FELDA PALM INDUSTRIES SDN. BHD

Development of Biogas Projects in Felda Global Ventures – Reflections & Way Forward and Opportunities for Value Creation in Palm Oil Based Biogas Biogas Asia Pacific Forum 2015, Kuala Lumpur Mohamed Fazil Mohamad Saad, Biomass Department, Felda Palm Industries Sdn. Bhd. Presentation Contributors : Ir. Mohd Rozali b. Ahmad, Mohd Redzuan Hassan, Abdul Latib Derassit, Mohd Kamahl Kamaruddin, Mohd Hazri Hanapi, Izzat Shaharuddin, Rahmat Dzulhairi Mohamed - FPISB

PRESENTATION CONTENT : INTRODUCTION TO FGV & FPI

HIGHLIGHTS OF BIOGAS PROJECTS CHALLENGES & WAY FORWARD

INTRODUCTION

Global Coverage

Felda Global Ventures Holdings Berhad (FGV) operates as a Malaysian based global agricultural and agri-commodities company. FGV produces oil palm and rubber plantation products, soybean and canola products, oleochemicals and sugar products. FGV was founded in 2007 and based in Kuala Lumpur, Malaysia. The company is listed on Bursa Malaysia under Main Market.

Introduction

Introduction to Felda Palm Industries Sdn. Bhd.

One of subsidiary of Felda Global Ventures ( FGV )

Felda Palm Industries Sdn Bhd - incorporated 1995

No of Mills - 70 ( as of 2015 )

No of Employees - +/- 6000

FPISB is currently the largest producer of CPO & PK globally

Palm oil industry is only second to oil & gas industry in terms of contribution to GNP in

Malaysia

FPISB had embarked on progressive, consistent biomass initiatives since 2000

1) 1998 : R&D Collaboration with MPOB

2) 1999: Designed, built & patented EFB processing equipment

1) 2002 : BOD approved 1st EFB based power plant in Sahabat Complex in 2002

2) Continuous operation from 2005 till now

3) IPP Sahabat recognised as 1st Clean Development Mechanism Project in Malaysia

1) 2006 : CDM strongly promoted for biogas capture

2) EFB compost facilities installed targeted for internal consumption, utilising POME thus eligible for CDM projects

3) Unfortunately, CER market collapsed due to low interest to CDM from developed countries

1) 2012 : SEDA was created & Feed-in-Tariff established – selling electricity to National Grid is potentially revenue generating endeavour without depending on CDM 2) 2013 : FNI Biofuel ( EFB Pelleting Plant ) successfully operated 3) FPI continue to build more biogas projects in mills 4) Reactor design for Biogas Plant i.e Maokil, Sg Tengi & Tenggaroh increased to > 45,000 cubic meter, potential gas generation of 1500 m3/hour, displaying confidence in design scale up 5) Serting Hilir Biogas Plant successfully connected to the grid

1) 2015 : 17 biogas capture plant successfully operated

2) First foray into bio-CNG, strategic collaboration with MPOB & Sime Darby Offshore Engineering as EPCC contractor

3) MPOB directive : all mills to be fitted with biogas capture facilities by 2020

1990 - 2000 2000 - 2007 2008 - 2011 2011 - 2012 2012 - 2015

Felda Palm Industries Biomass Department

FPISB BIOGAS PROJECT LOCATION - MALAYSIA

Biogas Project Biogas with Power Generation Biogas with Gas Compression

Biogas to Grid – Nitar POM

Biogas to Grid – Tenggaroh POM

Rural Electrification – Umas POM

Biogas to boiler – Kemahang POM

BIOGAS UTILIZATION : PALM OIL MILLING CONTEXT

Palm Oil Mill Processing

Fresh Fruit Bunches

POME : 60 – 70% of FFB

Anaerobic Digestion & Gas Capturing Facility

*BioCNG main application as industrial heating

Power

BioCNG

NGV

Boiler

Flaring

Options for Biogas Capture

Connection to Grid

Basic Biogas Facilities

Flaring

Mill Use – Boiler or Engine

National Grid through FiT

Direct Sale of Energy and Rural

Electrification

Other Options Bio-Compressed Natural Gas (CNG)

• Basic facility

• Flaring has no revenue generation

• Energy cost savings for mills using

boiler

• No load at the area based on

Power System Study by TNB

• Interconnection Point, too far from

mill (>5 km)

• Biogas Engine for internal use

( diesel fuel displacement )

• Requires FiT quota for National Grid

• Revenue generation

• High CAPEX

• 1st commercial pilot plant in Sg.

Tengi POM

• Natural gas & revenue

generation

• High CAPEX

• Compressed gas sold to

industrial customer

BIOGAS UTILIZATION : CONSIDERATIONS

Source: MPOB, Pemandu Biogas Workstream NKEA Lab February – March 2015

HIGHLIGHTS OF FPISB BIOGAS PROJECTS

Rural Electrification

Bio-Compressed Natural Gas

Project Background & Impact: Electricity Generation from gas engine (1,200 kW capacity ) using

biogas produced from biogas plant utilised as fuel source and diesel displacement in Felda cluster Umas , Tawau, Sabah.

Starting of Operation : 2013 ; officially launched by Minister of KETTHA

Biogas Pond Reactor Capacity : 46,000m3 ( Palm Oil Mill Effluent ) at 1,000 m3 / hour Electrical generation capacity from gas engine : 1,200kW ( 1 unit gas engine)

Electric Distribution Area : Felda Umas Cluster, Tawau, Sabah. (3,000 houses, estimated 15,000 settlers, Felda staff & family)

RURAL ELECTRIFICATION : BIOGAS POWER PLANT UMAS PALM OIL MILL, TAWAU, SABAH

BEFORE & AFTER IMPACT OF USAGE OF BIOGAS ENGINE TO FELDA UMAS SETTLERS

SCHEME*

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

PER

CEN

TAG

E O

F E

LEC

TRIC

AL

SU

PP

LY (

KW

H )

REDUCTION OF ELECTRIC SUPPLY FROM DIESEL ENGINE

Diesel Engine Supply Biogas Engine Supply

*Report & Monitoring by M. Hazri, Izzat S., Rahmat Z. M. Saufi - FPISB

BIO-COMPRESSED NATURAL GAS :

SG TENGI PALM OIL MILL, SELANGOR

Back in 2013, MPOB, FPISB & SDOE agreed to jointly collaborate on development of bio-

compressed natural gas (BioCNG) from palm oil mill effluent (POME).

OBJECTIVE : To be the pioneer project to demonstrate feasibility of biogas utilization as fossil fuel

replacement at industrial scale. Promoting BioCNG as viable alternative option other than grid connection project.

Project included in Malaysia’s NKEA - EPP 5 Project had successfully obtained conditional ‘Manufacturing License’ from MITI and also

approval on tax exemption & tax incentives from MIDA.

MPOB extensive support for project includes R&D, joint feasibility study & policy advisor

GENERAL PROJECT FLOW DIAGRAM

BIOGAS PLANT > 40,000 M3 BIOGAS POND REACTOR

1 UNIT BIOGAS ENGINE 600 kW + Scrubber System

BioCNG Plant 600 m3/hr capacity 79,760 MMBTU/year targeted output

600 M3 biogas at 65% CH4

200-300 M3 biogas at 65% CH4

250 - 400 kW electric power for BioCNG Plant

Status : • Operating 100% • Gas produced currently at

900 – 1000 m3/hour.

Chiller & Heat

Exchanger

Water Scrubber

2nd Stage H2S

Scrubber

Air Water Cooling System

Dispenser

1st Compressor (>120 kW) & Membrane

Separation System

Gas Odorizing System &

2nd Compressor (>70 kW)

BioCNG PROJECT – MACHINERY DESCRIPTION & TECHNICAL DATA*

*Prepared by M. Kamahl - FPISB

Inlet raw biogas – 660m3/hr ( 65% CH4 , 35% CO2 ,< 400 ppm H2S ex-first stage) Outlet biogas, BioCNG – 400m3/hr ( 97% CH4 , 3% CO2 , ≤ 10ppm H2S )

BIO-CNG AS RENEWABLE ENERGY - QUALITY

Raw Biogas -POME

60 – 65% Methane

30-35% CO2 2500 ppm H2S

Natural Gas Specification

> 94 % Methane

4% CO2 < 10 ppm H2S

250 barG

Pre-treatment to gas

compression

Transport

Potential Customers

CHALLENGES AND WAY FORWARD

Geographical location of mills suitable for connection to grid limited

Limited quota given by SEDA and this limits the number of mills to be connected to the grid

under the FiT Programme

High Capex and Opex for biogas capture facilities

Limited options for biogas facilities other than connection to grid and flaring/boiler

CHALLENGES FACING PALM OIL INDUSTRIES TO DEVELOP MORE BIOGAS PLANT

15 - 18

8

12 - 15

7

Grid Connection (FiT) Co-Firing

Capex (RM mil)

Digester Tank Covered Lagoon

400 - 600

300

200 - 400

200

Grid Connection (FiT) Co-Firing

Opex (RM ‘000)

Digester Tank Covered Lagoon

Source: MPOB, Pemandu Biogas

Workstream NKEA Lab

February – March 2015

Utilization Biogas to Grid Bio - CNG

Project Feasibility

• Mill location, load availability (PSS), FiT quota pre requisite to project

• Mill location ( near to customer ) • Volume of biogas

Economic Returns

• Depends on CAPEX, Technology Selection, FiT tariff rate

• Fixed rate up to 16 years ( stable )

• Depends on CAPEX, Technology Selection, CNG market price

• Exposure to market fluctuations

Operational Aspect • Trained personnel i.e Electrical Chargeman – competent person

• Trained personnel – no competent person needed ( yet )

Green Initiative • Reduction of carbon footprint • Support to company’s green

agenda

• Reduction of carbon footprint • Support to company’s green agenda

Scale / Volume • More than 45 mt/hr capacity mill • Options of 1.0, 1.2, 1.6 up to 2 MW

• More than 45 mt/hr capacity mill • Scale is from 70,000 – 110,000

MMBTU/year

BIOGAS UTILIZATION MATRIX : POINTS TO REFLECT

WAY FORWARD Biogas is indeed one of the potential revenue stream for mill Potential Lever to spur biogas development & further unlock its value in palm oil sector :

Good, reliable utilization technology with reasonable CAPEX ( consistent biogas production, robust engines, low waiting time for parts, low maintenance cost )

Government policy and support i.e tax exemptions, funds for new technology, increase in FiT quota

Regulation – Possibility of MPOB to mandate all mills equipped with biogas in future

THANK YOU