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Reports of CDM/JI Feasibility Studies: FY2007

Title of Feasibility Study (FS)Methane Recovery from Tapioca Wastewater in Lampung, Indonesia
FYFY 2007
Main Implementing EntityJFE Techno-Research Corporation
FS Partner(s)University of Lampung, Kajima Corporation
Location of Project ActivityKedaton, East Lampung Prefecture of Lampung Province, Sumatera, Indonesia
Summary of FS ReportPDF (404KB)
Description of Project ActivityCDM feasibility study was conducted for a biogas utilisation project (Project). Envisaged site is a tapioca factory of PT. WIRAKENCANA ADIPERDANA located in Kedaton, East Lampung, Sumatera (Ds. Kedaton Kec. Sukadana Kab. Lampung Timur). The Project plan is to collect biogas containing high concentration methane gas from cassava wastewater derived from tapioca production process. Generated biogas will be fed into a new biogas engine generator that will replace existing diesel power plant. Electricity will be used within the factory. Study was made on the conditions of 92 tons of daily tapioca production, 260 days of annual operation, COD concentration of 15,000 mg/l and 431,860 m3 of annual wastewater volume. The technology for the Project is of the closed fermentation tank system that enables steady methane fermentation with a short hydraulic retention time (HRT). Onggok, which is a by-product in the tapioca production process, is added to the fermentation process at the initial stage as a bio immobiliser to shorten HRT and to maintain stable fermentation activity. The gas engine generator of 1,024kW will be supplied in a containerised package from Germany.
Targeted GHGCH4
Category of Project ActivityBiomass Utilisation (Wastewater handling and disposal)
CDM/JICDM
Duration of Project Activity/ Crediting Period7years/ 7years
Baseline Methodology/ AdditionalityAfter analysis of alternatives and barriers according to ACM0014Ver.01, the most plausible baseline scenario turned out to be the use of open lagoons for the treatment of wastewater combined with power generation using fossil fuels in a captive power plant (continuation of the current situation). Assessment and demonstration of additionality was made according to “Tool for the demonstration and assessment of additionality” (version 04). More than 40 tapioca factories are now operating in Lampung Province where the Project site is located. To apply the proposed technology of closed fermentation tank system to the tapioca industry in the host country, there are investment barriers, technological barriers, common practice barriers, social barriers and business cultures barriers. Consequently no project employing the proposed technology has been realised in the region of the Project site. Therefore the proposed Project is additional.
Estimation of GHG Emission Reductions28,661 ton CO2e/year
200,627 ton CO2e/7 years
Monitoring MethodologyMonitoring scheme is shown below. University of Lampung (UNILA) as a partner of the host country will provide PT Wira with training of data monitoring and wastewater analysis.
Environmental Impact AnalysisBy implementing the proposed Project, favourable impacts on the environment can be expected such as curbing of GHG emissions, reduction of offensive odours around the Project site, improvement of quality of wastewater released to the environment and reduction of air pollutant emissions from the gas engine to the atmosphere. Due to the Decree No. 11 of 2006 by the Ministry of Environment, Environmental Impact Assessment (Analysis Mengenai Dampak Lingkungan/AMDAL) is not any more required for the implementation of projects to construct biogas recovery plant with power generation plant of 10MW or less at existing tapioca factories. On the other hand, Environmental Management Plan (Upaya Pengelolaan Lingkungan/UKL) and Environmental Monitoring Plan (Upaya Pemantauan Lingkungan/UPL) must be submitted to the authorities.
Issues and Tasks for Project RealisationThe technology for the Project is of the closed fermentation tank system that enables steady methane fermentation with a short hydraulic retention time. Procurement of required equipment will be from the global market. Construction will be undertaken by a local contractor. Estimated cost of the plant construction is approximately Japanese Yen 500 million at this stage. Project IRR was calculated on the before interest and tax basis. Based on the project duration of seven years and the CER sales price of US$ 10 or more, IRR is figured out as more than 10%, which can be considered reasonably satisfactory from the viewpoint of business feasibility. Number of years to recover the investment money turned out to be four years. On the other hand, availability of plant operation (number of days for operation) was identified as a possible major risk of lower IRR. To maintain a satisfactory level of availability, efforts by both public and private sector to take measures such as enhancement of cassava productivity by breed improvement and stabilization of cassava sales price are required. Other tasks required for the Project implementation include lowering the investment cost to increase IRR, maintaining continuous stable CER market, identifying the party for operation and maintenance, and agreeing to risk/benefit sharing among the Project participants. Another concern is that it takes too long a time before CDM registration in the host country. For smooth and efficient Project execution, it is also necessary to minimise the procedural time including that for selection of DOE.

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