Thesis (MBA (Business Management))--University of Stellenbosch, 2010. / ENGLISH ABSTRACT: The objective of the study was to establish whether a small-scale biomass renewable energy project that uses waste fruit and pomace as the predominant feedstock could be a feasible clean development mechanism (CDM) project. The study was based on the solid waste streams of a pome fruit processor. Renewable energy technologies that convert biomass into a methane rich gas were evaluated. These included the various anaerobic digestion technologies that yield biogas and gasification technologies that yield syngas. Gasification was not found to be a feasible technology due to the moisture content requirement of less than 20% against that of the biomass of 70-80% and due to the low bulk density of the biomass of 250 kg/m3 versus the required minimum of 500kg/m3. The biogas could either be fired in a combined heat and power (CHP) unit or in a dual fired burner with heavy furnace oil (HFO). Feeding the thermal energy and electricity from the CHP unit back to the processor or supplying the electricity to the national electricity grid was considered. The plant would supply electricity to the national electricity grid as an Independent Power Producer (IPP). Eskom would be the renewable energy purchasing agent (REPA) that purchases the electricity at an anticipated R0.96/kWh under a power purchase agreement (PPA) in terms of the renewable energy feed-in tariff phase II (REFIT) guidelines. The anticipated revenue for electricity was six fold the coal offset cost of R0.16/kWh, while there was no demand for the heat energy after the processing season, thus firing biogas in a dual fired burner was not feasible. The most feasible technology was the anaerobic digestion of the biomass using a continuous stirred tank reactor (CSTR) process followed by a CHP unit that feeds the heat to the processing facility and the electricity into the national electricity grid. Waste fruit and wet pomace would be codigested with abattoir waste during the operating season. Dried pomace, abattoir waste, waste fruit and any other non-woody material from the surrounding farms and packhouses would be digested after the season to optimize the utilisation of the plant capacity. A capacity of 11 dry tons per day for the case study at a cost of R13 138 889 yielded an IRR of 15.2% and a net present value (NPV) of - R1 498 616 based on a discount rate of 18%, when excluding revenue from the sale of carbon emission reductions (CERs). Therefore, without the sale of CERs, this project would be rejected as a non-feasible investment. The project is eligible for CDM registration as a small-scale renewable energy project activity. No barriers were identified that would prevent the registration of this project activity as a CDM project in South Africa. The sale of CERs increased the NPV of the optimum solution to R156 483 and the IRR to 18.3%. Registering the project as a CDM project activity improved the feasibility of the project to the extent that it was marginally feasible. The fermentation and hydrolysis of the biomass into bioethanol was investigated as an alternative to the generation of heat and electricity. Although the technology is proven, no facilities were identified that use spoilt apples or apple pomace as the substrate. This increased the risk of the project and a discount rate of 24% was set when calculating the project NPV. This project activity yielded an NPV of - R1 296 057 when excluding CDM revenue. The feasibility improved to an NPV of - R263 507 and an IRR of 23.4% when taking the additional revenue from the sale of CERs into account. This project alternative was only marginally out of the money. With the development of newer technology, this alternative could prove to be more attractive in the future.