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</o:shapelayout></xml><![endif]--></head><body lang=EN-CA link="#0563C1" vlink="#954F72"><div class=WordSection1><p class=MsoPlainText>Dear Dr Nurhuda<o:p></o:p></p><p class=MsoPlainText><o:p> </o:p></p><p class=MsoPlainText>Many thanks for your response regarding the availability of biofuels in Indonesia. The total resource is really large no matter where you are. The use of rice straw as pelleted fuel would be ideal if it is price competitive.<o:p></o:p></p><p class=MsoPlainText><o:p> </o:p></p><p class=MsoPlainText>Following a lengthy investigation into the economics of cooking the social science team is presently writing a report that will no doubt capture some of the reasons why people choose the fuels they do. There is a market segment of about 10% of the population that is highly sensitive to price. At present they cook primarily with LPG (not exclusively) but will change to wood if the price rises even a little. This same group went in and out of kerosene use for the same reason.<o:p></o:p></p><p class=MsoPlainText><o:p> </o:p></p><p class=MsoPlainText>A great many homes in Central Java use multiple fuels (fuel stacking), even very poor people have LPG and use it occasionally for specific tasks. Most homes have several stoves which are used for particular purposes (stove stacking). Sumba Island is quite different.<o:p></o:p></p><p class=MsoPlainText><o:p> </o:p></p><p class=MsoPlainText>The current pilot focuses on two areas: Central Java and Sumba Island. They are very different and were chosen for that reason. Sumba has two quite different environments, neither of which is like Central Java. Every argument for and against various approaches might apply to one or another area. No solution works everywhere. Money or transport is often the dominating reason for this. <o:p></o:p></p><p class=MsoPlainText><o:p> </o:p></p><p class=MsoPlainText>Java is extremely densely populated with most trees being in the vicinity of homes. Farms are largely devoid of trees as can be seen from the air. The patches of trees are the villages. This is the opposite of many African settlements.<o:p></o:p></p><p class=MsoPlainText><o:p> </o:p></p><p class=MsoPlainText><span style='mso-fareast-language:EN-CA'><img width=453 height=276 id="Picture_x0020_1" src="cid:image003.jpg@01CE38F9.DB65B110"></span><o:p></o:p></p><p class=MsoPlainText><o:p> </o:p></p><p class=MsoPlainText>The wide availability of subsidised fuels creates changes in that portion of the market where those cheap fuels are available. Many decisions are based on minimising cost, and many are based on convenience with cost as a factor even if it is not dominant. To bring in pellets, the value chain must be viable.<o:p></o:p></p><p class=MsoPlainText><o:p> </o:p></p><p class=MsoPlainText>As mentioned before, China is experimenting with producing large quantities of pellets from crop residues and there are some documents available on the challenges. A lot of the cost is transport of raw materials and the final product. Obviously producing and consuming locally is the best from a transport point of view. From a production aspect, bigger is better because the equipment is not cheap and wears rapidly even when made with very advanced materials. The discussion document about the subsidy is available and it is carefully considered, basically concluding that there is a limit to the collection and distribution radius.<o:p></o:p></p><p class=MsoPlainText><o:p> </o:p></p><p class=MsoPlainText>The situation in Indonesia is that subsidies went from kerosene to LPG in what was easily the largest fuel switching programme in the world. It required a massive investment and it works. In the process the subsidy per MJ delivered into the pot was reduced. Reading the papers we find that the allocation for fuel subsidies of all kinds was not enough to cover the number of gigaJoules sold (if you view if from an energy carrier perspective). That is not a direct threat to the LPG subsidy, but it is something to consider. Not everything can be subsidised so the policy makers have to choose. <o:p></o:p></p><p class=MsoPlainText><o:p> </o:p></p><p class=MsoPlainText>If some of the subsidy were switched to pellet production that could create a value chain for an alternative biofuel. Because fuel would be sold, not collected, it has to find a viable space in the market. One way to bring it in is to make pellets available in places where LPG is not available (some islands, for example) and to introduce it together with affordable stoves that cook well enough to be highly desirable. Obviously if it can cook in a way that people want, it becomes desirable. The portion of cooking that has been attracting people into spending money on high quality fuel is the preparation of short fast meals and reheating food. <o:p></o:p></p><p class=MsoPlainText><o:p> </o:p></p><p class=MsoPlainText>In homes that mostly cook with LPG and electricity and charcoal the main use of wood (sticks) is for heating water. If we were to change the devices that heat water to be perfect for a new fuel, that might open a channel for pellets (at the moment here is no significant availability, even in Yogyakarta). Pellets are produced a couple of hundred kilometers from here but exported. We have a box of them in the lab for experimentation.<o:p></o:p></p><p class=MsoPlainText><o:p> </o:p></p><p class=MsoPlainText>>There are currently massive deforestation due to palm plantation.<o:p></o:p></p><p class=MsoPlainText><o:p> </o:p></p><p class=MsoPlainText><span style='color:black'>That is an important point. I have seen a few times that people collecting firewood in the remnants of a forest are accused of being 'the problem' when it was commercial people who caused it.<o:p></o:p></span></p><p class=MsoPlainText><span style='color:black'><o:p> </o:p></span></p><p class=MsoPlainText>>...When the straw is converted to pellet, around 10% of mass will be lost. Thus, from 100 Million tons of rice straw we can get 90 million tons pellets. Assuming that each house hold needs only 1,5 kg pellet daily, the pellet will suffice for 164 millions house holds.<o:p></o:p></p><p class=MsoPlainText><span style='color:black'><o:p> </o:p></span></p><p class=MsoPlainText><span style='color:black'>Do you have samples of the product? Do you think we can get some from Cambodia or Vietnam? Maybe Marc knows. What we need to know is the heat content (LHV) and the moisture content. It would be helpful to know the moisture absorption rate when exposed to the local conditions.<o:p></o:p></span></p><p class=MsoPlainText><o:p> </o:p></p><p class=MsoPlainText>>All we have to do is introducing the change. We have to make the people aware that they can not rely at all to log woods as well as to subsidized LPG and kerosene.<o:p></o:p></p><p class=MsoPlainText><o:p> </o:p></p><p class=MsoPlainText><span style='color:black'>Quite right. Very good points. Thank you.<o:p></o:p></span></p><p class=MsoPlainText><span style='color:black'><o:p> </o:p></span></p><p class=MsoPlainText><span style='color:black'>Regards<o:p></o:p></span></p><p class=MsoPlainText><span style='color:black'>Crispin<o:p></o:p></span></p></div></body></html>