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June 25, 2008
Building a biodiesel plant on Sumba Island in Indonesia
So Claude Graves, the founder of Nihiwatu surf resort called me. He has been developing Nihiwatu for 20 years into a model of sustainability and responsible resort development. The latest challenge? what to do about fuel prices and how to keep that money local. The answer? Biodiesel. Through a mutual friend Claude and I start in the fall of 2007 e-mailing and designing a biodiesel refinery over email. His plan is to pay local people in Sumba (average wage $.50/day) to pick up and dry coconuts. Then crush them for the oil (60% oil), make biodiesel from oil to run electric generators at Nihiwatu and use the meal for feed or make nutrition bars out of it. By March 08, Claude had all the funds for the equipment and scheduled the coconut crushing/expelling equipment to be installed in April. He also had all the biodiesel mixing equipment fabricated in Bali and delivered to Sumba by early May 08. In May 08 the Indonesia government lowered the subsidy on fuel due to the high cost of that subsidy relative to $135/barrel oil. That caused the price of a litre of diesel to rise 30 percent overnight and has continued to spark riots across the country. It is a good time to consider alternatives.
Ok, I just decided to stop horn tooting and just get down to the project and what happened. The Tobias Foundation partnered with the Sumba Foundation to build a small scale biodiesel refinery at Nihiwatu resort with the goal of redirecting all the resort's diesel purchased into biodiesel from the local economy. Create revenue for Sumba Foundation with no extra cost, or maybe savings to Nihiwatu resort. Use the biodiesel by products in the nutrition and farming and other revenue generation projects for locals. Tobias Foundation donated time, expertise and money around biodiesel manufacturing and co-product refining.
Project planning was Nov '07- April '08
Equipment installation, commissioning, training April - May '08
Nihiwatu running on biodiesel in generators June 08.
Plant design size, two 750L biodiesel reactors, 4 ton a day coconut crusher.
Operating capacity of biodiesel plant June 08 when Tobias Foundation left: 750L/day biodiesel.
Nihiwatu resort diesel consumption 3-400L/day.
The biodiesel plant was designed to make 3-4x the daily demand of Nihiwatu resort to allow for sales of biodiesel to other customers and creation of back-log biodiesel. As of June 08 the limiting factor has been availability of Copra (the dried coconut shells). The local copra production has been mostly bought by Chinese investors for export for overseas processing. There has been little incentive to increase production. But now with a local processor buying every day, production is expected to increase. Sumba Foundation provides trucks to drive around the island purchasing copra.
Fixed Cost expenses:
Property plant and equipment about $100,000USD provided by Sumba Foundation and donors.
Training and start-up costs about $15,000USD provided by Tobias Foundation.
Variable economics:
in June 08, the government controlled Diesel price on Sumba was 13,000RP/L about $1.30USD/L. This price is still subsidized and under the market price you would get from $135/Brl crude. The all in cost including all operation expenses, Sumba Foundation overhead, and all raw materials to produce a litre of biodiesel from local copra was about 9,000 RP/L, about $.90USD/L, a savings of over 40%. It will be up to a negotiation between Nihiwatu and Sumba Foundation how to split the savings, but the bottom line is that it is cheaper to make your own biodiesel on Sumba than to buy diesel from the petroleum company.
That is a HUGE conclusion and economic driver. The Tobias Foundation focuses on setting up sustainable businesses that promote renewable energy. Where this works best is when the customers of the renewable energy don't have to pay more or even can have a savings. Then you are not asking a business to do something non-economic for an altrustic reason. You are just giving them a better product at a better price. That is capitalism. That is sustainable. That is what happened in Sumba with the biodiesel refinery.
The next phase of analysis will be for the Sumba Foundation to follow up on the economic impact of keeping all that oil money on the island. Measuring the economic multiplier effect of that money going local instead of to the oil company. That will be very interesting.
Some pictures:
martin and claude in front of bd refinery
the bd plant building
nihiwatu beautiful villa and pool
coconuts collected in the field
claude and drying copra in the sun
raw copra as bought from local people
the twin biodiesel mixers
copra crusher and oil expeller
coconut oil expeller
measuring the lye
manual sodium methelate mixer.
test batches
demethalation unit (recovery of excess methanol)
Sumba school supported by the Foundation
The benefactors of all this work.
Posted by Martin at 10:09 AM | Comments (0) | TrackBack
June 23, 2008
When will the economy collapse from high oil?
I dunno. but what I do know is that most of the world and especially our political class are in total denial that anything other than normal market stuff is going on. The more dangerous among them actually think that the government can "solve" the oil problem. Every US President has since Eisenhower has promised to make us more "energy independent" and EVERY ONE HAS FAILED. The US is more dependent on foreign energy now than ever. And drilling here won't do anything for 8-10 years if you started yesterday. so....
How big is the problem? Multiplying production (barrels per year) times the oil price (dollars per barrel) gives a total cost in dollars per year. It's an enormous number; tens of trillions of dollars per year. To put a scale on it, the three thin curves on the graph show the oil cost in contrast to the total world domestic product; the annual value the goods and services added up for all the world's countries. The three curves show the oil cost at one percent, two and a half percent, and five percent of the total world economic output. At $136 this morning, we are over six and a half percent.
Oil production obviously cannot consume 100 percent of the world's income. My intuitive, uninformed guess is that it cannot go above 15 percent. If we see oil at $300 per barrel, we will be looking out over the smoldering ruins of the world's economy. Source
Posted by Martin at 9:53 PM | Comments (0) | TrackBack
Kiva loan now 33% repaid
We loand Arceli Rios Lara $575 through Kiva. She has been repaying monthly and now paid back 33%. Kiva is a great facilitator of this kind of microlending.
Posted by Martin at 8:49 PM | Comments (0) | TrackBack
June 16, 2008
flickr photo stream of Nihiwatu Biodiesel trip
Posted by Martin at 4:53 PM | Comments (0) | TrackBack