Energy generation from palm oil mill effluent: a life cycle cost-benefit analysis and policy insights

Abstract

Malaysia's renewable energy policies do not cover production from waste, including the generation of biogas from palm oil mill effluent. This paper combines life cycle cost-benefit analysis (LCCBA) and the analytical hierarchy process (AHP) to provide new insights into costs and benefits of technologies over the life cycles, and on the basis of this information, asks experts to rank different options to enhance policy. The results show that the continuous stirred tank reactor has a higher LCC of 0.63 Million USD/year, compared to a LCC value of 0.55 Million USD/year for the covered lagoon bio-digester. In terms of cost-benefit, the continuous stirred tank reactor has a higher net present value of 0.46 Million USD/year, higher return on investment of 10.11% and a shorter payback period of 9.9 years compared to the covered lagoon bio-digester system, which has a net present value of 0.22 Million USD/year, return on investment of 7.79% and a payback period of 12.8 years. The continuous stirred tank reactor system therefore emerges as more economically feasible compared to the covered lagoon bio-digester system. On providing this information to experts using AHP, the three top ranked policy options emerged as: i) providing detailed environmental guidelines, ii) standardising technical guidelines for biogas installation and iii) covering the open pond wall using lining. Economic insights and policy opportunities based on this research can be used to inform policy decision making in multiple contexts where biogas plant projects are under consideration, in both Malaysia and globally.