Techno – economic study of utilizing CPO as fuel replacement for existing diesel power plant

Abstract

Indonesia as stated in General National Energy Plan (RUEN) aims to achieve 23% of new and renewable energy in its energy mix by 2025. One of the ways to achieve this goal is by replacing existing diesel power plant fuel from fossil based diesel to biofuel and crude palm oil or CPO. CPO is envisaged very potential fuel substitutes especially for low and medium speed diesel engine due to its simple process to acquire and availability in Indonesia. This study aims to evaluate the viability of CPO utilization as fuel replacement for low and medium speed diesel engine compared to high speed diesel from economic perspective. This study uses levelized cost of electricity (LCOE) calculation to determine equivalent CPO price compared to its respected diesel price taking into account technical considerations and project life time. The impact of CPO usage for energy production to the palm fruit farmer also briefly discussed. This study finds that CPO is economically viable to be used as diesel engine fuel replacement under certain technical and diesel price considerations. The continuity of the replacement project also plays important role in determining the economic feasibility of fuel replacement by CPO. Certain incentives may be needed to be passed on by the government to maintain the sustainability of the replacement project.