Powering the periphery: The transformation of emerging economies (Part 2/2)

This is the second part of the following article Part 1.

• Biofuels from agricultural residues reduce waste, boost energy independence, and create economic opportunities in developing nations

• Technological advancements in biofuels and off-grid systems improve efficiency and lower costs

• Public-private collaboration and strong policies are crucial to unlocking off-grid energy's potential for sustainable development

7. Beyond electricity: the multifaceted benefits of feedstock utilisation for biofuels

The use of locally generated feedstocks to power containerised biofuel systems goes far beyond just generating electricity. By changing farming methods, cutting waste, enhancing energy independence, and generating substantial economic opportunities, it opens up a chain reaction of positive externalities.

7.1 Waste reduction and circular economy principles

One of the main benefits of producing biofuel in poor nations is the utilisation of agricultural residues that would otherwise be regarded as waste. This minimises waste and maximises resource use, which is consistent with the tenets of a circular economy.

• Types of agricultural residues: Common agricultural residues suitable for biofuel production include:

• Crop residues: Stalks, leaves, husks, and cobs from crops like rice, maize (corn), wheat, sugarcane, cassava, and oil palm

• Animal manure: Dung from livestock, a potent source of biogas

• Processing residues: Bagasse from sugarcane processing, rice husks from milling, and POME (palm oil mill effluent)

• Current waste practices: These residues are frequently burned in the field in many poor nations, which contributes to air pollution and greenhouse gas emissions, or they are allowed to break down, which releases methane, a powerful greenhouse gas. According to FAO estimates, just a small portion of crop residues are being used productively worldwide, representing a huge unrealised energy potential.

• Example - Rice straw burning in Southeast Asia: Burning rice straw after harvest is a significant environmental issue in nations like Thailand, Vietnam, and Indonesia. According to a 2020 study published in the journal Atmospheric Environment, burning rice straw outdoors in Southeast Asia contributes significantly to air pollution by releasing large volumes of particulate matter, carbon monoxide, and other pollutants. Using containerised systems to turn this rice straw into biogas or bio-oil would reduce pollution while producing useful energy.

7.2 Maximising agricultural potential

Utilising agricultural residues for biofuel production adds value to the entire agricultural value chain.

• Additional income for farmers: By selling their agricultural residues to companies that make biofuel, farmers may increase their revenue, encourage collecting, and stop unnecessary burning.

• Improved soil health: Pyrolysis produces biochar, a by-product that can be applied as a soil amendment to increase soil fertility, water retention, and carbon sequestration. Consequently, a positive feedback loop may be created, increasing crop yields.

• Reduced fertiliser use: Anaerobic digestion yields digestate, a nutrient-rich by-product of biogas generation, which can be used as an organic fertiliser to lessen the need for synthetic fertilisers, which are frequently costly and have a negative impact on the environment.

7.3 Energy independence and reduced fossil fuel reliance

Countries can improve energy security and save significant foreign money by reducing their reliance on imported fossil fuels by generating biofuels domestically.

• Vulnerability to price fluctuations: Changes in the price of oil around the world can have a big effect on the economies of many developing nations. A domestic, renewable energy source that is less vulnerable to these price fluctuations is offered by biofuels.

• Creating a domestic biofuel industry: In addition to stimulating economic growth and technological advancement, fostering a local biofuel business helps to provide jobs in rural areas. This promotes innovation, skill development, and economic diversity in a positive feedback loop.

• Example: Indonesia's Biodiesel Mandate: Although sustainability issues with palm oil production require careful management, Indonesia's strict biodiesel regulations, which require blending biodiesel (mostly from palm oil) with fossil diesel, have greatly decreased the nation's dependency on imported diesel.

7.4 Quantifying the economic benefits

A number of factors, including as feedstock pricing, the cost of producing biofuel, the cost of avoiding fossil fuels, and the value of by-products like digestate and charcoal, make it difficult to pinpoint the exact economic benefits of using feedstocks for biofuels. Numerous research have endeavoured to measure these advantages, though:

• Avoided fossil fuel costs: According to a research conducted in Sub-Saharan Africa, the area could save billions of dollars a year on fuel imports if only 10% of fossil fuels were replaced with biofuels made from agricultural leftovers.

• Value of biochar: Depending on the crop and soil type, applying biochar can boost crop yields by 10–20% or more, according to research. This results in substantial financial gains for farmers. Provide relevant research on agricultural yields and biochar.

• Value of digestate: Farmers' input expenditures can be decreased by using digestate's nutrient content to replace a sizeable amount of synthetic fertiliser requirements.

• Example Calculation (Illustrative):

Assume that an Indonesian hamlet currently burns 1000 tonnes of rice straw annually.

• If generator efficiency and biogas yield are normal, this rice straw may be turned into biogas, which would provide about 200,000 kWh of energy

• The avoided electricity cost is $30,000 if the cost of grid electricity is $0.15/kWh

• Moreover, the digestate generated may take the place of synthetic fertiliser, say, valued at $5,000

• By increasing soil value, the biochar could provide further financial advantages

• For this one hamlet alone, the annual direct economic gain could exceed $35,000, ignoring saved health and environmental expenses from less burning. The potential economic benefits and national savings are significant when extrapolated across numerous settlements.

7.5 Positive externalities

Using agricultural leftovers to produce biofuel has several positive externalities in addition to the immediate financial gains:

• Reduced air pollution: By producing biofuel instead of burning leftovers in the open, air pollution is greatly reduced, benefitting public health and lowering medical expenses.

• Climate change mitigation: Compared to fossil fuels, biofuels made from biomass that is produced sustainably have a smaller carbon footprint, which helps to mitigate climate change.

• Improved water quality: Water quality can be enhanced by digestate application, which reduces nutrient runoff into rivers and the need for synthetic fertilisers.

• Enhanced rural livelihoods: In rural areas, increasing energy availability and generating economic opportunities help to enhance livelihoods generally and reduce poverty.

Developing nations in ASEAN and Africa can unleash a potent engine for sustainable development by adopting containerised biofuel technologies and taking advantage of the plentiful supply of agricultural residues. This will boost economic growth, improve energy security, and improve the lives of millions of people. This strategy does more than just generate electricity; it turns garbage into a useful resource that promotes a circular economy and builds a more resilient and affluent future.

8. Technological advancements in containerised biofuel and off-grid systems

Continuous innovation is driving down costs and improving the efficiency of containerised biofuel and off-grid energy technologies.

8.1 Biofuel technology advancements

• Advanced pre-treatment technologies: Improved methods for breaking down biomass feedstocks, increasing biofuel yields

• Enzyme engineering: Development of more efficient enzymes for converting biomass into sugars for fermentation

• Genetic modification of microorganisms: Enhancing the ability of microorganisms to produce biofuels from various feedstocks

• Integration of Carbon Capture and Storage (CCS): Capturing CO2 emissions from biofuel production to create carbon-negative energy systems

• Algae biofuel production: Advances in algae cultivation and processing technologies are making algae-based biofuels more viable

8.2 Off-grid system advancements

• High-efficiency solar panels: Continued improvements in solar panel efficiency are increasing power output per unit area

• Advanced battery technologies: Development of longer-lasting, higher-capacity batteries with improved energy density and safety features. Lithium-ion batteries, solid-state batteries, and flow batteries are showing promise

• Smart grids and microgrids: Integration of digital technologies, such as smart meters, remote monitoring, and control systems, to optimise energy distribution and management in mini-grids

• Hybrid systems: Combining multiple renewable energy sources (e.g., solar, wind, and biofuels) with energy storage to provide reliable and resilient power

• Internet of Things (IoT) connectivity: Enabling remote monitoring, diagnostics, and predictive maintenance of off-grid systems

9. Pathways to realising the potential: public-private collaboration

Governments, private companies, local communities, and development partners must work together to fully realise the promise of off-grid energy, containerised biofuels, and PPAs.

9.1 Role of governments

• Enabling policy and regulatory frameworks: Establishing supportive, uniform, and transparent regulations that expedite the licensing and permitting procedures, offer financial incentives for the growth of renewable energy sources, and set off-grid system requirements

• Financial incentives: Lowering the initial costs of off-grid initiatives and luring private involvement by offering grants, subsidies, tax exemptions, and other financial incentives

• Risk mitigation mechanisms: Supplying insurance plans, guarantees, and other risk-reduction instruments to reduce the risk associated with off-grid energy projects

• Capacity building: Putting money into the education and skills-building of regional engineers, technicians, and business owners to help with off-grid system installation, upkeep, and operation

• Rural electrification master plans: Creating thorough plans for rural electrification that combine grid extension techniques with off-grid options

• Promoting biofuel production: Putting into effect laws, tax breaks, and funding for research and development that promote the sustainable production and consumption of biofuels

9.2 Role of private enterprises

• Technology innovation: Creating and implementing cutting-edge off-grid energy business models and technologies, such as mini-grid solutions, PAYG models, and containerised biofuel systems

• Project development and financing: Obtaining finance for off-grid initiatives via crowdsourcing, debt financing, or equity investments

• Operation and maintenance: Supplying local communities with assistance and training while guaranteeing the dependable operation and upkeep of off-grid devices

• Customer service and Education: Delivering first-rate customer service and informing them about off-grid energy's advantages

• Supply chain development: Creating regional supply networks for off-grid system components such as biofuel feedstocks

9.3 Role of local communities

• Active participation: Engaging in the planning, implementation, and management of off-grid projects

• Demand creation: Utilising off-grid energy for productive purposes, such as agricultural processing, small businesses, and community services

• Ownership and sustainability: Taking ownership of the energy systems and ensuring their long-term sustainability

• Feedback and monitoring: Providing feedback to project developers and operators on the performance of the energy systems and identifying areas for improvement

• Local workforce participation: Contributing to the construction, installation, and maintenance of off-grid systems, creating local employment opportunities

9.4 Role of municipalities

• Resource allocation: Prioritise off-grid solutions in their energy planning and budgeting

• Information dissemination: Actively provide clear and accessible information to residents and businesses about PPA options, biofuel benefits, and available support programs

• Infrastructure support: Where feasible, provide supporting infrastructure, such as access roads or land for biofuel feedstock cultivation, to facilitate project development

• Streamlined permitting: Simplify and expedite the permitting process for off-grid energy projects within their jurisdiction

• Community engagement: Facilitate dialogues and partnerships between private energy providers, local communities, and other stakeholders

• Incentive programs: Offer property tax reductions, and grants

9.5 Role of development partners: international organisations, NGOs, philanthropic foundations...

• Financial assistance: Providing grants, concessional loans, and technical assistance to support off-grid energy projects

• Research and Development: Funding research and development of innovative off-grid technologies and financing mechanisms

• Capacity building: Supporting training programs and knowledge sharing initiatives to build local expertise in off-grid energy technologies and business models

• Policy advocacy: Working with governments to create enabling policy environments for off-grid energy development

• Monitoring and evaluation: Tracking the impact of off-grid energy projects on economic development, social well-being, and environmental sustainability

10. Addressing challenges and mitigating risks

Off-grid energy, containerised biofuels, and PPAs have enormous promise, but their effective deployment requires addressing a number of risks and challenges:

• Financing gaps: Obtaining adequate initial funding for off-grid projects is still quite difficult, especially in isolated and underdeveloped locations. There is a need for creative financing methods including results-based financing, blended finance, and crowdfunding

• Technical challenges and customisation: Strong technology, expert maintenance, and access to spare parts are necessary to guarantee the long-term dependability and performance of off-grid systems, especially in challenging environments. Production and energy production must be customised to the nation's feedstock, technical know-how, and climate 

• Supply chain constraints: In some areas, it can be challenging to set up trustworthy supply chains for solar panels, batteries, biofuel feedstocks, and other components

• Social acceptance: Off-grid projects' success depends on gaining support and approval from the community. It is crucial to address issues with land use, affordability, and dependability

• Environmental sustainability: It is crucial to make sure that the production of biofuel is sustainable and does not result in land degradation, deforestation, or competition with food crops. Best practices in land management and the procurement of sustainable feedstock are crucial

• Regulatory uncertainty: Regulations that are unclear or contradictory may discourage off-grid energy investment from the private sector. Governments must establish solid and unambiguous policy frameworks

• Grid integration challenges: As off-grid systems proliferate, there may be technological and legal obstacles to merging them with the current grid (where appropriate)

11. Conclusion: powering a brighter future for the global south

Off-grid energy solutions provide a revolutionary route to sustainable growth in areas with inconsistent or restricted grid connectivity, especially when paired with containerised biofuel technology and supported by properly designed PPAs. This strategy lessens dependency on fossil fuels, boosts economic growth, empowers communities, and speeds up the shift to a cleaner, more just energy future.

Decentralised energy solutions are essential for ASEAN countries like Indonesia, who have a wide range of energy requirements and a large archipelago, as well as for Africa, which is facing the biggest energy access gap in the world. Bypassing conventional grid infrastructure's constraints, switching to cleaner energy sources, and promoting local economic empowerment are all made possible by them.

A special window of opportunity is being created by the combination of growing availability of containerised biofuel solutions, novel business models like PAYG and PPAs, falling costs of renewable energy, and technological breakthroughs. Governments, corporations, and development partners can unleash the full potential of off-grid energy and power a better future for millions of people by cultivating strong public-private partnerships, establishing favourable legislative settings, and placing a high priority on community participation. In addition to supplying electricity, the goal of universal energy access is to empower communities, promote economic development, and create a more resilient and sustainable environment for everybody. The financial models and technologies discussed provide a powerful, flexible, and increasingly economical way to accomplish this important objective.