Building an Export-Oriented Wood Pellet Plant from an Energy Plantation

Although geographically, Indonesia is the largest country in the Southeast Asian region and has a tropical climate, the export of wood pellets from Indonesia is still very small and far less than Vietnam. The destination of Vietnam wood pellet exports to Korea and Japan. Japan's wood pellet imports in 2018 are estimated to be more than 1 million tons, or that number is almost double that of 2017, with a percentage of 63% coming from Canada and 31% from Vietnam. It means a small area but able to export wood pellets to Japan with a minimum of 310 thousand tons / year, while Indonesia is estimated to be less than 100,000 tons / year.

Indonesia is also very potential to develop energy plantations for the production of wood pellets. Even the energy plantation can be integrated with large farms such as sheep, cows and goats and honey beekeeping, for more details, please read here. So that in addition to the energy sector, the food sector and environmental conservation in the form of water and land can also be maintained. Why are currently no wood pellet producers from export-oriented energy plantations in Indonesia? Even though the potential of raw materials and markets is huge. Profit estimates are also interesting especially with the optimization of land use and the energy plantation harvest.

There are several analyzes, to answer this, among others as follows, first is market access. The market or buyer is important for investment in a wood pellet factory worth hundreds of billions, so the market guarantee is very important. Abundant production but no one absorbs it or the buyer will make the factory stop production and go bankrupt. The characteristics of wood pellet products will also determine the user or user of the wood pellet. Although the same is for power plant consumption but the power generation technology is also different, so it requires different technical specifications of wood pellets.

Second, the cost factor. Cost factor may be the main obstacle, this is because wood pellet plants from energy plantations are not something cheap, but they are generally cheaper than palm oil mills and plantations, for more details, please read here. But with good prospects in the renewable energy sector from biomass, there should be many investors interested in investing in this business. Non-usurious mutual investment is the best choice to execute it. It is estimated that for wood pellet plant with a capacity of 10,000 tons / month (20 tons / hour), more than 100 billion rupiah.

Next, the third factor is infrastructure. A number of regions do not yet have adequate infrastructure despite the vast available land. Provision of infrastructure such as roads, bridges and so on is not something that is easy and inexpensive, so that it can be a significant obstacle. This is why site selection is important. The availability of electricity is another thing that needs attention and is an important consideration. Electricity is vital for wood pellet production or factories. If it turns out there is no electricity supply, then the wood pellet plant must make a power plant. With a range of 250 KW of electricity demand per ton/hour of wood pellet production, for wood pellet production with a standard export volume of at least 10,000 tons/month or 10,000 tons/shipment or 20 tons/hour requires 5 MW.

The power plant is quite large, as comparison because for the size of a large palm oil mill the electricity needs are only around 2.5 MW and the investment in power plants for each MW is 1 million US dollars, so for 5 MW it requires 5 million US dollars or around 70 billion rupiah. Infrastructure such as adequate ports is also very important. Wood pellet plants generally have wood pellet storage units close to the port so that they are easy to ship. The wood pellet storage facility with a capacity of 10,000 tons also requires a large enough building, estimated at more than 50 billion rupiah.

Wood pellet port with storage facility at Prince Rupert, BC, Canada

At present, wood pellet production generally only relies on sawmill waste and wood industry waste. Supply of raw materials fluctuating in both quality and quantity. In the rainy season in general, wood processing factories need more waste as fuel to dry wood they processed, so that wood waste that can be taken is reduced or only a little, even not left. This is different from the production of wood pellets from energy plantations because it guarantees a better supply of raw materials. But cultivation and harvesting technology must also be mastered properly to be able to better guarantee the supply of raw materials to the plant. For plants, guaranteed supply of raw materials is vital. The plant will immediately close if there are no raw materials to process. Wood pellet plant generally have a large warehouse of raw materials, which also functions as a buffer for their production.

Next is the mastery of wood pellet production technology itself. To maintain the quality and quantity of wood pellets that are as expected, the mastery of production technology is absolutely necessary, in addition to handling the product to the shipment. The critical points of the production process such as particle size, level of dryness, pelleting and cooling must be of particular concern. Wood pellet products that can be accepted by the international market almost all must meet two standard requirements, namely quality standards and environmental standards (sustainability). Quality standards are closely related to the technical aspects of the wood pellet itself or its production aspects. While environmental aspects are closely related to the origin of raw materials, and various environmental aspects that make wood pellet raw materials sustainable, and for more details can be read here.

The momentum of the energy plantation is predicted to not be long anymore, even Sri Lanka will soon produce wood pellets from the gliricidae energy plantation of 150 thousand tons/year or more than 10,000 tons/month, for more details, please read here. Gliricidae as well as calliandra are a group of leguminous plants (leguminoceae) and gliricidae are more popular and have been planted by the community since tens or even hundreds of years ago which is usually for hedgerows and leaves for animal feed. While the red calliandra, which may have been planted by the community for hundreds of years, is generally only for high areas. For a more detailed comparison of calliandra and gliricidae plants, please read here.

Energy Plantation: Planting Calliandra and Gliricidia?

Each plant has an optimum location for its growth. Although it can grow if it is not at its optimum location, the results are not as good as the optimum location. Plants that are planted in their optimal locations will have great expectations for achieving optimal results, both wood, fruit, flowers and so on. When planting tea, apples, or edelweiss in the lowlands or even on the sea coast it is almost impossible to get the optimum results, maybe even wither and die. The selection of the best location that matches the characteristics of the plant is important to get optimum results from the cultivation.

Gliricidae on the seashore of Depok, Bantul, Yogyakarta

Red caliandra on the slope of Mount Merapi, Magelang, Central Java

Likewise, the energy plantation. In addition to the selection of plant species to be planted, the location of the plantation should also be considered in relation to the types of plants to be planted. Energy plantation generally use fast growing species and short rotation coppice (SRC) plants of leguminoceae because they have many advantages, among others, fast harvest age (on average only 2 years), maintenance is very easy, does not need replanting up to a dozen years, the roots can absorb nitrogen from the atmosphere so that it fertilizes the soil, its roots are also strong so that it can withstand erosion, plants are also very efficient in the use of water so that it can be planted in even barren areas, the leaves are for high nutritious animal feed, and the flowers are for honey beekeeping. In short to optimize the use of the land, the energy plantation is integrated with the livestock business.

Gliricidae & calliandra are 2 species commonly used as energy plantation plants. Gliricidae is more suitable for the lowlands to the coast, while calliandra for the highlands. The practice of calliandra planting is also widely practiced in high areas, whereas gliricidae in the lowlands. Temperature, humidity, soil fertility, rainfall also influence to produce optimal energy plantation products. Sri Lanka is an example of a country that has a lot of gliricidae, especially as a crop between coconut trees. Indonesia as a coconut island seduction country should also be able to do the same thing. Under these conditions, wood pellet production can also be done as well as reviving the integrated coconut industry (more details can be read here, here and here) and livestock, for the best land optimization.

Bioeconomy is defined as knowledge-based production and uses biological resources or living things to produce products, processes, and services in the economic sector within the framework of a sustainable economic system. With the pattern above, energy plantation can be created in many central locations coconuts in Indonesia such as Riau, Jambi, Bengkulu, Gorontalo and South Sumatra to optimize the potential of the bioeconomy. In addition, millions of hectares of idle, marginal, barren land and critical land can be revived and saved to bring profit. Even hardwood trees in HTI (industrial timber plantations) which take a long time and also sometimes require high social costs for maintenance can also be converted to fast-growing species and SRC plants with energy plantations. Untreated land will be increasingly damaged such as erosion, landslides to desertification so that the mission of saving the environment has also automatically become part of the energy plantation activities above.

Reviving the Integrated Coconut Industry in Indonesia Part 2: Production of Coconut Sugar with Biomass Energy from Energy Plantation

Energy needs have always been a hindrance to the development of an industry, including the integrated coconut industry. In the previous section the integrated coconut industry could be run by utilizing their coir/fiber waste as fuel (read here), with the main product being coconut fruit itself. Another alternative to the integrated coconut industry is the production of coconut sugar, because the need for sweeteners is still very large. Whereas if coconut oil for oil production such as cooking oil is currently unable to compete with palm oil derived from CPO, even though coconut oil has its own advantages. Coconut sugar production uses the raw material of coconut roomie, and when coconut roomie is taken then the coconut fruit is not produced from the coconut tree or the coconut tree does not bear fruit. When coconut sugar production is more profitable, coconut sugar production becomes the main product of the integrated coconut industry.

Coconut sugar

In 2016 Indonesia became the largest sugar importer in the world with a value of $ 2.1 billion or around Rp.28.4 trillion. The value of Indonesia's imports was greater than the three other importing countries whose populations were actually greater than those of Indonesia, namely the United States ($ 1.9 billion), China ($ 1.2 billion) and India ($ 922 million). Whereas in the colonial era, Indonesia was once the largest producer and exporter of sugar. The need for sugar is very large it should be substituted with coconut sugar which in some ways is better than cane sugar. In the food industry coconut sugar or brown sugar has advantages over other sources of sweeteners such as sugar from sugar cane. That is because the brown sugar or coconut sugar contains other elements such as aroma and distinctive physical properties whose effects on a food production cannot be replaced by other sweetener sources.

The use of coconut sugar ranging from kitchen herbs to various types of food from households, small industries to large industries. Indonesia's current coconut sugar production is estimated at around 500,000 tons / year and is expected to increase as the potential for coconut sugar replaces the very high shortage of sugar cane, as mentioned above. Even a number of large industries in Indonesia such as Unilever, ABC, and Indofood have great interest in the development of coconut sugar. These companies which are also big soy sauce producers apparently need coconut sugar for their soy sauce production which is estimated to reach 70 thousand tons / year.

Integration Coconut Sugar Industry with Gliricidae Plantation

For the energy needs of coconut sugar production can be done by planting gliricidae between coconut plantations or as intercrops. Gliricidae is a fast rotation plant that can grow anywhere and is most optimal in the lowlands. Gliricidae is also a crop so that no need replanting  after harvesting the wood for about fifteen years. And because gliricidae is a leguminocea plant, its roots can bind nitrogen from the atmosphere which fertilizes the soil and its leaves are also rich in protein so it is very good for livestock such as sheep, goats and cows. The practice of coconut plantations with intercropping of gliricidae has been carried out in Sri Lanka hundred years and the coconut industry is developing well there.

With the plantation pattern as above, besides producing coconut sugar, it can operate because energy sources are available, it is also very potential with the integration of ruminant farms above and also honey bees. When the animal husbandry is integrated, land potential can be optimized and manure from the farm can be used as organic fertilizer for the coconut plantation. In addition, among the coconut trees and gliricidae, with the grass including them can also be used for pasture such as sheep, cattle or both. Grass from pasture fields can be used as the main feed of the sheep or cattle and gliricidae leaves as additional feed. With the combination of a number of coconut sugar based businesses, the production of coconut sugar can be done anywhere and gives maximum profit. Insha Allah

Reviving the Integrated Coconut Industry Part 3

When continuous pyrolysis is used for processing coconut shells and producing charcoal and is not processed further into activated carbon, excess syngas and biooil can be used as energy sources for processing fruit flesh and coconut water. Fruit flesh and coconut water can be processed into a variety of products needed by the market. The production costs of various processed coconut products have become very competitive because energy costs are very minimal or even zero. In addition, energy needs can also be added from coconut fiber which is used as fuel as well. The energy source can be used for electricity or heat or both depending on industry needs.

If gliricidae is planted as a crop between coconut plantations, wood products will also be obtained. The wood can be used as raw material for wood pellets as an export commodity which is predicted to continue to increase demand in line with awareness of environmental problems and climate change. Gliricidae leaf waste can also be used as animal feed such as goats, sheep and cattle. Maintenance of gliricidae is very easy and planting patterns as intercropping with coconut plantations are also common in Sri Lanka. Land optimization can also be done by using land between coconut plantation and gliricidae as pasture fields such as goats, sheep and cattle and for beekeeping.

To make the business profitable and sustainable, professional management certainly needs to be applied in the business. Management of the upstream sector namely plantations and livestock should be separated from the downstream sector namely factory or plant as a processing unit. This is similar to the organization in the palm oil company which separates the plantation division from the factory or mill division. In addition to facilitating business operations, the business will become efficient and competitive. 

Designing Energy Plantation for Wood Pellet Production: Don't Choose the White Calliandra!

Day by day more and more parties are interested in the production of wood pellets from the energy plantation. The calliandra energy plantation is the choice of most prospective producers of wood pellets. This is because plants can grow fast and coppice has many advantages, including high woody biomass productivity, does not need to be rejuvenated every year and easy maintenance. And it turns out that the interest in making the calliandra energy plantation has also begun to spread to various regions in Indonesia and even abroad. By making energy plantations, it does have many advantages, especially in the supply of raw material will be more guaranteed and large quantities of raw materials achieved. Some of the advantages of wood pellet production from the energy plantations also can be read here. Besides calliandra, gliricidae ranks second for choice of energy plantation plant species. Even Sri Lanka will soon produce wood pellets from gliricidae, for more details, please read here.

Designing energy plantations for wood pellet production in large capacity is not a simple job. For the global scheme, you can read here. One thing to note is the selection of calliandra seeds themselves. Erroneous selection of calliandra seeds will be fatal, especially for large plantations. It turns out that there are two types of calliandra, namely red calliandra and white calliandra. Red calliandra is suitable for energy plantation and wood pellet production. Why is that? This is because there are several advantages of the species of red calliandra compared to white calliandra, namely first, the ability of coppice for red calliandra can be up to 15-20 years then rejuvenated (replanting), while white calliandra is only about 5 years old for coppice every year and must be rejuvenated. Second, red calliandra wood has a calorific value of more than 4000 kcal / kg while white calliandra is lower than 4000 kcal / kg. So when making the calliandra energy plantation is not automatic any calliandra seed can be used, but it must be selected and the red calliandra selected.

There is one more thing that is usually missed by the parties who will produce wood pellets from the energy plantation, namely optimizing the energy plantation. Of course, to optimize the growth of energy crops fertilizer is needed and if integrated with sheep, goat and cattle farms, then besides meat production it will also produce fertilizer. Though also calliandra leaves are also very good for animal feed because of its high protein content, due to the roots of the calliandra plant which is able to bind nitrogen from the atmosphere. Even if the farms developed are also large, the biogas can also be made of the manure. In addition honey bee farms can also be added, and even calliandra honey, including high-quality honey. For more details about large plantations and large farms, please read here.