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Reports of CDM/JI Feasibility Studies: FY2009

Title of Feasibility Study (FS)CDM Project Feasibility Study on Switching from Mixed Fuel to Biomass for Electricity Generation in North Sumatra, Indonesia
FYFY 2009
Main Implementing EntitySumitomo Forestry Co., Ltd.
FS Partner(s)PT. Canang Indah; Carbon and Environmental Research Indonesia; PT. Plarenco; and Japan Quality Assurance Organization (JQA)
Location of Project ActivityIndonesia (North Sumatra Province)
Summary of FS ReportPDF (403KB)
Description of Project ActivityThis is a feasibility study for implementing the CDM project to switch fuel used for power generation at PT. Canang Indah (hereafter, "CI"), which is located in Medan City, North Sumatra, Indonesia. CI is a wood processing company that makes particle board (PB) and medium density fibreboard (MDF) on its site. Its factory has a coal-based power plant with a capacity of 14MW, as well as diesel generators with a capacity of 11.5MW. Currently the coal-based power plant is employed for the factory's operations, while the diesel generators are used as back-up facilities for when the power plant is being overhauled or in case of emergency. This is studying the feasibility of converting the fuel used in the coal-based power plant from a mix of coal and waste biomass to 100% waste biomass.
Employing a coal and waste biomass mixed fuel for power generation system, the power plant used 46,716 tons of coal and 23,916 tons of waste biomass over the period from January 2007 to August 2009, calculated on an annual basis. The ratio of coal to waste biomass on an energy basis is 7:3. The waste biomass consists of palm kernel shells (PKS) as well as wood fibre generated from the production process at the factory. After this project is implemented, the goal is to use 100% waste biomass from palm oil mills in power generation. If there is a supply shortage of this waste biomass fuel, however, coal and waste biomass mixed fuel will be considered to ensure the steady operation of the power plant. Besides waste biomass from palm oil mills, waste biomass being considered for use includes old gum tree roots and scrap wood.
Targeted GHGCO2
Category of Project ActivityBiomass Utilisation
CDM/JICDM
Duration of Project Activity/ Crediting Period2011–2031/ 2011–2017 (First crediting period)
Methodology to be appliedAMS-I.A. (Version 13) "Electricity generation by the user"
Baseline ScenarioIn relation to this project, power is generated by a power plant with a capacity of less than 15 MW, and is consumed only within the CI group. The fuel used is waste biomass. As such, the project conforms to the applicability conditions stated in the methodology of AMS I.A. Version 13. The baseline was determined as the current status of the coal and waste biomass mixed fuel power generation system, which does not require investment costs. The project boundary is delineated by the "physical, geographical site of the renewable energy generating unit," as stated in AMS-I.A., Paragraph 6.
Demonstration of Additionality(1) Investment barriers:
    After the project is implemented, an additional US$140,507 per year will be required to cover the mounting costs of securing a supply of waste biomass and maintaining the power plant. Therefore, if revenue from Certified Emission Reductions (CERs) is not taken into account, an investment barrier can be said to exist because net present value (NPV) will be lower than when it was compared to the case of the baseline scenario.

(2) Technological barriers:
    As the power plant was originally designed for coal, the use of 100% waste biomass fuel will affect the plant's ability to reach full capacity due to biomass' lower combustibility, and there is a possibility that the power plant equipment could break down.

(3) Barrier related to the stability of biomass supply:
    According to the latest information available, among companies generating power on a similar scale to CI in North Sumatra, none have a facility equivalent to CI's that can generate power using 100% biomass waste procured externally.
Estimation of GHG Emission ReductionsAnnual average: 93,609tCO2
Monitoring PlanCI acquired ISO 9001 certification for its PB and MDF factory. Therefore, CI can record the details of its monitoring system in ISO documents to enable it to maintain this system.
CI has also created a new company division, comprised of staff from its power generation division, to fully enhance its CDM monitoring system. Data subject to monitoring will be collected daily and summarized monthly and annually in reports. Equipment used for analysis will be calibrated internally by CI's QA/QC sub-department, while the calibration tools and equipment will be calibrated externally at relevant national institutions when necessary.
Environmental Impact AnalysisIn November 2009, CI acquired Environmental Impact Assessment (AMDAL) certification. CI submits the results of its environmental impact surveys to the Medan City government twice per year. Data is measured by the Health Laboratory and the Superintending Company of Indonesia (SUCOFINDO), a research agency. In the event that measurement results exceed standard limits, improvements are carried out within one month and reported. The specific items of the surveys are listed below:
  • Air pollution
  • Noise
  • Vibration
  • Water pollution
  • Flood protection
  • Soil contamination
  • Toxic substances
  • Health of employees and surrounding residents
Project FeasibilityAn estimate of project feasibility performed under current conditions does not support establishing the project activity without benefit from CER because of the PKS price per calorific value lower than that of coal and the mounting costs of maintaining. However, as the result of the pre-validation, there are a lot of problems that should clear for CDM registration, and it is necessary to confer and reinvestigation with CI.
Pollutants Emissions Reduction(1) Assessment items:
Fields of air quality improvement
a) Soot emissionsb) NOx emissionsc) SOx emissions

(2) Results (tonnes/year):
Baseline emissions
Project emissions
Difference
Soot
1.13
1.56
-0.43
NOx
4.79
3.62
1.17
SOx
3.69
5.47
-1.78

As a result of implementing the CDM project, NOx emissions decreased while soot and SOx emissions increased. Standard limits for soot emissions in Indonesia are higher for using palm kernel shells than for using coal. The reasons for the increase in emissions is that palm kernel shells burn completely, which is not always the case with coal, and the shells contain ingredients that are completely emitted as exhaust gases, whereas with coal, it is assumed that some ingredients are burned into ash instead.

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