The use of biofuel as a way to address global warming is not a problem-free as some might assume. Jim Read casts an eye on some aspects of the issue, the subject of a recent Peak CEO Forum.

With oil at US$100 per barrel seemingly destined to become the new norm, and governments worldwide increasingly concerned about global warming caused by greenhouse gas emissions, biofuel might appear to offer a simple solution.

Not necessarily so, says Jorge Llamosas, one of four speakers at Indonesia’s inaugural Peak CEO forum held in February to discuss opportunities for investment in biofuel in the country. Llomasas is a senior adviser to Andrew Tani & Co, a consulting firm that offers technology advice, and one of the co-organizers of the forum.

The event was well attended by about 30 professionals mainly from the banking, energy and mining sectors. Other speakers were Deputy Minister for Research, Science and Technology Development Bambang Sapto, PT PLN (state electricity company), former president director Widiono Suwondho and Indonesian Geothermal Association President Suryadarma.

Biofuel can broadly be defined as solid, liquid or gas fuel derived from organic (living) matter (including plants) or from its waste.

The main advantage of biofuel, says Llamosas, is that when burned, they produce up to 60 per cent less greenhouse gas emissions than conventional fossil fuels, However, if the full environmental cost of producing them is factored in almost all of the biofuel used today fare worse than fossil fuels.

Part of the problem is that, as virgin land is converted for growing biofuel crops, carbon dioxide is released into the atmosphere; at the same time, the crops themselves are much less effective at absorbing carbon than the natural forests or grasslands they may be replacing.

In addition, biofuel crop production takes valuable agricultural land away from food, driving up the price of stable crops like corn, as illustrated by the 2007 food riots in Mexico, a response to the rising price of corn for tortillas.

Finally, deforestation for palm oil plantations may lead to forced displacement of indigenous peoples, as has sometimes occurred in Indonesia, while extensive use of pesticide for biofuel crops may reduce water supplies.

PARTIAL SOLUTION?

As Indonesia’s monopoly supplier of electricity, PT PLN could potentially be the largest buyer of biofuel in the entire country. However, as Widiono (PLN president director at the time the forum was held) explained, PLN is charged with producing electricity as cheaply and reliably as it can,. Fossil fuels like coal and gas are therefore likely to predominate as its main fuel source for some time to come.

While two-thirds of PLN’s customers are located in Java, the areas most suited to biofuel crop production are in the islands of Sumatra and Kalimantan, or event further afield.

PLN does not perceive biofuel as the large-scale solution to its fuel requirements, mainly due to the need to ensure continuity of its fuel source in enormous volumes. In essence, the organization believes that the role of biofuel is more likely to be in transportation (providing the power for motorized vehicles) than in electricity generation per se.

There is a more positive aspect. Commercial plantations produce significant quantities of organic waste matter, which can be used to produce biofuels to generate electricity locally.

In response to questions from the floor, Widiono acknowledged that PLN is prepared to buy electricity generated from biofuel by small-scale producers, particularly at times of peak demand. Further more, regional PLN managers are empowered to do so without needing to obtain approval from headquarters.

POSSIBLE WAYS FORWARD

While biofuels may offer a partial solution to the demand for energy, they are not the only ones.

Suryadarma believes there are strong environmental reasons for greater use of geothermal energy in Indonesia for electricity production, given its clean, environment-friendly and sustainable character. Currently, geothermal accounts for only 3.5 per cent of the energy mix, with installed capacity of 1,052 MW – enough to light 10 million 100W light bulbs.

Furthermore, as much as 40 per cent of the worlds potential geothermal resource are estimated to lie within Indonesia, mainly in Java, Bali, Sumatra and Sulawesi.

The main obstacle to more widespread use, says Suryadarma, is the government’s perception of geothermal as an alternative rather than mainstream energy source.

It is impracticable to transport geothermal energy, so it should be used at source as the localized, primary means of energy generation: Much better than monolithic power stations, he adds.

The forum was also told from the floor that biofuels will require continued and sustained government support if they are to make the leap into the mainstream, as localized, small-scale production currently lacks sustainability. Although biofuel use in its current form raises many controversial issues, plan algae offer a solution. Known as “third-generation” biofuels, they are characterized by low input/high yield and are biodegradable. Jon Dee, founder of the Plan Ark environmental news agency, says: “What we should be looking at, is how to derive biofuel from algae. That is the best way to go…”

Ultimately, it seems that whatever environmental advantages it might present, the right kind of biofuel will not offer a magic solution; rather, it will be another weapon in the ongoing battle against climate change. This article have been published at Peak Magazine Volume 21 no 3