Draft Final Report

PROMOTION OF RENEWABLE ENERGY,

ENERGY EFFICIENCY AND GREENHOUSE GAS ABATEMENT
(PREGA)

Indonesia

Utilization of Biogas Generated from

the Anaerobic Treatment of Palm Oil
Mills Effluent (POME) as Indigenous
Energy Source for Rural Energy
Supply and Electrification
A Pre-Feasibility Study Report1

June 2004

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Prepared by the National Technical Experts from P.T. Chazaro Gerbang Internasional.
Table of Contents
Table of Contents .................................................................................................................. ii
List of Figures ...................................................................................................................... iv
List of Tables........................................................................................................................ iv
List of Abbreviations..............................................................................................................v
1 Executive Summary .......................................................................................................1
2 Map of the Project..........................................................................................................3
3 Introduction ....................................................................................................................4
4 Background ....................................................................................................................4
4.1 Sector Description ..................................................................................................5
4.2 Constraints and issues related to the project sector................................................5
4.3 Sustainable development objectives ......................................................................5
4.4 Government policy and strategy relevant to the project sector..............................6
4.5 Overlap of the government’s and ADB’s policies and strategies in this sector.....6
4.6 Benefits of the project ............................................................................................7
5 General Description of the Proposed Project .................................................................8
5.1 About the Project....................................................................................................8
5.2 Project goal.............................................................................................................8
5.3 Project objective.....................................................................................................8
5.4 Poverty reduction ...................................................................................................8
5.5 Technology transfer ...............................................................................................9
5.6 Project partners.......................................................................................................9
5.7 Product or service generated by the project ...........................................................9
6 Project Implementation Plan ........................................................................................10
7 Contribution to Sustainable Development ...................................................................10
7.1 Long-term GHG and local pollutants reduction...................................................10
7.2 Other benefits .......................................................................................................10
8 Project Baseline and GHG Abatement Calculation .....................................................11
8.1 Current production and delivery patterns.............................................................11
8.2 Project boundary and monitoring domain............................................................13
8.3 Baseline methodology and calculation of the baseline emissions .......................13
8.4 Calculation of total project GHG emissions and net emission reduction ............14
9 GHG emission reduction monitoring and verification.................................................16

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10 Financial Analysis of the Project .............................................................................16
10.1 Estimation of Overall Cost Estimates ..................................................................16
10.2 Project Financial Analyses ...................................................................................16
10.3 Financing Plan......................................................................................................17
11 Economic Analyses..................................................................................................18
11.1 Project Economic Analysis ..................................................................................18
11.2 Statement of poverty reduction impact ................................................................18
12 Stakeholders’ comments ..........................................................................................18
12.1 Invitation letters to the Stakeholders....................................................................18
12.2 Comments on the Project by above stakeholders.................................................18
13 Key factors impacting project & baseline emissions ...............................................19
13.1 Key Factors ..........................................................................................................19
13.2 Project Uncertainties ............................................................................................20
14 Conclusion and Recommendation............................................................................20
Annex 1 Technical Analyses...................................................................................Annex 1-1
Annex 2 Financial and Economic Analyses............................................................Annex 2-1

iii
List of Figures
Figure 1 Map of the project location......................................................................................3
Figure 2 Flow chart of current production and delivery patterns.........................................12
Figure 3 Schematic diagram of project boundary ................................................................13
Figure 4 Concept for Integrated Waste Water Treatment (palm oil mill with 2 separators)Annex 1-2
Figure 5 Configuration of pilot plant (D1 active digester, D2 in standby mode) ...Annex 1-4
Figure 6 System for flotation test............................................................................Annex 1-7
Figure 7 Efficiency as function of COD-loading rate based on COD-dissolved ....Annex 1-9
Figure 8 Comparison of sludge profiles in digester D1 and D2 ...........................Annex 1-10
Figure 9 The velocity of flotation and sedimentation ...........................................Annex 1-11

List of Tables
Table 1 Parameters for estimating CH4 emission from POME...........................................14
Table 2 Parameters for estimating GHG emission by fossil fuel consumption ...................14
Table 3 Baseline emission from the project activity ............................................................15
Table 4 Data to be collected in order to monitor emission from the project activity ..........16
Table 5 Financing Plan.........................................................................................................17
Table 6 Composition of Waste Water.....................................................................Annex 1-3
Table 7 Specific data of the support material..........................................................Annex 1-5
Table 8 Data of Digester D1 in up flow mode ........................................................Annex 1-7
Table 9 Result evaluation for digester D1...............................................................Annex 1-7
Table 10 Data Digester D2 down flow mode..........................................................Annex 1-8
Table 11 Result of evaluation for digester D2 ........................................................Annex 1-8
Table 12 Analytical Data ......................................................................................Annex 1-11
Table 13 Nutrient content of POME .....................................................................Annex 1-12
Table 14 Mass Balance of Kjeldahl-N ..................................................................Annex 1-12
Table 15 Summary of Technical and Financial Parameters....................................Annex 2-1
Table 16 Weighted Average of Capital Cost ..........................................................Annex 2-2
Table 17 Financial and Economic Price..................................................................Annex 2-3
Table 18 Financial Analysis....................................................................................Annex 2-4
Table 19 Economic Analysis ..................................................................................Annex 2-5

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List of Abbreviations
ADB Asian Development Bank
ALGAS Asia Least-cost Greenhouse gas Abatement Strategy
BOD Biological Oxygen Demand
BPPT Badan Pengkajian dan Penerapan Teknologi
(Agency for Assessment and Application of Technology)
CDM Clean Development Mechanism
COD Chemical Oxygen Demand
CPO Crude Palm Oil
EFB Empty Fruit Bunch
FFB Fresh Fruit Bunch
GHG Greenhouse Gasses
GoI Government of Indonesia
IPB Institut Pertanian Bogor (Bogor Institute of Agriculture)
IPCC International Panel of Climate Change
IOPRI Indonesian Oil Palm Research Institute
MPR Majelis Permusyawaratan Rakyat
PLN Perusahaan Listrik Negara
POME Palm Oil Mill Effluent
PTPN Perseroan Terbatas Perkebunan Nusantara
(Nusantara State Enterprise for Estate Crops)
UNFCCC United Nations Framework Convention on Climate Change
WACC Weighted Average of Capital Cost

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1 Executive Summary
Site Development Rationale
The problems associated with aerobic treatment of palm oil mill effluent (POME) using a
pond system are long retention time (90-120 days), large area required, high demand for
maintenance, loss of nutrition and high emission of methane. With the increased
worldwide concern on environmentally friendly production processes particularly the
greenhouse gas (GHG) emission of methane, it is important to develop an alternative
concept for POME treatment.
With more efficient POME treatment plant, it is expected that large pond can be reduced
significantly. In addition, the process will easily tap the generated methane gas (biogas)
and utilize it for electricity generation.
Objective
The project goal is promoting environmentally friendly and clean palm oil production
process. This goal in the long term will increase the value of Indonesia’s palm oil products
thus increasing product competitiveness. Having more competitive product means that in
the future, the palm oil industry can become one of Indonesia’s main income generating
industries. Other than that the project will achieve the following targets:
a. Implementing better POME treatment using Anaerobic Treatment Plant
b. Introducing better use of POME treatment products.
Technical Description
The proposed concept will consist of the following components:
• Sludge separation system
• Fixed Bed Anaerobic Digestion system (with CH4 capturing capability: 0.56 m3
biogas/kg COD degraded or 15,400 m3 CH4/day)
• Thermal drying unit
• Composting unit
• Biogas fuelled generation set with installed capacity of 1900 kW.
Solid material will be separated from the fresh POME using the so-called dissolved
floatation separator. Dissolved floatation seems to be suitable for the separation of sludge
from fresh POME. Almost all the suspended solids can be removed and the liquid phase
contained less Chemical Oxygen Demand [COD (30 – 50 mg/L)] and nitrogen (60 – 70
mg/L). The fixed bed digester was successfully applied for the anaerobic treatment of
POME. Approximately 90% of the dissolved COD can be degraded and transformed to
useable biogas. The effluent contained COD ranging between 1500 – 4000 mg/L, which
can be directly used for land application. In addition, a specific electricity production of
26 kWh per ton Fresh Fruit Bunch (FFB) can be expected if all of the biogas is used by a
gas fuelled generating set.
Output of the Project
The project will be able to treat POME more efficiently than the former method of
treatment. The system will be able to degrade 90% of dissolved COD and transform it to
biogas. Biogas production is 15,400 m3 CH4 per day.

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The project will surely reduce COD to 30-50% of original condition. The project will also
be able to reduce Nitrogen content to 60-70% of original concentration. Besides reducing
environmental load, the project will generate organic fertiliser, compost, and also nutrient
rich slurry that can generate more income.
The electricity production will reduce the current use of diesel fuel and can be supplied to
the grid. The annual power generated will be used 900 MWh own use, while the rest
13,980 MWh will be supplied to the grid. The income from electricity selling will be
around US$ 699,067.
CO2 reduction due the project can reach 70,953 tonnes per year.
Benefit of the Project
There are many benefits of the project. The environmental benefit consists of: reduction of
environmental load from effluent, less use of synthetic fertiliser and more organic
fertiliser, less land is used for POME treatment and of course GHG gas recovery.
There are also social benefits such as more job opportunities for operators and plantation
workers. Selling electricity will indirectly increase workers’ welfare through increase of
wages, annual bonuses, etc.
Conclusion
The project is financially and economically feasible. Technically, the project will improve
the performance of POME treatment and in general will improve the quality of the
environment. The product value of crude palm oil (CPO) will be higher because it will be
environmentally friendly CPO.
The project is financially feasible. At the discount factor of 12%, it provides the FIRR
with- and without certified emission reduction (CER) of 29,92% and 17%, respectively.
Similarly, it generates EIRR with- and without CER of respectively 29,78% and 19,32%.
Annual power generation is more or less 14,880 MWh, and the plant will use
approximately 900 MWh, and the rest will be fed to the grid. The electricity selling will
generate revenue as much as US$ 699,067.

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2 Map of the Project

Figure 1 Map of the project location

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3 Introduction
Wastewater treatment facility is one of the most important components in the palm oil
production. This facility is normally used to treat a large volume of POME generated
during the production of CPO before the effluent is safely discharged to the surrounding
environment through water canal or river.
The project is proposed based on the request of palm oil mill factory belonging to PTPN
XIII located at Sanggau District, West Kalimantan province. The objective of the project
is to develop a more efficient POME treatment plant using an anaerobic fixed bed reactor
and sludge separation. The produced methane gas will be used to generate electricity for
supplying the electricity need of the factory.
The PTPN XIII Palm Oil Mill factory at Sanggau processes about 60 tons FFB per hour
and produces approximately 13 tonnes (22% of FFB) of CPO per hour. With the
conventional pond system it will require 7-10 Ha area to process of POME in order to
safely discharge the already treated POME to the environment.
The process technology will be adopted from the extensive research and development on
new process for POME treatment using anaerobic fixed bed reactor and sludge separation.
The Indonesian Oil Palm Research Institute (IOPRI), Medan in cooperation with UTEC
GmbH, Germany, conducted this research2.

4 Background
There is currently a worldwide discussion about environmentally friendly production
processes (e.g. zero waste concept, integrated waste management, etc.), with the aim to
defining standards for an eco label.
In view to the requirements of an eco label, there are needs for:
• Minimisation of emissions,
• Utilization of nutrients,
• Utilization of renewable energy sources (such as biomass); the pond system is not
acceptable in its current existing form.
The problems associated with aerobic treatment of POME using a pond system are long
retention time (90-120 days), large area requirement, high demand for maintenance, loss
of nutrition and high emission of methane. Specifically, the generated POME is
approximately 3.8 m3 for each ton of Crude Palm Oil produced. Thus the factory with
limited land availability will face a hard problem in managing POME.
With the above-mentioned worldwide concern on environmentally friendly production
processes particularly the emission of methane, it is important to develop an alternative
and efficient concept for POME treatment.

2
Presented on Palm Oil Workshop on Integrated Management and Environmentally Sound of Palm Oil Mill
Industrial Waste (Penanganan Terpadu Limbah Industri Kelapa Sawit yang Berwawasan Lingkungan),
Medan, 2000.

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4.1 Sector Description
World consumption for palm oil in 1993-1997 was around 92.03 million tonnes and this
number is expected to grow to 117.88 million tonnes in 2003-2007. Indonesia as the
second largest palm oil producer can only supply around 6 million tonnes CPO while
Malaysia can supply more or less 8-9 million tonnes of CPO.
Indonesia is expected to be the largest CPO producer in the world. The developments
below show this tendency:
a. There is continual land conversion to palm plantation in Indonesia while Malaysia
suffers from land limitation. Palm plantation area in 183 was around 405,600 ha,
while in 1995 the number reaches 1,952,000 ha
b. The plantations are relatively young so in the next 15 years they will produce CPO
at maximum
c. Production of CPO also increases. In 1983 the total production reached 983,000
tonnes, in 1994 it reached 4,000,000 tonnes, and in 1999 the CPO production
reached 5.9 million tonnes.
Palm oil in the future might become one of Indonesia’s main source of income in the
agriculture sector, thus the palm oil industry deserves greater attention.

4.2 Constraints and issues related to the project sector

In the Indonesia’s palm oil industry, the utilisation of biogas is new. This new technology
is not yet widely applied by plantations in Indonesia. In fact, there exists only a pilot plant.
Therefore, the first constraint is lack of technology dissemination.
The condition is worsened by the fact that to install such technology, a significant amount
of investment is needed. Compared to the currently applied wastewater treatment
technology, in short term the new technology is economically not feasible. Making the
condition worse is the environment awareness of plantations’ owners still low, despite
strong world demand for environment friendly products.
Although the government is supporting clean production concept for CPO production,
there is no “recommended” technology that is environmentally friendly and in the long-
term economically feasible. Being environmentally friendly and producer of biogas, the
POME anaerobic technology should be fully supported by the government.
Financing should not be a problem because palm oil industry is now in a very good
condition in terms of world pricing and production. The state owned plantation or private
plantation should be able to finance the development of the new technology.

4.3 Sustainable development objectives

Important contributions of the project to the sustainable development concept are:
environmental equity and social responsibility.
The new technology is proved to be able to reduce the land demand that was huge when
using old anaerobic pond technology. This fact means that available land could be used to
plant more palm tress. Less retention time of the new technology also gives impact to the
production of CPO. Production of CPO can be speeded up so that the plantation can
produce more CPO.

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Production of more CPO means more people are employed. This condition opens new job
market for the people in the surrounding area of the plantation. More jobs to the people
will improve the welfare of the community and also in the long term, the regional
economy. More jobs also mean that less people are in poverty or in other words more jobs
will reduce poverty.
The technology is proved to perform better than older POME treatment technology. This
means less pollutant loads are released to the environment. Less pollutant load will make
the environment able to regenerate naturally and less environmental damage will occur.
Better environment quality is for sure important for the future generation.

4.4 Government policy and strategy relevant to the project sector

The government of Indonesia (GoI) is supporting the development of palm oil industry.
GoI realises that palm oil industry is an important source of national income, so GoI
facilitates improvement in the sector. Environmental protection is one of the important
issues that GoI would like to address.
The world demands for CPO with inherent good environment quality. This means the
production process of CPO should be in line with environmental guidelines or no pollution
to the environment. GoI has implemented several strategies such as carrying capacity
policy and end of pipe policy. However, these two policies have not been performing very
well.
GoI finally realised that the approach should be more or less holistic. Holistic approach
will request every step of production to consider environment aspect. This holistic
approach is called clean production approach or zero emission approach.
In clean production approach, the producers should consider environmental aspect in
every step of the production line. The target is reducing pollution in every step and
improving efficiency. This approach should be used in combination with other policies i.e.
carrying capacity and end of pipe policies. The combination of approaches will result in
maximal environmental performance.
Cleaner production has some advantages such as:
a. There is economic benefit in the clean production practice because of efficiency
b. Prevent environmental damage and slowing down the degradation of environment
quality
c. Maintain and strengthen long-term economic development and competitiveness
d. Supporting the principle of environmental equity
e. Maintain the natural ecosystem and
f. Improving product’s competitiveness internationally.

4.5 Overlap of the government’s and ADB’s policies and strategies in this
sector
At the Earth Summit held in Rio de Janeiro in 1992, 155 countries signed the United
Nations Framework Convention on Climate Change (UNFCCC), which entered into effect
in 1994. The goal of the UNFCCC is to stabilize concentrations of carbon dioxide and
other greenhouse gases, and it calls on developed countries (including Russia and the

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countries of Eastern Europe), known as the Annex I Parties, to lead the way in taking steps
to cut down GHG emissions so that emissions in 2000 are at the same level as in 1990.
Indonesia signed the UNFCCC on June 5, 1992. On August 1, 1994, the President
approved the UNFCCC Ratification Law (Law No. 6/1994), and on August 23, 1994, the
instrument of ratification was submitted to the UN Secretary General and Indonesia
became a signatory country.
Indonesia signed the Kyoto Protocol in July 1998. Subsequently, the Environment
Minister established a National Committee on Climate Change and Environment to tackle
the problem of global warming. The translation of the Kyoto Protocol has now been
completed, and a translation certificate obtained from the UNFCCC. In the future, the LH
is to prepare a bill for ratification of the Protocol that will be submitted to the President via
the Ministry of Foreign Affairs. It is expected that the Majelis Permusyawaratan Rakyat
(MPR) ratify the Protocol after approval by the President.
Indonesia has drawn up a master plan for promoting the Clean Development Mechanism
(CDM) with support from Germany and the Netherlands, and although the members of the
above National Committee on Climate Change and Environment have been chosen, the
chairman has yet to be appointed. CDM approval procedures and an approval agency are
also lacking, and urgent action is required to establish the necessary agencies and
structures for the practical implementation and operation of CDM projects.

4.6 Benefits of the project

The project will benefit the environment very well. The application of improved POME
treatment plant will reduce pollutants concentration significantly. The treated water
effluent can be safely released to the water body.
Other benefits such as the production of compost and also organic fertilizer can improve
the economy of the people and the plantation owner. The use of organic fertilizer for
agriculture will improve the total environment quality not only for the area in the vicinity
of plantation but also other areas that are using fertilizer from the plantation.
The use of organic fertilizer will also reduce the dependency to synthetic fertilizer thus
reducing the dependency on fossil-based resources. In the long-term, this effort will
improve sustainable development in the area. The plantation will also be self- sustaining
by producing own organic fertilizer. Self-sustaining fertilizer demand will improve
economic condition of the plantation in general.
The community nearby can work in the plantation. As one of the impacts is more
production, more people can work, thus reducing unemployment rate and alleviating
poverty.
From the selling of electricity, the plantation will improve the cash flow. One ton of FFB
equals to 26 kWh of electricity from biogas per hour, the plantation can produce 60 tonnes
of FFB. That means that per hour, the plantation is potentially able to produce 1560 kWh
per hour. This is a significant number because for each kWh PLN can pay more or less
IDR 500. Producing own electricity will also benefit the plantation. There will be no
dependency on PLN or diesel generator. In general, the use of electricity from biogas will
reduce the emission of air pollutants especially GHG.

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5 General Description of the Proposed Project
5.1 About the Project
Project Title
Utilisation of Biogas Generated from the Anaerobic Treatment of Palm Oil Mills Effluent
(POME) as Indigenous Energy Source for Rural Energy Supply and Electrification
Location
Owner : PTPN XIII (PT. Perkebunan Nusantara XIII)
District : Sanggau
Province : West Kalimantan
Country : Indonesia

5.2 Project goal

As mentioned earlier, the palm oil industry will grow bigger in the future and as the
market needs environmentally friendly products, the palm oil industry should also produce
environmentally friendly products. Therefore the project goal is promoting clean and
environmentally friendly palm oil production process.
This goal in the long term will increase the value of Indonesia’s palm oil products thus
increasing the competitiveness of the product. Having more competitive product means
that in the future, the palm oil industry can become one of Indonesia’s main source of
income.
Promoting clean production also supports the principles of environmental equity.
Sustainable development principle says that the development should satisfy current need
without jeopardising future needs. Therefore environmental equity is one of the important
components.

5.3 Project objectives

Environmentally friendly palm oil production process consists of many components. Clean
production means that from the origin or raw material until the waste production,
environment considerations should be involved. One important component is waste
treatment because production efficiency can only reach around 20%-25% (In the case of
PTPN XIII is 22% of FFB is converted to CPO), so the objectives of the project:
a. Implementing better POME treatment using Anaerobic Treatment Plant
b. Introducing better use of POME treatment products.

5.4 Poverty reduction

The anaerobic treatment plant will need less land area, thus more land can be converted to
palm plantation. Increasing the plant area means increasing the number of palm trees,
increasing the need to maintain those palm trees, increasing production rate and finally
increasing the need of manpower.

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The indirect positive impact of anaerobic treatment plant is the opening of new job market.
More people can be employed by the plantation management, thus reducing
unemployment rate and in the long term, alleviating poverty in the area.

5.5 Technology transfer

The technology to be transferred through this project is the POME anaerobic treatment
plant technology. As mentioned earlier, IOPRI will cooperate with UTEC GmbH,
Germany.

5.6 Project partners

Current project partners are:
a. IOPRI (Indonesian Oil Palm Research Institute)
b. UTEC (Umwelt Technologie) GmbH, Germany
c. PTPN XIII, Sangau.
IOPRI and UTEC GmbH will be the technology agents. UTEC GmbH, which has the
technology, will transfer it to the experts in IOPRI. In the future, IOPRI experts should
disseminate the technology to all palm plantations in Indonesia.
PTPN XIII is the owner of the plantation. The bigger project will be installed at PTPN
XIII’s facility. PTPN XIII will also be the disseminating agent because every one in the
palm oil business should know the success story of this advanced POME treatment
utilisation.

5.7 Product or service generated by the project

From the process flow chart on Figure 4 in the Annex, there are 5 products to be
generated, namely: biogas, treated water, treated slurry, fertilizer, and compost. Treated
water will be released to the nearest water body. Treated slurry and fertilizer can be used
by the plantation or, especially for the fertilizer, can be sold outside to farmers or other
plantations. Compost can be used by the plantation it self. Another important product is
electricity from biogas.
For products that are dependent on ambient temperature such as fertilizer or compost, the
production rate will depend on the weather. When it is wet season, the production of
compost or fertilizer might be lower than in the dry season. The fertilizer and compost are
good organic materials for the soil and good for plants.
As the production rate is considered to be constant at 60 tonnes FFB per hour, then the
production of biogas should also be constant. This is assuming that the treatment plant
works at the same efficiency all the time. With such big production it is calculated that in
an hour the biogas plant could produce electricity equal to 1,560 kWh.
Higher or lower temperature might affect the performance of the anaerobic bed. For the
biogas production, lower temperature means less production of biogas and vice versa for
higher temperature. As the plantation location is in the tropical area then the temperature
difference is not so much to affect the production rate of biogas.

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6 Project Implementation Plan
The following project activities and milestones are foreseen:
• Survey, investigation, preparation of FS report Mid 2004
• Finalization of Technical Design and Engineering End 2004
• Construction of plant End 2005
• Starting commercial operation 2006

7 Contribution to Sustainable Development

7.1 Long-term GHG and local pollutants reduction
Methane (CH4) has higher warming potential than CO2 so recovering the CH4 will
significantly give positive impact to the environment. The CH4 generated will be used to
generate power. The current generation system in the area is using Diesel Generators then
the emission factor is 1 kg CO2/kWh electricity produced. Interconnecting the new system
to the grid means reducing possible CO2 emission from the operation of diesel generators.
The system will reduce GHG emissions of about 70,953 tonnes of CO2 equivalent. The
number will reach 1,135,248 tonnes of CO2 equivalent in 2022, after 15 years of operation
(lifetime of the system).

7.2 Other benefits

Less land will be used for POME treatment and treated effluent can be released to the
water body. Carrying capacity of the environment especially the water body will be
recovered because less pollutant is released.
Other benefits such as the production of compost and organic fertilizer also can improve
the economy of the people and or the plantation owner. The use of organic fertilizer for
agriculture will improve the total environment quality not only for the area in the vicinity
of plantation but also other areas that are using fertilizer from the plantation.
The use of organic fertilizer will also reduce the dependency to synthetic fertilizer thus
reducing the dependency on fossil-based resources. In the long-term, this effort will
improve sustainable development in the area. The plantation will also be self-sustaining by
producing its own organic fertilizer. Self-sustaining fertilizer demand will improve
economic condition of the plantation in general.
The community near the plantation can work for the plantation. Thus unemployment will
be reduced and poverty will be significantly alleviated.
From electricity selling, the plantation will improve the cash flow. One ton of FFB equals
to 26 kWh electricity from biogas and per hour the plantation can produce 60 tonnes of
FFB. That means per hour the plantation is potentially able to produce 1,560 kWh per
hour. This is a significant number because for each kWh PLN can pay more or less IDR
500. Producing own electricity will also benefit the plantation. There will be no
dependency on PLN or diesel generator. In general the use of electricity from biogas will
reduce the emission of air pollutants especially GHG.

10
8 Project Baseline and GHG Abatement Calculation
8.1 Current production and delivery patterns
Considering the chemical contents and physical properties of POME, the most efficient
system used in the initial stage of the wastewater plant is the anaerobic treatment. The
current system meets the requirement of the palm oil mill operator to safely discharge the
treated POME.
However, the system releases methane gas (CH4) into the atmosphere as the by-product of
anaerobic digestion of POME. The treatment of POME happens actually by an
anaerobic/aerobic pond system.
In the first view the pond system has some advantages as:
a. Simple system
b. Low investment costs for technical equipment,
c. Low energy demand.
But, a more detailed investigation shows that there are several negative aspects identified
as follows:
a. High demand for area (≅ 7-10 ha for an oil mill with 60 t FFB/h). The area needed
to treat POME using traditional method is quite large. On average between 7-10
hectares of land is needed to treat POME with production capacity of 60 tons
FFB/h
b. High demand for de-sludging of the pond and handling of the sludge
c. In oil mills, which use two-phase-separators all the fruit sludge goes to the ponds.
The suspended solids, which are not degraded, settle down and are enriched. The
ponds silt up without periodical sludge removal. The consequence is that the active
volume of the ponds and the hydraulic retention time of the wastewater in the
ponds decrease and the purification capacity are reduced. Furthermore it is rather
difficult to take out the sludge sediment all over the area because of the extended
area and depth of the ponds
d. Lost of nutrients. All nutrients needed for the plantation (N, P, K, Mg, and Ca) in
the effluent are discharged to the river and pollute the environment
e. High emissions of methane. Nearly all-organic matters are anaerobic degraded and
transformed to methane and carbon dioxide. Because high volume of FFB is
processed then the emission of Methane is also high. At minimum 10 m3 methane
are emitted per ton FFB

11
 Figure 2 Flow chart of current production and delivery patterns

The electricity generation in Sanggau is under the administration of PLN branch

Singkawang. Diesel generators supply the grid with capacities around 140 kW to 600 kW.

12
8.2 Project boundary and monitoring domain
The following is the schematic diagram of project boundary.

SHELL

FIBRE
CPO

EMPTY FRUIT
BUNCH

FRESH
CPO DIGESTER
FRUIT
PLANT POME BIOGAS TREATED EFLUENT
BUNCH
PLANT

ELECTRICITY

DIESEL
FUEL GENERATOR CH4
SET

Figure 3 Schematic diagram of project boundary

The project boundary consists of the diesel generator set and the biogas digester. Other
component of CPO production is not part of the project boundary. The shaded boxes are
the important components for calculating GHG emission reduction.

8.3 Baseline methodology and calculation of the baseline emissions

The baseline scenario is defined as the most likely future scenario in the absence of the
proposed project activity. The baseline scenario is the continued uncontrolled release of
GHG to the atmosphere, similarly to most palm oil mills in Indonesia and the use of diesel
generator.
Methane Release
This project activity assumes the 100% CH4 emission and will not include the recovery of
CO2 emission from the biogas in accordance with the IPCC guideline.
Formulae used to estimate the CH4 emission is as follows:
CH4 emission (tons CO2 eq./year) =
CPO production (t ) × POME yield in the CPO production (m 3 / t ) × Biogas yield (m 3 / m 3 )
× CH 4 fraction in biogas (m 3 / m 3 ) × CH 4 density (t / m 3 ) × GWP (CH 4 )
CPO production =
CPO yield (t / t ) × FFB received (t / y )

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 Table 1 Parameters for estimating CH4 emission from POME
Parameters Value Unit
FFB received 432,000 t/year
CPO yield 0.22 tonsCPO /tonsFFB
POME yield in the CPO production 3.86 m3-POME/tonsCPO
Biogas yield from POME 16.8 m3-Biogas/m3-POME
CH4 fraction in biogas 0.62 m3- CH4 /m3-Biogas
CH4 density 0.00071 tonsCH4 / m3-CH4
GWP CH4 21 -

Using the values above CH4 emission is 56,973 tons CO2 eq/year.

GHG Emission due to Fossil Fuel Consumption

Formula for estimating GHG emission by fossil fuel consumption is follow.
CO2 Emission (tonsCO2 eq./year) =
Electrical Demand to operate(kWh) × emission factor of diesel (kg CO2 eq / kWh) / 1000

Parameters for estimating GHG emission by fossil fuel consumption are shown in Table 2.

Table 2 Parameters for estimating GHG emission by fossil fuel consumption

Parameters Value Unit
Own electricity demand 900 MWh/year
Emission factor3 of CO2 1 Kg CO2/kWh

The factory needs 900 MWh per year that is supplied by local grid. The grid is supplied
using diesel generators, so the baseline emission will be 900 tons CO2 per year (1 kg
CO2/kWh).
The project will generate electricity and be able to supply its own electrical demand. This
means the project will not emit any GHG.

8.4 Calculation of total project GHG emissions and net emission

reduction
As the project will use own produced electricity, there is no emission from the project
(fossil fuel usage). The emission due to methane released is also minimised to 0. The
emission reduction is achieved by recovering CH4 and also fossil fuel avoidance (from
power generation). The formula emission avoidance of fossil fuel usage is as follows.
Emission Avoidance (kg CO 2 / year ) = (Gross Electricity Generation − Own Use) × Emission Factor
Gross annual production is:
Parameters Value Unit

3
Source: UNFCCC Indicative Simplified Baseline for Small Scale Project

14
 CH4 recovered 2,713 Tons CH4 r/year
Heat value of CH4 55,400 MJ/tonsCH4
Conversion of coefficient from heat to 0.33 kWh/MJ
electricity
Power generation efficiency 0.3 kWh/kWh (%)
Electricity supply 13,980 MWh/year

Annual power production by the project is 13,980 MWh; using 1 ton CO2/MWh emission
factor then the emission reduction will be 13,980 tons CO2/year. Reducing own use of 900
MWh/year then the fossil fuel avoidance will be 13,080 tons CO2/year. The CH4 recovery
is 56,973 tons CO2/year. Using the formula below the net emission reduction can be
calculated.

Emission Re duction = (CH 4 Re cov ery + Fossil Fuel Avoidance) − project GHG emission
where:
CH4 recovery : 56,973 tons CO2/year
Fuel Avoidance : 13,080 tons CO2/year
Project GHG emission: 0 tons CO2/year
Using the numbers above the Net Emission Reduction can reach 70,053
Table 3 Baseline emission from the project activity
Items Unit/Year 2007 2008-2012 2013-2021 2007-2022
Emission reduction tonsCO2 eq/y
by CH4 recovery
56.973 284.865 512.757 911.568
Emission reduction tonsCO2 eq/y
by fossil fuel
conversion
13.080 65.400 117.720 209.280
Total Emission tonsCO2 eq/y
Reduction 70.053 350.265 630.477 1.120.848

15
9 GHG emission reduction monitoring and verification
For the evaluation of the effect from this project activity in PTPN XIII palm oil plant in
West Kalimantan, the following monitoring plan shall be performed.
The following data will be collected.
Table 4 Data to be collected in order to monitor emission from the project activity
No Data variable Data Unit Measured (m), Recording Proportion of For how long is Comment
calculated (c) or frequency data to be archived data
estimated (e) monitored to be kept

1 FFB reception t/year m Every FFB 100% 15 years (project Data will be
from plantation reception by period) aggregated
truck monthly and
yearly

2 FFB reception t/year m Every FFB 100% 15 years (project Data will be
from other reception by period) aggregated
producers truck monthly and
yearly
3 POME yield m3- m Once a day 100% 15 years (project Data will be
from CPO POME/tonsF period) aggregated
produced FB monthly and
yearly
4 Biogas yield m3Biogas/ m Once a day 100% 15 years (project Data will be
from POME m3POME period) aggregated
monthly and
yearly
5 CH4 fraction in m3- CH4/ m3-m Once a day 100% 15 years (project Data will be
biogas POME period) aggregated
monthly and
yearly
6 Gross electricity MWh m Once a day 100% 15 years (project
produce period)

10 Financial Analysis of the Project

10.1 Estimation of Overall Cost Estimates
Financial analysis is prepared to provide a better picture of the profitability of the project.
Based on the technical and financial parameters as summarized in Table 15 of the Annex,
it can be seen that the total cost consist of investment, operational and maintenance cost is
USD 3,122,060. From electricity sales, the project can generate annual income of US$
699.067 and CER annual revenue of US$ 354,765.

10.2 Project Financial Analyses

The financial analysis in Table 18 of the Annex shows that the FIRR at 12% discount
factor is 29,92% with CER revenue and 17% without CER revenue. Similarly at 12%

16
discount factor provides the FNPV of IDR 24,381 million with CER Revenue and IDR
6,043 million without CER revenue.
Meanwhile if it uses the discount factor similar to WACC of 4.77% (see Table 16 and
financial plan Table 5), the FNPV with CER revenue will be IDR 53,608 million, and
FNPV without CER revenue will be IDR 23,252 million.
The above analysis shows that the project is financially feasible.

10.3 Financing Plan

Table 5 Financing Plan
Local Foreign Total %
(USD) (USD) (USD)

FUND REQUIRED
Proposed Project
Capital Expenditure 1,364,050 1,631,668 2,995,718 95.95%
Operating Expenditure 106,273 20,069 126,342 4.05%
Financial charges during development - - - 0.00%

TOTAL PROJECT REQUIREMENT 1,470,323 1,651,737 3,122,060 100.00%

SOURCES OF FUNDS
Proposed ADB loan - 2,341,545 2,341,545 75.00%
Other loan 312,206 - 312,206 10.00%
Equity or capital contributions
Government 156,103 - 156,103 5.00%
Other sources 312,206 - 312,206 10.00%
Subsidies for operation - - - 0.00%
Internal cash generation - - - 0.00%

TOTAL SOURCES 780,515 2,341,545 3,122,060 100.00%

17
11 Economic Analyses
11.1 Project Economic Analysis
The detailed economic calculation is summarized in Table 19 presented in the Annex of
the report.
The EIRR based on 12% discount factor is found to be 29.78% and 19.32% for
respectively with- and without CER revenue. Similarly, with CER revenue it gives ENPV
of IDR 22,469 million, and without CER revenue it gives ENPV of IDR 8,734 million.
Meanwhile if use the discount factor equals to WACC of 4.77% (see Table 16 and
financial plan Table 5), the ENPV with CER revenue will be IDR 71.978 million and
ENPV without CER revenue will be IDR 35,506 million.
The above shows that the project is economically feasible.

11.2 Statement of poverty reduction impact

The project will be using the skilled and unskilled labour. The unskilled labour majority
comes from the poor village community. Realization of this project will promote the
development of alternative energy for electricity in Indonesia that electricity is highly
beneficial for improving public welfare, enhancing the intellectual life of the nation,
making the development of other economic sectors, and advancing the economy. It is
expected that national standards will be improved due to the creation of social capital,
assurance of wage income and improvement in living conditions.

12 Stakeholders’ comments
12.1 Invitation letters to the Stakeholders
The project was introduced and outlined including the risks and benefits to officials/staff
of related institutions and/or organizations that have been contacted personally, by fax and
letters. They have been asked for their comments or no objection regarding the technical,
environmental and social issues.
The stakeholders identified for the project are as follows.
• Directorate General for Electricity and Energy Utilization (DGEEU)
• Bogor Institute of Agriculture (IPB)
• Indonesian Oil Palm Research Institute (IOPRI)
• Agency for Assessment and Application of Technology (BPPT)
• District Office of Environment

12.2 Comments on the Project by above stakeholders

As of date, all organizations have shown their interest to support the project concept and
most of them emphasized the socio-economic and environmental importance of the
project.

18
The District Office of Environment is basically supporting the project concept, as it will
improve the environment condition particularly improving water quality of the river
around the palm oil mills.
IOPRI one of the active institute active in palm oil research anticipates that the presented
study will be very promising to be disseminated to Palm Oil Mills in Indonesia. IPB also
confirmed that this anaerobic POME treatment concept is also considered as an innovative
technique that may have a prospective future.
BPPT together with PTPN III (owner of the palm oil plantation and mill located at
Sangau, West Kalimantan) are expecting that full-scale plant can be introduced and
installed at PTPN XIII’s facility. PTPN XIII will also be ready also disseminating the
success story of this advanced POME treatment utilisation.

13 Key factors impacting project & baseline emissions

13.1 Key Factors
Legal
The interest for the development of the anaerobic POME treatment plant is based on
the fact that this technology also produces burnable biogas as by product.
Technically this biogas can also be used to generate combined heat and power
(CHP) system. Having Ministerial Decree no. 1122 K/30/MEM/2002 of “PSK
Tersebar” that encourage of private to generate electricity using renewable energy
sources and sell electricity to PLN grid will have an economic impact for the palm
oil mill to develop the anaerobic POME treatment plant.
However, there are still some improvements of the decree that are required. The
most important item is the duration of electricity purchase contract is not specified
in the decree. This makes PLN only agree to sign the electricity purchase agreement
(contract) on yearly basis. It may become a financial problem if later the contract
cannot be extended due to any reasons.
Political
The above-described Ministerial Decree on “PSK Tersebar” is applicable since its
issuance on 12 June 2002. However, many of PLN officials are not fully understand
about the background, aim, and benefit behind that “PSK Tersebar” decree.
Additionally, they are also not fully aware about the simplified procedures for the
implementation of “PSK Tersebar”.
Economic
The base production cost (HPP) of electricity of PLN in Java is approximately 7 US
cents/kWh. According to the “PSK Tersebar” decree, the electricity will be paid by
PLN at 5.6 US cents/kWh (at medium voltage). The HPP of 7 US cents/kWh may
not become lower outside Java island as most of as most of current generating plant
of PLN in outside Java is still rely on diesel oil.
Baseline GHG emissions
The government of Indonesia is introducing the so-called “Green Energy Program”
to promote the use of renewable energy sources and energy efficient technologies.
Aim of this program is to reduce the use of fossil fuel particularly for electricity
generation in order to retard energy resources depletion. This program may

19
 influence the GHG emission baseline. As far as Outside Java is concerned, however,
the GHG emission rate of 1 kg CO2/kWh will more or less remain un-changed.

13.2 Project Uncertainties

• The most critical aspect would be the political stability of the country and the
consistency of the related government policies (e.g. PSK Tersebar and Green
Energy policies).
• The environment damage (because of e.g. poverty and deforestation) that may
lead to nature disaster such as flooding and climate change that lead to extreme
drought that are beyond human control.

14 Conclusion and Recommendation

The study confirms that the anaerobic treatment plant for POME is technically, financially
and economically viable. Furthermore, the discussions with the involved stakeholders and
other related institution revealed a high interest towards the proposed development.
Technically the project will improve the performance of POME treatment and in general
will improve the quality of environment. The product value of CPO will be appreciated
because considering the environmentally friendly process produces it.
The project is financially feasible. At the discount factor of 12%, it provides the FIRR
with- and without CER of 29,92% and 17%, respectively. Similarly, it generates EIRR
with- and without CER of respectively 29,78% and 19,32%.
Annual power generation is more or less 14,880 MWh, and the plant will use
approximately 900 MWh and the rest will be fed to the grid. The electricity selling will
generate revenue as much as US$ 699,067.
The sludge generated from the process can be directly distributed to the palm estate as
fertilizer or to be dried that later can be used as fertilizer. The sale of this natural fertilizer
is not considered.
However, before further steps in implementation are undertaken a more detailed case or
feasibility study should be prepared to further verify the overall frame conditions of the
project. A comprehensive survey of the site must be carried out.
The detailed design of the scheme should provide an even more accurate cost estimation
and financial and economic analysis.

20
Annex 1 Technical Analyses
Current Practice and Proposed Concept
Considering the chemical contents and physical properties of POME, the most efficient
system used in the initial stage of the wastewater plant is the anaerobic treatment. The
current system meets the requirement of the palm oil mill operator to safely discharge the
treated POME.
However, the system releases methane gas (CH4) into the atmosphere as the by-product of
anaerobic digestion of POME. The treatment of POME happens actually by an
anaerobic/aerobic pond system.
In the first view the pond system has some advantages as:
a. Simple system
b. Low investment costs for technical equipment,
c. Low energy demand.
But, a more detailed investigation shows that there are several negative aspects identified
as the followings:
a. High demand for area (≅ 7-10 ha for an oil mill with 60 t FFB/h). The area needed
to treat POME using traditional method is quite large. On average between 7-10
hectares of land is needed to treat POME with production capacity of 60 tons
FFB/h
b. High demand for de-sludging of the pond and handling of the sludge
c. In oil mills, which use two-phase-separators all the fruit sludge goes to the ponds.
The suspended solids, which are not degraded, settle down and are enriched. The
ponds silt up without a periodical sludge removal. The consequence is, that the
active volume of the ponds and the hydraulic retention time of the wastewater in
the ponds decrease and the purification capacity are reduced. Furthermore it is
rather difficult to take out the sludge sediment all over the area because of the
extended area and depth of the ponds.
d. Lost of nutrients. All nutrients (N, P, K, Mg, and Ca) in the effluent are discharged
to the river, pollute the environment and are for the plantation.
e. High emissions of methane. Nearly all-organic matters are anaerobic degraded and
transformed to methane and carbon dioxide. Because high volume of FFB is
processed then the emission of Methane is also high. At minimum 10-m3 methane
are emitted per ton FFB.
Proposed Concept
The concept has been proposed by IOPRI and UTEC with a process scheme as presented
in Figure 4. The process is briefly explained as follows.

Annex 1-1
Source: Anaerobic Treatment of POME, IOPRI, 2000.

Figure 4 Concept for Integrated Waste Water Treatment (palm oil mill with 2
separators)
At the first step, the suspended solids are separated using flotation plant, decanter, in order
to:
a. Reduce the Chemical Oxygen Demand (COD), Biological Oxygen Demand
(BOD), nitrogen and sand content
b. Minimise the problems in the subsequent treatment steps as foaming, plugging,
sedimentation.
The waste water, which is polluted mainly with dissolved component, is fed to an
anaerobic digester (fixed bed, UASB or other), where
a. The pollutant is mainly degraded and transformed to useful biogas,
b. The process occurs with a high performance and in a short time,
c. The produced biogas is collected.
The anaerobic pre-treated effluent can be used for land application to
a. Utilize the nutrient,
b. Save area,
c. Minimise emissions and energy consumption
Where a land application is not possible, the water can be treated aerobically (aerated
ponds, activated sludge system) to fulfil the standards for discharging into a river. The
sludge phase can be digested anaerobic in a totally mixed digester for production of
biogas, if the aspect of energy is important. The digested sludge can be used for land
application together with the wastewater to utilize the nutrients. The fresh and thickened
sludge can also be dried (rotary drier, other) to produce feedstuff or a storable fertiliser.
Furthermore the fresh sludge can be dried biologically by using the composting process.
The sludge is mixed with chopped the empty fruit bunch (EFB) and the mixture is rotting

Annex 1-2
in heaps and will be transformed to a compost, which is enriched with nutrients. The
mixture must be turned from time to time to evaporate a maximum of water.
The favoured variations are marked in Figure 4. In the case that an oil mill has a 3-phase
decanter the sludge separation is not necessary, but the alternatives for wastewater and
sludge treatment are identical.
The main components in the given concept for POME-treatment are:
a. Anaerobic pre-treatment
b. Sludge separation.
Both steps were investigated by IOPRI through the experimental plant consists of
anaerobic treatment plant and sludge separation as discussed in following sections.
Pilot Plant for Anaerobic Treatment
Anaerobic treatment of POME is performed using a pilot plant equipped with fixed bed
digesters. The fixed bed technology was chosen, because this type of digester has low
energy consumption, less risk in operation and an easy start up. Furthermore a high
performance could be expected. The following aspects are from interest:
a. performance (max. loading rate, efficiency, min. hydraulic retention time)
b. risk of plugging
c. Specific biogas production, composition of the biogas.
The pilot plant was located at Pagar Marbau Palm Oil Mill of PTPN II, Medan. The main
components of the plant are the fixed bed digester D1 and D2. Digester D1 was used for
operation in up flow mode, digester D2 for down flow mode. Figure 5 presents the
schematic configuration of the plant.
The wastewater consists of the effluent from the separators, the condensate and cleaning
water. The composition of the wastewater is given in Table 6. For comparison data from
IOPRI (28.02.97) are added.
The composition of the used POME varied in a wide range according to the operation
conditions of the oil mill.
Table 6 Composition of Waste Water
Unit Used POME Data of IOPRI
Parameter
PH - 4.0 – 4.5 4.0 – 4.6
Tot. Solids Mg/l 10,000 – 30,000 30,000 – 70,000
Tot. Dissolved Solids Mg/l 8,000 – 19,000 15,000 – 30,000
Tot. Suspended Solids Mg/l 1,000 – 5,000 15,000 – 40,000
Total COD Mg/l 12,000 – 25,000 40,000 – 120,000
Dissolved COD Mg/l 8,000 – 16,000 -
Total Kjehld.-Nitrogen Mg/l 90 – 16,000 500 – 800
Total Phosphate Mg/l 90 – 850 90 – 140
K Mg/l 110 – 924 1,000 – 2,000
Mg Mg/l 17 - 152 250 – 300

The technical data of the components:

Annex 1-3
Storage tanks (S1, S2)
Volume : 335 L (each)
Digesters (D1, D2)
Total volume : 275 L (each)
Active volume : 250 L
Diameter : 40 cm
Total height : 250 cm
Height of fixed bed : 200 cm
Material : stainless steel
Pumps
Type : processing cavity pumps
Flow rate : 60 L/h
Gas counter
Producer : Ritter
Type : wet gas flow meter, drum type

Source: Anaerobic Treatment of POME, IOPRI, 2000

Figure 5 Configuration of pilot plant (D1 active digester, D2 in standby mode)
The fresh wastewater is filled into the storage tanks S1 and S2, where the water cool down
to ambient temperature, rests of oil float and are skimmed manually. The feeding pump
P1 sucks water from the storage tank S2 and feed it into the bottom of the digester D1. The
water passes the fixed bed to the top (up flow), where the effluent flows out. A part of the
effluent is pumped by the circulation pump P2 back to the feeding system to dilute the

Annex 1-4
influent, to lift the pH and to optimise the distribution of substrate inside the digester. The
surplus of the effluent flows into the top of digester D2 to keep this digester active. The
water passes the fixed bed in down flow mode and is discharged finally.
The operation control of the pumps and the variation of the daily amount of bed and
recycled water happen by adjustable timers. The produced biogas is collected and is
measured by gas counters. The digestion happens at ambient temperature (26-28o C)
The following data were measured:
ƒ Daily amount of bed waste water and circulation rate
ƒ Dissolved and total COD of fresh water and effluent
ƒ PH in influent and effluent
ƒ Daily gas production and methane concentration.
Furthermore from time to time the amount of incorporated sludge was determined. For
this purpose this liquid was taken out step-by-step, whereby the liquid level in the digester
was measured in the same time. The difference between the liquid volume taken out and
the theoretical liquid volume of a certain part of the digester allows the calculation of the
fixed sludge volume.
In order to enrich and fix active bacteria in the digester with the aim to increase the
performance of the digester a certain support material is used. The bacteria grow on the
surface in the form of a bio film. Because they are fixed, they cannot be washed out, even
if the digester has a high hydraulic load. Both digesters are filled to 90% with support
material. The fixed bed consists of random packed, corrugated, cylindrical pipe sections.
The technical data of the support material are given in Table 7.

Table 7 Specific data of the support material

Producer Fraenkische Rohrweke Gmbh
Type Ewallporit
Material PVC
Diameter 50 Mm
Height 50 Mm
Spec. Surface 180 m2 / m3
Empty space volume 95 %

Sludge Separation
Separation of sludge was carried out using the principle of dissolved-air-flotation also
called pressure-flotation.
Principally using continuously working separators or decanters can do the separation of
suspended solids. Both aggregates are expensive and have a high demand for maintenance
and energy.

Annex 1-5
The flotation technology seems to be suitable alternative, from interest are:
a. Amount of floatable solids,
b. Velocity of the flotation process
c. Concentration of the floated sludge
d. Balance of nutrients in sludge and liquid phase
During the trials the effluent of the oil mill from Pagar Marbau (PTPN II) was used. The
unit is equipped with 2-phase-separators. The wastewater was taken from the effluent of
the oil skimmer.
The wastewater flow is split, 80% flows direct into a flotation basin, 20 % is pumped into
a vessel, where air is dissolved in the water under high pressure (6 bar). The gas-enriched
water is given back to the flotation basin passing a nozzle located at the end of the inlet
pipe. After passing the nozzle the liquid is not under pressure anymore the dissolved gas
cannot keep in the water, small fine bubbles are formed. The gas bubbles connect to the
sludge particles with the consequence that the particles float up and form a swimming
scum, which can be separated by a scraper.
As demonstrated in Figure 6 transparent measuring cylinder (1L) and a vessel with max
pressure of a 2 bar was used for the experiment. In the beginning the cylinder was filled
up to 80 % with waste water, the vessel was filled half with normal tap water and air
pumped in up to a pressure of 2 bar. After testing and optimisation of the bubble forming,
the gas-enriched water was given into the cylinder at the bottom area until the cylinder
was filled 100%. The tests were done with hot (60o C) and cool (28 o C) wastewater.
A sedimentation test was done with identical wastewater and cylinder for comparison.
Measured parameters were:
• Concentration of suspended solids in the waste water
• Volume of floated sludge as function of time
• Dry matter of the floated sludge
• Volume of sludge as function of time
• Nutrient content of wastewater, sludge and liquid phase.

Annex 1-6
 Figure 6 System for flotation test
Performance of the Anaerobic Process
The digester D1 was started up in June 1998 and ran until August 1999 without any
problems. During this time the COD-loading rate was increased step-by-step from 3.0 kg
O2/(m3*d) up to 7.0 kg O2/(m3*d), the hydraulic retention time could be shortened from 6.1
days to 1.7 days. The detailed data of the experiment periods are given in Table 8, results
of the evaluation in Table 9.
Table 8 Data of Digester D1 in up flow mode
Flow Influent Effluent Gas CH4
Period Rate pH COD-diss COD-tot pH COD-diss COD-tot Prod. Cont.
I/d - mg/l Mg/l - mg/l mg/l I/d %

1 41 5.0 12,750 19,120 6.8 1,235 (2,800)* 514 64

2 108 4.4 11,560 15,300 6.7 1,168 1,581 (426)** 69
3 122 4.6 12,050 14,670 6.7 1,165 1,546 (504)** 69
4 145 4.5 10,050 12,100 6.7 1,070 1,330 831 64
* influenced by inoculums sludge
** gas counter partly blocked
Table 9 Result evaluation for digester D1
Loading rate kg O2/(m3*d) Efficiency %
Period Retention time d
COD-diss COD-tot COD-diss COD-tot

1 6.1 2.1 3.2 90 -

2 2.3 5.0 6.7 90 90
3 2.1 5.9 7.2 90 89
4 1.7 5.9 7.0 90 89

Annex 1-7
From September 1999 until March 2000 the experiments were continued with the digester
D2 in down flow mode. The COD-loading rate could increase from 4.0 O2/(m3*d) up to
13.2 O2/(m3*d); the minimal hydraulic retention time was 1.3 days. The detailed data of
the experience run are shown in Table 10, the results of the evaluation in Table 11.
Table 10 Data Digester D2 down flow mode
Flow Influent Effluent Gas CH4
Period Rate pH COD-diss COD-tot pH COD-diss COD-tot Prod. Cont.
I/d - mg/l Mg/l - mg/l mg/l I/d %

1 76 4.9 12,200 14,900 6.9 769 1,278 552 66

2 118 4.6 11,500 14,500 6.9 675 1,200 820 65
3 176 4.6 11,970 15,700 6.8 1,195 2,418 924 64
4 192 4.4 13,300 17,250 6.6 1,570 3,140 1,250 62

Table 11 Result of evaluation for digester D2

Loading rate kg O2/(m3*d) Efficiency %
Period Retention time d
COD-diss COD-tot COD-diss COD-tot

1 3.3 3.7 4.5 94 -

2 2.1 5.4 6.8 94 92
3 1.4 8.1 11.0 90 84
4 1.3 510.2 13.2 88 82

It is obvious that the efficiency based on COD dissolved is in general higher than the
comparable efficiency based on COD-total. The reason is that there is nearly no
degradation of the suspended solids, because the retention time is too short for the more
complex degradation process. Therefore it is more suitable to use the efficiency based on
COD-dissolved. To demonstrate the performance of the digesters, the performances of up
and down flow operation are demonstrated for comparison in Figure 7.

Annex 1-8
 Figure 7 Efficiency as function of COD-loading rate based on COD-dissolved
Digester D1 has a constant removal efficiency of 90 % up to a loading rate of 6 O2/(m3*d),
which decrease to 89 %, when the loading rate reach 10 O2/(m3*d). Experiments with
higher loading rates have not been tried yet.
The digesters were driven with original wastewater including Total Suspended Solids
(TSS 1,000 – 5,000 mg/l). The sludge particles might have the consequence that they are
enriched/concentrated in the digester and plug the fixed bed. In Figure 8 the measured
sludge profiles are shown. It can be seen, that the Digester (up flow) has the max sludge
content in the bottom area and the minimum in the top. The reason is that particles with a
good sedimentation characteristic are enriched in the bottom area and that they are partly
incorporated in the top, are washed out with the effluent. After 15 month operating time
the maximum volume of sludge is calculated with 30 % at the bottom area. A risk of
plugging was not determinable.
In contrary the digester D2 (down flow) has the maximum sludge content in the top and
the minimum at the bottom. The opposite effect is working, settled sludge is washed out
with the effluent, and floated sludge is enriched in the top. After 15 months operating
time in sequence according to the configuration shown in concentrated Figure 2 the
maximum volume of incorporated sludge was 35 %. It happened during an experiment
run with high loading rate and high gas production that the fed sludge floated up and
formed a strong swimming scum with the consequence of foam formation and plugging of
the fixed bed (see Figure 8, line 6).

Annex 1-9
 Figure 8 Comparison of sludge profiles in digester D1 and D2
The most important conclusions of the experiments are:

• Fixed bed technology is suitable for the anaerobic treatment of POME

• A dissolved-COD-loading rate of 8 – 10 O2/(m3*d) and COD-removal rate of
approximately 90 % is realistic parameters for dimensioning of a full-scale plant.
• The specific gas production is around 560 l gas per kg COD-degraded with a
methane content of 62 %
• An up flow digester seems more suitable, when the wastewater content suspended
solids, the down flow operation can be used for water without suspended solids.

Sludge Separation
In Figure 9 the velocity of flotation and sedimentation are shown for typical wastewater
taken in Pagar Marbau. This parameter is important showing that retention time is better
than older system.

Annex 1-10
 Figure 9 The velocity of flotation and sedimentation
Table 12 Analytical Data
Dry matter DM Suspended solids (TSS) Unit

Waste water 21,400 5,000 mg/l

Floated sludge 32,900 mg/l
3.29 %
Liquid phase 13,590 mg/l

The essential results of the trial are summarized as follows:

• The total content of suspended solids can be separated by flotation without any
sediment
• There is no difference in the flotation characteristic for cold and hot POME as long
as the gas enriched water has ambient temperature
• With a vessel pressure of 2 bar 20 % of total wastewater flow is needed as gas
enriched liquid. It can be expected, that the demand on gas-enriched liquid will
decrease, when a pressure of 6 Bar is used.
• The floated sludge has a DM content of 3.2 % in minimum after a flotation time of
60 minutes. It can be expected, that the velocity and the DM-content can be
increase with higher pressure in the vessel.
The results of flotation tests show that the flotation technology is an interesting alternative
to other separation technologies and should be investigated in more detail.
Nitrogen balance
For investigation of the mass balance of nitrogen samples were taken in the palm oil mill
in Pagar Marbau and Bah Jambi. The samples were collected direct from the effluent of

Annex 1-11
the 2-phase-separators. A certain amount was separated with a centrifuge in laboratory.
Table 13 presents the analysis of the original effluent, the sludge phase and liquid phase.
It can be seen, that the separation has no effect to the NH4-N and the phosphor
concentration. These components are mainly dissolved in the liquid that cannot be
enriched by separation of sludge.
Table 13 Nutrient content of POME
DM COD N-Kj NH4-N P Mass balance
g/l mg/l g/l g/l mg/l %

Pagar Marbau
Effluent separator 32.1 44.830 0.64 0.10 126 100
Sludge phase 72.7 - 1.70 0.17 137 23
Liquid phase 19.0 24.300 0.32 0.13 112 77
Bah Jambi
Effluent separator 42.21 66,350 0.76 0.27 138 100
Sludge phase 55.16 - 1.01 0.25 140 24
Lquid phase 27.2 37,500 0.38 0.14 124 76

The mass balance for Kjeldahl-N has the following result:

Table 14 Mass Balance of Kjeldahl-N

Sample Pagar Marbau Sample Bah Jambi
Effluent 100 % 100 %
Sludge phase 61 % 76 %
Liquid phase 39 % 24 %

More than 60 % of N-K can be eliminated by sludge separation from the wastewater. The
sludge phase has an N-K content of 1.0 – 1.7 g/l, concentration depend on the DM content
of the sludge, according to the N content the protein concentration is 6.25 – 10.6 g/kg
sludge or 113 – 145 g/kgDM.
• The N-load to waste water treatment plants can be reduced significantly
• The separated sludge has a high protein content, therefore it might be suitable to
use sludge as feed stuff or as addition to a composting process to save nitrogen and
to increase the nutrient content of the compost

Annex 1-12
System Design
The POME treatment plant proposed herein is to process the POME generated from the
CPO mill with the capacity of 60 ton FFB/h. With this capacity the following data may be
generated:
CPO Mill Capacity : 60 t FFB/h
Working time : 20 h/d
Amount of FFB : 1200 t/d
Specific amount of POME : 0.85 m3/t FFB
Amount of POME : 3.86 m3-POME/tonsCPO
Amount of POME : 1020 m3/d
COD-concentration : 30,000 mg/l
Spec. COD-load : 25.5 kg O2/(m3*d)
Total COD-load : 30,600 kg/d.
Sludge separation
In view to a new concept for POME treatment it is necessary to separate the fruit sludge
from the wastewater, because:
a. The COD will be reduced (30 – 50 %)
b. The nitrogen content decreases (60 – 70 %)
c. The following treatment system has a smaller load and the operation conditions are
optimised.
Sludge elimination in front is also interesting in oil mills using a pond system, because the
efficiency of the ponds will increase and the demand for maintenance will decrease.
Furthermore a continuous separation of the fresh POME in front might be more suitable
than a de-sludging of the large ponds. The required technology for sludge separation is
well known and available in the market. The flotation technology looks suitable and
might be an interesting alternative to separators and decanters.
Anaerobic treatment
An aerobic treatment pre-treatment of POME can be done successfully with fixed bed
digesters. To minimise the risk of plugging and foam formation the suspended sludge
particles should be eliminated in front. Approximately 90 % of the dissolved COD can be
degraded and transformed to useable biogas. According to the COD-concentration in the
influent the COD content in the effluent ranges between 1,500 and 4,000 mg/l with a pH
of 6.5 and higher. Consequently the effluent can be used for land application.
The dimension of the digester required to process the above mill is summarized as
follows:

COD-loading rate : 9.0 kg O2/(m3*d)

Efficiency : 90 %
Gas production : 0.56 m3biogas/kg COD-degraded
Methane content : 62 %

Annex 1-13
 COD-effluent : 3,000 mg O2/l
Required volume of the digester : 3,400 m3 (active volume)
Hydraulic retention time : 3.3 d
Chosen volume : 4,000 m3
Methane gas production : 15,400 m3/d
Diesel-equivalent : 9,548 l/d.
Besides the aspect of wastewater treatment the energy production might be have a high
importance for a palm oil mill. A specific electricity production of 26 kWh per ton FFB
can be expected, if all biogas is used to generate electricity with a gas engine. The specific
electricity demand of the factory is estimated to 15 – 17 kWh per ton FFB.
The calculation demonstrated that the digester volume for the process is 4000 m3. This
digester will generate Methane gas as much as 15,400 m3/d. The use of gas allows the
substitutions of approximately 9,548 litres/day diesel fuels. This gas can also be utilised to
run the boiler or drive the generating set to produce steam or electricity respectively. As
the boiler is normally fuelled by the palm oil fruit wastes (e.g. mesocarp fibres and shells);
it is recommended to use the gas for electricity generation.
For a new palm oil mill, the option to integrate biogas to the new factory will be
economically interesting. The combined heat and power (CHP) generating plant may be
applicable for the process using gas engine. The gas engine should also allow the use of
diesel to provide operational security for the factory. When the biogas is not available the
CHP plant can be driven with diesel fuel.

Annex 1-14
Annex 2 Financial and Economic Analyses
Financial and Economic Summary

Table 15 Summary of Technical and Financial Parameters

TECHNICAL
Install capacity kW 1,878
Paracitic load % 6.00%
Operation hours hours p.a 7,920
Power generation kWh p.a. 13,981,334

REVENUE
Power sales
Sales price unit (med volatge) to HPP PLN USD cent/kWh 5
Annual revenue USD 699,067
CER revenue
CO2 emission reduction Ton CO2 p.a 70,953.00
GHG abatement price USD/ton CO2 5
Revenue USD 354,765

INVESTMENT
Equipment cost
Per kW USD/kW 1,500
Investment cost USD 2,817,000
Civil works USD 100,000
Other cost USD 60,000
2,977,000

OPERATION & MAINTENANCE

Fixed cost
Labour cost
Plant supervisor (3 persons) 1.00 USD p.a. 20,393
Skilled worker (6 persons) 0.90 USD p.a. 18,353
Unskilled worker (12 persons) 0.80 USD p.a. 16,314
USD p.a. 55,060
Maintenance cost USD p.a. 50,000
Other costs USD p.a. 18,000
123,060
Variable cost
Material 70% USD p.a. 15,400
Unskilled labour 25% USD p.a. 5,500
Others 5% USD p.a. 1,100
22,000
145,060

OTHERS
Exchange rate USD 1 IDR 8,500
Discount factor 12%
Inflation rate 7%

Annex 2-1
 Table 16 Weighted Average of Capital Cost
Equity
Foreign Domes-tic Govern-
ADB loan participatio Total
loans loans ment funds
n

A Amount ($ '000) 2,342 - 312 156 312 3,122

B Weighting 75.0% 0.0% 10.0% 5.0% 10.0% 100.0%
C Nominal cost 6.7% 6.7% 17.0% 7.0% 10.0%
D Tax rate 40.0% 40.0% 30.0% 0.0% 0.0%
E Tax adjusted normal cost
[Cx(1-D)] 4.0% 4.0% 11.9% 10.0% 10.0%
F Inflation rate 7.0% 7.0% 7.0%
G Real cost [(1+E)/(1+F)-1] 4.0% 4.0% 4.6% 2.8% 2.8%
H Minimum rate 4.0% 4.0% 7.0% 7.0% 7.0%
I Weighted component of WACC 3.0% 0.0% 0.7% 0.4% 0.7% 4.8%

WACC real 4.8%

Annex 2-2
 Table 17 Financial and Economic Price
Financial Financial Economic
price price Adjusment* price
(USD) (IDR'mil) (IDR'mil)

Revenue
Power sales 699,067 5,942 1.000 5,942
CER revenue 354,765 3,016 0.749 2,259
1,053,832 8,958 8,201
INVESTMENT COST
Equipment 2,817,000 23,945 0.930 22,263
Civil works 100,000 850 0.930 790
Other cost 60,000 510 0.930 474
Total 2,977,000 25,305 23,528

ANNUAL O&M COST

Fixed cost
Labour
Skilled labour 38,746 329 0.930 306
Unskilled labour 16,314 139 0.419 58
Maintenance cost 50,000 425 0.930 395
Other costs 18,000 153 0.930 142
Sub-total 123,060 1,046 902
Variable cost
Material 15,400 131 0.930 122
Unskilled labour 5,500 47 0.419 20
Others 1,100 9 0.930 9
Sub-total 22,000 187 150
Total 145,060 1,233 1,052

TOTAL COST 3,122,060 26,538 0.926 24,579

* economic price using domectic price numeraire

Annex 2-3
 Table 18 Financial Analysis
Power Revenue Cost
Year sales Power CER Total Invest- O&M Total Net Benefits Net Benefits
ment with CER without CER
GWh IDR 'mil IDR 'mil IDR 'mil IDR 'mil IDR 'mil IDR 'mil IDR 'mil IDR 'mil

0 2005 0 - - - 25,305 - 25,305 (25,305) (25,305)

1 2006 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709
2 2007 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709
3 2008 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709
4 2009 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709
5 2010 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709
6 2011 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709
7 2012 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709
8 2013 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709
9 2014 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709
10 2015 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709
11 2016 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709
12 2017 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709
13 2018 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709
14 2019 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709
15 2020 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709
16 2021 0 - - - - - - - -
17 2022 0 - - - - - - - -
18 2023 0 - - - - - - - -
19 2024 0 - - - - - - - -
20 2025 0 - - - - - - - -

PV @ 12.00% 85,022 36,134 18,338 54,472 22,593 7,498 30,091 24,381 6,043
Per unit (IDR/kWh) 425.00 215.68 640.68 265.73 88.19 353.92 286.76 71.08

With CER revenue Without CER revenue

FIRR 29.92% 17%

FNPV 4.77% 53,608 23,252
FNPV 29.92% (0) (7,603)
FNPV @ 12.00% 24,381 6,043

Annex 2-4
 Table 19 Economic Analysis
Power Revenue Cost
Net
Year sales Power CER Total Invest- O&M Total Benefits Net Benefits
ment with CER without CER
GWh IDR 'mil IDR 'mil IDR 'mil IDR 'mil IDR 'mil IDR 'mil IDR 'mil IDR 'mil

0 2005 0 - - - 23,528 - 23,528 (23,528) (23,528)

1 2006 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890
2 2007 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890
3 2008 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890
4 2009 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890
5 2010 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890
6 2011 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890
7 2012 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890
8 2013 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890
9 2014 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890
10 2015 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890
11 2016 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890
12 2017 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890
13 2018 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890
14 2019 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890
15 2020 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890
16 2021 0 - - - - - - -
17 2022 0 - - - - - - -
18 2023 0 - - - - - - -
19 2024 0 - - - - - - -
20 2025 0 - - - - - - -

PV @ 12.00% 85,022 36,134 13,735 49,869 21,007 6,395 27,402 22,467 8,733
Per unit (IDR/kWh) 425.00 161.54 586.54 247.07 75.22 322.29 264.25 102.71

With CER revenue Without CER revenue

EIRR 29.78% 19.32%

ENPV @ 4.77% 71,978 35,506
ENPV @ 29.78% 0 (5,728)
ENPV @ 12.00% 22,469 8,734

Annex 2-5