Firm inks agreement with Felda for next 16 years with project slated to start generating revenue from November 2018
By KEVIN WONG
Federal Land Development Authority (Felda) and Concord Green Energy Sdn Bhd (CGE) are working together on biogas projects in Pahang and Johor.
CGE CEO Datuk Khairuddin Mohd Hussin said the company has signed a build-operate-own agreement with Felda for the next 16 years as its partner to set up biogas plants at 14 of Felda’s palm oil mills. For a start, the project will involve four plants.
Currently, CGE is in phase one of the project, whereby construction works have started on four “green-field” palm oil mills, two located in Pahang and two in Johor.
CGE, he said, has invested approximately RM50 million in phase one of the project, including procuring six Jenbacher Type 4 gas engines from General Electric’s channel partner, Dana Engineering.
Dana Engineering will provide full power plant engineering solution including the installation of the Jenbacher units, engineering support, spare parts supply and overall maintenance of the units.
Additionally, the use of the gas engines are part of CGE’s biogas projects, whereby they will generate electricity from palm oil mill effluent discharged by Felda’s palm oil mills.
“That said, because of a certain number of palm oil mill owners have decided to installed biogas plants to manage the waste, the government has thrown in its support and came up with the idea of the feed-in tariff (FiT) incentive, which is run by Sustainable Energy Development Authority (SEDA).
“So, when millers have their biogas system in place, rather than just managing the waste, through the FiT incentive, millers will also be able to generate income as the produce from the biogas can be converted to electricity where it will be transferred to the nearest substation from the biogas plant,” he said yesterday.
Khairuddin also said that the palm oil millers who have had their FiT incentive application approved by SEDA will later sign a 16-year contract with Tenaga Nasional Bhd to supply electricity.
“Instead of just discarding waste from palm oil mills, we now can convert it to be something useful to us — generating electricity and to earn extra revenue. So that is why we have approached Felda as they have about 69 mills in the country, where some of them are viable to be under the FiT scheme.
“The six Jenbacher Type 4 gas engines will be set up in the four palm oil mills, which are to be commissioned by November next year. The revenue garnered from providing electricity to the grid will be a revenue shared between us and Felda within the 16-year agreement,” he said.
In terms of financial support, Khairuddin said they have received financial backing from the Bumiputera Agenda Steering Unit or Teraju, Malaysian Investment Development Authority, Malaysian Bioeconomy Development Corp and Hong Leong Bank Bhd.