T

he government launched the first pilot project late last month for large-scale solar power generation to supply rural areas in Kupang, East Nusa Tenggara. Now it is palm oil-based biogas that is poised to become a major source of electricity in rural areas that are far from the national grid of the state electricity firm (PLN).

The director general for renewable energy and conservation, Rida Mulyana, announced on Jan. 23 that the government was now finalizing a regulation that would require all palm oil companies to harness their palm oil mill effluents (POME) to produce biogas for power generation.

The potential of POME-based biogas in Indonesia, the world'€™s largest palm oil producer with more than 11 million hectares of oil palm plantations, is huge indeed. The rapid expansion of palm oil mills has so far resulted in the creation of vast wastewater lagoons containing the brown-hued detritus from the processed fruit, which releases a huge amount of methane, a greenhouse gas, into the atmosphere.

Only a small amount of this methane is currently being captured, but several palm oil businesses have started to realize the commercial use of the liquid waste if the methane can be captured and burned to generate power. So far these small plants (usually with a one-megawatt capacity) are operated mostly to power households around the mills.

It is encouraging, however, that the government has just issued a regulation that sets the feed-in tariffs for excess power from plants fired by POME-based biogas. This means that PLN is required to buy excess power from POME-based biogas-fired power plants.

Mulyana said at the opening on Saturday of the fifth such plant in Riau, which is owned by the Asian Agri palm oil group, that biogas from the liquid waste of the 850 palm oil mills across the country could generate 1,100 megawatts.

The regulation on the feed-in tariff will stimulate the development of POME-based biogas-fired power plants. Like solar power, electricity generated by POME-based biogas is quite suitable for rural electricity supplies because all palm oil mills are located near plantations and most of the households that are not yet connected to the PLN grid live in rural areas. Asian Agri'€™s general manager Freddy Widjaya said his company planned to build 15 more power plants, each with a one-MW capacity, near its mills in Sumatra.

But since palm oil companies have no experience in doing business with PLN to sell power through the feed-in-tariff policy, it would greatly contribute to speeding up the harnessing of POME for power if the government helps facilitate partnerships between palm oil companies, renewable-energy firms and PLN.

 Such partnerships will allow the palm oil companies to save their limited investment funds and transfer power investment management to the business partners who can better handle them.

The higher rate of power generation from POME-based biogas will not only accelerate rural electrification, but will also help improve the image of the palm ol industry, which has so far been notorious for alleged deforestation.