source increasingly expensive. Biomass is a possible alternative fuel supply

6. Project Objectives • To build wholly renewable energy, independently financed power plants. • To substitute for fossil fired generation • To avoid methane and nitrous oxide emissions from the decomposition of the dumped residues • To provide a waste disposal route for mill owners • To create jobs in the local area • To provide additional electricity to the grid

7. Potential for RE in Sumatra • There is a shortage of electrical generating capacity and an increasing demand. • On the Sumatran grid in 2000 there was an installed capacity of nearly 5,000 MW. • From 2001 –2010 there is expected to be an extra 4,600 MW added to the grid.

8. Projects : 10 MW Palm Oil Residue Plant, In RantauPrapat, North Sumatra. & 3 MW Rice Husk Plant, Perbaungan, North Sumatra

9. 10 MW Palm Oil Residue Plant, In RantauPrapat, North Sumatra. Project Description

10. Palm Oil Sector Background

11. Potential for RE from Palm Oil Mill Residues • Palm oil production in Indonesia is increasing rapidly • Palm oil mill residues are EFB’s, shell and fibre Conventionally the shell and fibre is used to produce steam and electricity to meet mill requirements. • But combustion at mills is often inefficient and contributes to local air pollution • EFB’s are often dumped and burnt producing methane and nitrous oxide • Potential to utilise residues for efficient electricity production and help meet electricity demand

12. Project Description • Conventional steam cycle system • The plant will combust:- Empty Fruit Bunches: 79% Shell: 21% • 100% of the required fuel can be supplied within 60 kms • Reduce dumping of 200,000 tonnes of EFB’s annually. • Electrical output 10 MWe sold to PLN.

13. Decomposition Emission Reductions • Plant will reduce methane and nitrous oxide release from decomposition and inefficient burning of the dumped wastes. • Predicted that the disposal behaviour will continue until environmental regulations change.

14. Sustainable Development Issues

15. Global and Local Environmental Benefits • Reduce dumping of 200,000 tonnes EFBs annually • Reduce air pollution • Provide secure disposal route for palm oil milling residues

16. Socio – Economic Benefits • Approximately 250 jobs created during construction • Approximately 180 Direct and indirect jobs created long term • Revenue for mill owners • Stimulate local economy • Demonstration of more efficient biomass to energy technology

17. Project Description: 3 MW Rice Husk Plant, Perbaungan, North Sumatra

18. Potential for RE from Rice Husks • Rice production is the main agricultural crop grown in Indonesia • 20% of rice paddy remains as husk after milling • Husks are often dumped burnt in open bonfires as a means of disposal • Potential to utilise residues for efficient electricity production and help meet electricity demand

19. Picture of rice husks

20. Potential for RE in Sumatra • There is a shortage of electrical generating capacity and an increasing demand in North Sumatra. • The potential exists to meet these energy demand shortfalls through renewable generation plants, including biomass, such as this rice husk project

21. Project Objectives • To build a wholly renewable energy power plant to combust rice husks to provide a sustainable source of electricity (3MWe) • To reduce carbon dioxide emissions by substituting for fossil fired generation. • To reduce methane and nitrous oxide emissions from dumping and burning husks • To create employment • To provide electricity for 6,000 households • Collect surplus husk residues from rice mills to produce electricity for supply to the grid. • Establish a commercially viable, independently financed power plant.

22. Rice Husk Project overview • Rice husk is a low density biomass, with a low moisture content • The husk can be burnt to produce electricity • Rice Husk ash used for beneficial purposes • Fuel transport economics suggest a 3 MW plant to be optimal

23. Technology Selected • Unground rice husks as fuel. • Overfed Stoker fired water tube boiler. • Continuous ash discharge from grate. • World Bank/Indonesian Emission Standards.

24. What are the environmental benefits?

25. Emission Reductions • Reduce GHG emissions from fossil fuels emissions and from dumped waste. • Project will displace current diesel fuel generation.

26. Emission Reductions • Methane and nitrous oxide from emissions offset by avoiding dumping and burning • Only current use for rice husk is for brick drying and as chicken litter (small) • Practice of dumping set to continue • Total Emission reductions from fossil fuels and avoided dumping

27. Global and Local Environmental Benefits • Electricity supplied to 6,000 households • Reduced air pollution by avoiding dumping and burning of husks • Reduced carbon dioxide emissions by offsetting fossil fuels • Beneficial and secure disposal of husks • Contribute to sustainable development

28. Socio-Economic AspectsDirect • Approximately 50 permanent positions • Revenue for mill owners • During O&M approximately $1-1.5 million spent on local economy

29. Socio-Economic AspectsIndirect • Indirect job creation (+85) in the community • Benefit local economy • Demonstration of advanced clean combustion technologies • Training Benefits • Provide modern energy service • Raise awareness of climate change

30. Summary • 3 Mwe electricity generated • Offset fossil fuels and emissions from dumping and burning the husks • Local and global environmental benefits • Jobs • Benefit to local economy

31. Thank You PT. LUNTO BIOENERGI PRIMA E-mail : bioenergi@cbn.net.id