BY FATIHAH MANAF

Hong Leong Bank Berhad that better understand developers ’ concerns helps to move this industry forward . In one of its sustainability roundtables , Hong Leong Bank discussed the role of biogas in supporting Malaysia ’ s energy mix .

The discussion highlighted the government ’ s initiatives to increase the adoption of biogas and opportunities and challenges in the biogas sector . The session was moderated by Nik Shahrizal Sulaiman ( Partner , Risk Assurance Service of PwC Malaysia ) and featured speakers Edisham Mohd Sukor , Datuk Khairuddin Tan Sri Mohd Hussin , Chan Yan Loon , Soon Hun Yang and Gladys Mak .

Mak , the Renewable Energy Specialist Business & Corporate Banking of Hong Leong Bank , said the bank had been very supportive of renewable projects , including solar and biogas .

“ Not only biogas from palm oil mill effluents , but we ’ re also looking at different sorts of waste resources . All this waste can be turned into a commodity ,” she said .

Opportunities in biogas development

Edisham , the Director Market Operations of Sustainable Energy Development Authority ( SEDA ) Malaysia , said only one out of four renewable energy programmes in Malaysia catered to non-solar resources projects such as biogas , biomass and small hydro , which is Feed-in Tariff ( FiT ) programme .

Technically , he shared that Malaysia was blessed with 3.6 gigawatts of bio-energy resource availability combining both biomass and biogas .

“ Biogas itself is about 736 megawatt . Still , a huge potential to explore ,” he stated , explaining that biogas can be produced by utilising the anaerobic digester to break down waste such as municipal solid waste , waste from agriculture , animal waste and landfill .

“ I must say that the biogas potential in Malaysia is huge . One thing about Malaysia , we are very blessed whereby we have more than sufficient feedstock to do biogas ,” said Khairuddin , the Chief Executive Officer of Concord Group .

He explained that almost all biogas plants in Malaysia received their feedstock from the palm oil mills already available here in the country . Unfortunately , only 20 to 30 per cent of these palm oil mills had biogas plants . He then shared the income opportunity for mill owners through SEDA Malaysia ’ s FiT programme .

“ FiT system is very attractive . One more thing , it is very certain because you have to sign with SEDA Malaysia and sign the power purchase agreement with TNB over 21 years . So , when you do the project , you have the comfort , and your stakeholders have the comfort that your income is

certain . Your off-taker is certain to move forward ,” said Khairuddin , adding that there were also alternative uses for biogas such as converting it into bio-CNG .

Khairuddin then shared that Concord Group , as part of its corporate social responsibility initiative , guided by SEDA , was looking into localising a lot of biogas technology .

“ We are also training some university students as trainees in our plants ,” he said , adding that Concord Group also created biogas modules for a university in Terengganu for its diploma and undergraduate programmes .

Challenges in biogas development

“ I do see a lot of opportunities but also a lot of challenges in developing these ( biogas ) projects ,” said Soon , the Chief Executive Officer , Eco-Ideal Consulting Sdn Bhd .

“ For example , in Sabah and Sarawak , it ’ s a different landscape compared to Peninsular Malaysia . We have a different electricity grid system . In Sarawak , it ’ s run by Sarawak Energy and in Sabah , by Sabah Electricity Sdn Bhd ( SESB ). Because of the vast land and relatively low population density , the infrastructure for electricity is not there .”

He then explained that the situation led to many of the sources of this biogas , such as palm oil mills , being off-grid . This condition naturally gave biogas developers a challenge to generate revenue from the power generation .

“ What the country needs to do , moving forward to explore the remaining biogas potential , is to develop new economic instruments . For example , the government should look at how to incentivise upgrading of biogas into bio-CNG as one option or giving other options to the sources of the biogas plants .”

Sharing the company ’ s experience , Chan , Deputy General Manager of Berjaya Energies Sdn Bhd , said : “ We encountered the design error , interconnection issues , electricity load issues , unstable gas extraction and the gas delivery ( issue ).”

He shared , over the years , the company learned that having good workers was essential in running successful landfill biogas . He also opined that human resource was a determining factor in maintaining the efficiency of any power generation system .

Mak , who used to work in SEDA Malaysia , then added that the rate was one of the most significant issues in biogas development . She said without a return on investment ( ROI ) or internal rate of return ( IRR ), the biogas projects were not going to take off .

She said : “ I remember telling the government at that point of time that we have to make it profitable as well , and then businesses will come in naturally . The incentives do not have to be so much but just enough to catalyse , and then we ’ ll go into a market sort of arrangement .”

Addressing the risks in biogas projects

Khairuddin said there were some risks that players had to look into before investing in biogas plants . He then shared some aspects that players must take into account to reduce the risk of investment which include : I . Perform feasibility and viability studies II . Know your project partners ( e . g ., mill owners ) III . Do proper cash flow IV . Have a strong banker and financier

Soon then added the pandemic as one of the risks faced by biogas operators . As the situation was unprecedented , the operators did not include it in their cash flow estimation . Additionally , he mentioned climate-related impacts like El Nino also affected the operational efficiency of the mills . Soon also agreed that the academic sector had a more significant role in creating the right talents to work in the biogas sector .

He said : “ A lot of research and technical expertise shall continue to be developed in Malaysia . My wish is to see the talent pool be more organised in Malaysia so that we can build knowledge upon each other .”

In assessing the risks , Mak said developers also need to consider the location that might be affected by floods , extreme weather , and other climate-related risks . She said it was important for players to consult experts in assessing and mitigating the risks .

Soon and Chan then added lightning as one of the natural disasters which could interrupt the biogas projects .

“ It ’ s not a direct hit from the lightning . The landfill is an open area , so it ’ s prone to lightning to strike or be nearby on the ground . That extra-low voltage equipment will easily fry up because of all this sudden surge ( of electricity ),” explained Chan , sharing that measures had been taken to reduce the risks .

Moving forward , Khairuddin then shared that Malaysia must localise more technology designs and prepare for the risks that might affect biogas plant operations . — @ Green

Not only biogas from palm oil mill effluents , but we ’ re also looking at different sorts of waste resources . All this waste can be turned into a commodity .”

– Gladys Mak