Promising gains from untapped biomass potential-
Given its vast potential, biomass-based power generation can play a key role in bridging the electricity demand-supply gap in Southeast Asia. “The Association of Southeast Asian Nations (ASEAN) member countries have tremendous biomass power generation potential due to plentiful supply of biomass resources such as agricultural residue, agro-industrial waste, woody biomass, animal waste and municipal solid waste,” explains Salman Zafar, chief executive officer, BioEnergy Consult, an organisation focused on biomass energy development around the world.
Development of biomass-based power generation in the ASEAN region can help achieve multiple goals, including that of meeting burgeoning energy demand. According to the “Southeast Asia Energy Outlook, 2015”, published by the International Energy Agency (IEA), the electricity demand in the region will almost triple between 2013 and 2040, stimulated by economic and demographic factors. There is already significant energy poverty in the region, with about 19 per cent of the population without access to electricity. Further, given growing national and international environmental concerns, governments in the region are looking to diversify the electricity generation mix by increasing the share of renewable energy sources.
Given the present scenario in the region, biomass represents a low-cost alternative to more expensive renewable energy generation sources like solar for complementing the power generated from conventional sources. It is a mature technology offering minimum development risk and higher plant load factors.
At present, Thailand leads in biomass-based power generation with an installed generation capacity of about 2.7 GW as of February 2016, including off-grid and on-grid installations. This accounts for over 60 per cent of the country’s installed renewable capacity, as reported by the Department of Alternative Energy Development and Efficiency, Ministry of Energy.
Indonesia and Malaysia have also made some progress, with their installed capacities standing at over 1.62 GW and 765 MW respectively. Other countries like the Philippines and Vietnam have set up about 290 MW and 155 MW of biomass generation capacity.
Most of the biomass potential of the region remains untapped because of the lack of a coherent policy and limited funding options. However, on a positive note, countries like Thailand, Indonesia, the Philippines, Vietnam and Malaysia are making concerted efforts to increase the share of biomass energy in their energy mix.
Substantial potential
The ASEAN member countries are large producers of wood and agricultural products as well as other bio-waste like sugar, palm oil and rice residues, and ths have an immense potential for biomass-based power generation. It is estimated that for the entire region, the energy generation potential from bio-waste stands at around 20 GW. An additional source of biomass is the high quantities of municipal waste generated by major cities in the region.
In the case of Thailand, which currently leads biomass-based power generation in the region, major biomass sources include rice husk, bagasse, palm oil residue and rubber wood residue. It is estimated that the country generates about 61 million tonnes (mt) of agricultural residues every year, of which 41 mt goes unused. Biogas resources from industrial wastewater and livestock manure further present an annual energy potential of 7,800 and 13,000 terajoule (TJ) respectively.
Indonesia is estimated to have the highest biomass-based generation potential of almost 50 GW. Source-wise, rice residue accounts for the highest share in the estimated potential at around 16 GW, followed by palm oil residue (at over 7 GW), sugar mill residue (8 GW) and rubber wood residue (13 GW). The remaining potential is accounted for by plywood and veneer residue, logging residue, coconut residue and other agricultural waste. Currently, the estimate excludes the power generation potential from city or municipal waste, including organic waste from households, which could be substantial.
Malaysia too has significant biomass potential given its equatorial climate that is ideal for forest growth and agricultural vegetation. The country has thriving wood- and agro-based industries, and is one of the largest producers and exporters of palm oil. The key sources of biomass in Malaysia include forestry (wood products), rubber cultivation, cocoa cultivation, sugar cane cultivation and oil palm cultivation.
Other ASEAN countries like the Philippines, Myanmar and Vietnam also possess significant potential, which has largely remained unutilised.
Policy push
Government support plays a critical role in the development of all renewable energy generation sources during the initial stages. So far, the policy support provided to the biomass industry in most ASEAN countries has been passive and lacking, except in Thailand.
The initial push to biomass development in Thailand was provided by the government’s Energy Conservation Programme, which financed 15 biomass and 21 biogas projects during 1995-2004. Later, in 2007, Thailand’s state-owned electricity distributors offered to buy electricity from renewable energy producers under power purchase agreements under which an additional rate was payable on top of the prevailing wholesale price of electricity in order to incentivise renewable generation. More recently, the government introduced the feed-in tariff (FiT) support mechanism for a period of 20 years as well as competitive bidding of projects to developers.
The Thailand government is currently focusing on the plantation of fast growing trees that can be used as fuel for power generation, development of biomass-to-liquid technology, promoting the use of high pressure boilers to improve efficiency of biomass generation and overall grid development. The government has set a target of 4,800 MW of biomass energy capacity by 2021, which is to be increased to 5,570 MW by 2036.
Indonesia is also actively pursuing policies to incentivise biomass-based energy production under its national energy policy. The government introduced the FiT mechanism for biomass, biogas and municipal solid waste in 2012. More recently, in January 2016, the government successfully implemented the plan for 20 per cent biodiesel blending (B20 blending). This makes Indonesia the only country in the world with a B20 blending policy.
The Malaysian government has prepared policies including a national renewable energy policy and an action plan for the development of renewable energy led by biomass energy development. Under the policy framework, the government aims to increase the share of biomass in total installed renewable capacity to 38 per cent by 2020 from the current 23 per cent. The government has also proposed clustering biomass plants in an area for better management of the plants.
Challenges
There are various issues that remain to be addressed in order to realise the true renewable energy generation potential of the region. “The highly unorganised feedstock market, inconsistent quality of biomass fuel, absence of biomass supply chain, complicated bureaucratic structure and lack of financial and regulatory support from respective governments are some of the major obstacles experienced by private project developers in Southeast Asia,.” says Zafar.
Biomass plant developers in the region face multiple challenges in setting up a plant. Most of them do not own feedstock and remain at the mercy of feedstock owners who can increase its price or withhold supply any time. Besides, imported boilers used in the power generation process are usually designed for biomass fuel with low moisture content and high calorific value. This limits the types of biomass waste that can be used as fuel for producing electricity. On the technology front, most boilers used are also inefficient. Other problems relating to grid connection and the unwillingness of banks to finance these projects also pose challenges to the sector.
Other than the lack of policy initiatives, inadequacy of finance and technical issues, climatic factors also tend to deincentivise developers from setting up biomass-based cogeneration plants. For example, the Philippines needs to take strong measures to protect crop damage due to unfavourable climatic conditions. Underdeveloped agro-forestry systems and crop residue recovery systems add to the difficulty in developing and operating biomass plants.
Conclusion
Biomass energy offers huge potential and opportunities in the form of increased renewable power production, reduced pollutants in the atmosphere, modernisation of the agricultural sector and creation of significant job opportunities for rural households in the region. But the future of biomass is contingent upon how different stakeholders come together to find solutions to the challenges that remain.
“The need of the hour is to create a robust biomass supply chain, an effective biomass price-setting mechanism, introduction of new biomass conversion technologies and enhance scale efficiencies of biomass power plants,” says Zafar. For agriculture-based ASEAN economies shifting to renewable energy, biomass clearly has an important role to play in the coming years.
