タイトル

Shimizu CorporationGHG Project Department

Hiroyuki KURITA

Biomass Power Generation Project in the State-owned Palm Oil Mills”

Sub-titleBiomass Power Generation Project in Sei MangkeiSpecial Economic Zone（SEZ）, North Sumatra(Studies for Project Development and Organization )

The target of study is to plan the introduction of Indonesia’s first small CFB (circulating fluidized bed) boiler technology and torealize commercial biomass power generation.

“Biomass Power Generation Project in Indonesian State-owned Palm Oil Mills” (Studies for Project Development and Organization ) Company proposed： Shimizu Corporation

(1) Planning of overall facilities and evaluation of project profitability

(2) Study of project scheme, project plan and risk countermeasures

(3) Preparation of MRV methodology and review of methodology applicability

(4) Environmental impact and stakeholders’ comments

(5) Discussions with related agencies

○(Indonesia) PTPNⅢ

（Host Country Counterpart）

○ (Indonesia) North Sumatra Province

EFB (empty fruit bunch) is an unused biomass resource in palm oil mills. It will be collected and utilized to generate power, which is supplied to industrial estates. As a result, the ratio of biomass used in domestic primary energy will be enhanced and this will contribute to NAMAs.

Purchased power Reduetion

of CO2 emissions

Current situation

CO2 emissions

- Power is supplied from the grid or generated by fossil fuels at the industrial estates.

- EFB is returned to palm fields close to the palm oil mill.

- Since part of the purchased power is substituted by power generated from biomass, emissions of CO2 derived from fuel at grid power stations is reduced.

- Auxiliary fuel for boiler and fuel for transportation of biomass are the project emissions.

Fossil fuel

Afterintroduction

NEDO’s Feasibility Studies with the Aim of Developing a Joint Crediting Mechanism (JCM) Country： Indonesia Sector：Biomass

Survey Items

Survey in Summary

Estimated Reduction amount

Partner / Site

Reduction amount；57,500tCO2/yReference scenario Emission reductions by project

Amount of Palm-oil Production

0

10000

20000

30000

40000

50000

60000

2005 2006 2007 2008 2009 2010 2011 2012

Amou

nt (×

1000

t)

Year

OtherMalaysia

Indonesia

Industrial Waste from Palm-oil Mill

FFB

EFB

Shell

Fiber

CPO

PKOProduct

Use Rate

0%

30～40%

100%

Water Content 75%Treatment 50%

LHV 7.75MJ/kg

FFB

FiberShell

EFB

FFB : Fresh Fruit BunchEFB : Empty Fruit BunchCPO : Crude Palm OilPKO : Palm Kernel Oil

Small CFB boiler power generation system: 12 MW

This Japanese low-carbon technology, which is unprecedented in the world, utilizes a compact (6 MW per boiler) fluidized bed (CFB) boiler for generating power from biomass. This has been developed for efficient power generation based on stably combusting EFB (empty fruit bunch of palm), which is fuel comprising high water content (50%) and large size (around 30 cm). The technology has undergone continuous combustion testing on the pilot level and is at the point where it can stand up to commercial operation. Conventionally, fibers and shells comprising low water content (20~30%) and small size (no more than a few centimeters) were used in small private generation stokers in mills, however, such equipment sometimes cannot be used with EFB because much of the fuel is not combusted and it is necessary to make frequent maintenance stoppages. The abovementioned CFB boiler has been packaged and its costs have been cut until it is now deemed to be internationally competitive in general assessments of technology, price and environment. The area around Medan in North Sumatra has been selected as the project site because it offers excellent road conditions and a high concentration of palm mills that will make it possible to achieve the cheap and stable transportation of fuel. Moreover, through conducting a joint project with a state-owned plantation corporation, it is intended to remove barriers to the biomass power generation business and realize stable commercial operation.

Summary of Introduced Technology

NEDO’s Feasibility Studies with the Aim of Developing a Joint Crediting Mechanism (JCM) Country： Indonesia Sector：Biomass

CFB Boiler over Grate Boiler

CFB : Circulating Fluidized Bed

Contents of the Feasibility Studies

NEDO’s Feasibility Studies with the Aim of Developing a Joint Crediting Mechanism (JCM) Country： Indonesia Sector： Biomass

Planning of overall facilities and

evaluation of project profitability

Project site: Sei Mangkei Special Economic Zone , Industrial Estate･Designated under the Indonesia Economic Development Acceleration and Expansion

Plan (MP3EI) ･The first phase zone of 104 ha, out of the overall estate area of 2,002 ha, is under

construction. ･3.8 ha is planned as a biomass power plant area

Power : Sold to the industrial estate management company

Fuel (EFB):Colleced from 5 nearby mills (250,000~300,000t/y)

Equipment : (CFB boiler + 6MW steam turbine generator) x 2Pretreatment equipment (dewater, cutting)

Power sale price: around 975Rp/kWh (FIT is projected)

Preferential measures: Reduction of import tax, partial exemption of profit tax, etc.

Study of project scheme, project

plan and risk countermeasures

Counterpart：PTPN3

Project style: Joint venture by PTPN3 and the Japanese consortium

Partner selection: Direct Selection

PTPNⅠ

　　　　Ⅱ

　　　　Ⅲ

　　　　Ⅳ

　　　　Ⅴ

　　　　Ⅵ

　　　　Ⅶ

　　　　Ⅷ

　　　　ⅩⅢ

　　　　ⅩⅣ

PTPN RNI

400km0 200

Luwu, PTPN14

SamuntaiMunggukLong Pinang

Parindu

Rimba BeliauMeliau H.

Ngabang

：Initial Project Area Suitable

Potential Map in 2011-FS

Excluding own consumption

Phase Ⅰ Ⅱ ⅢTotal

(2013-2014) (2015-2020） (2021-2025)

GeneratingCapacity

47MW 38MW 50MW 135MW

EmissionReduction

274,000 t-CO2/y 221,000 t-CO2/y 291,000 t-CO2/y 786,000 t-CO2/y

KEK SEI MANGKEI

February 2012: PP No.29/2012 for KAWASAN EKONOMI KHUSUS SEI MANGKEI

PP : Peraturan Pemerintah (Governmental Regulation)

MEDAN

KEKSEI MANGKEI

・140km from MEDAN・40km from Port Kuala Tanjung・2,002Ha approved as KEK(SEZ : Special Economic Zone)

SITE LOCATION

Port KualaTanjung

Area of Phase Ⅰ（104HA)

Regency of SIMALUNGUNNorth SUMATERA Province,INDONESIA

Possible Power Plant Area（A= 3.8HA）

Existing Entity and Facilities in KEK Sei Mangkei

PTPNⅢ Headquarter in Medan Office of Management Unit for Sei Mangkei

Main Street of KEK

Intake from RiverBar Borong

POM Sei Mangkei（75ｔ/ｈ） Under Construction of MOI Center

Plant side view

Fuel supply facilityBoiler

Key Result and Outcome

NEDO’s Feasibility Studies with the Aim of Developing a Joint Crediting Mechanism (JCM) Country： Indonesia Sector：Biomass

MRV Methodologies and Estimated Emission Reduction

Economic Viabilities, Financial Approaches, Prospect for the Project etc…

The base CDM methodology (ACM0006) is complicated and hard to understand due to its general applicability.

Results of examination implemented (tentative):・Initial investment cost ：$33.1M・Operational cost : $3.48M/y・Revenue

Income from power sales: $7.67M/yCredit income ＠€10/t-CER : $0.7M/y

・IRR = 9％（without Carbon Credit）12％ （with Carbon Credit）

・Pay back period : 7.1 years (without Carbon Credit ）6.2 years（with Carbon Credit ）

Issues in project actualization・JCM capacity building ・Support from the governments of Japan and Indonesia

MRV・Focused only on green field projects ・Simplified the calculation of fuel consumption for

transportation ・Used the methodology format for domestic

emissions trading

Expected reduction in emissions: 57,500t-CO2/year

Finance:Own funding + other company funding + Government of Japan aid system

BOT system is to be proposed

• All Fiber and a part of Shell are utilized for power and steam at almost all the POMs(Palm Oil Mills) by stoker type boiler, and EFB is returned to Palm plantation by its high water contents

• Composting projects and waste-to-energy projects for EFB with Shell have been commenced in a few POMs, but EFB(100%)-CFB Boiler is not introduced

Reference Scenario : BAU

Project Activities• EFB will be collected from several POMs to one site, and then CFB Boiler

Plant will supply power to SEZ Sei Mangkei• Emission Reduction（ER） of the Project is calculated by following

(the reduction of fossil fuel in the Grid system) - (fuel use for EFB transportation)

to GRID(PLN) Regulator Turbine &

GeneratorBoiler

Crusher

Conveyer

Dryer &Stock-yard

to GRID(PLN) Regulator Turbine &

GeneratorBoiler

EFB

Fiber

Shell

POM

SteamElectricity

Project boundary

×5 sitesAuxiliary Generator Diesel

Auxiliary Generator Diesel

Fossil Fuel

Fossil Fuel

ELPJ,y QEFB,y

FFag,y

FFaux,y

Monitoring Plan for the Project

Formula Monitoring Items

1 ELPJ,y Project Generation of Electric Power(MWh)

2 FFag,y Fossil Fuel Use of Stand-by Diesel Engine Generator(ton)

3 FFaux,y Fossil Fuel Use for Boiler Start-up(ton)

4 QEFB,y Transportation Volume for EFB(ton)

Emission Reduction

Reference emission (REy ): 60,103tCO2/yREy＝ELPJ,y×EFgrid,y

Power sales(ELPJ,y) : 80,352 MWh/yEmission factor(EFgrid,y) : 0.748 tCO2/MWh

Project emission(PEy) : 2,522tCO2/yPEy＝PEtrans,y＋PEaux,y＋PEag,y

Emissions arising from transportation(PEtrans,y) : 2,506tCO2/y

Emissions arising from use of combustion improver(PEaux,y) :5tCO2/y

Emissions arising from operation of the auxiliary generator(PEag,y) :11tCO2/y

Emission Reduction : 57,581tCO2/y

Expected Implementation Schedule

＃ Jan Feb Mar Apr May Jun Jul Sep Oct Nov Dec J F M A M J J S O N D J F M

1 NEDO-FS

2 Opening Seremony MOI Center ●3 Unilever Pile Driving Event ●4 FS Reporting ◎5 Bilateral Agreement for JCM ◎6 Capacity Build. of JC/Related Regulations ◎7 Emarging a New Carbon Market8 Japanese Consortium Formation9 SHIMIZU Proposal to PTPN3

10 Selective Procedure by PTPN311 MOU　Conclusion ◎12 Nego. and Conclusion/JV Agreement ◎13 Preparation of UKL-UPL14 Procurement of EPC15 Detailed Design16 Manufacturing/Installment of CFB Boiler17 Plant Test-run/Inspection18 Operation Start　of PLTBS19 Application to JC as a JCM Project20 Approvar and Registeration of the JV

JCM: Joint Crediting Mechanism between Indonesia and JapanJC : Joint Committee for JCM#20: Approval is necessary by Miniter of KBUMN for JV

2015Activities Items

2013 2014

・Operation Start : January 2015

・Commencement of Construction : September 2013

PLTBS:12MW

Further Supports by Indonesian and Japanese Government

National Energy Mix 25/25

Indonesia NAMAsER:-41 by 2020

Renewable Energy80 GWH/year

345kt-CO2e

JapaneseLow-Carbon Technology

CFB Boiler with Environmental

Integrity

Palm Oil Sector

250 kt/y-EFB(=Fuel)-Land-H. Resources-Others

:Utilization

:Contributionsto be expected

Development/Palm Oil Downstream Industry

SEZ Sei MangkeiSumatra Economic Corridor

MP3EI

TechnologyTransfer

Financial Mixture:SOEs, Private & (Gov.)

$33-35m.

Financial Instruments Support;Taxes, Duty & Feed-in Tariff

Rp.975/kWh

How to Contact Us

TERIMA KASIH

GHG Project DepartmentShimizu CorporationNo.16-1, Kyobashi 2-chome,Chuo-ku, Tokyo 105-8007, JapanTEL：+81-3-3561-4310FAX：+81-3-3561-8519http://www.shimz.co.jp/english/index.html

Mr. Hiroyuki KURITA, General Managerkurita@shimz.co.jp

Mr. Kazuhide MARUYAMA, ManagerKazuhide_maruyama@shimz.co.jp

Mr. Sueo MORI, Managermoris@shimz.co.jp

Our new head office in Tokyo