Palong biogas,
Malaysia

Location: Palong, Malaysia
Project type: Grid-connected, greenfield
Technology: Biogas
Capacity: 2MW
Camco involvement: Management

Project summary

When Camco’s 2MW biogas project was completed in Malaysia in 2013 it was one of the country’s largest grid-connected power plants of its kind, and represented an environmental sea-change for the local palm oil industry.

Until that time, most palm oil mill effluent (POME) – the industry’s most voluminous and environmentally harmful by-product – was treated using open pond and digester systems, which release large amounts of methane into the atmosphere.

Now Malaysia is poised to become Asia’s biggest biogas exporter by 2020, thanks largely to the exponential increase of power plants like Camco’s that use anaerobic digestion to recover methane-containing biogas from the effluent, which is then used to generate electricity.

Every year Malaysia produces around 58m tonnes of POME, making the effluent a serious issue for plantation owners, local communities and the country in general. As a result, the Malaysian government introduced a renewable energy feed-in tariff to incentivise the conversion of waste into power, putting palm oil producers under increasing pressure to reduce waste from their production processes.

Capitalising on the government’s intervention, Camco South East Asia invested $4m in the project, which including acquiring the rights to develop the power plant based at a leading palm oil mill in Palong, Pahang state.

The Palong project was developed under a 13-year build-own-operate-transfer agreement with the mill owner, under which they have to provide sufficient POME feedstock free of charge for the duration of the contract period.

Since the plant became operational it has been generating revenue from the sale of electricity to the grid through a renewable energy power purchase agreement.

Camco fully divested its interest in its South East Asian venture in 2013.

Image credits:Palm oil mill, Kunak District, Malaysia – by CEphoto, Uwe Aranas
Palm plantation with road – by CEphoto, Uwe Aranas