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Case study 5: Eco-friendly conversion of palm oil wastes intouseful energy: Sungei Dingin Palm Oil Mill (Guthrie)

PROJECT BACKGROUND

The Sungei Dingin Palm Oil Mill project (2 MWe plant) is implemented by the Kumpulan GuthrieBerhad (KGB) in Malaysia. The KGB Group is one of the leading conglomerates in South East Asia.Its core business includes plantation (oil palm), property development and manufacturing rubber and

rubber-wood products. In March 2001, KGB acquired interest in 25 oil palm operating companies fromHoldiko Palm Plantations (now known as Minamas Plantation) with estates covering Sumatra,Kalimantan and Sulawesi, Indonesia. This acquisition has increased the Groups land bank by two-fold to become a major producer of palm oil in the region. The Group is also developing 20,000hectares of oil palm plantation in Palembang, South Sumatra. It also operates in the United Kingdom,United States of America and Thailand.

The focus and driving force of the Groups initiatives and practices are based on the principle ofsustainable development, biodiversity and environmental management.

LOCATIONSungei Dingin Palm Oil Mill is located in Sungei Dingin Estate, Karangan, Kedah, West Malaysia.

PLANT LAYOUT

ECONOMICS

The total investment cost amounts to Euro 2.0 million, excluding civil works and building foundations.A pre-tax IRR of 15% (with a payback period of 8.6 years) was obtained, based on the revisedinvestment & operating costs and the potential energy savings data. The increase in the costs ofinvestment, reduction in the value of the potential energy savings, coupled with a reduction of energyutilisation due to a lower than expected operation of the palm oil mill, resulted in a lower profitabilityfor the project, when compared to the data used during the FSDP evaluation. It is expected, however,

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that with the increase in the milling capacity of the palm oil mill, maximum utilisation of electricity andsteam generated by the cogeneration plant will be realised, eventually resulting in a faster recovery ofthe investment and better profitability for the project.

TECHNOLOGY/ PERFORMANCE

The plant consists of the following components:

- Moving-floor Silo Unloading System;- Combined Watertube-Firetube Steam boiler, generating 2 x 22.5 tonnes/h of steam at 23

bar (g) and equipped with two Dynamic Water-cooled Step-grates;- Multicyclone Dust Collectors;- 2 x 2 MWe back-pressure turbo-generators (1 running, 1 standby).

The performance monitoring of the project was conducted during 22-23 August 2005. The plant hasbeen running efficiently since it was commissioned in August 2004. From the monitoring conducted onthe cogeneration plant, the average boiler efficiency was found to be about 76% based on the LHV ofthe fuel. The plant uses palm shell and mesocarp fibres as fuels for the boilers. All the steamgenerated by the boilers passes through the 2 MWe back-pressure turbo-generator. The exhauststeam is used in the palm oil mill for process applications.

ENVIRONMENTAL IMPACTKumpulan Guthrie has a long-term vision to introduce the concept of eco-tourism for their industrialcomplex. Thus, efforts are being made to ensure that the environment is well taken care of. All themeasurements and observations made during the monitoring confirmed that the plant has beenoperating well. The CO, NOx, SOx and particulate emissions are well below the allowable limit by theMalaysian Authorities. Ash and waste water are also properly disposed.

SOCIO-ECONOMIC BENEFITS

This cogeneration plant is, in many respects, a showcase of a modern and efficient palm oil mill. As amodel for future palm oil mills, it has adopted a strategy that favours efficiency and environmentalfriendliness. Moreover, the plant management has introduced Mission Guthrie Excellence whichcalls for the implementation and enhancement of best practices. The management also introduced thebalance scorecard (BSC) as a management system to monitor the implementation of strategic and

performance targets. These have helped Kumpulan Guthrie achieve creditable economic and socialbenefits.

SUPPLIER CONTACT DETAILS

BOILER MAIN OFFICE:Vyncke Energietechniek NVGentsesteenweg, 224, B-8530 Harelbeke, BELGIUMTel: +32 56 730 630Fax: +32 56 704 160

LOCAL REPRESENTATIVE:Vyncke (East Asia) Sdn BhdNo. 10, Section 14/44, 46100 Petaling Jaya, MALAYSIA

Tel: +603 7954 1408Fax: +603 7954 1409

TURBINE MAIN OFFICE:AG Kuhnle, Kopp & Kausch (KKK)D-67227 Frankenthal, GERMANYTel: +49 6233 852446Fax: +49 6233 852660

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AUTHORISED DEALER:Jebsen & Jessen Technology (M) Sdn Bhd16, Jalan 51A/225, 46100, Petaling Jaya, Selangor Darul Ehsan, MALAYSIATel: + 603 7876 9333Fax: + 603 7877 1033