Energy Education Science and Technology Part A: Energy Science and Research

2012 Volume (issues) 28(2): 1117-1136

Techno-economic analysis of
palm oil mill wastes to generate
power for grid-connected utilization
T. M. I. Mahlia1,2,*, J. H. Yong1, A. Safari3 , S. Mekhilef3
1
University of Malaya, Department of Mechanical Engineering, 50603 Kuala Lumpur, Malaysia
2
Syiah Kuala University,Department of Mechanical Engineering, Banda Aceh 23111, Indonesia
3
University of Malaya,Department of Electrical Engineering, 50603 Kuala Lumpur, Malaysia

Received: 14 February 2011; accepted: 28 July 2011

Abstract
In association with the rapidly depleting fossil fuel reserves as well as the unstable fluctuations of
the fuel prices, efforts are focused on exploration of an alternative to replace conventional energy
sources especially in the power generation sector. In Malaysia, the palm oil industry produces
significant amount of wastes that can be used as an admirable choice for energy production. This study
investigates the feasibility and stability of palm oil wastes for power generation including introduction
to the palm oil industry as well as the wastes generated, the assessment of the supply, current demand
and the future trend of biomass energy in Malaysia. Furthermore, economic aspects of the biomass
power generation are discussed in term of the payback period. Equations which are used to calculate
the potential of power generation from palm oil are also presented and assessments were conducted
based on the available information and models. It was confirmed that palm oil wastes are one of the
promising candidates for biomass power generation for grid connected in Malaysia; however, further
study is necessary to identify the technologies available in this area.
Keywords: Energy conversion; Alternative energy sources; Biomass fuel; Techno-economic; Palm oil
mill; Grid-connected utilization
©Sila Science. All Rights Reserved.

Nomenclatures
ACI annual cash inflows
AveHrs average number of hours POM operates in a month
B benefits
Bft Cash benefit
Csh Cash investment
CPO crude palm oil
E available energy from waste
EB estimated benefits
EC estimated costs
EFB empty fruit bunch

______________

Corresponding author: Tel.: +60-3-7967-5385; fax: +60-3-7967-5317.
E-mail address: indra@um.edu.my, i_mahlia@hotmail.com (T.M.I. Mahlia).
1118 T. M. I. Mahlia et al / EEST Part A: Energy Science and Research 28 (2012) 1117-1136

EP energy available based on POM overall efficiency

FFB fresh fruit bunch
FR discount rate factor
FV future value (RM)
GCV gross calorific value
HHV higher heating value
Hrs number of hours POM is in operation for a year
IRR internal rate of return
LCV lower calorific values
LHV lower heating value
LHV1 lower heating value at moisture content (1)
LHV2 lower heating value at moisture content (2)
MT million tonne
NPV net present value (RM)
P generated electricity from waste
Po output power of POM
POM palm oil mill
POME palm oil mill effluent
PP payback period
PPC2 power plant capacity at moisture content (2)
PPC1 power plant capacity at moisture content (1)
PV present value (RM)
R discount interest rate (%)
RM Malaysian ringgit
ROI return of investment
T time (year)
TC total cost
η overall efficiency of power generation process

1. Introduction

Energy utilization mainly in the form of electricity has become one of the necessities in
our everyday lives; however, conventional fossil fuel usage is widely known as one of the
main contributors to the global warming and environmental issues which are considered
critical. In addition, unstable fuel price as well as the rapidly depleting world’s fossil fuel
reserves has directed the governments and industries to explore for alternative resources that
can eventually be used to replace conventional fuels in sectors such as transportation and
electricity power generation. Some papers that discuss about to this matter can be found in
Refs. [1-7].
Increasing trend of the electricity energy demand and capacity in Peninsular Malaysia is
further emphasized in a forecast released by the Energy commission in 2006, which is shown
in Fig. 1, however, it predicts a decreasing trend in electricity growth rate against the energy
demand between 2007 and 2011.

16500 6

16000
5
15500
Energy Demand (MW)

15000 4
(% growth)

14500
3
14000

13500 2

13000
Energy Demand (MW) 1
12500 % grow th

12000 0
2007 2008 2009 2010 2011
year

Fig. 1. Electricity demand forecast (Energy Commission, 2006).

 T. M. I. Mahlia et al. / EEST Part A: Energy Science and Research 28 (2012) 1117-1136 1119

Based on the information released by Energy Commission, an increasing trend of the

energy demand per unit sold from 2003 to 2007 is shown in Table 1.

Table 1. Electricity sales and generation capacity (2003-2007)

2003 2004 2005 2006 2007
Sales of Electricity
Total units sold (GWh) 68254 72921 78933 82215 86545
Sales revenue (RM 'mil) 15974 17219 18326 19707 22384
Generation
Group installed capacity (MW) 10855 11138 11498 11263 11515

Biomass is generally the by-product of agricultural industry or industrial processes that are
unable to generate significant profit. Using biomass as an energy sources is not a new issue,
biomass for various implementation can be found in Refs. [8-10]. The main sources of
biomass in Malaysia are domestic wastes, agricultural residues, animal wastes and
wastewater. In the palm oil industry, the palm oil mill (POM) process wastes which consist of
the empty fruit bunch (EFB), palm oil mill effluent (POME), fibers and kernels are among
potential resource for power generation[11-13].
Conventionally, the EFB generated from the POM processes were incinerated and further
used for fertilization in the agricultural industry; however, since 1992, constructing of POM
sites for incineration as a waste management option is not allowed by law. Consequently,
POM sites without incinerator faced difficulty with managing the EFB especially during peak
seasons. The EFB has to be mulched or composted, but problematic factors such as access to
labor and land topography conspires against mulching as a cost effective option. Therefore,
alternative options should be investigated for the disposal of the EFB [14].
Currently, the combination of Malaysia and Indonesia palm oil production makes up more
than 80 percent of the world palm oil productions. Fig. 2 shows the percentages of the palm
oil production by the world major producers [15].

8%
2% 2%
3%

44%

41%

Indonesia Malaysia Thailand Nigeria Colombia Others

Fig. 2. World major palm oil producers.

Being one of the main palm oil producers, the mill processes in Malaysia has the capability
of generating enough process wastes to ensure a consistent and sustainable supply for power
generation. Traditionally, electricity power generation from the wastes of the POM processes
was used mainly to support the POM processes with the remaining wastes being incinerated
for agricultural applications as ash. It is also proposed that, excess electricity can be fed into
the grid-connected distribution system which can greatly reduce the environmental pollution
involved in the incineration process for producing the ash for agricultural use [16-18].
1120 T. M. I. Mahlia et al. / EEST Part A: Energy Science and Research 28 (2012) 1117-1136

The oil palm tree (Elaeis guineensis Jacq) is originally from West Africa. It was first
introduced in Malaysia in the 1800s initially as an ornamental plant. The oil palm was later
cultivated for commercial planting under the government’s agricultural diversification
program, which aimed to reduce the country’s economic dependence on rubber and tin export.
Being a tropical plant, the palm oil tree was easily cultivated in Malaysia. From 1990 to 2002
palm oil production has nearly doubled from 6,094,622 (MT) to 11,880,000 (MT) per year,
making Malaysia one of the biggest palm oil producer worldwide. With approximately 85%
of total production being exported, Malaysia is currently also one of the largest palm oil
exporters [15].
Today, at least 4 million hectares of land in Malaysia is covered by oil palm cultivation,
producing approximately 80 million tons of oil palm fruits in the form of FFB yield. In
addition, Malaysia accounts for 30% of the world’s traded edible oils and fats supply. This
industry provides employment to more than half a million people and livelihood to an
estimated one million people [16, 19].
An oil palm tree is generally a monoecious crop, which bears both male and female
flowers in the same tree. Each tree may grow up to sixty feet high and its trunk is wrapped in
fronds, normally produces 10 to 15 bunches per palm per year, with average weight of 10 to
20 kilograms per bunch. The oil palm fruitlets, with approximately 1000 to 3000 fruitlets per
bunch, are of round or oval shape, dark purple in color which turns orange red when ripe.
Each of the fruitlets consists of a hard kernel (seed) inside a shell (endocarp) which is
surrounded by a fleshy mesocarp [20].
The oil palm trees grown in Malaysia normally goes through a nursery period of 12 to 18
months, and it will be ready for harvesting 30 months after field planting. The harvesting
cycle of oil palm tree is 2 to 3 weeks and the economic lifespan is about 20 to 30 years [21].
This life cycle of the oil palm trees ensures a consistent supply of production.
The ripe bunch harvested from the tree is commonly known as Fresh Fruit Bunch (FFB)
and the plantation averagely yields about 4 to 5 tons of crude palm oil (CPO) per hectare per
year. One ton of palm kernels harvested per hectare per year contains about 3% to 8% kernel
content with an oil extraction rate of 20%. The oil palm has the most efficient oil production
rate which requires only 0.25 hectares to produce one ton of oil while soybean, sunflower and
rapeseed need 2.15, 1.50 and 0.75 hectares respectively [21]. Table 2 shows that oil palm has
the highest average oil yield compared to the other major oil crops planted for oil production.

Table 2. Comparison of the oil yields for some of the major oil crops
Oil Production % of Total Oil Average Oil Yield Planted Area % Total
Oil Crop
(mil tonnenes) Production (t/ha/year) (mil ha) Planted Area
Soyabean 35.26 29.78 0.38 92.63 42.27
Sunflower 11.1 9.37 0.48 22.95 10.47
Rapeseed 18.36 15.5 0.67 27.29 12.45
Oil Palm (mesocarp) 36.84 31.11 3.74 9.86 4.50

2. Methodology

Fiber and Shell (dry and wet) from the POM are able to generate the necessary power and
energy demand of the processes. While the dry shell is used totally to produce electricity
power for POM processes, parts of the fiber and wet shell can be used to generate excess
electricity for sales [22]. The electricity generated by EFB is wholly dedicated for sale to the
grid-connected system in Malaysia. Guidelines provided by Malaysia Energy Centre shows
 T. M. I. Mahlia et al. / EEST Part A: Energy Science and Research 28 (2012) 1117-1136 1121

that following equations can generally outline the estimation for power generation capacity of
the POM and the amount of power that can be available for sale to the grid-connected system
[23].

2. 1. Potential of Power Generation

The percentage of the EFB from the FFB content is 23% [23], which can be expressed in
tons as in Eq. (1):

EFB  FFB  0 . 23 (1)

The Gross Calorific Value (GCV) or Higher Heating Value (HHV) of the fuel is
determined by bringing all the products of combustion back to the original pre-combustion
temperature, while the Lower Heating Value (LHV) is determined by subtracting the heat of
vaporization for water vapor from the higher heating value [24]. Based on the amount of EFB
produced and the LHV or Lower Calorific Values (LCV), the available energy can be
calculated using Eq. (2):

E  EFB  LCV (2)

Hence the surplus power generated from the wastes is evaluated using (3).

Ep    E (3)

Ep is the amount of energy not required to support any of the POM processes. In other words
Ep is the amount of electricity can be sold to the national grid-connected system. With the
assumption of round-the-clock power production, capacity of the POM power production is
calculated using the power generated from the EFB:

EP
P (4)
365  24 
The annual hour of POM operation and the amount of power that can be available from the
EFB supply would be obtained from (5) and (6), respectively.

Hrs  Ave .Hrs  12 (5)

P
Po  (6)
Hrs

2. 2. Effect of Moisture Content

In sensitivity analysis for sustainability of POM waste resources, different percentage of

moisture content, results in different value of LCV, thus the generated energy from the EFB
would be different. Comparison of the re-calculated energy values determines the general
trend of the effect of the moisture content of the EFB supply:
1122 T. M. I. Mahlia et al. / EEST Part A: Energy Science and Research 28 (2012) 1117-1136

LHV 2
PPC 2  PPC 1  (7)
LHV 1

2. 3. Techno-economic analysis

Techno-economic analysis is conducted to determine the implementation feasibility and

suitability of a system. To be able to establish the feasibility of a system economically, it is
important that the economical aspect of the system is evaluated using one of the following
methods: Net Present Value (NPV), Payback Period (PP) or Return of Investment (ROI) [25-
27].

2. 3. 1. Net present value (NPV)

Two basic concepts of NPV are the benefit and cost which are calculated in terms of
present value (PV) and net value. NPV commonly shows the value of a stream of future cash
flows discounted back to the present by some percentage, representing the rate of return [28].

PV
NPV   (8)
1  R t
NPV compares the value of a dollar today to the same dollar in the future with considering
inflation rate and returns of the investment. NPV analysis, which is sensitive to the reliability
of future cash inflows of investment yields, is used in capital budgeting to analyze the
profitability of an investment. If NPV is positive, the prospective plan should be accepted,
while negative NPV projects a negative value cash flow of the investment plan. The
calculation for Present Value (PV) and discount rate factor is calculated using Eqs. (9) and
(10), respectively [29].

FV
PV   (9)
1  R t
1
FR  (10)
1  R t
Eq. (10) indicates that the higher discount rate results in the lower present values, and vice
versa. The evaluation of PV and NPV is based on the discount rates as R = 5%, 10%, and
15%.
The Internal Rate of Return (IRR) is the true interest yield expected from an investment
plan expressed in percentage. This break-even discount rate is at the rate of cash outflows
equals the value of cash inflows. IRR computes a break-even rate of return, showing the
discount rate at which when the investment results in positive NPV, the investment plan is
acceptable and when the investment results in a negative NPV, the plan should be avoided.
Generally, IRR can be used to rank the prospective variables in the project; the higher set of
variable's IRR is more desirable choice [30].
 T. M. I. Mahlia et al. / EEST Part A: Energy Science and Research 28 (2012) 1117-1136 1123

2. 3. 2. Payback period (PP)

Payback period is a method used to define the main point in time at which the initial
investment of the system would be paid off. Calculation of PP can generally represent the
amount of time (usually in years) that an implemented system requires to recover its initial
cost. It is the time needed for an investment to pay for itself or recoup the initial outlay. The
estimation of PP can be calculated using the following equations:

TC
P (11)
ACI

Csh
PP  (12)
Bft

PP is a method of analysis and comparison of investment plans. Limitations encountered in

obtaining the PP values include the disregard of benefits occurring after PP where the total
income of the investment is not measured. In addition PP analysis does not consider the time
value of money.

2. 3. 3. Return of Investment (ROI)

The purpose of ROI is basically to calculate ratio or percentage of investment return to

measure the profitability of an investment over a period of time. This time period could be the
expected life of the investment or it could be an arbitrary time period. The ROI can generally
be estimated using the following equations:

ROI 
EB  EC  (13)
EC

 B 
%ROI     100 % (14)
 TC 

3. Results and discussion

3. 1. EFB sustainability

Table 3 shows total planted area including the plantation areas in the Peninsular Malaysia,
Sabah and Sarawak by 2007. The trend of these areas in kilometer square is shown in Fig. 3.

Projection of total planted areas in the country can be calculated using:

y  117442 x  265167 ; R 2  0 .9864 (15)

Eq. (15) is used to generate the future trend of the plantation areas in Malaysia as tabulated in
Table 4.
Fig.4 shows the consistent rising trend of the plantation areas. This can be considered a
valid estimation of the future plantation area in Malaysia.
1124 T. M. I. Mahlia et al. / EEST Part A: Energy Science and Research 28 (2012) 1117-1136

Table 3. Planted Areas (1975 ~ 2007)

Year P. Malaysia Sabah Sarawak Total
(km2) (km2) (km2) (km2)
1975 5685.61 591.39 140.91 6417.91
1976 6295.58 697.08 153.34 7146.00
1977 6917.06 733.03 168.05 7818.14
1978 7555.25 782.12 192.42 8529.79
1979 8305.36 866.83 216.44 9388.63
1980 9065.90 939.67 227.49 10233.06
1981 9831.48 1006.11 241.04 11078.63
1982 10480.15 1107.17 240.65 11827.97
1983 10996.94 1282.48 250.98 12530.40
1984 11435.22 1605.07 262.37 13302.66
1985 12923.99 1615.00 285.00 14823.99
1986 14109.23 1626.45 257.43 15993.11
1987 14605.02 1826.12 297.61 16728.75
1988 15565.40 2131.24 362.59 18059.23
1989 16443.09 2529.54 492.96 19465.59
1990 16984.98 2761.71 547.95 20294.64
1991 17446.15 2890.54 603.59 20940.28
1992 17756.33 3448.85 771.42 21976.60
1993 18317.76 3871.22 870.27 23059.25
1994 18576.26 4524.85 1018.88 24119.99
1995 19031.71 5181.33 1187.83 25400.87
1996 19263.78 6260.08 1399.00 26922.86
1997 19593.77 7585.87 1751.25 28930.89
1998 19871.90 8424.96 2484.30 30781.16
1999 20515.95 9413.22 3204.76 33133.93
2000 20455.00 10007.77 3303.87 33766.64
2001 20968.56 10273.28 3748.28 34990.12
2002 21870.10 10689.73 4142.60 36702.43
2003 22021.66 11351.00 4647.74 38020.4
2004 22016.06 11654.12 5083.09 38753.27
2005 22986.08 12093.68 5433.98 40513.74
2006 23342.47 12394.97 5914.71 41652.15
2007 23620.57 12782.44 6646.12 43049.13

25000
P. Malaysia Sabah Sarawak
20000

15000
(km2)

10000

5000

0
75

77

79

81

83

85

87

89

91

93

95

97

99

01

03

05

07
19

19

19

19

19

19

19

19

19

19

19

19

19

20

20

20

20

year

Fig. 3. Plantation areas trend in Malaysia (1975 to 2007).

160000

140000
Plantation Area
120000

100000

80000

60000

40000

20000

0
75

80

85

90

95

00

05

10

15

20

25

30

35

40

45

50
19

19

19

19

19

20

20

20

20

20

20

20

20

20

20

20

Fig. 4. Planted areas estimation (by 2050).

 T. M. I. Mahlia et al. / EEST Part A: Energy Science and Research 28 (2012) 1117-1136 1125

3.1.1. FFB yield

Table 4 is the FFB yield (in tons) from 1987 to 2007.

Table 4. FFB yield (1987 to 2007)

FFB Yield
Year
(tonnes/km²)
1987 1710
1988 1752
1989 1957
1990 1853
1991 1785
1992 1783
1993 2026
1994 1842
1995 1893
1996 1895
1997 1910
1998 1598
1999 1926
2000 1833
2001 1914
2002 1797
2003 1899
2004 1860
2005 1888
2006 1960
2007 1903

The content of FFB can be separated into palm oil, kernel, fiber, shell and empty fruit
bunch (EFB). The general percentage of the contents is shown in Table 5 [31, 32].

Table. 5 FFB contents

Fresh Fruit Bunch (FFB) Contents % Contents
Palm Oil 21
Kernel 6~7
Fiber 14 ~ 15
Shell 6~7
Empty Fruit Bunch (EFB) 23

Total FFB yield are calculated and presented in Table 6 from 1987 to 2007. Graph plotted
from the FFB yield in Fig.5 shows a consistent averaging trend of FFB yield.
FFB yield (in tons) is also projected to give an approximate annual value between 1990
and 2051. The data is generated using the polynomial equation (16) and curve-fitting
methodology. Table 7 is the FFB yield whilst Figs. 6 and 7 the corresponding graphs.

y  3000000 x  30000000 ; R 2  0 .9731 (16)

Total EFB that can be supplied for power generation is dependent on the supply of FFB to
the POM for processing. Therefore, a linear prediction of estimated FFB yield values gives a
linearly increasing trend of the EFB supply for power generation. In other words, an
increasing trend of the FFB yield and the POM processing capacity, determines the
sustainability of supply of the resources for power generation purposes [33].
1126 T. M. I. Mahlia et al. / EEST Part A: Energy Science and Research 28 (2012) 1117-1136

Table 6. FFB yield

Total FFB Yield FFB Yield FFB Yield
Year
(km2) (tonnes/km2) (tonnes) (Mt)
1975 6418 -- -- --
1976 7146 -- -- --
1977 7818 -- -- --
1978 8530 -- -- --
1979 9389 -- -- --
1980 10233 -- -- --
1981 11079 -- -- --
1982 11828 -- -- --
1983 12530 -- -- --
1984 13303 -- -- --
1985 14824 -- -- --
1986 15993 -- -- --
1987 16729 1710 28606163 28.606
1988 18059 1752 31639771 31.640
1989 19466 1957 38094160 38.094
1990 20295 1853 37605968 37.606
1991 20940 1785 37378400 37.378
1992 21977 1783 39184278 39.184
1993 23059 2026 46718041 46.718
1994 24120 1842 44429022 44.429
1995 25401 1893 48083847 48.084
1996 26923 1895 51018820 51.019
1997 28931 1910 55258000 55.258
1998 30781 1598 49188287 49.188
1999 33134 1926 63815949 63.816
2000 33767 1833 61894251 61.894
2001 34990 1914 66971090 66.971
2002 36702 1797 65954267 65.954
2003 38020 1899 72200735 72.201
2004 38753 1860 72081082 72.081
2005 40514 1888 76489941 76.490
2006 41652 1960 81638214 81.638
2007 43049 1903 81922494 81.922

2500

2000
(to n nes/km2)

1500

1000

500 FFB Yield

0
87

89

91

93

95

97

99

01

03

05

07
19

19

19

19

19

19

19

20

20

20

20

year

Fig. 5. FFB yield trend.

Table 7. FFB & EFB yield estimated

Year FFB Yield (tonnes) FFB Yield (Mt) EFB (tonnes) EFB (Mt)
1990 37605968 37.606 8649373 8.649
1995 48083847 48.084 11059285 11.059
2000 61894251 61.894 14235678 14.236
2005 76489941 76.490 17592686 17.593
2010 135000000 135.000 31050000 31.050
2015 150000000 150.000 34500000 34.500
2020 165000000 165.000 37950000 37.950
2025 180000000 180.000 41400000 41.400
2030 195000000 195.000 44850000 44.850
2035 210000000 210.000 48300000 48.300
2040 225000000 225.000 51750000 51.750
2045 240000000 240.000 55200000 55.200
2050 255000000 255.000 58650000 58.650
2051 258000000 258.000 59340000 59.340
 T. M. I. Mahlia et al. / EEST Part A: Energy Science and Research 28 (2012) 1117-1136 1127

300.000

250.000 FFB Yield

200.000

Mt
150.000

100.000

50.000

0.000 90

95

00

05

10

15

20

25

30

35

40

45

50

51
19

19

20

20

20

20

20

20

20

20

20

20

20

20
year

Fig. 6. FFB yield estimate (in tons).

70.000

60.000

50.000

40.000
Mt

30.000

20.000
EFB Yield
10.000

0.000
90

95

00

05

10

15

20

25

30

35

40

45

50

51
19

19

20

20

20

20

20

20

20

20

20

20

20

20
year

Fig. 7. EFB yield estimate (in tonnes).

3. 1. 2. Number of Mills and Mill Capacity

The existing number of palm oil mill and its capacities determines whether the number of
palm oil mills in Malaysia will be able to support the processing of the increasing amount of
FFB supply to POM. It will ensure that the resource of POM processes wastes is available for
power generation. The currently available number of mills in Malaysia is tabulated in Table 8
[15].

Table 8 Total number of POM in Malaysia and its capacity (1999 to 2007)
Year No. of Mills Mill Capacity (tonnes FFB/year) Mill Capacity (Mt FFB/year)
1999 387 69242320 69.242
2000 387 71273320 71.273
2001 405 75993120 75.993
2002 409 78982920 78.983
2003 410 82556920 82.557
2004 422 85972400 85.972
2005 423 88638400 88.638
2006 425 90303600 90.304
2007 434 93644000 93.644

Number of mills and capacities are based on the linear equations (17) and (18):

y  5 .85 x  247 .53 ; R 2  0 .941 (17)

y  3000000 x  5000000 ; R 2  0 .9918 (18)

1128 T. M. I. Mahlia et al. / EEST Part A: Energy Science and Research 28 (2012) 1117-1136

Table 9 shows the number of mills and mill capacity. Corresponding graphs are plotted in
Fig. 8.

Table 9. Estimate numbers of mills and mill capacity (2000-2051)

Mill Capacity
Year No. of Mills
(tonnes FFB / yr) (Mt FFB / yr)
2000 393.78 70000000 70
2005 423.03 85000000 85
2010 452.28 100000000 100
2015 481.53 115000000 115
2020 510.78 130000000 130
2025 540.03 145000000 145
2030 569.28 160000000 160
2035 598.53 175000000 175
2040 627.78 190000000 190
2050 686.28 220000000 220
2051 692.13 223000000 223

800

700
600

500
400

300
200

100 No. of Mills

0
00

05

10

15

20

25

30

35

40

50
20

20

20

20

20

20

20

20

20

20

Fig. 8 Estimate numbers of mills and mill capacity.

Comparison between the information obtained for FFB yield (in tons) and the POM
capacities (tons FFB/yr) is shown in Fig.9 and Table 10 to determine the limiting factor of the
EFB supply for power generation. The comparison shows the POM capacity is the limiting
factor in supplying of the EFB resources for potential power generation.
300

250

200
Mt

150

100

50 Mill Capacity
FFB Yield
0
00

05

10

15

20

25

30

35

40

45

50

51
20

20

20

20

20

20

20

20

20

20

20

20

year

Fig. 9. FFB Yield vs. POM capacities.

 T. M. I. Mahlia et al. / EEST Part A: Energy Science and Research 28 (2012) 1117-1136 1129

Table 10. Comparison between FFB yield and POM capacity

FFB Yield Mill Capacity (tons Mill Capacity
Year FFB Yield (tons)
(Mt) FFB/year) (Mt FFB/year)
1990 37605968 37.61 -- --
1995 48083847 48.08 -- --
2000 61894251 61.89 71273320 71.27
2005 76489941 76.49 88638400 88.64
2010 135000000 135 100000000 100
2015 150000000 150 115000000 115
2020 165000000 165 130000000 130
2025 180000000 180 145000000 145
2030 195000000 195 160000000 160
2035 210000000 210 175000000 175
2040 225000000 225 190000000 190
2045 240000000 240 205000000 205
2050 255000000 255 220000000 220
2051 258000000 258 223000000 223

The EFB generated from the POM processes are dependent on the ability of the POM to
process the FFB supplied itself which is determined by the POM capacity. EFB supply is
presented in Table 11 based on the POM capacity and FFB yield.

Table 11. EFB supply based on POM capacity and FFB yield
EFB (tons) EFB (Mt)
Year
Mill Capacity FFB Yield Mill Capacity FFB Yield
2000 16392864 14235678 16.39 14.24
2005 20386832 17592686 20.39 17.59
2010 23000000 31050000 23.00 31.05
2015 26450000 34500000 26.45 34.50
2020 29900000 37950000 29.90 37.95
2025 33350000 41400000 33.35 41.40
2030 36800000 44850000 36.80 44.85
2035 40250000 48300000 40.25 48.30
2040 43700000 51750000 43.70 51.75
2045 47150000 55200000 47.15 55.20
2050 50600000 58650000 50.60 58.65
2051 51290000 59340000 51.29 59.34

Table 12 is a summary of power generation from fiber and shell fuel type. Electricity
generated by POM process wastes are used to support the POM operation [23].

Table 12. Power generation from fiber and shell fuel type
POM
% to LCV MWJ at 10% energy
Fuel Type Energy (MJ) Total MWh Total MW operation
FFB (kJ/kg) conversion
MW
Fibre 12 11,344 122,515,200 12,251,520 3,403 0.388 0.252
Dry Shell 4.2 20,720 78,321,600 7,832,160 2,176 0.248 0.248
Wet Shell 1.8 18,836 30,514,320 3,051,432 848 0.097 0.000

3. 2. Lower heating value (LHV) / Net heating value

The available energy that can be generated from the POM wastes is calculated using
equation (2). The LHV of POM wastes based on moisture content are given in Table 13 [23].
1130 T. M. I. Mahlia et al. / EEST Part A: Energy Science and Research 28 (2012) 1117-1136

Table 13. LHV of POM wastes (based on moisture content)

Shell Fiber EFB
Moisture
Pure Oily Pure Oily Pure Oily
0 20,720 20,930 19,670 20,720 17,580 18,836
10 17,245 18,836 - - - -
40 - - 10,778 11,344 - -
50 - - 8,312 9,134 7,354 8,162
60 - - - - 5,525 6,028

The available power produced from the EFB is calculated using equation (3), at minimum
and maximum efficiency of the overall processes of power generation [23].

E P  E  0.15 or E P  E  0.24 (17)

Energy available from EFB as well as the power plant capacity to generate electricity
for sales to the grid is calculated. Basically, four sets of results will be generated with pairing
of the following moisture content condition and plant overall efficiency at minimum and
maximum. The main purpose is to evaluate the effects of EFB at different moisture conditions
on output power as well as to evaluate the total power generation at minimum and maximum
overall efficiency of the plant.

 Power generation (1) : LHV at 60% and η at 15%

 Power generation (2) : LHV at 50% and η at 15%
 Power generation (3) : LHV at 60% and η at 24%
 Power generation (4) : LHV at 50% and η at 24%

Tables 14 - 17 are the current and expected power generation (GWh) by 2050 to predict
the amount of electricity that can be sold to the grid-connected distribution system by the
POM.

Table 14. Power generation (1) - LHV at 60% and 15% overall efficiency
EFB E E (106) Ep (106) P (1)
Ear EFB (tons) LHV (kJ/kg)
(106) (kg) (106) (GJ) (MJ) (MJ) (GWh)
2000 16392864 16393 5525 90.57 90570.57 13585.59 3.774
2005 20386832 20387 5525 112.64 112637.25 16895.59 4.693
2010 23000000 23000 5525 127.08 127075.00 19061.25 5.295
2015 26450000 26450 5525 146.14 146136.25 21920.44 6.089
2020 29900000 29900 5525 165.20 165197.50 24779.63 6.883
2025 33350000 33350 5525 184.26 184258.75 27638.81 7.677
2030 36800000 36800 5525 203.32 203320.00 30498.00 8.472
2035 40250000 40250 5525 222.38 222381.25 33357.19 9.266
2040 43700000 43700 5525 241.44 241442.50 36216.38 10.060
2045 47150000 47150 5525 260.50 260503.75 39075.56 10.854
2050 50600000 50600 5525 279.57 279565.00 41934.75 11.649
2051 51290000 51290 5525 283.38 283377.25 42506.59 11.807
 T. M. I. Mahlia et al. / EEST Part A: Energy Science and Research 28 (2012) 1117-1136 1131

Table 15. Power generation (2) - LHV @ 50% and 15% overall efficiency
EFB E E (106) Ep (106) P (2)
Year EFB (tons) LHV (kJ/kg)
(106) (kg) (106) (GJ) (MJ) (MJ) (GWh)
2000 16392864 16393 7354 120.55 120553.12 18082.97 5.023
2005 20386832 20387 7354 149.92 149924.76 22488.71 6.247
2010 23000000 23000 7354 169.14 169142.00 25371.30 7.048
2015 26450000 26450 7354 194.51 194513.30 29177.00 8.105
2020 29900000 29900 7354 219.88 219884.60 32982.69 9.162
2025 33350000 33350 7354 245.26 245255.90 36788.39 10.219
2030 36800000 36800 7354 270.63 270627.20 40594.08 11.276
2035 40250000 40250 7354 296.00 295998.50 44399.78 12.333
2040 43700000 43700 7354 321.37 321369.80 48205.47 13.390
2045 47150000 47150 7354 346.74 346741.10 52011.17 14.448
2050 50600000 50600 7354 372.11 372112.40 55816.86 15.505
2051 51290000 51290 7354 377.19 377186.66 56578.00 15.716

Table 16. Power generation (3) - LHV @ 60% and 24% overall efficiency
EFB E E (106) Ep (106) P (3)
Year EFB (tons) LHV (kJ/kg)
(106) (kg) (106) (GJ) (MJ) (MJ) (GWh)
2000 16392864 16393 5525 90.57 90570.57 21736.94 6.038
2005 20386832 20387 5525 112.64 112637.25 27032.94 7.509
2010 23000000 23000 5525 127.08 127075.00 30498.00 8.472
2015 26450000 26450 5525 146.14 146136.25 35072.70 9.742
2020 29900000 29900 5525 165.20 165197.50 39647.40 11.013
2025 33350000 33350 5525 184.26 184258.75 44222.10 12.284
2030 36800000 36800 5525 203.32 203320.00 48796.80 13.555
2035 40250000 40250 5525 222.38 222381.25 53371.50 14.825
2040 43700000 43700 5525 241.44 241442.50 57946.20 16.096
2045 47150000 47150 5525 260.50 260503.75 62520.90 17.367
2050 50600000 50600 5525 279.57 279565.00 67095.60 18.638
2051 51290000 51290 5525 283.38 283377.25 68010.54 18.892

Table 17. Power generation (4) - LHV @ 50% and 24% overall efficiency
EFB E E (106) Ep (106)
Year EFB (tons) LHV (kJ/kg) P (4) (GWh)
(106) (kg) (106) (GJ) (MJ) (MJ)
2000 16392864 16393 7354 120.55 120553.12 28932.75 8.037
2005 20386832 20387 7354 149.92 149924.76 35981.94 9.995
2010 23000000 23000 7354 169.14 169142.00 40594.08 11.276
2015 26450000 26450 7354 194.51 194513.30 46683.19 12.968
2020 29900000 29900 7354 219.88 219884.60 52772.30 14.659
2025 33350000 33350 7354 245.26 245255.90 58861.42 16.350
2030 36800000 36800 7354 270.63 270627.20 64950.53 18.042
2035 40250000 40250 7354 296.00 295998.50 71039.64 19.733
2040 43700000 43700 7354 321.37 321369.80 77128.75 21.425
2045 47150000 47150 7354 346.74 346741.10 83217.86 23.116
2050 50600000 50600 7354 372.11 372112.40 89306.98 24.807
2051 51290000 51290 7354 377.19 377186.66 90524.80 25.146

Summary for the power generation in Tables 14- 17 which are based on different moisture
content and overall efficiency, is represented by graphs in Fig.10.
1132 T. M. I. Mahlia et al. / EEST Part A: Energy Science and Research 28 (2012) 1117-1136

30

25

20
P (GWh)

15

10

5
P (1) P (2)
P (3) P (4)

0
00

05

10

15

20

25

30

35

40

45

50

51
20

20

20

20

20

20

20

20

20

20

20

20
Year

Fig. 10. Summary of power generation for different moisture content

and overall efficiency.

Fig.10 confirms that the moisture content of EFB as well as the efficiency of the system
significantly affects the power generation. Therefore, any effort in POM system improvement
will extensively improve the power generation output of the plant. Table 18 is a summary of
analysis result for available power to be fed into the grid. A general method is adopted to
estimate the potential power generation of biomass power plant; however, the figures used are
susceptible to fluctuations of values, due to development of the fruit itself, the technology
available for better efficiency of power conversion and consistency of FFB and EFB supply.

Table 18. Data summary

Total Average
FFB Yield per Mill (Mt) 100
Milling Hours 24 × 365
Analysis Result
EFB Yield per Mill (Mt) 23
EFB Yield per Mill (kg) 23 × 109
LHV (kJ/kg) 5525
Available energy (MJ) 127075 x 106
Generated power at 15% efficiency (MJ) 19061 x 106
Available power for grid (GWh) 5.298

In order to increase the output power and hence the electricity generation, additional
drying process of the EFB prior to the power generation process would be considered;
however, further evaluation should be conducted before implementation of any cost-incurring
system. Therefore, in-depth calculation would be performed to further analysis of the input
condition, power conversion efficiency of the equipment in the mills and the condition of the
fruits itself [34].

3. 3. Economic Analysis

A sensitivity analysis conducted based on the economic rate is shown in Table 19. The net
present and present values of the project costs are calculated using equations (9) and (10),
respectively. The variation of the interest rate is 5%, 10%, and 15%. As expected, higher
 T. M. I. Mahlia et al. / EEST Part A: Energy Science and Research 28 (2012) 1117-1136 1133

interest rate value gives higher resultant present value of the project initial cost. Subsequently,
Fig.11 demonstrates the present value for the 5-year analysis [35, 36].

Table 19. Economical analysis (PV and NPV)

Present Value (RM)
Interest
NPV Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Rate
5% 175,152,638 79,000,000 75,238,095 68,243,170 58,951,016 48,499,147 38,000,351
10% 101,391,768 79,000,000 71,818,182 59,353,869 44,593,440 30,457,920 18,911,972
15% 58,460,928 79,000,000 68,695,652 51,943,782 34,153,880 19,527,592 9,708,664

80,000,000

70,000,000

60,000,000

50,000,000
PV (RM)

40,000,000

30,000,000

20,000,000

10,000,000
5% 10% 15%
0
Year 1 Year 2 Year 3 Year 4 Year 5

Fig.11. Present value (PV) for the 5-year analysis.

From monetary standpoint, a successful project should be able to return a significant

amount of profit in a timely manner which will determine the feasibility of the project [37].
To compare the energy sales prices between RM0.15/kWh to RM0.25/kWh, the capital cost
and the IRR value of the operation is estimated based on the demo plant by [23]:
 Project cost ( Capital ) RM 79,000,000
 Internal rate of returns (IRR) – after tax 5.87%
The net profit of the electricity sales to grid-connected distribution system is tabulated in
Table 20. Based on the net profit values, the payback period would be estimated accordingly.

Table 20. Estimated net profit

Average Net Profit per Year
Year P (MWh) P (kWh)
RM 0.15/kWh RM 0.17/kWh RM 0.19/kWh RM 0.21/kWh
2008 4977 4977104 -79000000 -79000000 -79000000 -79000000
2009 5136 5135948 3851961 4365556 4879151 5392745
2010 5295 5294792 3971094 4500573 5030052 5559531
2011 5454 5453635 4090227 4635590 5180954 5726317
2012 5612 5612479 4209359 4770607 5331855 5893103
2013 5771 5771323 4328492 4905624 5482757 6059889
2014 5930 5930167 4447625 5040642 5633658 6226675
2015 6089 6089010 4566758 5175659 5784560 6393461
2016 6248 6247854 4685891 5310676 5935461 6560247
2017 6407 6406698 4805023 5445693 6086363 6727033
2018 6566 6565542 4924156 5580710 6237265 6893819
2019 6724 6724385 5043289 5715728 6388166 7060605
2020 6883 6883229 5162422 5850745 6539068 7227391
2021 7042 7042073 5281555 5985762 6689969 7394177
2022 7201 7200917 5400688 6120779 6840871 7560963
2023 7360 7359760 5519820 6255796 6991772 7727748
2024 7519 7518604 5638953 6390814 7142674 7894534
2025 7677 7677448 5758086 6525831 7293576 8061320
2026 7836 7836292 5877219 6660848 7444477 8228106
2027 7995 7995135 5996352 6795865 7595379 8394892
2028 8154 8153979 6115484 6930882 7746280 8561678
2029 8313 8312823 6234617 7065899 7897182 8728464
2030 8472 8471667 6353750 7200917 8048083 8895250
Payback Period (yrs) 17 15 14 13
1134 T. M. I. Mahlia et al. / EEST Part A: Energy Science and Research 28 (2012) 1117-1136

The payback period of the evaluation performed is presented in Fig.12. Consistent with the
interest rate for the PVs increasing trend, the payback period of the system will decrease with
increasing electricity price, which means the higher the price, the more feasible the system
implementation.
18
16
14
12
10
years

8
6
4
2 Payback Period (yrs)
0
RM 0.15/kWh RM 0.17/kWh RM 0.19/kWh RM 0.21/kWh

Fig.12. Payback period.

4. Conclusions

Palm oil mill waste is a feasible energy source to be set up in Malaysia. Implementation of
such systems potentially revert the dependency of power generation sector from the
conventional fossil fuels to the more sustainable renewable energy sources. Results obtained
from statistical records as well as the analysis conducted for the estimation of the future trend
shows that palm oil mill wastes can produce sustainable supply of empty fruit bunch (EFB)
and generate significant amount of electricity which would be even sufficient for sales to the
grid-connected systems. Projection of the industry performance using the simple curve-fitting
equation implies an increasing trend of this industry; however, individual analyses have to be
conducted for every mill to accurately determine the amount of power that can be supplied.
Techno-economic analysis shows the general effect of the different interest rate onto the
investment capital of the project, in the form of PV and NPV. An agreement should be drawn
up for a certain period to ensure no loses for all parties involved. It also seems to be necessary
to conduct analysis for the environmental impacts of biomass power generation grid-
connected utilization [38-46].

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