Challenges and Barriers in Technology Transfer and ... · Challenges and Barriers in Technology...

Challenges and Barriers in

Technology Transfer and

Performance of Biogas plants

in Southeast Asia: An Analysis

of Tapioca and Palm Oil

Industry Associated with CDM

business in Thailand

Sulabh Jain (IMRE 2007), Karlsruhe - Germany

Bernardo Okazaki Kehdy (IMRE 2007), Belo Horizonte - Brazil

Masachika Suzuki, IUJ, Osaka - Japan

Presented in INDONESIA – GERMAN SEMINAR

on Setting the Pace for Renewable Energy Technologies in Developing and Emerging Markets with Case Studies

on Renewable Energy Technology Transfer

Institut Teknologi Bandung

Bandung , 27th of September 2011

German-Indonesia Workshop & Seminar / IMRE Alumni Conference

Sulabh Jain, Bandung, 27th September 2011 2

Table of Contents

What is CDM/VER?

1. Motivation & Objectives

2. Methodology

3. Importance of Biogas Technology

4. CDM / VER Project Analysis

5. Barriers Analysis

6. Conclusions



What is CDM/VER?


2. Methodology




6. Conclusions



What is CDM/VER?

Developed by UNFCCC, also k/as Kyoto Mechanisms.

Developed to reduce the GHG emissions of the so called Annex I (developed &

industrialized countries) countries.

VER / VCS : Flexible, comparatively less stringent mechanism out of UNFCCC

framework.

Source: IGES (2006)



What is CDM/VER?


2. Methodology




6. Conclusions


Sulabh Jain, Bandung, 27th September 2011

1. CDM/VER Market Research & Business Analysis in Thailand.

(CDM – Clean Development Mechanism

VER – Voluntary Emission Reduction or VCS – Voluntary Carbon Sequestration)

1. Understanding the Project & Business Development: PDDs, Additionality Approach, Technical and Financial indicators, Common Practice Analysis.

2. Identification of barriers that hinder the performance of biogas projects.

6




What is CDM/VER?


2. Methodology


4. CDM / VER project Analysis


6. Conclusions



2. Methodology & Steps

Source: Self-elaboration



What is CDM/VER?


2. Methodology




6. Conclusions



Source: Waste Solutions (2010)

3. Biogas Importance in Industries

Palm Oil Production Process

Tapioca Starch Production Process

Waste Water (Organic Contents)



What is CDM/VER?


2. Methodology




6. Conclusions



Financial Support – GHG avoidance, CDM/VCS mechanism.

12

4. CDM/VER Projects in Thailand

Source: IGES (2006)



PDD : Project design document

Central component in a CDM project cycle which details all salient information related to a project.

Additionality Approach: “Additionality is the proof that a CDM project activity will achieve reductions that are additional to those that otherwise would occur without the project implementation” (IGES, 2009).

Steps involved:

1. Identification of alternatives

2. Investment analysis

3. Common practice analysis

4. Barrier analysis

5. Impact of CDM registration

13




62 Projects analyzed in all.

14

4. CDM/VER Projects in Thailand - Analysis

Source: Self-prepared



What is CDM/VER?


2. Methodology




6. Conclusions



5. Barrier Analysis

In literature Barriers are evaluated from several levels, and they may vary depending on the specific country or region, specific market niche or specific technology.

International organization e7 (2003): Macrobarriers and Microbarriers. (Macrobarriers are policy-level barriers while Microbarriers refer to barriers addressed to, and by, specific stakeholders).

Mayaki (2007), divided in 13 categories (Country, Political, Business, Technology, Financial, Credit etc.)

Painuly and Fenhann (2002), divide the barriers according to singular dimensions. (Most commonly observed classification amongst PDDs)

For a solid barrier analysis, the literature survey was combined with the study of existing projects and interactions with different stakeholders.



Barrier Type Examples

1) Awareness /

Information

Lack of awareness/ access to information on RETs

2) Capacity Lack of skilled manpower and training facilities

3) Economic Unfavorable costs, taxes, lack of subsidies and energy prices

4) Environmental Visual pollution, lack of valuation of social and environmental benefits

5) Financial Inadequate financing arrangements (local, national, international) for RET

projects

6) Institutional Institutional capacity limitations (R&D, demonstration and implementation)

7) Market Size of markets, limited access to international markets for modern RETs,

limited involvement of the private sectors

8) Policy Unfavorable energy sectors policies and unwieldy regulatory mechanisms

9) Social Lack of social acceptance and local participation

10) Technical Lack of access to technology, inadequate maintenance facilities, bad quality

of the product

5. Barrier Analysis

Source: Painuly and Fenhann (2002)




What are the barriers that hinder Biogas technology penetration in Thailand?

Most cited barriers

Barriers identified in 48

biogas CDM projects for

Tapioca Starch and Palm Oil industries in

Thailand

Most voted barriers

Barriers identified through

brainstorming sessions with CDM/biogas specialists

RESULTS

18



Analysis of 48 CDM biogas projects.

Sorting of the barriers following the CDM project design documents (PDD).

Categories: technical, social, prevailing practice, business culture, investment/financial.

Barriers identified: 23.

Most frequently cited: 4.

5. Barriers Analysis (Results: Most cited Barriers)

Barrier Category

Barriers cited on the studied PDD’s Project that cites the barrier

Business culture

Insufficient knowledge/ confidence in new technology

3, 9, 12, 13, 17, 19, 38, 39, 40, 41, 42, 43, 47

No strong driver to become energy self-sufficient

39, 42, 43

Limited information for project developers

1, 8

Lack of attention on biogas business by owners (not core business)

3, 20, 40

Investment/ Financial

New anaerobic digester (AD) systems require large investments

1, 3, 18, 20, 21, 22, 23, 24, 25, 29, 33, 34, 36, 37, 40, 44, 48

AD systems operation and performance risks

1, 4, 6, 7, 8, 9, 10, 17, 19, 20, 40, 41, 42, 43, 48

Uncertain commercial returns 1, 4, 5, 36, 37, 38, 48

Difficulties to obtain loans and find local investors

4, 9, 8, 17, 38, 42, 43, 48

High operation and maintenance (O&M) costs

3, 4, 5, 9, 29, 33, 34, 36, 37, 38, 44, 47, 48

Unawareness of CDM amongst financial institutions in Thailand

1, 39

Renewable energy perceived as unfamiliar and risky investment

3, 20, 39, 40, 41, 42, 43

Involved commercial risks 1, 3, 8, 9, 17, 19, 41, 42, 43, 44

Volatility of Thai Baht/ uncertain economic developments

3, 4, 8, 26, 39, 41, 42, 43

Electricity sold not enough to cover project’s expenses

29, 34

Prevailing practice

No driver to change from open lagoons (well known, cheaper and prevailing technology) to AD systems

1, 3, 4, 5, 6, 7, 10, 11, 13, 14, 15, 16, 18, 20, 21, 22, 23, 24, 25, 26, 29, 34, 36, 37, 38, 39, 41, 42, 43, 44, 45, 48

Social No knowledge about anaerobic digesters and their benefits and risks

3, 4, 8, 9, 17, 39, 40, 41, 42

Technical

Low or no awareness about AD systems and new technologies.

1, 4, 5, 8, 9, 17,19, 26, 30, 31, 39, 42, 43, 47

Lack of skilled and trained staff

1, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 15, 16, 17, 18, 19, 21, 22, 23, 24, 25, 26, 29, 30, 31, 34, 38, 39, 40, 41, 42, 43, 44, 45, 48

Lack of equipments and local technology providers/ suppliers (imported technology)

1, 3, 4, 5, 8, 9, 13, 17, 19, 26, 30, 31, 38, 39, 40, 41, 42, 43, 44, 45, 48

Sensitivity of the AD systems (strict and delicate operating parameters)

3, 11, 12, 13, 14, 15, 16, 21, 22, 23, 24, 25, 29, 34, 40, 41, 44, 45, 48

Few other similar plants using similar technology (technology not widespread in the country)

1, 14, 18, 20, 29, 34, 39, 40, 42, 43, 44, 45, 48

19



5. Barriers Analysis (Results: Most cited Barriers)

Results:

1) Lack of skilled and trained staff.

2) No drivers to change from open lagoons (prevailing technology) to AD systems.

3) Lack of equipments and local technology providers/suppliers (imported technology).

4) Sensitivity of the AD systems (strict and delicate operating parameters).

20



5. Barriers Analysis (Results: Most voted Barriers)

Brainstorming session: Search for all the possible causes to the problems. Discuss and argue until you reach the root cause.

21

Poor

performance

of biogas

plants

Problem

Cause 4 Cause 5

Lack of standards

Cause 6

Cause 1 Cause 2 Cause 3

Operator not trained



5. Barriers Analysis (Results: Brainstorming Session)

22



5. Barriers Analysis (Results: Most voted Barriers)

Cause & Effect diagram.

4 Major categories: Management, Cost, Technology, Operation.

Sub-categories: 16

Root barriers identified: 29

Voted as the most important: 6

Interview with

consultants:

23



5. Barriers Analysis – Results

1) Lack of attention on biogas business by the management (marginal activity within the plant).

2) No understanding of the complex biological process (operator).

3) Lack of proper training on operation.

4) Lack of knowledge about anaerobic digester systems (management level).

5) Lack of business long term strategy and business plan.

6) Optimistic figures provided by technology suppliers.

24



What is CDM/VER?


2. Methodology




6. Conclusions



6. Conclusions

Palm Oil and Tapioca industries play an important role in SE Asian economy.

Biogas generation from these industries is relatively new but promising business.

CDM/VER & some government initiatives/policies have boosted up biogas since the 90’s and constantly increasing trend exists (CPA).

However, based on the samples analyzed, the business seems to underperform.

Even with financial benefits:

• design and operation of a biogas plant requires high initial investments;

• still perceived as a risky business due to a number of barriers.

26



THANK YOU VERY MUCH FOR

YOUR ATTENTION !

Questions??? [email protected]

27

mailto:[email protected]



Bibliography

Adhikari, S., Mithulananthan, N., Dutta, A., & Mathias, A. (2008). Potential of sustainable

energy technologies under CDM in Thailand: Opportunities and barriers. Renewable Energy,

33(9), 2122–2133.

FAOSTAT. (2007). Food and Agricultural commodities production. Retrieved February 11, 2010,

from FAOSTAT: http://faostat.fao.org/site/ 339/default.aspx

iCFD. (2010). Retrieved March 20, 2010, from iCFD database: http://cfd.cineca.it/ cfd/

repository/database-of-particles-dispersed-in-a-stirred-tank-reactor-144gbyte/ CSTR.jpg/view

UASB.org web site. (2010) http://www.uasb.org/discover/agsb.htm

UNEP Risø Centre. (2010, February 1). UNEP Risø CDM/JI Pipeline Analysis and Database.

Retrieved February 4, 2010, from UNEP Risø Centre Web site: http://cdmpipeline.org/

Ward, A., Hobbs, P., Holliman, P., & Jones, D. (2008, April). Optimisation of the anaerobic

digestion of agricultural resources. Bioresource Technology, 99(17), 7928-7940.

Waste Solutions. (2010). Retrieved March 21, 2010, from Waste Solutions Web site:

http://www.wastesolutions.co.nz/

28



7. Limitations of the study

Identification of barriers from practical experience was done based on the opinion of a specific group.

No consultation of “field” workers: plant managers, plant supervisors, plant operators, maintenance personnel, technicians on the biogas sector and sectorial government agents.

Influence of human factors (operation and management) were not evaluated.

Assumption that information collected from public sources and interviews was true/truly shared and best to the knowledge.

29



Future researches:

Broader analysis, involving various stakeholders : More

accurate evaluation of biogas for 2 industries.

Similar study for other biogas sectors in Thailand (e.g., animal

manure, sugar cane, MSW): Broader picture of biogas situation.

Stratification of the industries: by size, technology, managerial

practices: Perhaps different barriers affect different clusters of

industries in different proportions.

30



Barriers

Social (Understandability and acceptance, Safety, foul odor)

Investment (requirement of no additional investment in old open lagoon system, high

investment / O&M costs, uncertain commercial returns)

Financial (Viability and feasibility, Volatility of THB, Lack of local investors and finance

from local banks)

Prevailing Practices (CDM implementation and approval, Incentives)

Legal (Discharge and Disposal of water)

Business Culture (Willingness towards regulation and change in technology, Familiarity and

experience)

Institutional Barriers (Uptake on advanced technologies remain slow)

31



Also known as digestion gas, a product of the anaerobic digestion.

Introduced in Thailand: around 1950 by Kasetsart University.

First large scale proliferation: around 1960, Ministry of Health (Drum type systems). Others: GIZ, EPPO etc.

Breakdown of organic matter (urban waste materials, manure and wastewater from agro-industries, sewage sludge, crops) in an anaerobic environment by micro organisms.

32


3. Biogas Importance in Thailand



2. Methodology & Steps




Majority of current Thai CDM projects are biogas projects, mainly from Tapioca Starch and Palm Oil industries:

Source: UNEP Risø Centre (February 2010)




What is CDM/VER?


2. Methodology

3. Tapioca, Palm Oil & Biogas Technology Importance in Thailand


5. Common Practice Analysis


7. Conclusions

8. Limitations



Tapioca: (Manihot esculenta)

Originated from South America.

Also k/as Cassava, Yuca, Manioc, Mandioca, Kappa.

Propagation in SE Asia: beginning of 19th century.

Popularity among Thai farmers:

• Increased demand in the foreign market.

• Good adaptability of the crop in adverse conditions and soils.

Main products: starch, flour, pellets, chips.

3. Tapioca Importance in Thailand

36

Source: 1) perpetualpreparedness.blogspot.com 2) agroindustriindonesia.blogspot.com



Tapioca production process overview and wastewater generation:

Source: Self -elaboration

37

3. Tapioca Importance in Thailand



3. Palm Oil Importance in Thailand

38

Palm Oil:

Derived from processing fruit bunches from the oil palm tree (Elaeis guineensis).

Propagation in SE Asia 19th century.

1st commercial plantation in 1917 (Malaysia).

Well established industry in Thailand: palm oil holds 62% of the total vegetable oil market.

High expansion potential in the near future.

Uses: primarily combustible oil, industrial use, Biofuel.

Soource: 1) www.foxtailpalmtree.com 2) http://davesgarden.com



Palm Oil production process overview and wastewater generation


39

3. Palm Oil Importance in Thailand



What is CDM/VER?


2. Methodology





7. Conclusions

8. Limitations



• CPA is an important technique to determine whether and how far the biogas technology is implemented and diffused in the Thai tapioca starch industries.

• Intensive study of publically available data like TTSA, UNFCCC, VCS, www.thaibiogas.com, others.

• To extend the research: Conducting surveys through questionnaires, telephonic conversations with industrialists & specialists, interviews with biogas technology providers in Thailand.

41


http://www.thaibiogas.com/



On an average, there is 6.52 million Rais of cassava cultivation area in Thailand. (1 Rai = 1,600 square meters (40 m x 40m).

Most of this area is located in the northeastern and eastern region, especially Nakhorn Ratchasima, Chaiyaphum and Kalasin provinces.

Best possible observation - There are 85 native starch factories.

These starch factories are normally situated closely to the cassava cultivation areas.

Interestingly, cassava cultivation and starch production practices do not vary significantly across the country.

42

5. Common Practice Analysis - Results

Source: http://www.thaitapiocastarch.org/article05.asp

7%

46%

33%

14%




Selection of technologies by analyzed 61 projects.

(UASB) Upflow Anaerobic Sludge Blanket Bioreactors (CIGAR) Covered In Ground Anaerobic Reactor (AFFR) Anaerobic Fixed Film Reactor (CSTR) Continuously Stirred Tank Reactor


Additionality Approach: On a cumulative overview, exclusive Barrier

Analysis is the predominant type of analysis for CDM market on

these specific industries in Thailand.

Source: Data from UNFCCC and South Pole

Additionality Approach

19 9

1

5 3

5

8 4

8

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

CDM's on Validation CDM's Registered and

Requesting Registration

VER's

Only Barriers Analysis Only Investment Analysis Both (Barriers + Investment)

2. Results – PDD’s Analysis

5. Matrix Main Conclusions

Quality of Analysis: For CDM projects under validation,

‘Satisfactory’ rated analysis are predominant…

Source: Self prepared based on UNFCCC data

CDM's on Validation - Quality of Analysis

Very Good Very Good

GoodGood

Satisfactory

Satisfactory

Poor

Poor

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Barriers Analysis Investment Analysis

5. Matrix Main Conclusions

… but for CDM registered projects and projects requesting

registration, ‘Good’ and ‘Very good’ rated analysis go in front.

Source: Self prepared based on UNFCCC data

CDM's Registered and Requesting Registration - Quality of Analysis

Very Good

Very GoodGood

Satisfactory

Poor

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Barriers Analysis Investment Analysis



CDM Project Cycle

48



What is CDM/VER?


2. Methodology





7. Conclusions

8. Limitations



Anaerobic digestion process

50



Performance Analysis

Total 7 studied plants : 6 Tapioca Starch and 1 Palm Oil:

• Selected out of 14 plants;

• More reliable and stable processes;

• Technical data for at least 16 months;

• Input parameters: wastewater volume (m3), CODIn (mg/l),

COD load (ton), COD removal (%);

• Output parameters: total biogas produced (m3), biogas utilized

(m3), methane in biogas (%).

51



General information for the selected plants:

Factory

code Type

Digester

Type

Plant

production

(ton/year)

Monitoring

period

Biogas

purpose

044 Tapioca

starch UASB 201,000

Apr/2008 to

Aug/2009 Heat

059 Tapioca

starch UASB 44,376

Dec/2007 to

Jul/2009

Heat +

Electricity

084 Tapioca

starch UASB N/A

Jan/2008 to

May/2009 Electricity

283 Tapioca

starch AFFR+ ACL 54,316

Jan/2007 to

Dec/2008

Heat +

Electricity

310 Tapioca

starch UASB 60,000

Jun/2007 to

Dec/2008 Heat

447 Palm oil CSTR + ACL 209,973

FFB

Jan/2007 to

Dec/2008 Electricity

467 Tapioca

starch UASB N/A

Nov/2006 to

Dec/2008 Electricity

Source: Carbon company database


52





53



WW

volu

me (

m3 )

COD In (m

g/l)

COD load (t

on)

COD rem

oval (

%)

Bioga

s pro

duced (m

3 )

Bioga

s util

ized (m

3 )

Met

hane (%)

Input Parameters Output ParametersFactory

44

59

84

283

310 N/A

447 N/A

467

Input Parameters Output Parameters


Technical performance for the selected plants:

Source: Self-prepared based on company database

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Total Economic Benefit = Benefit of replace heavy fuel (heating) +

Selling electricity to national grid

Initial assumptions and simplifications to allow the estimation

Factory

Code

Electricity Economic

Benefit (US$)

Heating Economic

Benefit (US$)

Total Economic

Benefit (US$) Difference

(%) Design Actual Design Actual Design Actual

044 3,721,764 5,388,827 3,721,764 5,388,827 +44.79%

447 1,119,177 1,099,414 1,119,177 1,099,414 -1.77%

283 617,516 288,017 875,430 932,758 1,492,946 1,220,776 -18.23%

310 1,219,243 846,294 1,219,243 846,294 -30.59%

084 1,425,643 698,851 1,425,643 698,851 -50.98%

467 1,347,460 587,661 1,347,460 587,661 -56.39%

059 1,008,976 354,932 3,291,637 773,277 4,300,613 1,128,208 -73.77%



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Challenges and Barriers in Technology Transfer and ... · Challenges and Barriers in Technology...

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