Energy 170 (2019) 62e72

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Energy
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Cost competitiveness of palm oil biodiesel production in Indonesia

Fumi Harahap*, Semida Silveira, Dilip Khatiwada
€gen 68, 100 44,
Division of Energy and Climate Studies, School of Industrial Engineering and Management, KTH Royal Institute of Technology, Brinellva
Stockholm, Sweden

a r t i c l e i n f o a b s t r a c t

Article history: This study investigates opportunities to improve the cost competitiveness of the palm oil biodiesel in-
Received 7 February 2018 dustry in Indonesia. It compares costs and revenues of standalone conventional palm oil and biodiesel
Received in revised form production with an integrated system that includes utilisation of biomass residues. Economic metrics,
9 October 2018
viz. net income, NPV, IRR, payback period and biodiesel breakeven price are evaluated. Sensitivity an-
Accepted 17 December 2018
Available online 18 December 2018
alyses are carried out to verify how parameter changes affect net income. The results show that the
integrated concept with upgraded CPO and biodiesel processing plant (Biorefinery), which simulta-
neously produces biodiesel, electricity, heat and biofertiliser, can obtain an additional income of 14 USD/
Keywords:
Biomass residues
t-FFB compared to the Conventional System. The biorefinery system helps to reduce dependency on
Palm oil government subsidy for biodiesel production, and lowers the industry vulnerability to fluctuation of
Biodiesel fossil diesel prices. The shift to modern facilities with value chain integration provides a pathway to
Economic indicators enhance the share of renewable energy in Indonesia through increased biodiesel production and elec-
Conventional system tricity generation from palm biomass residues. It may also promote resource efficiency and climate
Biorefinery change mitigation through reduced emissions from untreated residues and fossil energy carriers. The
analysis enhances understanding about potential gains and consequences of more stringent policy
implementation in the country.
© 2018 Elsevier Ltd. All rights reserved.

1. Introduction
Crude palm oil (CPO) is an important commodity for Indonesia
both domestically and internationally. The domestic market
consumed 25% of the country's CPO production in 2016 [1]. After
food, the largest use of CPO is for biodiesel production. CPO is a key
feedstock for meeting the government's 30% biodiesel blending
target by 2025 [2]. In a recent study, Khatiwada et al. [3] showed
that the growing demand for biodiesel in Indonesia could be met
without jeopardizing the use of palm oil for food, or adding new
planted area, if an agriculture policy is pursued aligned with efforts
to expand the use of biofuels in the country. While larger yields can
contribute to reduce costs for biodiesel, other improvements along
Abbreviations: biodiesel breakeven price, (BBP); combined heat and power,
(CHP); crude palm oil, (CPO); empty fruit bunch, (EFB); fresh fruit bunch, (FFB);
heavy fuel oil, (HFO); internal rate of return, (IRR); kernel shell, (KS); life-cycle cost,
(LCC); mesocarp fibre, (MF); net present value, (NPV); palm oil mill effluent,
(POME); payback period, (PBP).
* Corresponding author.
E-mail addresses: harahap@kth.se (F. Harahap), semida.silveira@energy.kth.se
(S. Silveira), dilip.khatiwada@energy.kth.se (D. Khatiwada).
the biodiesel supply chain may be also attractive. In this paper, we
explore the potential of increasing resource and cost-efficiency in
the biodiesel production. Exploring this potential is very relevant as
the biodiesel program in Indonesia includes policies and financial
support to improve the biodiesel cost competitiveness and sus-
tainability of the supply chain.
The production of CPO generates considerable amount of
biomass residues (e.g. empty fruit bunches, fibre, shell and palm oil
mill effluents). Part of this biomass is conventionally used in the oil
palm plantations as soil mulch, but large portions remain unused or
are burnt in the fields [4]. There is growing interest to use palm oil
biomass for bio-based products. For example, palm oil bio-
resources such as empty fruit bunches, fibres, shells and milling
effluents can be used as feedstock to produce electricity in com-
bined heat and power (CHP) plants. Alternatively, empty fruit
bunches and effluents can be used for producing biofertilisers.
Present policies require improved environmental performance of
the palm oil industry (e.g. reduce GHG emissions) which provides
an incentive for utilisation of the biomass available. However, the
implementation of these policies has been slower than anticipated
[5e7]. The unexplored economic values of large quantities of palm
oil biomass residues, on the one hand, and the low profitability of

https://doi.org/10.1016/j.energy.2018.12.115
0360-5442/© 2018 Elsevier Ltd. All rights reserved.
 F. Harahap et al. / Energy 170 (2019) 62e72
biodiesel production, on the other hand, justify an evaluation of
opportunities to integrate the value chain of CPO and biodiesel
production as a way to improve the total economy and sustain-
ability of the industry.
While significant attention has been put on sustainability di-
mensions such as energy balance and greenhouse gas emissions
from palm oil biodiesel production, the potential economic impact
of production system improvements in Indonesia have not been
evaluated in the same way [8e11]. Globally, several case studies
have evaluated the economic impacts of different palm oil biodiesel
supply chains, but very few have discussed system improvement or
introduction of the biorefinery concept. In terms of system
improvement, Quintero et al. [12] evaluated the impact of crop
productivity on palm biodiesel production cost considering
different feedstock growers (i.e. smallholders or large-scale plan-
tations) in Peru. The study examined improvement of upstream
activities and oil palm plantations, but did not consider the upgrade
of palm oil and biodiesel processing plants. Moncada et al. [13]
compared the economic performance of a standalone biodiesel
plant with multiproduct biorefinery system in Colombia without
technology improvements. Solikhah et al. [14] discussed the eco-
nomic profitability of palm biodiesel production from multi feed-
stocks (i.e. palm stearin, palm fatty acid distillate, CPO) and the
opportunity of locating the palm oil mill and biodiesel plant in one
facility without describing the upgrading biomass conversion
technologies of different plant configurations in Indonesia. Khati-
wada et al. [3] concluded that aligning Indonesian biodiesel man-
dates with an agriculture strategy will improve production
efficiency and reduce pressure on land. An analysis of industrial
integration as proposed here will contribute further insights on
potential efficiency improvements along the supply chain of the
biodiesel industry.
The main objective of this paper is to compare the cost
competitiveness of palm oil based biodiesel produced in a con-
ventional plant in Indonesia (Conventional System) with an upgra-
ded system (Biorefinery) that includes the utilisation of palm
biomass residues as required by the current national policy. Many
authors have carried out comparisons of the economic and/or cost
competitiveness of different production system configurations in
an effort to explore the attractiveness of biofuels and enhance ef-
ficiency. For example, Bansal et al., Crago et al., and Millinger et al.
[15e17] used economic indicators (e.g. total cost, breakeven price)
to compare the economic feasibility of biofuels from different
feedstock production. Barua et al. and Blum et al. [18,19] scrutinized
the cost competitiveness of energy based on renewable sources
compared with fossil fuels using economic parameters such as
levelised cost of electricity.
Our study enhances understanding about the context of
Indonesia, the largest producer of palm oil in the world. The scope
of our study is limited to the system improvement at the plant level
i.e. basically integrating the palm oil mill and the biodiesel plant.
We consider an average size of palm oil mill (i.e. 150 kt-FFB/y)
which supplies all produced CPO (i.e. 30 kt-CPO/y) to a medium size
biodiesel plant for producing biodiesel only. In other words, the
production chain is dedicated to biodiesel using palm oil as feed-
stock. Dedicated biodiesel production will allow the palm oil mill to
source feedstock from palm fruits with higher CPO yields such as
palm pisifera (i.e. with thicker mesocarp) compared to other vari-
eties (e.g. palm dura) with higher palm kernel yields and thus more
favourable for edible oil production [20]. The analysis is applicable
to palm oil mills across Indonesia, but can also be applied to palm
oil biodiesel production elsewhere.
Based on previous studies, we can assume that Indonesia has
the potential to produce sufficient palm oil to meet the domestic
demand for biodiesel, food and industrial uses, as well as the export
63
demand [3]. In a context of enhanced biodiesel production in the
country, as opposed to large exports of CPO, dedicated plants for
biodiesel production are justified as a way to guarantee competi-
tiveness. Dedicated processing plants for biofuel production have
been implemented in other biofuel producing countries such as
Brazil, the largest producer of sugar in the world. Thirty five percent
of the sugarcane-based mills in Brazil produce ethanol only, and the
remaining mills produce either only sugar or both sugar and fuel
[21].
Ultimately, this study explores ways to improve the economic
competitiveness of palm oil biodiesel production in Indonesia. We
evaluate the potential profits from the use of palm biomass residue
(i.e. empty fruit bunches, fibre, shell and palm oil mill effluents) and
explore different allocations of the residues to produce value added
products (i.e. electricity, heat, and biofertiliser) in the context of
integrated palm oil and biodiesel production. We examine the
biorefinery concept in three different cases, considering utilisation
of biomass residue, plant conversion options, and production of
value added in the form of energy products (biodiesel,
bioelectricity, heat) and non-energy products (biofertilisers). This
study performs life-cycle cost analysis and cost effectiveness
analysis to assess the net income, net present value (NPV), internal
rate of return (IRR) payback period (PBP) and biodiesel breakeven
price (BBP). The life-cycle cost quantifies the cost starting from the
construction phase to the end of the economic life of the plant.
Fig. 1 shows simplified diagrams representing the Conventional
System and the Biorefinery as per applied in the analysis.
The coming sections are structured as follows. Section 2 de-
scribes the system boundaries and data sources for the palm oil and
biodiesel production system. Section 3 presents the methodology
Fig. 1. Simplified diagrams of Conventional System and Biorefinery configurations in
this study.
Abbreviations: EFB (empty fruit bunch); MF (mesocarp fibre), KS (kernel shell);
POME (palm oil mill effluent).
Notes:
- Remaining biomass in the Conventional System are untreated. 98% of KS is sold
to the market, 24% of EFB is left to decay.
- a % is to the quantity of EFB to be treated proportionately in cogeneration plant
and composting.
- b % is the quantity of POME to be treated proportionately in biogas plant and
composting.
- Details of biomass conversion technologies, quantity of biomass residues, bio-
products, energy supply and distance between palm oil mill and biodiesel plant
are given in Section 2.1 for the Conventional system and Section 2.2 & 3.1 for
Biorefinery.
64 F. Harahap et al. / Energy 170 (2019) 62e72

for developing the biorefinery cases, and methods to carry out the Table 1
economic analysis. Section 4 provides results and discussions. Material and energy flow for palm oil production, per t-FFB, in the Conventional
System.
Finally, conclusions are given in Section 5.
Item Value Unit
2. Palm oil and biodiesel production system: system Input material
boundaries and data sources FFB 1
Electricity 22 kWh
Steam 500 kg
Fresh fruit bunch (FFB) is the main feedstock for producing CPO.
Diesel for pumping effluent(*) [26] 0.064 l
The production of CPO from FFB includes sterilization, stripping, Output material
digesting and pressing the fruits, and oil extraction [9]. Besides the Crude palm oil, CPO 200 kg
main products, CPO and palm kernel, palm oil mills produce solid By-product
Palm kernel, PK 47 kg
and liquid biomass residues i.e. empty fruit bunches, mesocarp
Biomass residue
fibre, kernel shell, and palm oil mill effluent. In the biodiesel plant, Empty fruit bunch, EFB 230 kg
biodiesel is produced through the transesterification process using Kernel shell, KS 60 kg
short chain of alcohol e.g. ethanol or methanol [22]. The process can Mesocarp fibre, MF 140 kg
profit from the help of an alkaline catalyst such as potassium hy- Waste water
Palm oil mill effluent, POME 0.6 m3
droxide to accelerate the reaction. It converts ester that separates
the triglycerides, takes the glycerol of the triglyceride and replaces Note: All values were obtained from field visit, except diesel for pumping effluent (*)
it with alkyl radical of the alcohol used [23]. Apart from biodiesel,
the process generates glycerol as co-product.
installed capacity of the cogeneration plant is 0.6 MW, which is
We evaluate palm oil and biodiesel production systems based on
calculated based on shells and fibres treated (see calculation in
biomass conversion technologies, the quantity of biomass residues
Appendix A). In the Conventional System, the mill effluent is treated
treated, the bioenergy (i.e. electricity and heat) and bio-product (i.e.
in aerobic and facultative open lagoons with no biogas recovery.
biofertiliser) produced from the residues, the fuel (i.e. fossil or
The system also considers co-composting of empty fruit bunches
renewable) used in the facility, and the integration of the palm oil
and effluents treated for producing biofertilisers, which has been
mill with the biodiesel refining plant. The system boundary of a
the common practice in palm oil mills in Indonesia [25]. The
Conventional System and a Biorefinery are described in Section 2.1
amount of biofertiliser produced in the Conventional System is
and Section 2.2. The information about palm oil conversion and
96.23 kg/t-FFB (see calculation in Appendix B). The value is close to
mill operation was obtained from a palm oil mill in North Sumatra,
the estimation presented by Stichnothe et al. [26].
and literature gathered during a field visit in Indonesia in 2015 and
In the Conventional System, the biodiesel plant receives CPO
2016. The material and energy flows were estimated based on the
from the palm oil mill. As described above, our assessment con-
existing palm oil mill. Information for the biodiesel plant and bio-
siders a dedicated mill supplying all produced CPO to a biodiesel
diesel conversion was obtained from literature primarily describing
plant. The use of CPO for purposes other than biodiesel production
conditions for Indonesia. Data sources for upgraded systems were
is not considered in this study. The biodiesel plant has capacity to
obtained from international references when local data was not
process 30 kt-CPO/y. Biodiesel is the main product of the plant and
available.
glycerol is the co-product. Table 2 shows material input and output
for palm biodiesel production. The biodiesel plant was assumed to
2.1. The Conventional System
be located 50 km from the palm oil mill. The transport cost was 0.14
USD/t-CPO/km [27]. Diesel fuel and heavy fuel oil supply energy to
The Conventional System depicts a typical production of palm oil
the biodiesel plant. The quantity of the fuels were estimated as
biodiesel in Indonesia. The palm oil mill and the biodiesel plant in
described in Appendix C.
Indonesia are typically geographically separated, whereby the palm
oil mill is closer to the plantation, and the biodiesel plant is located
near a seaport to more easily serve the export market. The handling
capacity of a palm oil mill in Indonesia is between 10 and 60 t-FFB/h Table 2
Material and energy flow for palm biodiesel production, per kg-biodiesel, in the
[4]. In this study, we describe the production unit of a palm oil mill
Conventional System.
in North Sumatra, which has a representative size for a typical mill
in Indonesia: 30 t-FFB/h and operating time 5000 h/y. The steam, Item Value Unit

and electrical requirements, as well as yields of empty fruit bunch, Input material
fibre, shell and mill effluent were obtained from the field visit, Crude palm oil, CPOa 1.19 kg
Methanolb 0.14 kg
shown in Table 1.
Catalyst, NaOHc 0.02 kg
The Conventional System considered in this study has a cogen- Dieseld 0.092 l
eration plant, or CHP plant, which has long been used in some palm Heavy fuel oile 0.039 l
oil mills in Indonesia. Other mills still use a diesel generator to meet Output material
the internal energy consumption [24]. In the conventional palm oil Biodiesel 1
By-product
mills, the CHP plant has 20 bar (2.0 MPa) and 350
C of steam, low Glycerolf 0.167 kg
efficient boilers (70% efficiency) and steam turbine with electrical
Notes:
efficiency (16%) for producing steam (500 kg/t-FFB) and electricity a
Calculated based on 950 l-biodiesel/t-CPO [28] and biodiesel density 0.88 kg-
(22 kWh/t-FFB) required for palm oil milling operation. The low- biodiesel/l-biodiesel [29]
efficient cogeneration plant only burns a small portion of the b
Quantity of methanol is the average values from Refs. [10,28,30]
shells (2%) and fibres for energy generation. It consists of steam c
Quantity of catalyst NaOH is the average values from Refs. [10,30,31]
d
boilers, back pressure turbine, and electrical networks which have Calculated based on electricity consumption in biodiesel plant, 0.27 kWh/kg-
biodiesel, which is the average values from Refs. [10,31,32]
been integrated in one system. It generates sufficient energy e
Calculated based on steam consumption in biodiesel plant, 1360 MJ/t-biodiesel
(electricity and heat) to run the mill. Most palm oil mills in [32,33]
f
Indonesia are not connected to the external electricity grid. The Data from Ref. [10]
 F. Harahap et al. / Energy 170 (2019) 62e72
Fig. 2. Schematic representation of the Conventional System, a 30 t-FFB/h palm oil mill
with a low efficiency biomass cogeneration, an adjacent aerobic co-composting plant
and a biodiesel plant at 50 km distance (numbers are per t-FFB).
Abbreviations: CPO (crude palm oil); EFB (empty fruit bunch); FFB (fresh fruit
bunch); MF (mesocarp fibre), KS (kernel shell); PK (palm kernel); POME (palm
oil mill effluent); HFO (heavy fuel oil).
Data sources and assumptions:
(a) Values obtained from field visit
(b) Data from Ref. [26]
(c) Quantity of methanol is the average values from Refs. [10,28,30]
(d) Quantity of catalyst NaOH is the average values from Refs. [10,30,31]
(e) Calculated see Appendix C
(f) Calculated, assuming total distance: 2*50 km; transport cost was 0.14 USD/t-
CPO/km [27]
(g) Estimated based on substrate ratio for co-composting of POME and EFB
[34,35]
(h) Calculated see Appendix B
(i) Calculated based on conversion from Ref. [28]
(j) Calculated based on conversion from Ref. [10]
The schematic representation of the Conventional System is
shown in Fig. 2.
2.2. The biorefinery
The Biorefinery is a conceptual plant which comprises a palm oil
mill, a biodiesel plant, a high efficiency biomass cogeneration plant,
a biogas unit or a co-composting plant, all in one facility. It is an
upgraded system in comparison with what is typically installed in
Indonesia. Petterson et al. and Solikhah et al. [14,36] indicated that
the cost for transporting feedstock is significant in relation to the
total cost of feedstock, capital and biodiesel production and dis-
tribution. Hence, an integration of the feedstock production and the
biofuel production plant can reduce transport costs and related
emissions. For Indonesia, such integration can also contemplate the
location of the refinery closer to domestic markets unlike the
present location of biodiesel plants, which is often close to the
seaport mainly to serve the export market. Energy for the Bio-
refinery is derived from palm biomass sources helping to eliminate
the deposition of residue. The proposed biorefinery is a simple one
that uses one feedstock to produce two or three products with
current available technologies [37]. The Biorefinery is connected to
the external electricity grid and, therefore, excess electricity can be
sold beyond the refinery borders.
For the purpose of comparison, the Biorefinery has similar
feedstock input (i.e. FFB) as the Conventional System, thus 30 t-FFB/h
or 150 kt-FFB/y; and operating time of 5000 h/y. Notice that FFB is
considered as feedstock in this study instead of CPO because CPO is
an intermediate product to be processed into biodiesel. As
mentioned before, this study does not discuss other uses for the
CPO.
The treatment of palm oil mill effluent in the Conventional
65
System with a series of ponds can reduce pollutants (i.e. BOD and
COD), but does not capture methane. To meet the sustainability
requirement as defined by the national policy, the proposed Bio-
refinery treats the effluent in a biogas plant to capture the methane
for producing biogas for electricity. The biogas plant consists of
biodigester, scrubber, gas engine, boiler, flare [7]. There are several
anaerobic digestion technologies (biodigester) for biogas recovery.
The covered lagoon (covered ponds with mixing mechanisms) was
chosen in this study due to lower installation costs compared to the
continuous stirred tank reactors, although the gas production ef-
ficiency is lower [38]. The installed capacity of the biogas plant (in
MW) was calculated based on the quantity of effluents (see calcu-
lation and assumptions in Appendix D). The potential for bio-
fertiliser from POME bio-digestate from the biogas plant is not
considered in this study.
The cogeneration plant in the biorefinery is described as a high
efficient CHP plant (a 4.0 MPa and 360
C of steam with 90% boiler
efficiency), coupled with steam turbine (30% electrical efficiency) to
generate steam and electricity for CPO and biodiesel production. It
is equipped with pre-treatment system for pressing, cutting and
drying the empty fruit bunches. The pre-treatment system is used
to convert the empty fruit bunches into a better fuel for the boiler
[39]. The installed capacity of the cogeneration plant was calculated
based on the quantity of residues (i.e. empty fruit bunches, shell
and fibre) (see calculation and assumptions used in Appendix E). As
mentioned in the Introduction, we explore three different cases of
Biorefinery (i.e. Case 1 to Case 3) to assess the impact of different
conversion options of palm biomass residues to produce value
added products (i.e. electricity, heat, and biofertiliser). Description
of the biorefinery cases and methods for economic evaluation are
presented next.
3. Evaluating the cost competitiveness of palm oil biodiesel
production systems
3.1. Biorefinery cases
In order to investigate the most cost-effective biorefinery
configuration for palm biodiesel production in Indonesia, we
explore three different Biorefinery cases (Case 1 to Case 3) utilising
the available biomass residues. The quantity of palm oil mill ef-
fluents and empty fruit bunches vary because both types of residue
can be treated in more than one biomass conversion technology
available at the site. Table 6 presents the quantity of biomass uti-
lised in each biomass conversion technology. The effluents are
either used for biogas generation in the anaerobic digestion plant
(using covered lagoon to capture methane) for later producing
electricity, or can be used to produce biofertiliser together with
empty fruit bunches. The empty fruit bunches can be processed in
the cogeneration plant as described above, and in a co-composting
plant with the effluents. The aerobic co-composting plant applies
similar technology as the Conventional System. The schematic rep-
resentation of the Biorefinery is shown in Fig. 3.
3.2. Metrics for performing economic analysis in different
configurations
As mentioned previously, the study investigates the economic
metrics for measuring the competitiveness of the conventional and
upgraded palm oil biodiesel production in Indonesia. NPV (net
present value), IRR (internal rate of return), payback period, and
biodiesel breakeven price were evaluated. Details about the metrics
and data sources are provided below.
66 F. Harahap et al. / Energy 170 (2019) 62e72

facility [42]. In our analysis, we considered scaling effect, with a

scaling factor (R) of 0.7, to adjust the capital costs in relation to the
size of the equipment, based on a reference cost [43], which is
expressed in Eq. (3). The reference values of the capital cost are
shown in Appendix F. The maintenance cost is estimated at 4% of
the annual capital cost [44].
X
C¼ ðVi *Pi Þ þ AEC þ M (1)

where,

C is annual cost
Vi is annual quantity of input (feedstock, materials, energy)
Pi is unit cost
AEC is annualised capital cost
M is annual maintenance cost
Fig. 3. Schematic representation of the Biorefinery, a 30 t-FFB/hour palm oil mill with a
high efficient biomass cogeneration, a biogas plant, or with a co-composting plant and i
a biodiesel plant (numbers are presented per t-FFB). AEC ¼ . $CC (2)
1  1 ð1 þ rÞt
Abbreviations: CPO (crude palm oil); EFB (empty fruit bunch); FFB (fresh fruit
where,
bunch); MF (mesocarp fibre), KS (kernel shell); PK (palm kernel); POME (palm
oil mill effluent).
Data sources and assumptions: AEC is annualised capital cost
(a) Values obtained from field visit r is interest rate
(b) Data from Ref. [26] CC is total capital cost
(c) Quantity of methanol is the average values from Refs. [10,28,30]
t is the economic lifetime
(d) Quantity of catalyst NaOH is the average values from Refs. [10,30,31]
(e) Calculated see Appendix D  R
(f) Estimated based on electricity required for treating POME in biogas plant [38] CCa Sizea
(g) Estimated based on substrate ratio for co-composting of POME and EFB from
¼ (3)
CCbase Size base
Refs. [34,35] where,
(h) Calculated see Appendix E
(i) Estimated based on electrical consumption for EFB pre-treatment plant [38]
(j) Quantity of electricity use in biodiesel plant is the average values from CCa and Sizea represent the costs and installed capacity of the
Refs. [10,31,32] equipment or technology evaluated in this study
(k) Calculated based on conversion from Ref. [28] CCbase and Sizebase are the costs and installed capacity of the
(l) Calculated based on conversion from Ref. [10] reference equipment from the scientific works
(m) Excess electricity to the grid is electricity production from biogas and
cogeneration plant subtracted by the electricity for on-site use
(n) Quantity of biofertiliser was quantified using similar approach as in the
Conventional System, as shown in Appendix B
3.2.2. Potential revenues
Total revenues (Eq. (4)) presents annual quantity of outputs
multiplied by unit prices (in Table 4). The unit prices are fixed.
3.2.1. Life-cycle system costs
We apply life-cycle cost (LCC) which quantifies the cost, starting X
R¼ ðVo *Po Þ (4)
from the construction phase of a facility to the end of its economic
life [40]. LCC includes annualised capital costs and annual recurrent
where,
costs (materials, fuel, and maintenance), Eq. (1). Input for LCC
assessment is shown in Table 3.
R is annual revenues
The capital costs comprise cost for palm oil mill, conversion
Vo is annual quantity of output (biodiesel, palm kernel, CPO,
technologies for biomass residues and biodiesel plant. The capital
excess electricity, biofertiliser, glycerol)
cost of technology or plant was annualised considering 25 years
Po is unit price
lifetime and 6.8% interest rate [41], using Eq. (2). The cost of land
was excluded. Capital cost reduction of 25% was considered when
the palm oil mill and biodiesel plant are located in one single
3.2.3. Economic metrics
Net income, NPV, IRR, and PBP are common indicators for
Table 3
Input for life-cycle cost.
Table 4
Item Value Reference Unit prices of materials, fuel, products.
CPO mill and biodiesel plant
Items Amount Reference
FFB 0.12 USD/kg [45]
Diesel 0.38 USD/l [46] Palm kernel 0.41 USD/kg [48]
Heavy fuel oil 0.43 USD/l [46] Electricity from bioenergy sources 0.085 USD/kWh Regulation 12/2017
Methanol 0.35 USD/kg [47] Biodiesel 0.66 USD/l [46]
Catalyst, NaOH 0.635 USD/kg [47] Glycerol 0.16 USD/kg [49]
Other assumptions Biofertiliser 0.09 USD/kg (*)
Transport cost 0.14 USD/t-CPO/km [27]
Note: (*) Based on inorganic fertiliser price (NPK) [50] and considering nutrients
Plant lifetime 25 years
value substitution of a tonne inorganic fertiliser equals to 7.9 dry tons of produced
Interest rate 6.8% [41]
biofertiliser [51].
 F. Harahap et al. / Energy 170 (2019) 62e72 67

economic analysis, used to investigate the feasibility and desir- Table 5

ability of a system [20,52]. Net income (Eq. (5)) is calculated as the Parameters for sensitivity analysis.

difference between total income and total cost. NPV indicates Economic indicator Parameter Base value Variations to the base
overall financial performance of a project. NPV (Eq. (6)) is derived for sensitivity test value
from the total discounted income and costs at lending rate of 6.8% Net income (Million FFB cost 0.12 USD/kg 50%, 25%, þ25%, þ50%
(average lending rate in Indonesia JanuaryeJune 2016 from USD/y) Electricity price 0.085 USD/
Ref. [41]) and project lifetime of 25 years. IRR (Eq. (7)) is calculated from biomass kWh
Biofertiliser 0.088 USD/kg
at NPV equal to zero. PBP (Eq. (8)) presents the time it takes before
price
an investment is recovered. It is expressed by capital cost divided Biodiesel price 0.663 USD/kg
by annual revenues. Total (based on
annualised configuration)
I ¼CR (5) capital cost *

Note: * Total capital cost is shown in Table 6. The annualised cost was calculated
where, using 8.45% annuity factor.

I is annual net income

C is annual cost
and biodiesel 33 MJ/l [29]). The FFB cost from 80 to 240 USD/t was
R is annual revenue
proportionally linked to CPO market price in the past 10 years [57].
! Fossil diesel prices were obtained from official policy documents1
X
n
R  ðCC þ TÞ
NPV ¼ (6) and expressed in 2016 price. Notice that the method used to
1
ð1 þ rÞn derive the breakeven line in this study is appropriate for analysis of
short term potential and economic viability of biodiesel [54,58].
!
X
n
R  ðCC þ TÞ
NPV ¼ ¼0 (7) C  R  ðVob *Pob Þ
ð1 þ IRRÞn BBP ¼ (9)
1 Vob
where,
where,
NPV is net present value
R is annual revenue BBP is biodiesel breakeven price
T is annual O&M cost includes annual cost of feedstock, mate- C is annual costs
rials, energy and maintenance cost R is annual revenues
CC is total capital cost Vob is annual biodiesel production
r is interest rate Pob is biodiesel price
n is project lifetime
IRR is internal rate of return

CC 3.2.4. Sensitivity analysis

PBP ¼ (8) Sensitivity analysis is used to address uncertainties related to
RT
where, investment and market fluctuations that can alter economic out-
comes in significant ways. The sensitivity test investigates the
PBP is payback period variation of economic performance with changes in key assump-
CC is total capital cost tions. In studies related to palm oil, common variables for sensi-
R is annual income tivity analysis include raw material prices, interest rate, capital cost,
T is annual O&M cost includes annual cost of feedstock, mate- O&M cost [28,59,60]. We run the test to measure the impact of
rials, energy and maintenance cost parameters on net income. Table 5 shows the key parameter
changes and variations for sensitivity analysis.
We also estimated biodiesel breakeven price (BBP), (Eq. (9)),
known as sale price of product at zero plant profit. It is defined as
4. Results and discussions
net income excluding profit from the sale of biodiesel. Branca et al.
[53] and Miranowski et al. [54] applied that concept to estimate the
4.1. The shift towards an integrated biorefinery
maximum purchase feedstock price for biofuel processing. Johari
et al. [55] estimated the CPO price for palm biodiesel to determine
Table 6 presents the capital costs of the analysed plant config-
the level of subsidy needed for biodiesel to compete with fossil
urations (Conventional System and Biorefinery Case 1 to Case 3),
diesel. Keske et al. [56] quantified the profitability of biofuel feed-
showing the investments needed to move towards an integrated
stock for the farmer at certain diesel price using breakeven point
system. The capital costs of all biorefinery configurations are higher
analysis. We used BBP to draw breakeven line to understand the
than the Conventional System, primarily due to the investment for
biodiesel profitability of the evaluated cases, and compare it with
upgrading the treatment of palm biomass residue. Meanwhile
fossil diesel. The breakeven line draws BBP at various costs of
other recurrent costs in the Biorefinery are 10% lower than in the
feedstock (i.e. FFB) and against the historical FFB cost and fossil
Conventional System. The study shows that insignificant potential
diesel price from January 2010 until April 2016. BBP was expressed
economic benefits can be gained moving from Biorefinery Case 1 to
in energy equivalent of diesel (energy content of diesel: 35.8 MJ/l
Case 3, due to the high investment required for the biogas tech-
nology. However, the technology is more efficient to capture
1
Policy documents of Indonesia for obtaining diesel prices data: Regulation 9/
methane from POME compared to the aerobic co-composting [61]
2006, 16/2008, 38/2008, 15/2012, 34/2014, 191/2014, 39/2014, 4/2015, 39/2015, 2/ and thus has higher environmental benefits.
2016, 4738/20. The annual costs and revenues are shown in Table 7. The cost of
68 F. Harahap et al. / Energy 170 (2019) 62e72

Table 6
Capital cost of Conventional System and Biorefinery Case 1 to Case 3*, based on quantity of biomass residues treated.

Unit Biomass conversion options % of biomass residues utilised Production per year Total capital cost (Million USD)

Conventional System Palm oil mill 30 kt-CPO 6.02

Biodiesel plant 25 kt-biodiesel 1.48
Low efficiency biomass cogeneration KS: 2%** 3 GWh 1.04
Aerobic co-composting plant MF: 100% 14.4 kt-biofertiliser 0.80
Total 9.34
Biorefinery-Case 1 Palm oil mill 30 kt-CPO 6.02
Biodiesel plant 25 kt-biodiesel 1.11
Aerobic co-composting plant POME: 100%, EFB: 82% 14.4 kt-biofertiliser 0.80
High efficiency of biomass cogeneration plant KS: 100%, MF: 100%, EFB: 18% 21 GWh 16.20
Total 24.13
Biorefinery-Case 2 Palm oil mill 30 kt-CPO 6.02
Biodiesel plant 25 kt-biodiesel 1.11
Aerobic co-composting plant POME: 50%, EFB: 41% 7.2 kt-biofertiliser 0.49
Biogas plant e anaerobic covered lagoon POME: 50% 1.5 GWh 0.99
High efficiency of biomass cogeneration plant KS: 100%, MF: 100%, EFB: 59% 22 GWh 16.99
Total 25.61
Biorefinery-Case 3 Palm oil mill 30 kt-CPO 6.02
Biodiesel plant 25 kt-biodiesel 1.11
Biogas plant e anaerobic covered lagoon POME: 100% 3 GWh 1.61
High efficiency of biomass cogeneration plant KS: 100%, MF: 100%, EFB:100% 24 GWh 17.77
Total 26.51

Notes:
*see Figs. 2 and 3 for the schematic representation of the configurations.
**the remaining shells are sold to the market.

Table 7 household/y [64]. The system can obtain additional income of 14

Costs and revenues of the Conventional System and Biorefinery (Case 1 to Case 3), in USD/t-FFB compared to the Conventional System.
thousand-USD/y.

Items Conventional System Biorefinery

Case 1 Case 2 Case 3 4.2. Results of the economic analysis

Costs
Feedstock (i.e. FFB) 18,000 18,000 18,000 18,000 The NPV, PBP, and BBP of the Conventional System and Biorefinery
Diesel 1,426 12 12 6 Case 1 to Case 3 are shown in Fig. 4. Our analysis demonstrates that
Heavy fuel oil 426 e e e Biorefinery-Case 1 provides the highest net income (i.e. 25 Million
Transport cost 432 e e e USD/y) and NPV (i.e. 31 Million USD/y), lowest BBP (0.57 USD/l-
Methanol 1,241 1,241 1,241 1,241
Catalyst 261 261 261 261
biodiesel) and 17% IRR. The production of biodiesel from palm oil
Maintenance cost 52 4 4 4 mill in that unit is economically viable as the payback period 5.7
Annualised capital cost 1,290 2,414 2,539 2,616 years is less than one-third of the plant's life time (i.e. 25 years)
(a) Annual cost 23,126 21,933 22,058 22,128 [28]. Therefore, we identify Biorefinery-Case 1 as the most cost-
Revenues
effective configuration among the considered alternatives, or
Palm kernel 2,898 2,898 2,898 2,898
Biodiesel 18,896 18,896 18,896 18,896 the one that can enhance the economic competitiveness of palm oil
Glycerol 670 670 670 670 biodiesel production in Indonesia the most.
Electricity to grid e 902 1,135 1,369 The breakeven line in Fig. 5, which was configured based on BBP
Biofertiliser 1,265 1,265 632 e at different unit cost of FFB, represents the minimum selling price
(b) Annual income 23,729 24,631 24,232 23,832
for biodiesel at plant zero profit, that is, when costs are equal to
Annual net income (b) e (a) 602 2,699 2,174 1,704
revenues. The X-axis is biodiesel and diesel price and Y-axis is FFB
cost from January 2010 to April 2016. Palm oil based biodiesel is
profitable at FFB cost and diesel price below the line, whereas
values above the line represent unprofitable production. The graph
feedstock (i.e. FFB) is the item affecting the total cost the most, with
an average share of 80%. This is in line with other studies showing
that the feedstock affects production costs in a range of 50e80%
[28,62,63]. Cost reduction opportunities in the Biorefinery include
reduction of fossil energy costs for industrial operation (by utilising
on-site generated energy), reduction of transport cost of feedstock
to the biodiesel plant, reduction of material losses through imple-
mentation of high efficient biomass conversion technologies, and
increase value added for the biomass residues (i.e. selling excess
electricity and biofertiliser).
Selling biofertiliser and excess electricity to the grid results to
annual revenues which are highest in the Biorefinery-Case 1. This
unit supplies excess electricity of 10.6 GWh/y which, for instance,
can be used to electrify about 6000 households in Indonesia,
Fig. 4. Net income, NPV, payback period and biodiesel breakeven price of the Con-
assuming an average electricity consumption of 1.7 MWh/ ventional System and the Biorefinery Case 1 to Case 3.
 F. Harahap et al. / Energy 170 (2019) 62e72
Fig. 5. Historical FFB cost and diesel price, and biodiesel breakeven lines of Conven-
tional System and Biorefinery-Case 1. Notes: X-axis is diesel and biodiesel prices and Y-
axis is FFB cost from January 2010 to April 2016. Cost of FFB is proportionally linked to
CPO market price [57]. Price of diesel was obtained from various official policy docu-
ments. All prices data were converted to 2016 price.
shows that none of the historical prices of diesel and costs of FFB
falls below the breakeven lines. There are five points that nearly
intersect with the breakeven line of Biorefinery-Case 1 which were
from August 2015 to December 2015 when the diesel price was
around 0.48e0.5 USD/l (76e79 USD/barrel) and the FFB cost was
around 111e120 USD/t-FFB (or equal to 557e604 USD/t-CPO).
Market price of palm oil has rarely been low enough or diesel
prices high enough to make biodiesel profitable.
The most cost-effective plant configuration (Biorefinery-Case 1)
can help to reduce the level of fiscal support by 0.07 USD/l-
biodiesel. It can generate savings of 0.7 billion USD/y for meeting
the consumption target of 30% biodiesel blending rate with fossil
diesel by 2020 (or 10.11 billion litre of biodiesel2). In order to bring
the breakeven line further up, either plant revenues or the level of
fiscal support need to be increased. The effect of adding fiscal
support to the price of biodiesel is shown in Fig. 5. Fiscal support in
the range of 0.1e0.2 USD/l-biodiesel was provided from 2015 to
2016. When similar incentives were added, (represented by the
green and the blue lines in Fig. 5), the breakeven lines go up above a
few historical values, implying profitable biodiesel production at
FFB costs and diesel prices combination below the line.
The breakeven line can also be used to assess the maximum
price that the biodiesel producer can pay for the feedstock (i.e. FFB),
given the price of fossil diesel, which is the biodiesel substitute. At
50 USD/barrel (0.31 USD/l) of fossil diesel, the biodiesel producer
can afford to purchase feedstock for up to 76 USD/t-FFB in the
Biorefinery-Case 1 compared to 59 USD/t-FFB in the Conventional
System. When incentive of 0.2 USD/l-biodiesel is added, the bio-
diesel producer can afford 114 USD/t-FFB while still keeping the
biodiesel production profitable. The incentive given for biodiesel
produced in the Biorefinery provides support both for the industry
as well as oil palm farmers, but it is not a sustainable solution.
4.3. Effects of parameter changes: sensitivity analysis
We analysed the sensitivity of our comparative cost estimates to
external prices and technology capital cost, shown in Fig. 6. The
2
Authors calculation based on diesel fuel projection in 2025 of 43 billion litres
for transport and industry sectors [75] and biodiesel blending rate of 30% (Regu-
lation 12/2015). Energy content of diesel 35.8 MJ/l and for biodiesel 33 MJ/l [29].
69
Fig. 6. Sensitivity analyses on net income (Million USD/y) of Conventional System (CS)
and Biorefinery-Case 1 (BC1) with parameter change of 50%,-25%, þ25%, þ50% from
the base value on i) FFB cost; ii) biofertiliser; iii) bioelectricity price; iv) biodiesel price;
v) annualised capital cost.
description of key parameter changes and the variations is outlined
in Table 5. For the purpose of sensitivity analysis, the comparison
was performed for Conventional System and Biorefinery-Case 1 (the
most cost-effective system).
Fig. 6 reveals that the feedstock (i.e. FFB) cost and sale price of
biodiesel are the two parameters affect the net income the most.
The uncertainties of both parameters become the main driver of the
economic sustainability of the industry. The Conventional System is
more affected with the changes compared to the biorefinery
configurations.
5. Conclusions
Our analysis identified Biorefinery-Case 1 to be the most cost-
effective plant configuration, offering new economic opportu-
nities for the palm oil biodiesel industry in Indonesia. The Bio-
refinery-Case 1 is an improved system that simultaneously
produces biodiesel, electricity, heat and biofertiliser. It converts
100% of mill effluents and 82% of empty fruit bunches into bio-
fertiliser. It also processes 18% empty fruit bunches, 100% shells and
100% fibres to produce energy, meeting on-site energy demand and
generating excess electricity to the grid. The most cost-effective
configuration (i.e Biorefinery-Case 1) provides the highest net in-
come and NPV and lowest BBP. It delivers net income and NPV four
times higher than the Conventional System. Producing and selling
biofertilisers create a new revenue flow compared to, for example,
the Biorefinery-Case 3 that does not have the biofertiliser produc-
tion. The additional revenues improve the mill's resilience to
feedstock prices, increasing the economic robustness in the sector.
The analysis reveals that the configuration with biogas plant for
methane capture (i.e. Biorefinery Case 2 and 3) is less cost-effective
due to the high capital cost of the technology. However, the system
can bring more environmental benefits due to higher emissions
reduction compared to the aerobic co-composting system, and can
contribute to increase electricity generation from biogas sources. If
carbon markets evolve, emissions reductions can add to the
attractiveness of biogas. For the time being, the analysis suggests
that a strategy may be needed if increased penetration of biogas
70 F. Harahap et al. / Energy 170 (2019) 62e72

technologies is aimed at for the mills. 4;125 MWh=y

Installed capacity ¼ 7008 ¼ 0.6 MW
The Biorefinery offers clear opportunities to reduce costs and
increase revenues in the biodiesel industry. The analysis of bio-
diesel breakeven price demonstrates that biodiesel dependency on
government subsidies for competing with fossil diesel can be Appendix B. Production of biofertiliser from EFB and POME
reduced if production is organised in biorefineries. Thus part of the in the Conventional System
subsidy budget could be directed to promote industrial integration
in the models discussed here. This would reduce the industry's POME to FFB ratio ¼ 0.6 m3-POME/t-FFB (Ref. field visit)
vulnerability to diesel price fluctuations and make it more Quantity of waste water ¼ 90,000 m3 POME/y
competitive. In the short term, biodiesel market expansion will be POME to EFB ratio ¼ 3.2 m3-POME/t-EFB (Ref. [34,35])
90;000 m3 POME=y
limited in the absence of government incentives unless high diesel EFB ¼ 3:2 m3POME=tEFB ¼ 28,125 t-EFB/y
prices or low feedstock costs prevail. In the meantime, infrastruc- COD POME ¼ 55,000 mg/L (Ref. field visit)
ture support such as connection to the electricity grid, which most POME solids content ¼ 40,000 mg/L (Ref. [65])
conventional palm oil mills currently do not have, needs to be POME moisture ¼ 96% (Ref. [51])
established to support the shift towards biorefineries as well as the EFB moisture ¼ 57.2% (Ref. [66])
possibility to market excess electricity. Compost moisture ¼ 35% (Ref. [51])
This study focused on present system performance and Dry matter loss during composting ¼ 60% (Ref. [51])
improved biomass conversion technologies. The upgrade of exist-
Dry matter POME ¼ 90;000 m3 POME=y 109
40;000 mg=L
¼ 3600 t-dry
ing systems is in line with the current regulatory frameworks, and
POME/y
is a starting point towards more complex biorefinery systems. Yet,
Dry matter EFB ¼ 28,125 t-EFB/y * (1e57.2%) ¼ 12,038 t-dry EFB/
there is need to do more in order to reduce the barriers for in-
y
dustrial transformation, and accelerate policy implementation.
Total dry matter POME þ EFB, considering losses during
Eventually, the shift to a modern facility with value chain integra-
composting¼ (3600 t-dry POME/y þ 12,038 t-dryEFB/y) *
tion as explored in this study can contribute to secure feedstock
60% ¼ 9382 t/y
supply, reducing transport, enhancing penetration of renewable
Total biofertiliser produced ¼ 9382 t/y * (1e35%) ¼ 14,435 t-
energy in Indonesia, and making the whole integrated system more
biofertiliser/y ¼ 96.23 kg-biofertiliser/t-FFB
energy and carbon efficient. All together, these benefits contribute
to various policy objectives, and to the country's climate
commitments.
Future studies should explore ways not only to improve the Appendix C. Quantity of diesel and Heavy Fuel Oil (HFO) for
biodiesel cost-competitiveness in Indonesia but also to accelerate electricity and steam requirements in the biodiesel plant of
policy compliance. That can include exploring second-generation the Conventional System
bioethanol, production of pellets and methanol, together with
market creation for these products. It may also review pricing Biodiesel plant capacity ¼ 28,500 kL-biodiesel/y ¼ 25,080 t-bio-
policies for feedstock, biodiesel and fossil diesel, or evaluate elec- diesel/y
tricity tariffs from bioenergy sources, which can serve to promote Density of biodiesel ¼ 0.88 kg/L (Ref. [29])
both electricity and biodiesel production in the country. LHV of diesel oil ¼ 42.8 MJ/kg (Ref. [29])
Finally, while this study discusses improvement opportunities Density of diesel oil ¼ 0.837 kg/litre (Ref. [29])
in a typical palm oil mill, future work could incorporate geospatial Electricity demand
location of the existing mills in Indonesia to identify mills and areas Electricity demand of biodiesel plant ¼ 0.27 kWh/kg-biodiesel
that are most attractive to be upgraded as Biorefineries for biodiesel (Ref. derived from average value [10,31,32])
production, also considering the possibility to receive feedstock Annual electricity demand ¼ 0.27 kWh/kg-biodiesel * 25,080 t-
from other mills in the same area. biodiesel/y * 1000 ¼ 6855 MWh/y
Efficiency of diesel generator ¼ 30%
Acknowledgements Generator operating hours ¼ 7008 h/y
6;855 MWh=y
Gross electricity demand ¼ 30% ¼ 22,851 MWh/
This study is developed as part of the INSISTS cooperation y ¼ 82 TJ/y
(Indonesian Swedish Initiative for Sustainable Energy Solutions). Capacity of diesel generator ¼ 22;85 MWh=y
¼ 3.26 MW
7008
The authors would like to thank you Indonesian Oil Palm Research 82 TJy*106
Institute (IOPRI) for facilitating the field work. This work was Diesel consumption ¼ 42:8 MJ=kg0:837 kg=litre
¼ 2,296,383 l-
supported by the Swedish Energy Agency [T6473]. The analysis was diesel/y
carried out independently. Steam demand
Steam demand of biodiesel plant ¼ 1360 MJ/t-biodiesel
Appendix A. Installed capacity of low efficiency biomass (Ref. [32,33])
cogeneration in the Conventional System LHV of HFO ¼ 41 MJ/kg
Density of HFO ¼ 0.988 kg/l-HFO
Cogeneration plant capacity factor ¼ 80% Boiler capacity ¼ 2 t/h
Cogeneration plant operating hours ¼ 7008 Boiler efficiency ¼ 90%
Electrical efficiency ¼ 16% Operating hours ¼ 7008 h/y
Electricity demand of palm oil mill ¼ 22 kWh-e/t-FFB (Ref. field Enthalpy of water at 100degC, 3100kPA ¼ 42 MJ/t (Ref. enthalpy
visit) table)
Annual net electricity demand ¼ 2 ht 42 MJ 7008 hy
Annual enthalpy of feedwater ¼ t
^ ¼ 6 TJ/y
22 kWh electricity =tFFB  150;000 tFFB=year 106
1000 ¼ 3300 MWh/y Enthalpy of water at 300degC, 3000 kPA (31 bar) ¼ 2991 MJ/t
Gross electricity demand ¼ 3;30080% MWh=y
¼ 4125 MWh/y (Ref. enthalpy table)
 F. Harahap et al. / Energy 170 (2019) 62e72 71

2 ht 2991 MJ 7008 hy Appendix F. Capital cost and installed capacity of the

Annual enthalpy of feedwater ¼ t
^ ¼ 42 TJ/y
106 reference equipment
42 TJy6TJ
Annual energy demand ¼ 90%
y
¼ 40 TJ/y
40 TJy*106 Table F.1Capital cost and installed capacity of the reference equipment.
HFO consumption ¼ ¼ 988,039 L-HFO/y
41 MJ
kg
kg
*0:988 litre
Technology Capital cost of the Installed capacity of Reference
reference equipment the reference
(Million USD) equipment

Appendix D. Calculation of electricity production and Palm oil mill 6.02 30 t-FFB/h [71,72]
Biodiesel plant 12 50,000 t-biodiesel/y [73]
installed capacity of biogas plant in Biorefinery-Case 3
Low efficiency 10.69 7.68 MW [74]
biomass
POME to FFB ratio ¼ 0.6 m3-POME/t-FFB (Ref. field visit) cogenerationa
Quantity of waste water ¼ 90,000 m3 POME/y Aerobic co- 0.6 9563 t-wet-compost [51]
COD POME ¼ 55,000 mg/L ¼ 0.055 t-COD/m3 (Ref. field visit) composting
plantb
Methane density ¼ 0.716 kg-CH4/m3-CH4 (Ref. [67]) Biogas plant - 2.87 1.2 MW [7]
Methane yield ¼ 0.252 t-CH4/t-COD (Ref. [68]) anaerobic
Methane conversion factor ¼ 0.8 (Ref. [67]) covered lagoonc
Uncertainty factor ¼ 0.9 (Ref. [68]) High efficiency 30.5 9.2 MW [70]
biomass
Methane energy content ¼ 35.9 MJ/Nm3 (Ref. [67])
cogenerationd
Conversion from MJ to kWh ¼ 3.6 MJ/kWh (Ref. [29])
Lagoon COD efficiency ¼ 98% (Ref. [69]) Notes:
a
Capital cost consists of cogeneration plant with low pressure boiler.
Electrical efficiency ¼ 30% b
Capital cost includes equipment cost.
Plant operating hours ¼ 7008 h/y c
Capital cost includes digester (covered lagoon), scrubber, dehumidifier biogas,
Annual methane production ¼ 90,000 m3 POME/y * 0.055 t- gas engine, boiler, biogas flare.
d
COD/m3 * 0.252 t-CH4/t-COD * 0.8 * 0.9 * 98% ¼ 880 t-methane/ Capital cost includes cogeneration plant with high pressure boiler, including EFB
pre-treatment plant. Data from literature are adjusted for inflation to 2016 price,
y
MJ
using Indonesia GDP deflator (Bank of Indonesia) Exchange rate 1 USD ¼ 13,000
880 tmethane 30%35:9 Nm3
Gross electricity generation ¼ y
kgCH4 MJ
Indonesian Rupiah (local currency)
0:716 m3CH4 3:6 kWh
¼ 2942 MWh/y
2;942 MWh=y References
Installed capacity of biogas plant ¼ 7008 h=y
¼ 0.52 MW

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