2MW biogas plant to rise in Pahang

Camco Southeast Asia will establish a US$4 million biogas clean energy project in Pahang.

The two-megawatt biogas project will be based at a leading palm oil mill in Palong, Pahang, and will use anaerobic digestion to recover biogas-containing methane from palm oil mill effluent.

"Camco SEA will continue the construction of the project, with completion of the plant expected in early 2013.

"Total cost is anticipated to be incurred by Camco SEA in developing the project to completion anticipated at approximately US$4 million," said Camco SEA's Managing Director Kent Carter in a statement.

The acquisition of the Palong biogas project would further strengthen Camco SEA's market position in the biogas development business, one of the fastest growing areas of renewable energy development in the region, he said.

Kent also said the project, funded directly from existing cash resources within Camco SEA, would be among the largest of its type to date to generate electricity for supply to the Malaysian national grid.

Camco SEA, a joint venture company between Khazanah Nasional Bhd and Camco International Ltd,
acquired the rights to develop the project through the acquisition of Biopower Climate Care Holding Sdn Bhd, a wholly-owned subsidiary of Rhodia Energy GHG (France).

The Malaysian government recently introduced a renewable energy feed-in tariff as an incentive to encourage the conversion of waste into power and it is expected, over the coming years, that palm oil producers will come under increasing pressure to reduce waste from their production processes.

The project is being developed under a 13-year build-own-operate-transfer agreement.

Under this agreement, the mill owner will provide sufficient POME feedstock free of charge covering the full contract period. Once operational, the plant will generate revenue from the sale of electricity to the grid and from the sale of carbon credits generated under the United Nations' clean development mechanism.

The mill owner will receive a portion of the power and carbon sales under a revenue share agreement.

The electricity will be sold to the grid through a renewable energy power purchase agreement to be entered into a Malaysian utilities company, under the renewable energy feed-in tariff which sets a guaranteed off-take price for the duration of the project.

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