Asia Biogas turning POME to power
Palm oil mill effluent (POME) represents a major untapped source of energy and greenhouse gas emissions in the form of methane. Capturing and converting POME to biogas not only significantly reduces the environmental and climate impacts of palm oil production, it can also provide a revenue stream.
Thailand is the world’s third largest palm oil producer. According to the US Department of Agriculture (USDA) June 2016 forecast the 2016/2017 production is estimated at 2.3 million tonnes. Though its production is a factor ten less than compared to that of Indonesia and Malaysia, the world’s largest two producers, all three share a major untapped source of energy and greenhouse gas (GHG) emissions reduction.
Major GHG source
– It is estimated that methane slippage from conventional treatment systems for palm oil mill effluent (POME), the organic liquid waste generated during palm oil production, can account for up to 70 percent of the total GHG emissions in crude palm oil (CPO) production, said Desmond Godson, CEO, Asia Biogas (Thailand) Co., Ltd. Fresh POME is hot (temperature 60–80°C), acidic (pH of 3.3–4.6), thick, brownish liquid with high fats, oil and grease (FOG), Chemical Oxygen Demand (COD) and Biological Oxygen Demand (BOD) values.
– Typically in Thailand and Indonesia palm oil mills use open lagoon systems for anaerobic and aerobic treatment of POME before discharge to a recipient due to their low costs and operational simplicity, explained Godson.
A conventional open lagoon system consists of four types of ponds: a fat pit, cooling pond, anaerobic pond, and aerobic pond. The fat pit recovers any remaining FOG in the POME and is generally recovered by the mill operator. The cooling pond decreases the temperature of POME, creating optimal conditions for the decomposition of organic material in the anaerobic and aerobic ponds. After treatment in these four ponds, the effluent is safe to discharge to waterways or apply on land as a fertiliser. Although open lagoon system is economical, it is land and time intensive, and releases large volumes of methane to the atmosphere primarily from the organic decomposition that occurs in the anaerobic pond.
This is a major market opportunity that Asia Biogas is addressing with its modified Anaerobic Baffle Reactor (ABR) biogas technology designed to be able to handle the high FOG content in POME. In principle an Anaerobic Baffle Reactor (ABR) is a tank with alternating hanging and standing baffles that create reactor sections within the tank. The baffles forces the liquid to flow up and down from one section to the next, enabling an enhanced contact between the incoming wastewater entering the reactor and the residual sludge with the microorganisms that digest the organic pollutants and generate the methane. This sectional design separates the hydraulic retention time from the solids retention time making it possible to maximise digestion of suspended solids in the wastewater. Solids high treatment rates are high, while the overall sludge production is low.
– We have researched numerous types of digester technologies, before deciding upon a system that would be efficient at both methane production, wastewater treatment while being extremely cost-effective and easy to operate. Traditional tank digester systems are quite the opposite, with lower methane recovery, higher capital and operating cost structures, said Godson.
– We never retrofit lagoons with cover. That approach fails due to sludge build up inside the reactor reducing retention time. The upflow in ABR system prevents sludge build up, he said. Asia Biogas Palm Oil Mill ABR System has been installed at palm oil mills in Indonesia and Thailand with the latest, Krabi Waste to Energy Co Ltd, (KrabiWTE) entering into commercial operation in January 2016. Located in Krabi province in southwest Thailand, KrabiWTE processes 500 m3 POME per day supplying biogas for a 2.2 MWe power plant at a palm oil mill operated by Krabi Oil-Palm Farmers Cooperatives Federation Ltd.
– ABR’s have the advantage that they are very robust to hydraulic and organic shock loading, which is an important consideration given the variable seasonality of palm oil production. However our design is highly engineered, that involves careful design of the ABR and feeding system to ensure correct vertical and horizontal flows in the digester. We can design in tank systems but in tank systems are inherently more expensive and less robust than in ground systems, therefore we recommend and prefer in-ground systems, explained Godson.
KrabiWTE has a Power Purchase Agreement (PPA) for the electricity with the Provincial Electricity Authority (PEA) under the Very Small Power Producers (VSPP) scheme and entered commercial operation in January 2016. As grid-fed electricity is a major component of the cost structure of industrial plants and farms in the region the biogas plant has a suitable gen-set unit. Here the choice fell on two Cat CG170-12 engines supplied by Metro Machinery Co. Ltd, the exclusive Caterpillar dealer for Thailand, Laos and Cambodia. Metro also runs a Power System Division for the sale and service of Cat gas engines in Thailand.
Commercial non-recourse loan
On the subject of financing, in May 2014 the company via its subsidiary for the KrabiWTE project struck a deal with Caterpillar Financial Services whereby Caterpillar Leasing (Thailand) Ltd provided debt finance on a non-recourse basis. According to Godson the loan is most likely one of the first commercial non-recourse loans provided to a biogas project in Southeast Asia. The project has been funded to date by shareholders Asia Biogas Singapore Pte Ltd, parent of the Asia Biogas Group and Metro Machinery Co Ltd.
– Closing a non-recourse deal is always a difficult process but even more so in this case as it is certainly one of the first of its kind in Southeast Asia. Transaction costs usually make non-recourse project finance impractical for small-scale projects, but we have received great support from the Caterpillar team and the advisors which has ensured that this transaction not only gets over the line, but also we now have a set of documents available for a number of follow on projects in our pipeline, remarked Godson.
Cash-flow to BOOT
There seems to be no shortage of projects and to date the company has completed some 80 or so biogas projects in Thailand, Philippines and Indonesia with another two under construction and a further two in the design phase. Projects are on either an Engineer, Design and Construct (EPC) basis, or on a Build Own Operate Transfer (BOOT) basis, such as KrabiWTE.
– KrabiWTE is our forty fifth project on a BOOT basis and we have another under construction in Indonesia and a strong pipline of projects in development. The BOOT projects provide cash flow that help to balance the financial tops and troughs that one can experience with EPC contracts, commented Godson.
The company is open to taking a position in other projects such as in 2014 when it acquired TEPCO’s stake in a cassava waste to energy project in Kalasin, Thailand.
– Actually we’re well established in the cassava starch industry as it was in 2002 when we commissioned the Korat Waste to Energy (KWTE) project. It was our first, indeed Thailand’s first, commercial cassava wastewater biogas plant and a great success. It was a BOOT project and was followed by five more such cassava wastewater biogas projects all on a BOOT basis. Incidentally KWTE was handed over to the host Sanguan Wongse Industries (SWI) in 2013 and is still operating today, said Godson. We also deliverd a second project to SWI in 2012 which was the solid waste – cassava – pulp from the factory. Collectively both projects now generate over 11 MW of electricity and over 40 MW of thermal energy.
EFB to biogas next?
– Here at this site in Krabi we’ve also looked at utilising the empty fruit bunches (EFB) from the oil mill for biogas and compost production. Phase two here involves setting up a 3 MW high solid digester, said Godson without revealing much detail on how feedstock pre-treatment and preparation would be solved. The original plan was that construction of phase two would begin during 2015.
– We’ve had to push back and put it on hold, not because of technology or finance issues but for local power politics. The regional grid has feed-in capacity restrictions and there are plans for a coal fired plant despite significant local opposite and the huge abundance of biogas and biomass feedstocks from the palm industry, ended Desmond Godson.
Processing fresh fruit bunches (FFBs) from palm trees for palm oil production generates several types of waste. Oil extraction, washing, and cleaning processes generate liquid waste called palm oil mill effluent (POME). In the oil extraction process, three major operations generate the bulk of POME; sterilisation of the FFBs, pressing station where extraction, separation and clarification of the crude palm oil (CPO) takes place and finally empty fruit bunch (EFB) pressing. An average palm oil mill generates from 0.7 to 1 m3 of POME for every tonne of fresh fruit bunches (FFBs) processed.
The oil extraction process does not use chemicals in its process and POME contains a considerable amount of nitrogen, phosphate, potassium, magnesium and calcium making it a desirable fertilizer for palm oil plantations. However fresh POME is a hot (temperature 60–80°C), acidic (pH of 3.3–4.6), thick, brownish liquid with high fats, oil and grease (FOG), Chemical Oxygen Demand (COD) and Biological Oxygen Demand (BOD) values and must be pre-treated before field application or discharge to recipient.