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HighlightsWe recommend a fuel collection hub and explore the potential use of less sought after large fibre and palm frond. We suggest centralising a technology hub facility to encourage conversion to a low carbon technology at the existing mills. Smart-partnership collaboration for building a large-scale biomass plant is worth consideration as it lowers the business risks and enhances economies of scale. Off-grid solutions involving decentralized generation would help to avoid further grid infrastructure investment. Contents lists available at SciVerse ScienceDirectRenewable Energy j o u r n a l h o m e p a g e : w w w . e l s e v i e r . c o m / l o c a t e / r e n e n e a b s t r a c tThe palm oil industry contributes 85.5% of the total biomass production in Malaysia, hence offering great potential for large-scale power generation. Despite being a tool that was designed to steer renewable energy development, the Small Renewable Energy Power (SREP) scheme has failed to stimulate the growth of the industry. To assist the industry, a new Feed-in Tariff (FiT) regime was introduced in 2011 with an ambitious 2080 MW national renewable energy target by the year 2020. Palm oil biomass is projected to contribute 800 MW of grid-connected capacity towards this target, a huge step up from the 41.5 MW capacity reached during the SREP period. This study investigates whether the current downstream value chain mechanism under the new policy system is capable of supporting such a high capacity goal. The main objective of this study therefore is to evaluate the sustainability of components that constitute the value chain, including the availability of palm oil biomass supply, bio-energy conversion technology and the costs and alternatives to grid extension. In order to understand the industry problems, this study uses a mixed methodology approach involving a combination of market survey and regulators' interviews. The aggregated results from these techniques were later discussed by focus group experts representing both industry and government stakeholders before arriving at a final consensus. Potential future strategies deriving from this research include options to explore the potential use of less sought after large fibre and palm frond. Centralising a technology hub facility offers an alternative approach to encourage conversion to a low carbon technology at the existing mills. Smart-partnership collaboration for building a large-scale biomass plant is worth consideration as it lowers the business risks and enhances economies of scale. Finally, off-grid solutions involving decentralized generation would help to avoid further grid infrastructure investment.

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The current global trends demonstrate the significant role of renewable energy in meeting the growing energy demand across all sectors to support national economic growth. In Malaysia, palm oil is one of the major agricultural export commodities with a total production of 17.7 million tonnes or 41% of the total world palm oil production in 2008. This research evaluates the sustainability of the grid-connected oil palm biomass renewable energy industry in Malaysia and proposes a policy framework and industry roadmap. The factors investigated include resource supply, the efficiency of waste to energy conversion technology used in the existing plants, and the attractiveness of the electricity interconnection scheme in encouraging exports of excess power from the participating mills to the main grid. A literature review and field survey were conducted to understand the barriers and possible enhancements to the current FiT system. The study concluded that harmonisation between upstream and downstream palm oil agricultural activities is essential for achieving the goal of making the oil palm biomass waste to energy industry sustainable. The policy framework and industrial roadmap models provide a distinctive enhancement to the FiT system besides indicating the way towards a sustainable biomass to the energy industry.