Palm biodiesel prospect in the Indonesian power sector

The recent low oil prices tend to render the acceleration of renewable energy (RE) development in the world. Only few sectors of RE can still keep growing with this situation. One of the inexhaustible renewable energy sources in Indonesia is palm trees which produce palm oil that can be further processed into biodiesel that can potentially generate power and electricity as well as promote rural economic development. This paper investigates the use of palm biodiesel in Indonesian power sector, especially in the region of Java, Madura, and Bali (JAMALI). Projection on electricity demand, environmental impact, and emissions reduction over the next 20 years were established into two scenarios. The first situation examines recent energy policy, while the second situation promotes substitution of diesel fuel that is still consumed in the JAMALI power generating system. The effect of palm biodiesel on emissions such as CO2, CO, SO2, NOx, PM, and VOCs were calculated for each scenario. An externality study, resource analysis of palm oil plantations, and the economic feasibility of palm biodiesel were also conducted to accomplish the environmental analysis. The analysis shows the urgency for development of policies that support massive scale of biodiesel production.