ENERGY ANALYSIS PLAYS AN IMPORTANT ROLE IN PURCHASE DECISIONSRSM GC ADVISORY SERVICES (INDIA)

Energy Analysis Matrix

What are the options available?

Important Macro Factors

Present Energy Situation in Indonesia

• Coal Reserve of 120.5 billion tons (146 yrs), 3.69 billion barrels (23 yrs), 101.54 trillion cubic feet (59 yrs).

• The country has significant potential of Hydro power (75,000 MW), mini hydro (1013 MW), Geothermal Power (28,000 MW – 40% of world reserve), Solar radiation (4.80 kWh/sqm/day), Wind Speed (3-6 m/s).

• 2013 figures suggest that annual primary energy supply of the country was 1.61 BOE (barrels of oil equivalent)- Oil 46.08%, Coal 30.90% and gas 18.26%, Hydropower 3.21%, Geothermal 1.15%, Bio-fuel 0.40% and rest different biomass from woods and forest.

Largest economy in South East Asia

Important Macro Factors in Indonesia

• As per 2015 World Bank data the GDP of the country is US$ 861.93 billion with an annual growth rate of 5 -6%.

• Being one of the founding member of OPEC, Indonesia left the organization in 2009.

• Energy Prices are highly subsidized in the country. In 2010 the combined fuel & electricity subsidy was IDR 111.9 trillion (US$ 12.40 billion) out of which allocation for fuel subsidy was IDR 57.46 trillion ($ 6.37 billion).

• Consequently, energy intensity is also high- 565 toe per million $ GDP (compared to 439 toe of Malaysia, 191 toe of India and average 139 toe for OECD countries) .

Net Oil Importer

Economic Transition in Indonesia

• Transition from energy export oriented economy to domestic manufacturing based economy.

• Became net oil importer in 2004.

• However the country is still net exporter of natural gas.

• The Energy Elasticity of the country is also high – for every 1% increase in GDP, energy demand rise by 1.6%.

• The projected energy demand for the year 2025 and 2050 are 380 and 980 MTOE respectively.

• Present high oil percentage in national energy mix shall be reduced to half in the future days.

• As per National Energy Conservation Master Plan there will be radical shift in energy mix by 2025 compared to 2011 figure.

• Coal generation is expected to go up by three times.

• Gas generation will be more than double

• Use of renewable energy will be more than ten folds.RKEN target Energy Mix by 2025

Shift from Oil dependency

Macro Factors

Energy Requirement of Composite Textile Unit

• Energy cost varies from 7% to 17% of the total operating cost depending on scale of operation, type of end products and country of operation.

• Use of Electricity is predominant: 80% or more

• Use of Thermal Energy is less: 8 to 20% only.

BUYING FROM THE GRID?

PUTTING UP CPP?Keep both the options with pre-decided power mix??

What Should I do for Electricity???

Grid Electricity as an option

Electricity

Regulatory compulsions

Pricing mechanism,

social & political factors

Reliability of supply &

Power Quality

Power Mix in the grid & availability of primary fuel for power generation

Present Electricity Tariff in IndonesiaEach segment has slabs based on installed power capacity. Highest tariff is charged above 6600 VA contract demand.

• Low Voltage Consumers (all sorts of domestic, medium scale commercial & street lighting): Rp 1355 per unit (INR 6.78/ kWh)- Max

• Medium Voltage Consumers (large scale commercial & medium scale industry) : Rp 1042 per unit (INR 5.21/ kWh)- Max

• High Voltage Consumers (medium and large scale industries): Rp 933 per unit (INR 4.67/ kWh)- Max

Present Electricity ScenarioGeneration, transmission & distribution is thru Government Utility company PLN or their Licensees

• Total power generation is around 55,000 MW – out of which 30,000 MW by PLN alone.

• Out of this 30 GW- 80% electricity is produced from fossil fuel like oil, coal, gas etc. 18% comes hydropower while balance 2% from geothermal.

• Remaining 25 GW mostly comes from CPP of different industries or PLN Licensees.

• Diesel generator accounts for around 60% of the total captive power where co-generation contributes 25% only.

Generation Expansion Need of Indonesia (in MW)

Electricity demand is growing on an average rate of 7% per year

ADB Estimate & Trend Chart

Generation Cost vs. Tariff vs. Subsidy

Forecasting of Grid Power Price

Electricity Price going Up

Forecasting of Electricity Price.

Electricity Price going Down

What about CPP based on Natural Gas?

Does coal price follow crude oil price??

What about CPP based on Coal?

Comparison of various OptionsEnergy Heat

Value (Rp/ Kcal)

Net operative heat rate of CPP (Kcal/kWh)

Other Operating Costs (Rp/kWh)

Cost of Electricity without waste heat recovery (Rp/kWh)

Cost of Electricity with Co-generation(Rp/kWh)

Electricity 1.211 - - - 1042

NG 0.4534 2717 181 1392 905

Coal 0.1471 3200 264 660 429

HSD 1.060 2073 116 2309 -

Use Gas based Heat Pump instead of conventional Chiller

Save Water, Electricity & CostReduce GHG Emission

• Electricity consumption is reduced up to 90%• Compressor (main load) is coupled with IC

engine which runs on NG• Elimination of Cooling Tower operation• Simultaneous production of hot water at no

additional cost- eliminates hot water boiler• Waste heat of gas engine is also being used to

boost up hot water production.• Also operates in reverse cycle (heating

application)• Cut down up to 70% of operating cost.

THANK YOU FOR YOUR TIME AND ATTENTION