2011 has reminded us all with emphasis that the energy supply is one of the world’s most critical questions. And the substitution of fossil fuels with climate-friendly alternatives is clearly on the agenda.
A Swedish entrepreneur, Per Dahlen, believes in biomass as a new green technology miracle for Southeast Asia to produce biofuel for transportation, electricity and heating etc.
While biofuels is the subject for controversies within the European Union, Per is fully dedicated to introducing available new solutions for biofuel production in Asia, the continent he claims to be ideal for this kind of sustainable energy production.
Biofuel technology finally delivers
“The answer lies in the tremendous developments we have had over the past 5-10 years in biotechnology. Finally the existing biofuel technologies can be deployed in an economically and environmentally friendly manner.”
According to the renewables analyst and partner of Portelet Asia, who is not afraid to mince words when it comes to this renewable energy source, renewable biofuels produced in an environmentally and socially responsible manner could make Southeast Asia oil independent and it could export biofuels to Europe.
A former Internet business developer and Philips intrapreneur manager Per Dahlen has a multidisciplinary education combining technical engineering with an MBA from Spain. Within Philips he worked in Singapore back in 1997, his wife’s home country.
After settling down in Singapore in 2006 he started looking into renewables.
Soon he turned fully dedicated to the fast growing cleantech market, primarily as a facilitator in deal sourcing and investment management (targeting the SME-segment where most of the innovations and creativity resides for sustainable renewable energy solutions).
“It started off with the idea to be a consultant for such companies wanting to enter the market in Southeast Asia – Sweden must be in the forefront regarding environmental technologies so why not bringing that over here – besides realizing where we are heading; which was certainly not any enjoyable reading,” Per says, referring to the climate change threat.
He senses big business opportunities for instance in importing Swedish cleantech technology that fits here and assisting those companies.
“Sekab from Sweden, for example, they should come here! They have developed enough now.”
Biomass laid to waste
Using so called second generation biofules crops any biomass which contain cellulose – such as sugar cane, palm trees, cassava and different types of grass like sorgum or energy grass – can be turned into useful products like biofuels, bio-chemicals or bio-plastics.
“Having high production of biomass is one part so we need things which grow fast, is easy to harvest and does not consume too much water. Here in South-east Asia we have ten times more biomass production than in Europe or in the U.S for that matter. It’s in the tropics it grows fast.”
Also, Portelet predicts a deficit in biomass in Europe which could be produced at half the price over here and ten times as much as in the west.
“If the oil price exceeds 50 US dollar per barrel you will make profit. If oil costs more payback time for a plant will be faster. Then you get an enormous potential in this. Judging from the currently best estimates with regards to operating costs and capital requirements, this is an untapped gold mine.”
The second part is the biotechnology where the underlying process can make use of virtually any waste containing starch, sugars, or low concentrations of natural ethanol.
The region is also being abundant in biomass residues where so much material is laid to waste. The Palm, sugar cane and rice industries together represent 75% of the total agricultural output of Southeast Asia. To date only 25-30% of the harvested biomass ends up as an end-product, the remaining parts are discarded in the field or at the processing plants.
“At the palm mills they just waste hundreds of tons of waste materials every day!,” says the Swede who has a solution to plug into these mills – there are around 900 of them in Indonesia and Malaysia – and get not only palm oil, but also fuel from the residues.
“A palm plantation farmer could then double his income. “
And if succeeding in getting it going in this part of the world one could actually avoid the mistake of building large centralized power plants and instead have it distributed and renewable from the very beginning, he points out.
Linking technologies and clients
The Malaysian government is one of Portelet’s early clients which wants a strategy for the future what could be the result and implications should they invest in advanced biofuel.
And different plantation owners are welcome to turn to them with what they have and find out which technology would be suitable. There are different technologies and specifications.
“We want to be the link between the technology companies and those buying those technologies and running the plants. We are just now in the process of making the potential customers understand this and that it’s coming now and get the technology companies to understand that we have an enormous growth market here.”
They want companies with tried and tested technology to provide the assistance these need in order to grow on a new market. Three to four companies (already identified by Portelet) with different technologies must be integrated in order to have a complete system and which must then be adapted for the local types of biomass raw material.
“With second generation biofuels crops and technologies we would only need 4.5 million hectares of land for full oil independence, compared to the additional land used for primary crop production which grew 18 million hectares between 1998 and 2008. According to WWF and Food and Agriculture Organization of the United Nations, Southeast Asia has an estimated 17.5 million hectares of additional land available for energy crops and food production.”
“There is no production of advanced fuel from biomass here today but ten producers have announced that they will build the first plants here in Southeast-Asia. So we can already see that those with the most advanced technologies and a strategy to grow are on their way.”
The major barriers for large scale deployment of second-generation biofuels in Southeast Asia, says Per, will be the required capital for financing the deployment, and the political will of the regional governments.
Selling the concept to the authorities is also an undertaking for Portelet aside assisting with contacts, local financing and partnerships etc.
“We need governments to give support so it’s an enormous challenge to get this to work, and we must go about things step by step.”
In Scandinavia governments already supports this sector. Finland, for instance, has a programme to promote the development of second generation production technologies for biofuels for transport. Denmark has supported 6 advanced biofuels projects, and the Swedish government intends to have its transport sector fossil fuel free by 2030
The positive impact comes from replacing fossil fuels with carbon-neutral biofuels with biomass being the only renewable energy source able to produce fuel.
“The largest challenge lies in convincing the majority that there exists sustainable biofuel production. Palm oil and sugar should be in order to produce food. And it will never be profitable to produce ethanol from wheat, rice, or sugar cane so one must find a biomass that is inexpensive and is available in abundance – and that is cellulose. So you can get that from agricultural waste, from forestry or energy crops plantations.”
“Of course we don’t stop the emissions but decreases outtake.”