INVESTING IN NEW AND RENEWABLE

ENERGY IN INDONESIA
Energy for All Investor Forum
Manila, 16 June 2015
1 THE PARADOX OF INDONESIAN ENERGY - NO LONGER AN OIL EXPORTER
Historical changes of Indonesian energy, from Member of OPEC to Oil importer

Thsd
bpd
1,800
1,600 Oil Production
1,400
1,200
Import
Golden age of Indonesian era
1,000 Oil
800
Oil Consumption
600
400
200
Source: IEA dan EIA/AS
0
Thn

Proven reserves of petroleum are feared to be exhausted within

10-13 years
-RPJMN 2015-2019, 7 January 2015
2 THE ENERGY SITUATION IN INDONESIA - TARGETING 23% FROM NRE SOURCE

17% increase of new & renewable energy (NRE) in 11 years

National Energy Mix National Energy Mix
E 2014
NRE Target 2025
6% Gas
G Gas
2
23% NR
NRE 22%
Coal
30% 23%

Oil Coal Oil

41% 30% 25%
RATIO OF IC/RESOURCES
NO NRE RESOURCES INSTALLED CAPACITY (IC) (%)
1 2 3 4 5 = 4/3
1 Hydro 75,000 MW 7,572 MW 10.1 %
2 Geothermal 28,910 MW 1,403.5 MW 4.9 %
3 Biomass 32,654 MW 1,717.9 MW 5.4 %
4 Solar 4.80 kWh/m2/day 48.05 MW -
5 Wind 3 6 m/s 1.87 MW -
6 Ocean 49 GW ***) 0.01 MW ****) -
7 Uranium 3,000 MW *) 30 MW **) -
*) Identfied in the Kalan Basin in West Kalimantan ***) Source: National Energy Council
**) As a center of research, non-energy ****) BPPTs Prototype

Indonesia NRE potential could reach more than 200.000 MW. Today,
Indonesia has just used 6.8% of the total NRE Potential.
3 INVESTING ON NRE 2015 2025

A TOTAL OF
23% NRE
135 BILLION USD INVESTMENT IN
2025

39 Billion USD
27 Billion USD

13 Billion USD
54 Billion USD
4 CHALLENGES FOR INVESTMENTS ON NRE
Risks
Challenges
Factors
Access to site condition Land/site contractual risk
Availability of logistic Capital cost over-run:
facility (ports, road licenses, logistics
availability) (transport facilities),
On-site main resources construction delay, grid
Availability of local interconnection, etc
construction company and Technology: life-time and
material efficiency of module and
equipment, grid reliability
Financial viability of PLN
(long-term PPA)
Disasters: flood, fire,
earthquake
Tariff
Existing FiT shall be Capacity and technology
attractive enough for the
investor to cover risk and
gain expected financial
return (ROR > 15%)
Technology supply relies
on mainly from offshore
Barrier to
entry
transfer: lack of experience
of local investor to build
and operate utility scale
plants needs experience
partner
Low learning curve, slow
market penetration
Limited access to most
efficient technologies
5 ROADMAP FOR ACCELERATED DEVELOPMENT OF NRE

FOUR PILLARS OF BREAKTHROUGH

1 POLICY
package, facilitating good
Issuing policy packag
energy industries development for all NRE
program and investment.

2 FINANCIAL
IInnovative
nnovative funding mechanism
m that allows the
channeling of various sources of funding to
renewable energy initiatives.

3 TECHNOLOGY
Breakthrough
B kth h off ttechnological
h advancement
in the development of renewable energy.
4 CAPACITY
IIncrease in
i public
bli and industrial capabilities in
the supply and use of renewable energy.
6 SETTING UP INVESTMENT CLIMATE FOR NRE DEVELOPMENT

One Step Service (OSS) for
license application.
Interlink with sectoral
Ministries.
Fiscal Incentives
Import Duty Facilities
Tax Holiday
Tax Allowance
PPP facilities for NRE
projects: i) PDF; ii) VGF; iii)
Guarantee; iv) Infrastructure
Fund
Data and Information
Update
Capacity building to
stakeholders
Subsidies and infrastructure
support to poor and remote
communities
Policy on Tariff
Facilitation-based planning
and budgeting

INVESTMENT MINISTRY OF MINISTRY OF ENERGY

Y
COORDINATING AND MINERAL
BOARD FINANCE RESOURCES

RENEWABLE ENERGY FUND

7 RENEWABLE ENERGY FUND TO ACCELERATE NRE DEVELOPMENT

Sources of funds Intermediary

RE Projects
(grants, loans, investment) institution
RENEWABLE ENERGY FUND

Hydro power plant

funds funds 9 Fund
funds
Management Biomass/ Biogas
9 Project
funds funds Assesment & Solar
a power plant
Sola
Monitoring
funds
9 Project
Wind power plant
funds funds Development
funds Others

Supported by: PT SMI, as SOE in financing PPP infrastructure development

Indonesian Infrastructure Guarantee Fund (IIGF), as SOE providing guarantee facility for
infrastructure development
SOME CASES OF INVESTMENT OPPORTUNITIES:
1. BIOENERGY INDUSTRY
2. SOLAR PV INDUSTRY
3. BALI AS CLEAN ENERGY ISLAND
8 BIOFUEL SUPPLY SCENARIO 2015-2025
20.0
TOTALKEWAJIBAN
TOTAL MANDATORY OF BIODIESEL
BIOSOLAR 18.1 Eksport target: 30%
18.0
CURRENT PRODUKSI
KAPASITAS PRODUCTION CAPACITY OF BIODIESEL
BIOSOLAR
16.0
TOTAL
TOTALKEWAJIBAN
MANDATORYBIOETANOL
OF BIOETHANOL 13.9
14.0
juta kiloliter
kilo litre

KAPASITAS
CURRENT PRODUKSI BIOETANOL
PRODUCTION CAPACITY OF BIOETHANOL
12.0 11.0
10.0 8.5
Million

8.0
7.6 7.6
5.6
6.0 4.7 Total land
4.0
2.9 2.9 needed till 2025:
2.0 0.9
-
0.6 8.1 mio Ha
2015 2019 2025

till 2019 till 2025

2.0 millions kiloliter (covered from 10.5 millions kiloliter (covered from the ratio
Target of biodiesel production capacity increase
existing production of CPO) between CPO and sustainable plants = 50:50)
Total land needed
nee

- 3.3 millions Ha
NYAMPLUNG JARAK KEMIRI SUNAN

Target of bioethanol production capacity increase 2.3 millions kiloliter 8.7 millions kiloliter
Total
ota land
a d needed
eed
ded
d

1.0 millions Ha 3.8 millions Ha

SUGARCANE SWITCHGRASS CASSAVA
9 STRENGTHENING BIOENERGY VALUE CHAIN AND INDUSTRY

APPROACH ON STRENGTHENING BIOENERGY SUPPLY CHAIN AND INDUSTRY

Assertiveness of Government policies presents on every stage of bioenergy supply chain
DEGRADED LAND AND CONNECTIVITY AND PRODUCTION DISTRIBUTION INDUSTRY
LOCAL COMMUNITY FEEDSTOCK PRICE INCREASE CAPACITY AND SUPPLY AND MARKET

Planting on Encourage proper Encourage new Encourage proper Monitoring of biofuel blend
degraded lands. transport modes with establishment of bioenergy policy application.
Diversification of policy and bioenergy factories or distribution modes End user target: mining
feedstock type incentives. production capacity with policy and industry, power plant &
based on soil Maintain feedstock increase with incentives. transportation.
characteristics and price with incentives. Increase network Ensure OEM (Original
localities. incentive/subsidy. Support blending capacity. Equipment Manufacturer)
Collaboration with Maintain feedstock plant technology. Maintain supply with to support biofuel
local people & local supply with Develop intermodal Domestic Market utilization.
government. Domestic Market network & Obligation policy. Encourage automotive
Obligation policy. connectivity. industries to support
biofuel utilization.

FEEDSTOCK FEEDSTOCK BIOENERGY BIOENERGY BIOENERGY

PRODUCTION LOGISTICS PRODUCTION DISTRIBUTION CONSUMPTION
10 UTILIZATION OF DEGRADED LAND FOR BIOENERGY DEVELOPMENT

Definition of Degraded Land: land Category % Area (ha)

that is critically assessed based on
Slightly Critical 65,4 45.878.466
several parameter conditions
including vegetation cover, slope,
8.6
7.8 Critical 27,9 19.564.909
erosion, and land management
Very Critical 6,8 4.738.384
conditions. (Dirjen Decrees No. 041
/ Kpts / V / 1998) Total 70.181.759

5.1

3.2
3.6
4.2

2.3
1.6

1.8
1
1. 8
1.4 2.6 2.4
1.9
2.1 2.0 0.9
0 9 1.6
1 6
2.2 1.4
0.6 1.2 0.7
2.7
1.2 2.1
0.7 Millions of ha
0.9 1.4

0.7
0.3 0.0 0.6
0.1
0.2

Source: Directorate PEPDAS, DG BPDASPS Ministry of Forestry, 2013

12
 TARGET OF BIOENERGY DEVELOPMENT
11
IN KATINGAN & PULANG PISAU DISTRICT, CENTRAL KALIMANTAN PROVINCE

KATINGAN PULANG PISAU

Target: 50.000 Ha Target: 50.000 Ha

A glance of degraded land in Central Kalimantan

12 INVITING INVESTMENT ON SOLAR PV INDUSTRY

Feed in tariff: USD 25 cent/kwh

Quota: 1 GW per year

Transfer technology policies

Rooftop PV policy program

Regional-based feed in tariff

13 BALI AS CLEAN ENERGY ISLAND

Bali Hosts Centre of Excellence

CoE

Geothermal Building
Technologies

Hydro Power

Solar PV Biofuel Utilization

Bioenergy
14 DEVELOPMENT OF CENTER OF EXCELLENCE
sun pipes solar panels
Coordination center for the development of photovoltaic highly
panels insulated
NRE technology; roof (U=0.50)
air tight
Facilitation of technology implementation at envelope Eco-logic roof tiles
local and industrial level;
Enhancing energy efficiency and conservation; highly insulated timber triple-glazed
framed walls (U=0.15) windows and doors
and
(U=0.80)
Boost knowledge on NRE research and secure cycle
development store highly insulated
floor slab
(U=0.15)
Knowledge Support
Technical Information rainwater porous paviors
waste recycling composting
harvesting
Landscape Analysis
Project Facilitation TECHNICAL PARTNERSHIP
TECHNICAL
INFORMATION PROGRAMS
Basic Knowledge SOLAR
FUELS
UTILISATION
Support Team
Technical
BIOFUEL LANDSCAPE MONITORING
TRAINING
Training ANALYSIS AND EVALUATION
INDUSTRIAL
TECHNOLOGIES
Business
Knowledge GEOTHERMAL

PROJECT MANUFACTURING
Implementation Support FACILITATION
BUSINESS
AND PROCESSING
BUILDING
TECHNOLOGIES

Partnership Program
WIND
Monitoring and Evaluation
Manufacture and Processing BASIC TECHNOLOGY
CONSERVATION
SCIENTIFIC PROGRAMS
SCIENCE INNOVATION
Technology Innovation HYDRO
THANK YOU

BUKU STATISTIK