Indonesia Energy Overview / Market Opportunities

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Islanded Grid Wind Diesel Conference March 6, 2015 Anchorage, AK Brian Hirsch, PhD Senior Project Leader NaEonal Renewable Energy Laboratory www.nrel.gov [email protected] SuEyo Siswanto Senior Manager for Hydro Energy New and Renewable Energy Division PT PLN (Persero) Head Office Milosz Mogilnicki Resident Advisor to PLN U.S. Department of the Treasury Office of Technical Assistance

Indonesia Energy Overview / Market Opportunities

Total Hydro 3,523 MW Geothermal 439 MW Steam-turbine

12,386 MW

Combined Cycle

7,704 MW

Gas-turbine 3,224 MW Diesel 3,268 MW Others 39 MW IPP 5,427 MW TOTAL 36,010 MW

Java-Bali Hydro 2,399 MW Geo 375 MW Steam-turbine

10,880 MW

Combined Cycle

6,786 MW

Gas turbine 2,114 MW Diesel 120 MW IPP 4,185 MW TOTAL 26,859 MW

NTB Diesel 141 MW Hydro 1 MW TOTAL 142 MW

NTT Diesel 53 MW Geothermal 4 MW Hydro 1 MW TOTAL 58 MW

Papua Diesel 266 MW Hydro 4 MW TOTAL 270 MW

Maluku Diesel 198 MW TOTAL 198 MW

Sulawesi Hydro 220 MW Geothermal

60 MW

Steam-turbine

100 MW

Gas-turbine

123 MW

Diesel 567 MW IPP 357 MW TOTAL 1,422 MW

Kalimantan Hydro 32 MW

Steam-turbine

201 MW

Combined Cycle

60 MW

Gas-turbine

113 MW

Diesel 969 MW Others 39 MW IPP 56 MW TOTAL 1,470 MW

Sumatera Hydro 867 MW Geothermal 0 MW Steam-turbine

1,175 MW

Combined Cycle

858 MW

Gas-turbine 874 MW Diesel 953 MW IPP 829 MW TOTAL 5,556 MW

PLN has an extensive generaHon porIolio with total installed capacity of 30,583 MW across Indonesia. PLN purchases 5,427 MW from IPPs on top of its own capacity.

Sumatera Kalimantan

Sulawesi

Maluku Papua

NTT NTB Java-‐Bali

PLN GeneraHon Network

PLN Cost of GeneraHon

Sumatera Kalimantan

Sulawesi

Maluku Papua

NTT NTB Java-‐Bali

$0.30/kWh

$0.34/kWh

$0.27/kWh

$0.28/kWh

$0.33/kWh

$0.38/kWh

Average cost of generaHon $0.12 / kWh Average electricity price $0.072 / kWh Cost of generaHon in insolated areas can be up to $0.45/kWh

$9.7 Billion Electricity Subsidy

$0.40/kWh

OpportuniHes -‐ Cost Savings

Other Benefits: •  Scalability -‐ RE systems are scalable thus applicable for use as

distribuHve generaHon for remote and isolated grids, where convenHonal energy is too expensive (diesel) or too big (coal)

•  Power security -‐ lower dependence on oil

Cost of GeneraHon in remote area $0.35 LCOE for RE systems* $0.07-‐$0.25 Cost of GeneraHon Savings $$$

* Based on GOI FiT and other incenHves

OpportuniHes -‐ Resources

Renewable Energy Resources PotenHal PLN Planned Capacity

1

Hydro

75 GW

624 MW

Mini -‐ Hydro 418 MW

Micro -‐ Hydro 186 MW

2 Solar Pv 4,80 kWh/m2/day 22 MW

3 Wind 3 – 6 m/s 1.87 MW

4 Ocean 49 GW 0,01 MW

6 Geothermal 29 GW 1.2 GW

7 Biomass/Biogass 49 GW 500 MW

ICED’s Project Pipeline Sites (as of December 2013)

SERIG Project Broad ObjecHves

ü  Demonstrate the value of RE/EE technology soluEons that enable economically sustainable energy market alternaEves

ü  Support the development of a naEonal-‐level policy framework to foster private investment in RE throughout remote areas

ü  Mobilize private investment in RE and EE projects, parEcularly by working to foster market potenEal for companies

ü  Leverage and promote further engagement with exisEng clean energy efforts in Indonesia

ü  Develop a replicaEon plan for accelerated RE and EE deployment across hundreds of other remote grids in Indonesia.

Demonstrate business cases for high-‐penetraEon renewable energy and energy efficient technologies to replace diesel generaEon on selected islands and remote

grids

Project RaHonale and ObjecHves

Ra#onale: §  High cost of diesel powered electricity esp. for remote island grids and

relaEvely low levels of electrificaEon §  Clean energy and energy efficiency and GHG goals §  Rapidly expanding market potenEal for clean energy technologies §  Access to renewable energy resources §  Significant internaEonal investment in RE and EE

A few of the challenges: §  NaEonal subsidies for diesel fuel §  Detailed site-‐specific resource data §  RE technology supply chain and experEse in remote locaEons §  Capacity building – operaEon and maintenance of RE systems §  Accessibility of island grids

Indonesia

Indonesia has the 4th largest popula>on in the world, and a rapidly expanding economy with na>onal goals and policies to increase access to electricity while also increasing usage of renewable energy.

Site Selection

Diesel Plant Sites Throughout Indonesia

(~900 sites)

PLN's 4 Preferred Provinces (~200 sites)

Desktop Study (19 sites)

Stakeholder ConsultaEon (10 sites)

Site Visits

(5 sites)

Final SelecEon (2-‐3 Sites)

Selection Process

2 provinces selected for Feasibility Analysis: Central Kalimantan and East Nusa Tenggara

Sample Criteria: 1. Cost of electricity 2. Local government

support 3. PotenEal for replicaEon 4. ElectrificaEon RaEo

SelecEon Process: 1. PLN prioriEes 2. Regional desktop study (data availability) 3. Stakeholder consultaEon 4. Site visit/survey

Lamandau – Central Kalimantan

Population: 70,000

Electrification Ratio: 36.4%

Diesel Consumption (PLTD AMP): 4.8 Million Litres/yr

RE resources: solar/hydro/bioenergy

Sabu Island – East Nusa Tenggara Population: 67,000

Electrification Ratio: 41.7%

Diesel Consumption: 1.3 Million Litres/yr

Primary RE resources: wind/solar Substantial off-grid PV

SUMBA – Iconic Island IniHaHve

Financing OpHon Overview Technology Ownership ExecuEon Method Financing SERIG LocaEon Key Comments

Solar PV Private Sector Requires tender from PLN

Equity (developer or private) and debt (Banks)

Lamandau and Sabu Island

•  Requires PLN to issue tender •  Private developers are likely only

interested in large projects •  Development bank loans could be

possible for large projects also.

Solar PV PLN PLN investment afer request from regional office

PLN budget or development bank loan


•  Obtaining budget from PLN for large solar projects appears unlikely

•  Development bank loan for solar already underway and requires a large (~$100M) transacHon

Biogas Private Sector Standard power purchase agreement (PPA)

Palm Oil Mills (if they own the project) Developer Owned-‐ Equity (developer or private) and debt (Banks)

Lamandau

•  Likely strong financial return based on other studies

•  Mature industry in Malaysia •  Will require coordinaHon between

Mills, local government, and PLN

Wind Private Sector Standard PPA Equity (developer or private) and debt (Banks)

Sabu Island •  InstallaHon and maintenance

challenges due to remote locaHon / lack of local capacity

Power lines PLN Likely a tender afer funding is obtained and PLN approves

Could be local government, PLN, grant, or developer but will need to be operated by PLN


•  Required for biogas and wind projects as resources are far from the exisHng grids

•  No clear mechanism to fund these components

Hybrid system components PLN

Likely a tender afer funding is obtained and PLN approves

Could be local government, PLN, grant, or developer. Needs to be operated by PLN


•  Will be required for some renewable energy diesel hybrid systems No clear mechanism to fund these components.

Off-‐grid systems Village Coordinate with district and village governments

Grant from central government ministry or donor organizaHon


•  Appears to be a large need here but not clear if this fits with project and repeatability would be limited since it would be grant dependent

Opportunities & Challenges

OpportuniEes:

•  Infrastructure needs to support rapid economic growth.

•  High electricity demand growth of about 8.5 % annually.

•  Abundant Renewable energy potenHal: 13 GW new RE plants planned through 2021; 47% expected to be developed by IPPs.

Challenges: •  RegulaHons and permits •  Funding •  Planning and Pricing policy •  Environment and social issues •  Grid stability issues •  HR -‐ Capacity building

Thank you

Brian Hirsch, PhD Senior Project Leader

NaHonal Renewable Energy Laboratory [email protected]

907-‐299-‐0268

www.nrel.gov

Documents

Indonesia Energy Overview / Market Opportunities