SOLAR MARKET in INDONESIA

By Carlos Rosas

Agenda Indonesia Energy Market Solar Market Grid Parity Example

IndonesiaLocation: 6.175 S, 106.83 ETerritory: 1,919,440 km2 (15th)

Population: 237,560,000 (4th;2011;

tradingeconomics.com) Rural: 111,060,243

(47%;2010)

Access to Electricity: 64,5%GDP/capita: 1148 $ (144th,2008;122nd)

Poverty: 2007 17,8% 2011 = 12,5%

Unemployment rate: 6,3% (11,2%;2006)

Inflation: 4,5%(7%;2010)

Currency: 1€ <> 11643Rp (2012)

http://data.worldbank.org/country/indonesia

Energy Market PLN (86%) 26,9 GW by 2012 (including subsidiaries) (www.pln.co.id/)

Own rights for transmission and distributionLaw (1985, 2002, 2004, 2009) Third Generation IPP2009 (Removed PLN from total power decision, IPPs can satisfy unserved areas and are allowed to sell to public directly, however not connected to public transmission, tariff are not controlled by PLN anymore, tariff no longer uniform throughout country)

Gov. share risk with PLN“BKPM” The Investment Coordinating Board (centralized projects electricity)“The Ministry of Finance” Tax incentives through Gov. electricity project and guarantees.“APLSI, The Independent Power Producers Association” Facilitate communication to Gov.“PPP, Public Private Partnership” Collaboration of private efficiency to reap better value for public.“PT PII, Indonesian Infrastructure Guarantee Fund” Reduce financial cost for investors and/by guarantees (Burocracy, project performance, legislation changes) Bidding process for tariff and approval For renewables: Arrangements (Certain price and time for renewables)

Ref: http://www.pwc.com/id/en

Four main sectors of energy usersHousehold 11,4 %Commercial 3,7 %Industrial 44,2 %Transportation 40,6 %

Source of EnergyOil 46,93 %Coal 26,4 % (2nd in 2008 exporters)Gas 21,9 % (14th)RE (Hydro, Geothermal, Wind, PV) 4,8 %

Ref : www.energyefficiencyindonesia.info/energy/indonesia

Solar Market Installed 14MW (2011;mostly SHS & utility-scale plants)

Radiation: 4,8 kWh/m2/day (Germany 2,73 from NASA) 17,000 small/remote islands with bad electricity connection and many

rural villages and thousands of 35,5 % No access to Electricity (41.573.000 people) Half of Potential clients than Bangladesh

StatisticsAverage 2009 570,00 kWh/capitaIndonesia Produces http://www05.abb.com/ ; 2011 150,00 TWh/yearsWhole Indonesia Consumed 104,06 TWh/yearsHouseholds Consumes 14,57 TWh/yearsEnergy Demand Needed Whole Population 22,59 TWh/yearsHouseholds that Need Electricity 7,79 TWhSo Far SHS n Utility SOLAR 14 MW% Produced relative With Already installed System 0,26 %Future install capacity 5,48 GWProjects 1MW > 5000 2012 Biggest Power Plant Charanka Park, India. (http://www.pvresources.com/) 214 MW… 64,5% ONLY Rural Areas 39,41 Millions PeoplePossible Market 4,93 Millions SHS

Grid ParityBy PLN 2009Residential average (Low V): 13,9 €cts/kwhUp to 10MW any renewable energyContracts 15 years (Not clear)http://thinkrenewables.wordpress.com/2010/04/30/md-no-31-2009-feed-in-tariff-for-up-to-10-mw-capacity/

If price @ 1€/ wp system cost.7 years ROI at 8% (5,8% Interest Rate Central Bank Republic of Indonesia)FROM NREL (LCOE) Online Calculator15 years, Interest of 8%, O&M fixed cost of 3 %, Capacity Factor 17%@ 1000 €/ wp 10,1 €cts/kWh@ 2000 €/ wp 19.9 €cts/kWh@ 2400 €/ wp 29.8 €cts/kWh (Sharp in Bali @ March 2, signed MoU. 300milion$ 100MW) thejakartapost.com

18,34 €cts/kWh (Half price of Fuel energy (No price of selling to PLN have been set)

Example Grameen Shakti started ‘96 with SHSreached 600 thousands SHS : Plan 1 million by 2015Solid structure of management company ++ organizations involved to develop renewable energy. University of Singapore (Report of Governance small-scale renewable energy in Asia) Indonesia Solar Loan Programme (oct2010 - dec2011)Support programme to help develop a competitive credit market for Solar Energy TechnologyUNEP With GermanGO help of Frankfurt school of financeAim Help to reduce risk therefore cost and to jointly partner together FI’s and SET’s38 pilot projectsPT. Azet Syrua Lestari with sustainable business

No experience with Solar PV project finance or Solar PV technologyPLN adopted also that program. 140 millions $ 25MW (1 year ending 2012)Now plan installing over 1000 island by 2020 Rendev (NGO, aims: alleviate poverty through development of microfinance)

Synergies between MFI, promote development in solar market. GOI With Technical, institutional and financial issues development in Indonesia studyPlan 2025 95% rural villages will be electrified.

Rural Electricity condition in Indonesia (By UNEP/SoF REPORT)

Indonesian Population: 237 million (2011 estimate) Villages: 66 thousand Electrified Villages: 78% or 51,000 Non-electrified Villages: 22% or 15,000 No of Households: 38,5 million Electrification ration: 53% or 20.4 million households Non-electrified Households: 47% or 18.1 million householdshttp://www.giz.de/Themen/de/SID-66498112-72C70C43/dokumente/2012-de-stojiljkovic2-pep-informationswork-indonesien-solar.pdf

RENDEV “Intelligent Energy Europe” 2007 - 09

All for Solar projects

http://www.rendev.org/docs/resources/reports/RENDEV_WP5_%20D14_MFIS_Indonesia_ap09.pdf