Fabby Tumiwa - Indonesia FiT Implementation and Improvement Challenges

8/6/2019 Fabby Tumiwa - Indonesia FiT Implementation and Improvement Challenges

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IndonesiaFiT:

Implementation andImprovement Challenges

Fabby TumiwaInstitute for Essential Services Reform

Renewable Energy Policy and Regulation:

Workshop on FiT Policy

ADB, Manila, 20-21 June 2011


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Indonesia Electricity Market at Glance

Vertically integrated state-owned utility (PLN) PLN has a monopoly power, control >98% of electricity market

38 million consumers (Social, Public, Residential, Business andIndustrial)

Electricity tariff is highly regulated by the government PLNs electricity production cost is varies among the region/provinces

Cross subsidy scheme (among consumers, among region)

PLN recovers about 60-65% of the cost from regulated electricity tariff,and the remaining comes from government subsidy

New Electricity Law in 2009 promotes new industry structure,encourage local government, and private sector to invest, andtheoretically ending PLNs monopoly


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National Electrification Ratio

NAD

90,85%Sumut

79,05%

Sumbar

71 13%

Riau

58,66%

Sumsel

56,39%

Kalbar

58,34%

Kalteng

57,07%

Kaltim

65,25%

Sulut

65,84%Gorontalo

46,79% Malut

63,84%

Sulbar

60 85%

Kepri

44,45%

Papua Barat

41,87%

Bengkulu

61,11%

Babel

68,73%

Lampung

61,25%

Jakarta

100%

Banten

67,29%

Jabar

69,04%

Jateng

70,42%

Jambi

75,71%

DIY

75,70% Jatim

65,54%

Bali

70,87%

NTB

31,20%

NTT

29,10%

Kalsel

70,53%

Sulteng

56,04%

Sultra

47,11%

Sulsel

65,93%

Maluku

72,62%Papua

31,61%

3


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47%

26%

6%

6%

15%

Coal

Natural Gas

Hydro

Geothermal

Diesel Oil

ENERGY MIX FOR

ELECTRICITY GENERATION (2010)

88% electricity generation come from fossil fuel (coal, natural gas, and

diesel oil), the remaining from geothermal and hydro. Total energy

generated was 172 TWh in 2010


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Additional Capacity Expansion Plan (2010 2010)

5.000

6.000

7.000

8.000

9.000

Total : 55,484 MWMW

6.248

4.5864.985

8.643

5.490 5.596

6.607 6.565

Additional capacity is

55,484 MW from 2010

to 2019) PLN: 31.958 MW

IPP 23.525MW

Average: 5,500

5

-

1.000

2.000

3.000

4.000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

PLTU PLTP PLTGU PLTG PLTD PLTA

4.156

2.608

Source: RUPTL 2010-2019

PLTU: Coal PP

PLTPL Geothermal PP

PLTG: Natural Gas PP

PLTD: Diesel PP

PLTA: Hydro (large/Mini Hydro)


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BasicFeed in Tarifffor RE

MEMR Regulation No. 31/2009 Applied for any RE power plant up to 10 MW and excess

power

On- rid connectivit

Mandatory for PLN to purchase using a standard PPAcontract (developed by PLN)

Fixed tariff, with two variables of differentiation: gridconnectivity and location

PLN can purchase another electricity from small, mediumRE plant and excess power with different tariff based onPLNs estimation cost, with the approval of tariff come fromthe minister


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Cont

Differentiation tariff rate based on grid connection andgeographical location, determined by a multiplayer F- factor

Connected to low-voltage grid: Rp. 1004 ($0.118)/kWh x F

Connected to mediumvoltage grid: Rp. 656 ($0.077)/kWh x F

= or ava a

F = 1.1 for Sumatra & Sulawesi

F = 1.2 for Kalimantan, NTB and NTT

F = 1.3 for Maluku and Papua

Formula is developed based on evolvement of purchasing tarifffor micro/mini-hydro

The differentiations are based on the electricity production cost


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Jawa, Madura & Bali (Jakarta)

Various electricity production cost (2008)

0 250 500 750 1000 1250 1500 1750 2000 2250 2500 2750 3000 3250

North Sumatra (Aceh)

East Kalimantan

Papua

Maluku LV

MV

HV


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FiTfor Geothermal

Government objective is to develop geothermalpower capacity up to 6000 MW by 2020.

MEMR Regulation No. 02/2011

Fixed rate: up to $ 0.097/kwh Connected to the high voltage-grid

Mandatory for PLN to purchase

Standardized PPA for all projects

Fiscal incentive for geothermal developer : VATexemption for geothermal equipments


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Challenges for implementing

Basic RenewablesFiT

Application of FiT: suitable for mini and small hydro, butnot for others technology and size for hydro (such solarPV, biomass/biogas, wind, etc). Applicability for the feed-stock based technology, such as

,

By default it creates a cap (up to 800 MW) for mini andsmall hydro-power

No review mechanism currently in place

Supporting Infrastructure: limit of grid availability to

reach potential projects site No grid priority determined

NoFiTsupport for off-grid application


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Cont

Market development: unclear how the market for RE can bedeveloped, and innovation is promoted

Participation of individual and small investors are questionable

Technology innovation is questionable

Financing: subsidized by PLN & government No specific funding available for FiT

PLN blends cost of purchasing RE into its production costcalculation, that will determine the level of subsidy fromgovernment

Public/consumer benefits

Excessive return on investment for mini-hydro investment (> 20%).

No direct link to the quality of services (improving reliability)


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Move from BadFiTto GoodFiT

LinkingFiTwith the broad national policy objective (e.g. renewable

energy target 25/25)

Develop/improve policy and regulatory capacity of the policy makerand energy regulator institution

Payment based on RE generation Differentiating the tariff prices to account for different technologies,

project sizes, locations, and resource intensities

Guaranteed grid access (investment for grid expansion)

Eligibility for all users and RE developers

A reliable purchase obligation Financing supports

Ensuring high degree of transparency and accountability, ensurepublic benefits.


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THANK YOU

[email protected]

Fabby Tumiwa - Indonesia FiT Implementation and Improvement Challenges

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