RENEWABLE ENERGY AS A NATIONAL DEVELOPMENT PRIORITY Rida Mulyana Director General of New, Renewable Energy and Energy Conservation Climate Change and REDD+ in the National Medium Term Development Plan United Nation Office for REDD+ Coordination in Indonesia (UNORCID Menara Thamrin 7th Floor, 9 March 2015 Energy and Mineral Resources for People s Welfare 1
I. INTRODUCTION 3 II. POTENTIAL OF NRE RESOURCES AND EC IMPLEMENTATION 6 III. ROAD MAP FOR NREEC DEVELOPMENT AND UTILIZATION 9 IV. STRATEGIC ISSUES AND IMPLEMENTATION OF NEW RENEWABLE ENERGY 14 V. NATIONAL COMMITMENT TO REDUCE GHG EMISSION 18 2
I. INTRODUCTION 3
INTRODUCTION 1. Energy has been became a global issue, that played as important role on national development 2. Energy is main capital for development as well as main human needs 3. Energy based on fossil resources become limited and scarce, that caused the prices tend to increase. Utilization of energy that are more massive and constrained by limited resources could trigger a war. 4. Most of world energy sources produced from fossil resources (In Indonesia almost 94% from total primary energy supply came from fossil resources. GLOBAL ENERGY TREND Source: IRENA, June 2014 NATIONAL ENERGY POLICY ROADMAP Source: National Energy Policy Doubling of share of total renewable energy in 2030 including goal of efficiency and modern energy access Tripling of share of modern RE in 2030 on Global Total Final Energy Consumption 5. Indonesia has high dependency on energy import to full fill national energy demand. Utilization of new and renewable energy as well as implementation of energy conservation can increase energy sovereignty 4
1. TO PROVIDE NATIONAL ENERGY SUPPLY BASED ON RENEWABLE ENERGY (AS ELECTRICITY AND FUEL; Energy growth rate at 8% per annum in need of capacity addition to fulfill the needs. 2. TO REDUCE SUBSIDY ON FOSSIL ENERGY (FUEL AND ELECTRICITY. Substitution diesel power plant with Renewable Energy especially for rural electrification and remote area that based on renewable energy potential locally. Electricity production cost from RE is currently competitive to diesel generation substituting diesel power plant with RE power plant could reduce the amount of fuel oil subsidy. 3. TO SUPPORT THE ENVIRONMENT (THROUGH ENERGY CONSERVATION. The increased energy efficiency and NRE utilization altogether will reduce the green house gases emission from the energy sector. Energy efficiency can delay the need for additional power plant capacity as well as fuel oil consumption (as saving 1 kwh of energy is cheaper than producing 1 kwh 5
II. POTENTIAL OF NRE RESOURCES AND EC IMPLEMENTATION 6
POTENTIAL OF NRE RESOURCES NO NEW RENEWABLE ENERGY RESOURCES INSTALLED CAPACITY (IC * Preliminary figures up to December 2013 excluding biomass and the use of non-energy RATIO OF IC/RESOURCES (% 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/m 2 /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 ** - NO * Only in Kalan West Borneo ** As a center of research, non-energy POTENTIAL OF ENERGY CONSERVATION SECTOR *** Source: National Energy Council **** BPPT s Prototype ENERGY CONSUMPTION PER SECTOR 2012 (MBOE * POTENTIAL OF ENERGY CONSERVATION TARGET OF SECTORAL ENERGY CONSERVATION (2025 1 Industry 305 (39,7% 10 30% 17% 2 Transportation 311 (40,4% 15 35% 20% 3 Household 92 (12% 15 30% 15% 4 Commercial 34 (4,4% 10 30% 15% 5 Others (Agriculture, Construction, and Mining 26 (3,4% 25% - Source: Draft on National Energy Conservation Master Plan 2011 7
thousand kl RENEWABLE ENERGY POWERPLANT NO TYPE OF POWERPLANT CUMULATIVE INSTALLED CAPACITY INTO 2014 (MW 2013 2014 TAMBAHAN 1 GEOTHERMAL 1.343,50 1.403,50 60,00 2 HYDRO 7.573,60 8.111,55 537,95 3 BIOENERGY 1.716,50 1.740,40 23,90 4 SOLLAR 42,77 71,02 28,25 5 WIND 1,33 3,07 1,74 6 HYBRID 0,54 0,54 0,00 T O T A L 10.678,24 11.330,08 651,84 ENERGY CONSERVATION Declining primer energy intencity by 1% per year or equivalent with the declining 5 SBM per Billlion Rupiah. Energy savings can be said to be "hidden energy sources": Saving 1 kwh is much cheaper to produce 1 kwh of energy. Additional powerplant capacity from renewable energy in 2014 amounted to 651 MW BIOFUEL UTILIZATION Biofuel utilization increased significantly each year. Implementation of biofuel mandatory reached 1,69 million KL (43% of the target, save foreign exchange 1,23 billion USD (increased 61% compared to the realitation in 2013 3500 3000 2500 2000 1500 1000 500 0 Production Domestic Export 2009 2010 2011 2012 2013 2014 8
III. ROAD MAP OF NREEC DEVELOPMENT AND UTILIZATION 9
Oil 41 % Gas 23 % Coal 30% Coal 30% NRE 23% Gas 22% Oil 25% CURRENT CONDITION NRE 6% 2025 TARGET (NATIONAL ENERGY POLICY NATIONAL ENERGY MIX: 215 MTOE. NRE: 13 MTOE GEOTHERMAL: 6 MTOE BIOFUEL: 4 MTOE BIOMASS: 2 MTOE HYDRO: 1 MTOE DGNREEC MAIN OBJECTIVES: ENERGY ELASTICITY < 1, OPTIMIZING AND INCREASING NRE SHARE ON NATIONAL ENERGY MIX ENERGY CONSERVATION, CLEAN AND EFFICIENT TECHNOLOGY REDUCING GHG EMISSION 1. ENERGY CONSERVATION to increase energy efficiency on supply and demand side, e.g industrial sector, transportation, household and commercial. 2. ENERGY DIVERSIFICATION to increase the share of new renewable energy use in the primary energy mix. 10
(Government Regulation NO. 79/2014 on National Energy Policy YEAR 2015 2020 2025 2030 2040 2050 UNIT MTOE % MTOE % MTOE % MTOE % MTOE % MTOE % Biofuel 6 2.8% 9 3.1% 19 4.7% 22 4.6% 44 5.9% 78 7.7% MSW 4 1.9% 7 2.4% 20 5.0% 25 5.2% 52 7.0% 64 6.4% Geothermal 9 4.2% 23 7.9% 28 7.1% 31 6.5% 36 4.9% 58 5.8% Hydro 2 0.9% 5 1.7% 11 2.6% 12 2.5% 13 1.8% 20 2.0% Ocean 0 0.0% 0 0.0% 0 0.0% 1 0.2% 2 0.3% 4 0.4% Solar 0 0.0% 0 0.0% 0 0.0% 1 0.2% 11 1.5% 17 1.7% Other RE (Wind 0 0.0% 0 0.0% 0 0.0% 0 0.0% 1 0.1% 1 0.1% New Energy (Nuclear, CBM etc 0 0.0% 5 1.7% 13 3.2% 27 5.6% 48 6.5% 68 6.8% Oil 84 39.3% 93 32.1% 100 25.0% 106 22.1% 155 20.9% 200 20.0% Gas 47 22.0% 64 22.1% 88 22.0% 110 23.0% 178 24.1% 240 24.0% Coal 62 29.0% 84 29.0% 120 30.0% 144 30.1% 200 27.0% 250 25.0% TOTAL 215 100.0% 290 100.0% 400 100.0% 479 100.0% 740 100.0% 1000 100.0% SUB TOTAL FOSSIL 193 90.2% 241 83.1% 308 77.0% 360 75.2% 533 72.0% 676 69.0% SUB TOTAL NON FOSSIL (NRE 21 9.8% 49 16.9% 92 23.0% 119 24.8% 207 28.0% 310 31.0% EBT Lainnya 0% 2015: 215 MTOE Minyak Bumi 39% Bioenergi 5% Hidro 1% Gas Bumi 22% Panas Bumi 4% Batubara 29% Minyak Bumi 32% EBT Lainnya 2% Bioenergi 5% 2020: 290 MTOE Gas Bumi 22% Hidro 2% Batubara 29% Panas Bumi 8% Minyak Bumi 25% EBT Lainnya 3% 2025: 400 MTOE Gas Bumi 22% Batubara 30% Bioenergi 10% Hidro 3% Panas Bumi 7% EBT Lainnya 6% 2030: 480 MTOE Gas Bumi 23% Minyak Bumi 22% Bioenergi 10% Hidro 3% Batubara 30% Panas Bumi 6% Minyak Bumi 21% EBT Lainnya 8% 2040: 740 MTOE Gas Bumi 24% Bioenergi 13% Hidro 2% Batubara 27% Panas Bumi 5% EBT Lainnya 9% 2050: 1000 MTOE Minyak Bumi 20% Bioenergi 14% Gas Bumi 24% Hidro 2% Batubara 25% Panas Bumi 6% 11
FOSSIL = OIL, NATURAL GAS, COAL + 29.312 84% COAL?* ADDITIONAL CAPACITY FOR ELECTRICITY GENERATION 78% FOSSIL 40.675 MW NRE 11.306 MW + 35.000 MW FOSSIL 69.987 PLN PLN 2014 51.981 86.981 2019 22% MW MW MW NRE 16.993 MW 20% 80% * To generate 1 MW coal power plant will consume 3000 Ton/year, and 1 million US$/MW investment, and need 3.0-3.5 years from FC COD. 16% + 5.687 GEOTHERMAL 1.791 HYDRO 2.507 BIOENERGY 1.155 OTHER NRE 233 INVESTMENT: 20 Mbillion US$ atau sekitar Rp. 260 Triliun (for NRE power plant. 12
2013 2014 2015 2016 2017 2018 2019 2020 2025 2030 2035 2040 2045 2050 Capacity (KL Millions REGULATION POLICY ACHIEVEMENT MEMR Regulation No. 25/2013 that has been revised to MEMR Regulation No. 20/2014 Mandatory policy of biofuel utilization: 10% biodiesel blended (B-10 since 1 st September 2013 Biofuel utilization increased significantly from year to year. Utilization of biodiesel for domestic consumption in 2013 amounted to 1,05 million KL (an increase of 56,62% from the use of biodiesel in 2012. Sector September 2013 January 2014 January 2015 January 2016 January 2020 January 2025 Transportation, PSO 10% 10% 10% 20% 20% 25% Transportation, Non PSO 3% 10% 10% 20% 20% 25% Industry 5% 10% 10% 20% 20% 25% Electricity Generation 7,5% 20% 25% 30% 30% 30% Biofuels domestic usage mandatory policy: Fossil fuel substitution/reduce oil import creating the market of biofuel industrial development improvement of domestic economy 1. Utilization biodiesel B-10 and will increase to B-20 by 2016 and B-30 by 2020 2. Demand for biodiesel will increase significantly doubled by 2016 (the implementation of B-20 and 1.5 times in 2020 (the implementation of B-30. 3. With the current installed capacity of the existing biodiesel industry new investment of biodiesel plant should be accelerated to meet the potential demand. 30 25 20 15 10-5 Increasing demand of biofuel since the implementation of mandatory policy through MEMR Regulation 20/2014 Biodiesel Demand Biodiesel Installed Capacity shortages of supply installed capacity projection (BaU great opportunities 13
IV. STRATEGIC ISSUES AND THE IMPLEMENTATION 14
REGULATION (Legislation until the ministerial regulations, harmonisation, provision of land, licensing-ptsp, PNBP ENERGY CONSERVATION (saving culture, finanial SOCIAL ISSUE (changing land profit, perception of safety (PLTA, PLTP &PLTN, indigenous lands, culture TOP ISSUES EBTKE DOMESTIC COMPONENT LEVEL (reliance on foreign technology, drilling rigs, technical HR (EPC, ESCO DM teknis (EPC, ESCO FINANCIAL (funding for development EBTKE: Geothermal exploration and exploitation, MHP, PLTBio, PLTS, Energy Efficiency Revolving Fund (ESCO 15
1. Improvement of the national electricity supply through the development of Geothermal and Hydro Power Plant; 2. Improvement of the electricity access in remote areas, small islands and border areas with Micro Hydro and Solar Power Plant; 3. Development of Bioenergy Power Plant including agricultural waste and municipal solid waste to provide electricity as well as to improve the environmental; 4. Development of wind power and ocean energy plant pilot project in order to prepare the stage of commercialization; 5. Utilization of Biofuel (solid, gas and liquid for substitution of fuel oil; 6. Development of new energy (CBM and shale gas commercially and use of the conventional energy bussiness regulation and practice; 16
1. CREATING MARKET Through the activities of privisioning (supplying and utilization of bio-fuel, obligating National Electric Company (PT PLN to buy electricity, the application of Indonesian National Standard (SNI, etc; 2. SUBSIDY The subsidy program for bio-fuel has been running since 2009. Subsidies are provided on the difference between fuel prices and bio-fuel prices, distributed through Pertamina; Subsidy is also provided for plantations 3. FEED-IN TARIFF Declared through the Minister of Energy and Mineral Resources Regulation, regulates the selling price of electricity from renewable energy purchased by National Electric Company. There should be no negotiations; 4. PROVIDING INCENTIVES AND FACILITIES Reduction of taxes and customs duties, licensing procedures to be simplified; Electricity produced by power plants up-to 10 MW will be sold to PLN; no signing of Power Purchase Agreement is needed. 17
V. NATIONAL COMMITMENT TO REDUCE GHG EMISSION 18
NATIONAL ACTION PLAN-GHG ON ENERGY SECTOR 2010-2020 Mandatory of Energy Management at 400 energy intensive industries (10,16 Million ton CO 2 Conservation Energy Partnership at 1303 buildings & industries (2,11 Million ton CO 2 Efficiency on Household Appliances as amount 21,43 GWh (10,02 Million ton CO 2 Micro Hydro Power Plant 130,4 MW (0,61 Million ton CO 2 Mini Hydro Power Plant 692 MW (3,25 Million ton CO 2 Solar Power Plant 326,78MW (0,29 Million ton CO 2 Wind Power Plant 59,2 MW (0,06 Million ton CO 2 Biomass Power Plant 16,9 MW (0,01 Million ton CO 2 DME 700 villages (0,18 Million ton CO 2 Biogas 31.400 units (0,13 Million ton CO 2 657.83 MMSCFD natural gas for public transportation at 9 cities and 21.16 ton LGV/day at 2 cities (3,07 Million ton CO 2 Natural Gas pipelining to 94.500 HH at 24 location (0,15 Million ton CO 2 Construction of a mini refinery LPG 2,2 MMSCFD (0,03 Million ton CO 2 26,82 million ton CO 2 DGNREEC 3,25 million ton CO 2 OIL & GAS TOTAL 32,8 Million ton CO2 Post-mining land reclamation 72.500 ha (2,73 Million ton CO 2 2,73 million ton CO 2 COAL AND MINERAL 19
ACHIEVEMENT OF NATIONAL ACTION PLAN-GHG ON ENERGY SECTOR Based Presidential Regulation Number 61/2011 NO MITIGATION ACTION EMISSION REDUCTION (ton CO2e 1 Energy Efficiency 2.475.547,88 2 New and Renewable Energy - Electricity 1.094.678,77 - Biogas 51.152,00 3 Gas Utilization for Public Transportation - Public Transportation 92.800,00 - Household 3.500 4 Post-mining land reclamation 1.211.019,90 Total Realization 2013 based Presidential Regulation No. 61/2011 4.928.698,55 Additional Activities Precentage 16,43% 1 Biofuel 1.567.468,00 2 Energy and Water Efficiency (Inpres 13/2011 23.316,18 3 Electricity Sector 1.612.833,59 4 Kerosene to LPG Conversion 19.929.459,51 Total Realization 2013 based Presidential Regulation No. 61/2011 28.061.775,83 Precentage 93,54% FROM TARGET ON ENERGY SECTOR 32,8 Million ton CO2 20
ENERGY FOREST AND ENERGY PLANTATION PROGRAM 1. The objectives: a Provide biofuel feedstock to fulfill domestic demand. b Provide bio-electricity especially in the eastern of Indonesia and the islands. 2. Production from the forest is dedicated for bioenergy feedstock. 3. The development priority is to the eastern of Indonesia especially on biofuel dedicated plant. 4. To Substitute the fossil fuel consumption, for fuel and electricity. 5. Energy forest development is integrated with the production of pellets, biogas and other value-added enhancement. 6. Developed in corporation with community involvement. 21
MINISTRY OF ENERGY AND MINERA RESOURCES DIRECTORATE GENERAL OF NEW RENEWABLE ENERGY AND ENERGY CONSERVATION JALAN PEGANGSAAN TIMUR NO. 1, MENTENG, JAKARTA 10320 Phone: +62 21 39830077 Fax: +62 21 31901087 www.esdm.go.id - www.ebtke.esdm.go.id