Case study 5: Eco-friendly conversion of palm oil wastes into useful energy: Sungei Dingin Palm Oil Mill

(Guthrie)

PROJECT BACKGROUND The Sungei Dingin Palm Oil Mill project (2 MWe plant) is implemented by the Kumpulan Guthrie Berhad (KGB) in Malaysia. The KGB Group is one of the leading conglomerates in South East Asia. Its core business includes plantation (oil palm), property development and manufacturing rubber and rubber-wood products. In March 2001, KGB acquired interest in 25 oil palm operating companies from Holdiko Palm Plantations (now known as Minamas Plantation) with estates covering Sumatra, Kalimantan and Sulawesi, Indonesia. This acquisition has increased the Groups land bank by twofold to become a major producer of palm oil in the region. The Group is also developing 20,000 hectares of oil palm plantation in Palembang, South Sumatra. It also operates in the United Kingdom, United States of America and Thailand. The focus and driving force of the Groups initiatives and practices are based on the principle of sustainable development, biodiversity and environmental management. LOCATION Sungei Dingin Palm Oil Mill is located in Sungei Dingin Estate, Karangan, Kedah, West Malaysia. PLANT LAYOUT

ECONOMICS The total investment cost amounts to Euro 2.0 million, excluding civil works and building foundations. A pre-tax IRR of 15% (with a payback period of 8.6 years) was obtained, based on the revised investment & operating costs and the potential energy savings data. The increase in the costs of investment, reduction in the value of the potential energy savings, coupled with a reduction of energy utilisation due to a lower than expected operation of the palm oil mill, resulted in a lower profitability for the project, when compared to the data used during the FSDP evaluation. It is expected, however,

that with the increase in the milling capacity of the palm oil mill, maximum utilisation of electricity and steam generated by the cogeneration plant will be realised, eventually resulting in a faster recovery of the investment and better profitability for the project. TECHNOLOGY/ PERFORMANCE The plant consists of the following components: Moving-floor Silo Unloading System; Combined Watertube-Firetube Steam boiler, generating 2 x 22.5 tonnes/h of steam at 23 bar (g) and equipped with two Dynamic Water-cooled Step-grates; Multicyclone Dust Collectors; 2 x 2 MWe back-pressure turbo-generators (1 running, 1 standby).

The performance monitoring of the project was conducted during 22-23 August 2005. The plant has been running efficiently since it was commissioned in August 2004. From the monitoring conducted on the cogeneration plant, the average boiler efficiency was found to be about 76% based on the LHV of the fuel. The plant uses palm shell and mesocarp fibres as fuels for the boilers. All the steam generated by the boilers passes through the 2 MWe back-pressure turbo-generator. The exhaust steam is used in the palm oil mill for process applications. ENVIRONMENTAL IMPACT Kumpulan Guthrie has a long-term vision to introduce the concept of eco-tourism for their industrial complex. Thus, efforts are being made to ensure that the environment is well taken care of. All the measurements and observations made during the monitoring confirmed that the plant has been operating well. The CO, NOx, SOx and particulate emissions are well below the allowable limit by the Malaysian Authorities. Ash and waste water are also properly disposed. SOCIO-ECONOMIC BENEFITS This cogeneration plant is, in many respects, a showcase of a modern and efficient palm oil mill. As a model for future palm oil mills, it has adopted a strategy that favours efficiency and environmental friendliness. Moreover, the plant management has introduced Mission Guthrie Excellence which calls for the implementation and enhancement of best practices. The management also introduced the balance scorecard (BSC) as a management system to monitor the implementation of strategic and performance targets. These have helped Kumpulan Guthrie achieve creditable economic and social benefits. SUPPLIER CONTACT DETAILS BOILER MAIN OFFICE: Vyncke Energietechniek NV Gentsesteenweg, 224, B-8530 Harelbeke, BELGIUM Tel: +32 56 730 630 Fax: +32 56 704 160 LOCAL REPRESENTATIVE: Vyncke (East Asia) Sdn Bhd No. 10, Section 14/44, 46100 Petaling Jaya, MALAYSIA Tel: +603 7954 1408 Fax: +603 7954 1409 TURBINE MAIN OFFICE: AG Kuhnle, Kopp & Kausch (KKK) D-67227 Frankenthal, GERMANY Tel: +49 6233 852446 Fax: +49 6233 852660

AUTHORISED DEALER: Jebsen & Jessen Technology (M) Sdn Bhd 16, Jalan 51A/225, 46100, Petaling Jaya, Selangor Darul Ehsan, MALAYSIA Tel: + 603 7876 9333 Fax: + 603 7877 1033