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PLAN & READINESS OF PLNTO EXPLOIT OR TO PURCHASE

BIOMASS – BASED ELECTRICITY

Mochamad SofyanHead of New & Renewable Energy Division

INDONESIA – GERMAN WORKSHOPInstitut Teknologi Bandung

Bandung , 26th of September 2011

AGENDA

C.

AGENDA

CONCLUSION

GENERAL POLICYA.

B. THE UTILISATION OF BIOMASS TO GENERATE ELECTRICITY

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AGENDA

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Gas

Geothermal

Hydro

LNG

HSD MFO

Coal

General Policy:• Conservation and Diversification of primary Energy by utilization of renewable energy

• President Decree no 5/2006, contribution of renewable energy by 2025 : 17%.

• PERMEN ESDM (Regulation of Ministry of Energy and Mineral Resources) no 31/2009concerning energy price and obligation of PLN to purchase an electricity generated fromsmall scale renewable energy ( under 10 MW ).

PLN Plan and Policy ( RUPTL 2010 -2019 ) :• The growth of electricity demand by 9,2 % annually which supplied by various energy

resources

• Electrification ratio grows from 68 % in 2010 to be 91 % by 2019.

• The program to reduce oil consumption from 19 % to 3 % by 2015.

• With the dominant of coal power plant development (58 %), the contribution of renewableenergy will increase from 12 % ( 2010 ) to be 19 % ( 2019 ).

• The utillisation of biomass energy has been planned in the RUPTL ( general plan forelectricity supply).

• PLN considered not to have biomass power plant, but treated as an “ Excess Power” or IPPpower plant , due to feedstock supply issues.

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Policy on Energy Development

Indonesia Energy Policies to Reduce GHG emission• Presidential Decree No 5/2006 regarding National Energy Policy

• Presidential Decree No. 4/2010 that assigns PLN to accelerate development of power generation plants using renewable energy, coal and gas. The renewable energy portion is 40% of the total capacity listed in this program

Oil20 %Oil20 %

Gas 30 %Gas 30 %

Coal 33 %

N&RE17 %

Bio-fuel 5 %

Geothermal 5 %

Biomass, Nuclear,Hydro, Solar Power,Wind Power 5 %

Coal Liquefaction 2 %

Target of National Energy Mix 2025

(Based on Presidential Regulation No. 5/2006)

Planning Policy

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Policy for Generation Expansion Planning– Reserve margin for power systems outside Java-Bali is allowed to be higher

than 40% to accommodate uncertainties in the completion of power plantprojects.

– Site location for new power plant is determined by taking into account theavailability of local primary energy sources and considering the regionalbalance principle to minimise investment of transmissions.

– Development of renewable energy, especially geothermal, is not decided byleast-cost principle, but by considering its expected development period.

– Fuel-oil power plants are only planned to meet peak demand, and other typeof peaking plants such as pumped storage hydro plants, reservoir hydro plantsand gas-fired turbine power plants are also planned.

– The development of electricity supply in remote areas, the borders islandsand other outer islands, especially in the eastern part of Indonesianarchipelago, would be prioritized to utilize locally available renewable energy

Realisation and Projection of Electricity Demand 2010-2019 (GWh)

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Realization Projection

Indonesia electricity demand is predicted to grow at average of 9.2% annually (Java-Bali 8.97%, West Indonesia 10.2% dan East Indonesia 10.6%)

327 TWh

252 TWh

54 TWh

28 TWh

133 TWh

104 TWh20 TWh

10 TWh

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Renewable Energy ( RE ) Development Target( RUPTL PLN – 2010-2019)

Development Program ( up to 2019 ):

Hydro :

Additional Cap: 5.990 MW

Geothermal :

Addtional Cap: 5.550 MW

Others – Small scale RE:

Additional Cap: 1.700 MW

( Including Biomass : 374 MW )

PLN will focus mainly on mini hydro , solar and biomass development.

6% 6% 5% 5% 5% 4% 4% 4% 4% 4%

6% 6% 6% 9% 12% 13% 13% 13% 13% 13%

46%54% 52%

51%51%

54% 56% 57% 56% 58%

25%

25% 28%29%

26%24% 22% 19% 20% 18%

0%

0%3%

2% 2% 2% 2% 3% 4% 4%

3%

3%2.0%

1% 0% 0% 0% 0% 0% 0%

13%7% 4.8% 3% 3% 2% 2% 2% 2% 2%0% 0% 0% 0% 0% 0% 0% 0% 0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Hydro Geothermal Nuklir Batubara Gas LNG MFO HSD Pumped Storage

• RE contribution on National Energy Fuel Mixedi will increased from 12 % (2010) to 19 %, Coal Thermal still dominant by 58 % ( 2019 )

AGENDA

C.

AGENDA

PENUTUP

GENERAL POLICY AND POTENTIAL RESOURCESA.

B. RE DEVELOPMENT PLAN AND THE UTILISATION OF BIOMASS

AGENDA

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ADDITIONAL PLANT CAPACITYCAPACITY

(INCL. GREEN & NEW ENERGY DEVELOPMENT)

• Total Capacity of Green & New Energy PP to be built in the period is 11,540 MW(total capacity of Geothermal PPs, Hydro Electric PPs-HEPP, Mini HEPPs, and Small Scale Green & New Energy PP)

• 57% of the total capacity of Green Energy PP will be expected from IPPs

Tahun 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Total

PLNCoal STPP 3,291 4,090 834 1,479 2,203 110 1,200 200 7 3,007 16,421

Comb. Cy. PP 194 820 393 350 240 - 700 1,500 2,250 - 6,447

Gas TPP 105 - 225 50 - 65 235 800 1,065 1,280 3,825

Diesel PP 11 14 12 48 44 42 34 16 33 50 303

Geo. PP 10 55 78 143 203 20 23 3 20 20 575

Mini HEPP 14 6 6 14 8 4 5 8 1 - 66

HEPP - - 10 300 1,000 65 103 715 1,311 818 4,321

Total PLN 3,625 4,985 1,558 2,384 3,698 306 2,299 3,242 4,686 5,175 31,958

IPP -

Coal STPP 26 891 2,649 1,703 2,212 2,160 2,550 1,930 1,410 745 16,276

Comb. Cy. PP 290 110 30 - 120 - - - - - 550

Gas TPP 10 10 80 - - - - - - - 100

Diesel PP - 22 - - - - - - - - 22

Geo. PP - 3 178 857 2,450 50 330 392 510 645 5,415

Mini HEPP 25 31 91 42 6 2 1 1 1 - 201

HEPP 180 195 - - 157 90 310 30 - - 962

Total IPP 531 1,262 3,028 2,601 4,945 2,302 3,191 2,353 1,921 1,390 23,525

PLN+IPPCoal STPP 3,317 4,981 3,483 3,182 4,415 2,270 3,750 2,130 1,417 3,752 32,697

Comb. Cy. PP 484 930 423 350 360 - 700 1,500 2,250 - 6,997

Gas TPP 115 10 305 50 - 65 235 800 1,065 1,280 3,925

Diesel PP 11 36 12 48 44 42 34 16 33 50 325

Geo. PP 10 58 256 1,000 2,653 70 353 395 530 665 5,990

Mini-Hydro PP 39 38 98 56 13 6 6 9 2 - 267

Hydro Electric PP 180 195 10 300 1,157 155 413 745 1,311 818 5,283

Total PLN+IPP 4,156 6,248 4,586 4,985 8,643 2,608 5,490 5,596 6,607 6,565 55,484

SMALL SCALE

GREEN & NEW

ENERGY PP

58 57 90 155 191 208 217 222 242 263 1,703

SMALL SCALE RE DEVELOPMENT PLAN

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 TOTAL

1 PLTMH MW 0

2 PLT Surya MWp 2 5 5 10 15 30 30 30 30 30 187

3 PLT Bayu MW 0 5 5 8 8 8 10 10 10 10 74

4 PLT Biomass MW 4 10 10 10 10 25 25 25 25 40 184

5 PLT Kelautan MW 0.0 0.0 0.2 0.3 0.5 1.0 1.5 2.0 2.0 2.5 106 PLT Bio-Fuel MW 0.0 0.5 2 2 2 3 5 5 10 10 40

7 PLT Gas-Batubara MW 12 15 15 15 15 25 25 25 30 30 207

MW 18 36 37 45 51 92 97 97 107 123 702

( RUPTL TAHUN 2010 - 2019 )

No Pembangkit - EBT StnTAHUN

PENGEMBANGAN PEMBANGKIT LISTRIK EBT - ENERGI ALTERNATIF

TOTAL

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 TOTAL

1 PLTMH MW

2 PLT Surya MWp 20 40 50 60 70 70 75 75 80 80 620 3 PLT Angin MW 5 15 15 15 15 15 20 20 25 25 170

4 PLT Biomass MW 16 33 35 35 35 40 40 45 45 50 374

5 PLT Kelautan MW - - 0 0 1 1 2 2 2 3 10

6 PLT Bio-Fuel MW - 1 2 2 2 3 5 5 10 10 40

7 PLT Gas-Batubara MW 12 56 60 80 80 90 90 95 95 100 758

MW 53 145 162 192 203 219 232 242 257 268 1,972 TOTAL

PENGEMBANGAN PEMBANGKIT LISTRIK EBT - ENERGI ALTERNATIF ( USULAN REVISI RUPTL TAHUN 2011 - 2020 )

No Pembangkit - EBT StnTAHUN

PALM WASTE BIOMASS POTENTIAL ( MW )( State Own Plantation Company)

Sahabat Setia untuk Kemajuan11

2010 2011 2012 2013 2014

1 PTPN I 0.59 0.16 0.16 0.05 0.13

2 PTPN II 9.49 8.37 5.64 4.45 3.51

3 PTPN III 13.26 13.65 14.06 14.48 14.92

4 PTPN IV 11.54 14.98 12.84 16.05 16.05

5 PTPN V 21.86 18.59 17.11 14.49 13.29

6 PTPN VI 14.33 16.49 16.41 16.24 15.85

7 PTPN VII 3.91 3.56 2.71 2.24 2.24

8 PTPN VIII 0.62 0.75 0.75 0.75 0.75

9 PTPN XIII 3.09 3.34 3.66 3.92 4.32

10 PTPN XIV 1.82 2.24 2.65 2.90 2.90

11 RNI 4.83 5.24 5.37 5.74 6.58

12 Jumlah 85.34 87.38 81.38 81.32 80.55

13 Tot.Inti+Plasma+Phk III 249.10 265.23 268.25 285.24 287.19

Proyeksi Besarnya Daya (MW) BUMN Perkebunan 2009-2014

No UraianAsumsi (MW) - Rata rata

MSW (PLTSampah) Potential (Proposed by Developers)

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No Lokasi MW

1 Bekasi, Bantargebang 26

2 Bandung 10

3 Surabaya, Benowo 10

4 Bali, Suwung 9

Total 55

The Current Biomass Power Plant Contracted with PLN ( 38 MW )

No Nama Perusahaan Nama Pembangkit COD Jenis kontrak Lokasi Biomass

Type

Kapasitas

Kontrak

(MW)

Harga

Rp/KWh

1 PT Listrindo Kencana PLTBiomassa

Listrindo Kencana

2006 IPP Bangka Palm waste 5

766

2 PT Growth Sumatra PLTBiomassa

Growth Sumatra 1

2006 Excess power Sumatera

Utara

Palm waste 6 785.4

3 PT Navigat Organic PLTSampah

Suwung

2008 Excess power Bali MSW 2

800

4 PT Navigat Organic PLTSampah Bantar

Gebang

2009 Excess power Bekasi MSW 4

800

5 PT Belitung Energy PLTBiomassa

Belitung Energy

2010 IPP Belitung Palm waste 7

787

6 PT Growth Sumatra PLTBiomassa

Growth Sumatra 2

2010 Excess power Sumatera

Utara

Palm waste 9 785.4

7 PT Pelita Agung PLTBiomassa

Dumai

2010 Excess power Riau Palm waste 5 787

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Data Perusahaan Penjual Tenaga Listrik dari Biomassa kepada PT.PLN (Persero)

Biomass Power Plant in Progress of Contract with PLN( 21 MW )

1 PT Victorindo PLTBiomassa

Padang Lawas

2011

progress

Excess

power

Sumatera

Utara

Palm

waste

5 787

2 PT Nubika Jaya PLTBiomassa

Pinang

2011

progress

Excess

power

Sumatera

Utara

Palm

waste

6 787.2

3 PT Growth Asia PLTBiomassa

Growth

Sumatra 3

2011

progress

Excess

power

Sumatera

Utara

Palm

waste

10 787.2

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No Nama Perusahaan Nama Pembangkit COD Jenis kontrak Lokasi Biomass

Type

Kapasitas

Kontrak

(MW)

Harga Rp/KWh

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Key Challenges / Constraints

1.

Legal aspect / regulation :

Permits

Pricing

Contract

2. Uncertainty on long term fuel supply of biomass feed stock

Continuity of long term supply

3.Lending Aspect Contract for Excess Power limited to 3 yearUncertainties on long term fuel / feed price

4. Environmental and Social Aspect

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Regulation for Feed-in Tariffs ( FIT )

MoEMR Decree 31/2009:

For RE with 10 MW Maximum installed capacity

Tariff is set as: - 7 c USD /kWh (connected to medium voltage line)

- 10.8 c USD /kwh (connected to low voltage line)

- Incentive factor of 1.1 – 1.5 for outside Java-Bali

Tariff higher than setting tariff : B to B mechanism and subject to GOI approval

MoEMR Decree 32/2009 :

Ceiling tariff set as 9.7 c USD/kWh for Geothermal

Propossed FIT for Biomass :

Estimated Tariff propossed: 10 – 11 cent USD/kwh

Incentive factor based on region

The Barriers of Biomass Energy Development

• There is no standard price of biomass fuel. The price tends to follows oil price issue.

• The continuity of supply is questionable as the feedstock producer tend to export their product ( esp. Palm waste) for higher offer.

• Feedstock producer do not want to be tightened with long term contract .

• The lack of interest of farmers to plant energy crops due to Income from growing energy crops may not be competitive than growing other crops.

• Unpredictable crops failure that lead to uncertain financial return for farmers.

• High capital cost of advanced biomass technology

• Social objection for MSW power plant17

Opportunities of Biomass Energy Developers

• Unlike in Sumatra and Kalimantan, there are only a few biomass plant developers in Eastern Indonesia. These provide opportunities for new players to invest.

• Low electrification ratio by less than 60% in Eastern Indonesia presents interesting chance for developers.

• There will be new Feed in Tarif for electricity generated from biomass, which is around 10 – 11 cent USD/ kWh.

• The risk of sustainability of feedstock supply can be minimized with the availability of various type of biomass

• Availability of unproductive land that can be utilize as a cultivated wood for wood pellets.

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AGENDA

C.

AGENDA

CONCLUSION

GENERAL POLICY AND POTENTIAL RESOURCESA.

B. THE UTILISATION OF BIOMASS TO GENERATE ELECTRICITY

AGENDA

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CONCLUSION

• As the electricity demand growing rapidly, PLN is ready to purchase electricity generated from Biomass.

• Considering that the average selling electricity price to customers is Rp 700,00 per kWh, the new proposed base Feed in Tariff for biomass energy by Rp 950,- is sufficient to provide profit for energy developers as well as to avoid subsidy burden for government.

• The export of raw materials biomass should be limited by introducing the fiscal policy to stabilize domestic price.

• Financial incentive is required by all stake holders in order to accelerate the biomass plant growth.

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