Sabah is exploring the use of microalgae to support its long-term renewable energy targets under the Sabah Energy Roadmap and Master Plan 2040, which aims to raise renewable energy capacity to more than 50 per cent by 2035 and 80 per cent by 2050, reports The Edge Malaysia.
In July, the Sabah Agro-Industrial Precinct (SAIP) signed a memorandum of understanding with CCE Power Holdings Sdn Bhd to develop a microalgae-based biomass power plant in Kimanis. The project will use microalgae as raw material to produce crude algae oil for biofuel and generate green electricity.
SAIP general manager Annef Osyairi Osman said microalgae has strong potential as an energy source because it grows quickly and absorbs carbon dioxide during cultivation. He said this means biofuel made from microalgae does not add new carbon to the environment, making it a cleaner option compared with fossil fuels and land-based crops.
The Kimanis facility will have two main production streams. Dried algae biomass will be converted into what is described as “green coal” for power generation, while crude algae oil will be refined into biofuels and other products such as bioplastics, medical creams and cosmetics.
Annef said the plant is expected to generate 30 megawatts of electricity through biomass combustion, using a mix of dried microalgae and palm-based waste. However, the expected volume of crude algae oil has not yet been made public.
He added that CCE Power’s technology allows microalgae to be grown continuously because the process does not rely on sunlight. The project will use a closed-tank cultivation system, which enables faster production by growing algae in controlled tanks using organic carbon sources.
Under this method, Annef said microalgae can be harvested within five to seven days, achieving yields of nearly 60 per cent, much higher than systems that rely on sunlight. He said the dried algae biomass has an energy value similar to coal, making it suitable for power generation.
The overall capacity of the plant will depend on the level of investment. Annef said the design allows for a single large tank capable of processing between 10 and 100 tonnes of microalgae. Current plans point to a capacity of about 50 tonnes, which would require several million ringgit in funding.
SAIP has set aside 100 acres of land in Kimanis for the project, which will be developed in phases over about three years from 2025 to 2027 to reach the full 30MW capacity. For the first phase, CCE Power has been allocated about 50 acres, which could support around 15MW, mainly for feasibility studies.
The feasibility study began in July after the MoU was signed and is expected to be completed by the end of this year. Annef said the project team must submit the study to the Energy Commission of Sabah to demonstrate that the concept is viable before moving to full development.
He said the company must meet all regulatory requirements before construction of the power plant can proceed.
The project also aims to reduce reliance on food crops for biofuel production. Annef said microalgae can complement existing agricultural biomass, particularly palm oil waste, which has long supported Sabah’s bioenergy sector.
Sabah is Malaysia’s second-largest oil palm-producing state and recorded the country’s highest oil extraction rate in 2023. The state has 129 palm oil mills with a combined processing capacity of 34.7 million tonnes a year and processed 22.4 million tonnes of fresh fruit bunches in 2023.
Annef said the Kimanis plant will gradually move from using only palm biomass to a mix of about 70 per cent microalgae and 30 per cent palm-based material. He said this shift is expected to reduce pressure on land, improve carbon recycling and lower overall emissions.
Despite its promise, large-scale microalgae production remains challenging. Annef said such projects require high upfront investment and take time to reach steady production, as initial growth can take up to a year before operations stabilise.
He said costs are currently higher, but these are expected to settle as the market develops. Studies have shown that algae-based biofuel is still more expensive than palm-based biodiesel, largely because palm oil benefits from more established supply chains and higher volumes.
Annef also pointed to a shortage of skilled workers and the need to develop downstream markets as additional challenges. He said these issues will be addressed through phased development, supported by CCE Power’s technology and partnerships with universities and training institutions.
He said the project, which is expected to involve investment in the low hundreds of millions of ringgit, will create hundreds of jobs during construction and provide permanent skilled positions once operational, with priority given to local communities around Kimanis.
