Techno-economic analysis of enzymatic biodiesel co-produced in palm oil mills from sludge palm oil for improving renewable energy access in rural areas

Wei Zhe Ng, Aaron Anthony Obon, Chin Loong Lee, Yi Hui Ong, Wail Gourich, Kireshwen Maran, Dennis Boon Yong Tang, Cher Pin Song and Eng-Seng Chan

Energy, 2022, vol. 243, issue C

Abstract: To date, irregularity and lack of power supply remain a global problem in the rural areas of underdeveloped and developing countries. This paper proposes a new concept for rural electrification by using palm oil mills to co-produce biodiesel from sludge palm oil. We performed a case study based on a medium-sized palm oil mill in Central Kalimantan. Approximately 2.5 tonnes of biodiesel could be produced daily using an enzymatic batch process and potentially support around 1,375 households of 4 people each in the surrounding areas. Subsequently, we performed a techno-economic assessment to study the commercial feasibility of the concept for rural electrification using the enzymatic biodiesel as opposed to commercial diesel. A 10% price deduction was applied to incentivize the local community to use the co-produced biodiesel. From our analysis, the rural electrification concept was found to be commercially viable with a return on investment of 29% and a breakeven period of less than 4 years of operation. Barring the short-term impacts of the COVID-19 pandemic and the price fluctuations of diesel and crude palm oil, the long-term commercial prospect of this rural electrification concept is attractive as it financially benefits both the rural community and the mill operators.

Keywords: Biodiesel; Economic analysis; Sludge palm oil; Lipase; Rural electrification (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:243:y:2022:i:c:s0360544221029947

DOI: 10.1016/j.energy.2021.122745

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