LIANA BRATASIDAAssistant Minister for Global Environmental Affairs & International CooperationMinistry of Environment - Indonesia

Renewable Energy Development In Indonesia

1

POLICIES & REGULATIONS..(1)

1. Energy Law

� Law No. 30/2007

2. Geothermal Law and Regulations

� Law No. 27/2003

� Government Regulation No. 59/2007

� Ministerial Regulation No. 14/2008

3. Green Energy Policy

� Ministerial Decree No. 0002/2004

POLICIES AND REGULATIONS..(2)

4. Supply and Utilization of Biofuel� Presidential Instruction No. 1/2006

� Ministerial Regulation No. 32/2008

5. Renewable Energy Utilization for Electricity � Government Regulation No. 26/2006

� Ministerial Decree No. 1122 K/30/MEM/2002

� Ministerial Regulation No. 002/2006

� Ministerial Regulation No. 269-12/26/600.3/2008 on Electricity Production Cost

6. Regulation on Energy and Water Efficiency� Presidential Instruction No. 002/2008

� Issued in 2007

� Give more attention on new and renewable energy development

� For the time being, Government Regulation on New and Renewable Energy is being finalized(includes incentives for new and renewable energy developers for certain periods of time)

Law No. 30/2007 on EnergyLaw No. 30/2007 on Energy

POLICYINDONESIA ENERGY ACT NO. 30/2007

Shifting Paradigm :

SSM DSM

Foundation for energy policy

Security of Energy SupplyBASIC CONCEPT

Energy

Diversification

Energy

Conservation

Law No. 27/2003 on Geothermal, Government Regulation No. 59/2007 & Ministerial Regulation No. 14/2008

� To regulate the management and development of geothermal energy sources for direct and indirect utilization

� The price of electricity from geothermal PP by Public Utility (PLN):

� Capacity 10-55 MW : 85% x Utility’s Production Cost if connected to high or medium voltage grid

� Capacity > 55 MW : 80% x Utility’s Production Cost connected to high voltage grid

Ministerial Decree No. 0002/2004 on Green Energy Policy

Renewable Energy and Energy Conservation

Development Policy ���� Green Energy Policy:� Implementing the maximum utilization of renewable

energy

� Efficient utilization of energy

� Public awareness in energy efficiency

Presidential Instruction No. 1/2006 on Biofuel Development

� Objective: Accelerating biofuel utilization for fossil (especially oil) substitution

� Instructions to 13 Ministers, Governors and Mayors to take necessary initiatives and actions for biofuel development from supply (feedstock) side until consumption/commercialization side

� Coordinated by Coordinator Minister of Economic

Ministerial Regulation No. 32/2008 on Biofuel Supply, Utilization and Trading

� Prioritize the supply and utilization of biofuel by national companies and Energy Self-Sufficient Village through mandatory actions

� Regulate the type, standard and quality of biofuel as fossil fuel substitute

� Regulate the biofuel business and trade activities

� Mandatory for minimum biofuel usage until 2025

MANDATORY FOR MINIMUM BIODIESEL USAGE

January January

20092009January January

20102010January January

20152015January January

20202020JanuaryJanuary

20252025

TransportTransport

1 %1 % 2,5 %2,5 % 5 %5 % 10 %10 % 20 %20 %

Industry Industry

CommerceCommerce 2,5 %2,5 % 5 %5 % 10 %10 % 15 %15 % 20 %20 %

ElectricityElectricity

0,25 %0,25 % 1 %1 % 10 %10 % 15 %15 % 20 %20 %

January January

20092009JanuaryJanuary

20102010January January

20152015January January

20202020January January

20252025

Transport Transport

SubsidiesSubsidies1 %1 % 3 %3 % 5 %5 % 10 %10 % 15 %15 %

TransportTransport

Non SubsidNon Subsid5 %5 % 7 %7 % 10 %10 % 12 %12 % 15 %15 %

Industry Industry

CommercialCommercial5 %5 % 7 %7 % 10 %10 % 12 %12 % 15 %15 %

MANDATORY FOR MINIMUM BIOETANOL USAGE

POLICYBIOFUEL DEVELOPMENT STRATEGY

Fast TrackEach Region

Developing its

Biofuel Potential

SPECIAL BIOFUEL

ZONE

Create Job

Poverty

Alleviation

Energy

SHORT RUN LONG RUN

Energy Self Sufficient

Village

• Infrastructure

• Demplot

• On time schedule

• Explicit investment and employment ratio

Source : ESDM

Government Regulation No. 26/2006 on Electricity Supply and Utilization

� Regulating the supply and utilization of electricity

� Prioritizing utilizing renewable energy for power generation

� Renewable Energy for Power Generation without bidding process

Ministerial Decree No. 1122 K/30/MEM/2002 on Small Distributed Power Generation using Renewable Energy

� Developer : Small Enterprises

� Capacity : < 1 MW

� Electricity Price by Utility :

�60% x Utility’s Production Cost, if connected to the low voltage grid

�80% x Utility’s Production Cost, if connected to the medium voltage grid

Ministerial Regulation No. 002/2006 on Medium Scale Power Generation using Renewable Energy

� Developer : Business Entity

� Capacity : 1 < Cap ≤ 10 MW

� Electricity Price by Utility :� 60% x Utility’s Production Cost, if connected to the low

voltage grid

� 80% x Utility’s Production Cost, if connected to the medium voltage grid

� Purchase Contract : 10 years and could be extended

Ministerial Regulation No. 269-12/26/600.3/2008 on PLN’s Electricity Production Cost year 2008

•• PLNPLN’’s Electricity Production Cost (BPP) s Electricity Production Cost (BPP)

consist of consist of high, medium and low voltage high, medium and low voltage

BPP BPP in 13 electricity gridin 13 electricity grid

•• These BPPs are used as basis for These BPPs are used as basis for

electricity purchasing tariff from electricity purchasing tariff from

renewable energy power plantrenewable energy power plant

Regulation on Energy and Water Efficiency (Presidential Instruction No. 2/2008)

Instructions to Ministers, Governors and Mayors

to implement energy and water efficiency in

government office:

Energy efficiency: lighting, AC, electricity

equipment, official vehicle and other buildings

Water efficiency: in all activities that use water

Energy Policy...(11)Energy Policy...(11)

Renewable Energy Development Program

•• Non CommercialNon Commercial--based:based:

�� Carried out by the Government through Rural Carried out by the Government through Rural

Electrification Program and Energy SelfElectrification Program and Energy Self--Sufficient Village Sufficient Village

Program Program (ESSV)(ESSV)

•• CommercialCommercial--basedbased::

�� Private entities are expected to play a major role in its Private entities are expected to play a major role in its

developmentdevelopment

�� Government will support the pilot projects, such as Solar Government will support the pilot projects, such as Solar

Photovoltaic for Urban AreaPhotovoltaic for Urban Area

1. Rural Electrification Program. Government has taken

measures to replace diesel power with renewable power plant to

fulfill the electricity demand in rural area

2. Renewable Energy Power Generation Interconnection Program. Government will assist the interconnection of small and

medium renewable energy power plant to PLN’s (state-owned utility

company) electricity grid. The electricity purchasing tariff from RE

power is 80% from PLN local production cost, if it is connected to

medium voltage; and 60% for low voltage.

Renewable Energy Program

Non Commercial -based

4. Solar PV for Urban Area Program. The Minister of Energy and

Mineral Resources, the Minister of Research and Technology and the

Minister of Environment has launched the solar energy for urban area

program in 2003. This program is directed to promote electricity

production from solar energy in urban area.

5. Energy Self-Sufficient Village. This program has launched in

2007 to improve the rural energy supply based on renewable energy,

which locally available to fulfill basic energy needs as well as

productive activities.

Non commercial-based …(2)

ENERGY SELFENERGY SELF--SUFFICIENT VILLAGE (ESSV)SUFFICIENT VILLAGE (ESSV)

� Background

� There are approx 70,000 villages in Indonesia, where

45% of it are located in remote areas, and approx

6,200 villages have not been supplied by electricity.

� Indonesia has been facing many obstacles in

fulfilling energy supply, including the increase of

fuel demand.

� The ESSV program is an effort to develop villages

through energy supply with intervention and

investment of technology to produce energy from

renewable energy sources.

TARGET ESSV (Cumulative)

YearYear 20072007 20082008 20092009

Number of formed ESSVNumber of formed ESSV230230

≈≈AttainedAttained270270

≈≈AttainedAttained350350

Cumulative the Cumulative the

achievementachievement214214 442442 10001000

ENERGY SELFENERGY SELF--SUFFICIENT VILLAGE (ESSV)..2SUFFICIENT VILLAGE (ESSV)..2• ESSV is a village having capability to produce a part/whole their energy demand for

consumptive and productive use from renewable energy sources through the utilization of local resources (biofuel, solar energy, wind energy, mycro hydro energy and biomass from animall and garbage

• CRITERIA

– Utilization of locally available energy (renewable energy)– Creation of productive activities– Job creation & income generation

• PROGRAM:

– Utilization of locally available energy resources

– Development of productive activities

– Development of applicable technologies

– Development of institution and people participatory

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Potensi Lahan Pengembangan TebuRendahSedangTinggiSangat Tinggi

ESSV Stimulus

PlanESSV 2008Legend:

NAD

6 villages

3 villages

Sumut

7 villages

1 villages

Riau

7 villages

--

Jambi

9 villages

--

Bengkulu

21

villages

2 villages

Sumsel

5 villages

--

Kalbar

11

villages

2

Kalteng

5 villages

2 villages

Kalsel

• 9

villages

• 1

Kaltim

10

villages

2 villages

Sulbar

36

villages

8 villages

Sulteng

10

villages

1 villages

Gorontalo

8 villages

--

Sulut

17

villages

2 villages

Sultenggara

5 villages

--

Sulsel

23

villages

4 villagesSumbar

42

villages

4 villages

Babel

4 villages

--

Lampung

17

villages

5 villages

Banten

13

villages

1

Papua

3 villages

2 villages

Jateng&DIY

37 villages

12 villages

Jatim

20

villages

3 villages

Bali

5 villages

--

Papua Barat

6 villages

2 villages

NTT

21

villages

5 villages

NTB

20

villages

6 villages

Maluku

3 villages

--

Malut

7 villages

3 villages

Jabar

36

villages

8 villages

DKI

1 villages

--

• # of ESSV up to 2008 are 424 villages

• # of ESSV Stimulus on 2009 are 79 villages

ENERGY SELFENERGY SELF--SUFFICIENT VILLAGE (ESSV)SUFFICIENT VILLAGE (ESSV)

RENEWABLE ENERGY DEVELOPMENT

COMMERCIAL-BASED

1.Bioethanol Installed capacity192.349 kL/th.

2.Biodiesel installed capacity 2.029.110 kL/th.

3. Electricity plant with biofuel based : 96 MW

24

25

BIOFUEL FEEDSTOCK

Palm Oil

Jatropha curcas

Cassava

BIOOIL

BIODIESEL

BIOETHANOLSugar cane

MA

IN F

EE

DS

TO

CK

BIOOIL

BIODIESEL

BIOETHANOL

UN

DE

R D

EV

EL

OP

ME

NT

Coconut

Micro algae

Seed of Hevea braziliancis

Aleurites molucana

Waste

Sweet sorghum

Sugar palm

Sago

Corn

Waste

BIOETHANOL INSTALLED CAPACITY

as of Juni 2008: 192.349 kl/th

Molindo Raya Malang, Jatim

50.000 kl/tahun

(molases ex-PTPN)

BPPT Lampung

2.500 kl/tahun

(Cassava)

BERLIAN LIMA Gadog

73 kl/tahun

(Cassava & Molases)

TRIDAYA Cilegon

1.095 kl/tahun

(Molases)

BLUE Balikpapan

73 kl/tahun

(Molases, Sorghum)

BEKONANG, Solo

140 x 37 kl/tahun

(Molases)

R&D

UKM

Big industry

PT. Taktakan Bioenergi,

Serang

1.095 kl/tahun

(Molases)

KUD Neg.

Tulangbawang,

Lampung

73 kl/tahun (Molasses)

PT. Bio Prima Energi

Mandiri, Kebumen

1.095 kl/tahun

(molases, singkong,

jagung)

Koperasi Asri Sea,

Minut, Sulut

73 kl/tahun

(Nira Aren)

Koperasi Kairos,

Halut, Malut

73 kl/tahun

(Nira Aren)

BLUE & MONONUTU

Minsel

2 x 73 kl/tahun

(Sugarpalm)

RAP Bintaro

Bintuni-Irjabar

300 kl/tahun

(Nira, nipah, sorgum

manis)

PANCA Cicurug

573 kl/tahun

(Cassava & Molases)

MEDCO Lampung

60.000 kl/tahun

(Molases, Integrated

Industry)

SUGAR GROUP

Lampung

70.000 kl/tahun

(Molases, Integrated

Industry)