Renewable Energy Regulatory Support Project Chaired by Prof. Dr. J. - - PowerPoint PPT Presentation

Renewable Energy Regulatory Support Project

Chaired by Prof. Dr. J. Scott Younger

Morrisey Hotel , Jl. K. H. Wahid Hasyim No. 70, Jakarta, 10340

Contents

• Objectives
• Some Introdutory Facts
• Overview of Coal & Renewable Energy Resources
• Project Undertakings
• Today’s Issues & Ideas for Changes -> Toward New Framework

Canadian Government 0bjective

Through strategic engagement and investment to help the economy of Indonesia develop through reducing poverty and increasing sustainable economic growth and expand trade between Indonesia and Canada .

Project Objective

To help Indonesia develop it’s considerable renewable energy resources , an area of great interest to Canadian business and in which they wish to engage with Indonesia to help develop local skills with Canadian knowledge and Investment.

Supply and Demand

Supply Side

• Power Generation
• Transmission & Distribution

Demand Side

• Transportation
• Buildings
• Urbanisation

Forms of

f Ren enewable le or Cle lean Energy

• Solar
• Hydro
• Geothermal
• Wind
• Nuclear
• Tidal and Current
• Biomass
• Biofuel
• Waste to Energy
• Partial or hybrid solutions
• Algae for biofuel

What Countrie

ies Sh Should ld Be Be Focussin ing On

• A. Cities : Hot Spots and Pollution

 Smart designs  Better Energy efficiency -> Renewable Solutions  Water /Waste ; Modern Technologies and reuse

• B. Rural : Lack of Supply

 Renewables  Off-grid (smart) solutions  Appropriate water/waste designs

In

Indonesia`s Demand

• 57 GW ( RUPTL )

2017 Regional demand Increasing

• 100 GW (c.f. 40GW by 2019)

2025 2025

23% Renewables

Overview of Coal and Renewable Energy Resources

Figure 1. The Indonesian archipelago and population distribution

Figure 2. Global population changes over the past century Source: Younger, 2017

ASE SEAN and Renewable Energy

• Considerable forward momentum in China, India and Latin America
• Little attempt in ASEAN – worst performing region globally in terms
• f RE deployment and transport sector electrification. ( possible

exception Philippines – introducing renewable performance standards which would make a difference , if enforced ).

• Some 1.2 bn globally still lack access to electricity <- including an

unacceptable number in Indonesia.

• In ASEAN <- power generation is expected to double by 2025 while
• verall energy demand grows by 50%

National and International commitment’s to renewable energy

• National – RUPTL 2018 – Renewable energy to amount to 23% of the energy-

mix by 2025 ( currently at < 12 % ) – moved to 2027

• International – increase in renewable energy made as part of a package of

measures to tackle climate change in Indonesia’s Nationally Determined Contributions (NDC’s) made at COP 21 in Paris 2015

• Pledge to reduce GHG missions 26% by 2020 against a “business-as-usual”

scenario, and 41% if International support / funding granted – none will be achieved.

Sales to 2011 2012 2013 2014 2015 2016 2017*) Domestic Users 64.581 71.554 76.579 83.402 87.972 92.886 96.063 Industry 54.232 59.635 63.774 65.295 63.533 67.586 71.822 Business 27.718 30.391 33.831 35.507 36.108 38.963 40.966 Social 3.959 4.457 4.898 5.400 5.889 6.573 6.879 Government Offices & facilities 2.750 3.018 3.220 3.440 3.669 3.969 4.172 Street Lighting 3.049 3.123 3.233 3.375 3.429 3.478 3.628 Total 156.289 172.178 185.535 196.419 200.600 213.455 223.530

Table 1. Generated supply, 2011-2017

Realised Electric Sales in Indonesia TWh 2017 Estimate including Tarakan

Figure 3. Electricity consumption/capita in ASEAN countries

10,11 8,84 4,65 2,57 1,44 0,81 0,71 0,27 0,21 BRUNEI SINGAPORE MALAYSIA THAILAND VIETNAM INDONESIA PHILIPPINES CAMBODIA MYANMAR

MWh/capita

Coal Resources

• See figure 4 - estimated 100+ years of supply
• Quality : mostly low ranked ( 2,500 – 3,000 kcal ) to thermal quality (

4,500 – 5,000 kcal )

• High moisture , low sulphur
• Exploitation for power generation from about 1990
• Indonesia world major exporter – mostly regional
• Increasing domestic demand for PLN at subsidised price ( US $70/t

cap ) – short term

Figure 4. Locations of main coal operations across the archipelago

Coal Resources

• Provides about 50% of energy resource for current electricity output
• Estimated will still provide about 30 % of mid-century requirement ;

hence about same level plus on current output

• Export markets demanding only thermal coal or better quality
• India is looking into clean coal technology – including for their

Indonesian resources

• There will be a future for coal – but it will be different

Gas

• Cleaner than coal but more limited supply
• Supplies available in Indonesia – but not everywhere

and ultimately finite quantity ( 20 years ?)

Figure 5. Potential and developed renewable energy resources in Indonesia

75 19 33 29 18 6 207 5 0,2 1,7 1,4 0,8 0,3 H Y DRO MINI & MIC RO H Y DRO BIO- RE LA T E D GE OT H E RMA L OC E A N C URRE NT /T IDA L W IND S OLA R

INDONESIA RE SOURCES

Potentail GW Developed GW

Table 2. Potential Capacities across Main Island Groups No Island Potential (MW) Population (m) 1 Sumatra 15,600 66 2 Java 4,200 160 3 Kalimantan 21,600 10 4 Sulawesi 10,200 12 5 Bali, NTB, NTT 620 10 6 Maluku 430 2 7 Papua 22,350 5 Total 75,000 265 MINI HYDRO

Geothermal

• Indonesia holds 40% of world known reserves – 29 GW ( See Fig 6 )
• Many locations unsuitable , e.g remote locations, protected forest

reserve, sometimes local opposition.

• Target for development to date – est 9 GW
• Developed to date about 3.2 GW

Figure 6. Locations for geothermal projects

Geothermal

• Contract structure until more recently not conducive ( arguably still not

to investment )– developer has high front end cost in exploration.

• Field mapping techniques are improving.
• Majority of projects connected to “ Ring of Fire “
• PLN thinks it understands Geothermal so now starting to reactivate

developer interest.

Bio

Bio Crops and Bio Biomass

BIOCROPS

• Food crops, e.g. Sugar, corn,

cassava grown produce ethanol

• Fuel output only, e.g jatropha
• Controversial, competing with

food

• Often subsidised, e.g. USA
• Indonesian market immature

BIOMASS

• Waste from growing of food

e.g. Rice, coconut palm oil

• Potential for expansion
• Waste as wood chopping

Bio

Biomass

Small plants in operation in Indonesia using agricultural waste Suitable for localised rural requirements but dependent on steady supply

• f waste, e.g rice husk ash, wood chippings, solid waste; sometimes added

to coal fired stations

Bio

Biofuel

Usually derived from CPO Used as partial replacement of diesel – biodiesel Conflict with CPO products for food derivates

(Algae)

Waste to Energy

• A few plants operating in Indonesia, main one for Jakarta ; focus increasing
• Efficiency depends on composition of waste
• Requires good percentage of organics to develop methane gas
• Engineering of landfills needs careful design and operations daily monitoring
• Plastic waste projects being investigated
• Can be combined with recycling

Win

ind

• Obviously requires areas where there is adequate wind, like western Europe and Sulawesi.
• Also wind turbines can only operate in a comparatively narrow range of wind speeds, say above 5 kph and up to 50 kph

depending on size ; have to be turned off under fresh to gale conditions ; however new technology is lowering bottom limit and developing horizontal turbines

• Cannot be considered for base load power
• Indonesia has some opportunities for wind applications in specific areas . Most wind passes through East Indonesia,

especially Sulawesi which would be better served by solar, mini-hydro, biofuel

• Two 75 MW projects under construction / planned in Sulawesi.
• Where appropriate can be linked to another form of energy

Ocean Energy Estimated Resource base : 10-15 GW

• Projects built and being built in

Scotland, Canada

• First 1MW

Projects in East Indonesia being considered – held back by unsatisfactory regulations

• Large project in Lombok starts

requires appropriate regulation

Solar

• Effectively ‘limitless’ supply and in future probably a major contributor to overall global

power requirements ( for Indonesia over 200 GW potential )

• East Indonesia is one of the sunniest areas of the world
• A number of private developments there use solar power
• So far photovoltaic large panel solutions; slowly growing interest in rooftop.
• Considerable ongoing research to improve battery storage
• Predicted to become increasingly used in the future / main source by mid- century
• Up to 1 GW being considered in Indonesia – no progress to date
• By 2050, estimated that solar, direct and midirect , will provide 40% world output.

Macr cro Sola lar

Oxfordshire, England

Source : Gridserve Ltd

39 MW installed in 3 month

Source : Gridserve Ltd

1 MW Array

Source : Gridserve Ltd

Th The Sola lar Fig igures

Source : Gridserve Ltd

Source : Gridserve Ltd

• Project Undertakings
• Today’s Issues & Ideas for Change Towards New Framework

Project Undertakings

• Review the current conditions of the Indonesian market and the legislation and or

policies affecting the renewable energy sector in Indonesia with a particular focus on solar energy, biomass / waste to energy and potentially wave / tidal energy.

• Identify bottlenecks and the main stakeholders.
• Hold interviews and discussions with the main stakeholders concerning the major issues.
• Disseminate the findings via focus discussion group (FDG) and workshop to which all

relevant stakeholders would be invited.

• Prepare a ‘road map’ to encourage and implement positive change in the investment

climate for renewable energy in Indonesia, including recommendations and solutions that could potentially encourage Canadian and other investors to enter feasible projects and provide a satisfactory return on investment.

• Rank from most to least important the identified issues by level of difficulty or ease with

which stakeholders could potentially seek positive change.

Today’s Issues and Ideas for Change

• PLN tariff structure constrained by it’s lack of profitability , with resulting

negative impact on approach to RE

• Tariff offer to RE produces modest , or under working viability - 15% less than

average cost of Production.

• Government keeps changing regulations – flip flops, but is focused on coal usage

for next year, 2018 – 2019, and will continue to pursue coal solutions thereafter.

• PLN still uses considerable diesel driven output – conflict of interest issues.
• PLN has conflicts of interest between operations and regulations more generally.
• PLN is in difficuly with current operating structure.

Today’s Issues and Ideas for Change

• Recognition of the different imperatives for electricity delivery between

east and west Indonesia .

• Separate funding for grid integration.
• Eliminate tariff on self generating solar.
• Consider different tariff structure for RE c.f. fossil fuels, to recognise higher

front end costs and considerably lower operating costs, especially once capital borrowings paid off.

• Allow PLN to access government guarantees under proper structure.
• Allow project bundling , e.g. for mini hydro.
• Divide PLN into say 3 parts.
• Altogether develop a paradigm shift for PLN operations, including cleaning

up the regulations. ( Discussion )

Thank You