policy and regulation of renewable energy in indonesia

policy and regulation of renewable energy in indonesia

GIZ WORKSHOP
“POLICY AND REGULATION OF
RENEWABLE ENERGY IN INDONESIA”
BERLIN, AUGUST 24, 2011
PRESENT BY ARIO SENOAJI
VICE CHAIRMAN FOR POLICIES & REGULATIONS
INDONESIA RENEWABLE ENERGY SOCIETY (IRES/METI)
WEBSITE : WWW.METI.OR.ID
INTRODUCTION ABOUT IRES/METI
IRES/METI is an communication, consultancy and
cooperation forum among Renewable Energy (RE)
practitioner, which has goal to accelerate gain on RE
function to fulfill national energy demand.
Founders :
- A Group of Intellectuals
- Government Officials
- Private Companies
Officially declared May 11,1999
INTRODUCTION ABOUT IRES/METI (continued)
IRES/METI is Forum for Scientist, educations, regulations, business
developers and organizations, NGO’s and other stakeholders to
discuss and exchange views on strategic and pragmatic issues using
renewable energy to serve the nation’s interest and objectives to be
less dependences on fossil energy and prevent the environment from
deteriorating as a result of the continuous and unabated use of fossil
energy.
IRES/METI is Committed to contribute to the global efforts in combating
the negative impact of the global climate change by producing ideas
and solutions forward the global concerns, particularly through
advocating and promoting the use of renewable energy.
A COUNTRY WITH 17.000 ISLAND
Renewable Energy (RE)
Development Challenges
• High initial investment cost
• High production cost that cannot compete with the
conventional technology
• Lack of incentives and smart funding mechanisms
• Energy subsidy removal (subsidies have created an
unfair market advantage for conventional fuels and
technologies)
• Formulating energy price based on its economic
value (electricity prices not reflect the true cost of
generating power)
• Quantifying externality costs
Advantages
1. Abundant of RE Potential in Indonesia
2. RE available throughout the year
3. Indonesia is an Archipelago Country which is
have barrier in Fuel Supply and electricity
Transmission/ Distribution
New and Renewable Energy Policy
Regulation
Description
1.
Law No. 30/2007 on Energy
•Provision and utilization of new & renewable energy should be increased by the
government and local government in accordance to their authorities.
•Provision and utilization of new renewable energy can get incentives from
government/local government for certain period until it reaches economical
development stage.
2.
Law No. 30/2009 on Electricity
•Putting priority to utilize locally available energy resources for electricity
generation.
•Process of procurement is implemented through direct selection ( without tender).
3.
Law No.27/2003
on Geothermal
•To regulate the management and development of geothermal energy sources for
direct and indirect utilization.
•According to Ministerial Regulation, the highest benchmark of electricity purchasing
price from geothermal power plant is set to be US$ 9,70 cent/kWh.
4.
Ministerial Regulation
No.31/2009 on Small and Medium
Scale Power Generation using
Renewable Energy
State owned (PT.PLN) has the obligation to purchase electricity from small-medium
scale RE power plant which is developed by cooperatives, community or business
entities; ( Capacity : ≤ 10 MW)
Price: Rp 656/kWh x f, if connected to medium voltage
Rp1,004/kWh x f, if connected to low voltage; f =1.0, 1.2, 1.3, 1.5
 PT. PLN is allowed to purchase electricity higher than the above mentioned price
based on PLN’s Own Estimation (OE) price and has to be approved by the Minister
of Energy and Mineral Resources
5.
Minister of Finance Regulation
No. 21/PMK.011/2010 and
24/PMK.011/2010 on Renewable
Energy Incentives
Tax facility for renewable energy In the form of Income Tax, Import Duty and Tax
Holiday, Tax Exemption etc.
MEMR REGULATION NUMBER 31 YEAR 2009
Regulation of electricity price from renewable energy resources and incentive factor based on plant’s
location:
Article 1 paragraph (1)
PT. PLN (PERSERO) shall be obliged to purchase electricity from small and middle scale renewable power plant
up to 10 MW or the excess electricity from State Electricity Enterprises, Regional Electricity Enterprises, private
enterprises, cooperatives and non governmental organization in order to enhance local electricity supply systems.
Article 2 paragraph (1)
The price of electricity purchase as referred in paragraph (1) is stipulated :
a. Rp 656/kWh X F, if interconnected at Medium Voltage level;
b. Rp1,004/kWh X F, if interconnected at Low Voltage level.
Article 2 paragraph (2)
F is an incentive factor which based on the location of
the electricity purchase by PT. PLN, as referred in
article 2 which values at :
*Java and Bali region
: F = 1.0
*Sumatera and Sulawesi region
: F = 1.2
*Kalimantan, NTB & NTT region
: F = 1.3
*Maluku & Papua region
: F = 1.5
Region
Price at MV
(Rp/kWh)
Price at LV
(Rp/kWh)
Java , Bali
656
1,004
Sumatera , Sulawesi
787
1,205
Kalimantan, NTB,NTT
853
1,305
Maluku, Papua
984
1,506
MEMR REGULATION NUMBER 31 YEAR 2009
Regulation of electricity price from renewable energy resources and incentive factor based on plant’s
location (continued):
Article 3 paragraph (2)
The electricity purchasing price as referred in Article 2 is used in the power purchase agreement from excess
electricity without any negotiation and without approval from the Minister of energy and Mineral Resources or
Governor’s or Major’s/Regent’s, based on their authorization.
Article 4 paragraph (2)
The electricity purchase as referred in paragraph (1) is based on PT. PLN (PERSERO)’s Self Estimated Price and
shall be obligated to receive the Minister of Energy and Mineral Resources’ approval
MINISTRY OF FINANCE REGULATION NUMBER 21/PMK.011/2010
Regulation of tax and customs facility for renewable energy resources utilization activities
FINANCIAL INSTRUMENTS
SUPPORT
Income Tax
 Reduced net income
for 30% of total
investment
 Accelerated
depreciation
 Imposition of Income
Tax on dividend paid to
Foreign Taxable at 10%
 Compensation for
losses in certain
circumstances
Value Added Tax
Import Duty
Tax Borne by
Government
Exemptions of
VAT for Taxable
Goods,
machinery and
equipment for RE
utilization (not
included spare
parts)
Exemptions for
Import Duty of
 Goods and
Machinery for
development and
capital investment
 Capital Goods
Imports for
construction and
development of
electricity industry
Regulated in
State Annual
Budget Law
and its
implementing
regulations
National Energy Mixed
CURRENT POSITION
Coal
30,7 %
NRE
4,4 %
Gas 21
%
Oil
43,9 %
VISION 25/25
Coal
32 %
NRE
25 %
Gas 23
%
Oil
20 %
By Directorate General of New
RE and Energy Conservation,
MEMR
ENCOURAGEMENT OF RE UTILIZATION
President decree no 5/2006, Target RE for national
energy mixed of 17% by 2025
Bio fuel 5%
Oil
20%
Coal
33%
N&RE
17%
Gas
30%
Geothermal 5%
Biomas, Nuclear, Hydro, Solar
Power, Wind Power 5%
Coal Liquefaction 2%
RESOURCES AND EXISTING CAPACITY
NO
NEW/ RE
RESOURCES
INSTALL
CAPACITY
RATIO %
1
2
3
4
5 = 4’3
1
Hydro Power
75,670 MW
5,705.29 MW
7.54
2
Geothermal
28,543 MW
1,189 MW
4.17
3
Mini/Micro Hydro
769.69 MW
217.89 MW
28.31
4
Biomass
49,810 MW
1,618.40 MW
3.25
5
Solar Power
4.80 kWh/m²/day
13.5 MW
-
6
Wind Power
3 6 m/s
187 MW
-
7
Nuclear/Uranium
3.000 MW
(e.q.24,112 ton) for 11 years*
30 MW
1.00
* Only at Kalan – West Kalimantan
Source: EBTKE-KESDM
RUKN 2010 - 2029
TWh
GW
200
800
180
700
160
600
140
~ 4.5 Times
500
120
100
400
80
300
60
200
40
100
20
0
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
Kebutuhan tambahan daya
4
8
12
16
20
25
30
36
42
48
54
62
70
79
89
100
112
125
140
156
Kapasitas existing *)
30
30
29
28
28
27
26
26
25
24
24
23
23
22
22
22
21
21
20
20
Beban Puncak
26
28
31
33
36
39
42
46
50
54
58
64
69
76
83
91
99
109
119
131
Kebutuhan tenaga listrik
145
157
169
183
198
215
233
253
274
298
325
353
385
419
458
500
546
597
653
716
Source: DJLPE-KESDM
0
The Proposal of Electricity Price of Biomass to
Govt. of Indonesia by IRES (METI)
July 25, 2011
Biomass
Biogas
Municipal waste
: Rp1,000/kWh
: Rp1,000/kWh
: Rp1,100/kWh (plus tipping fee
Rp150,000/ton*)
* Depend on local government regulation/capability
Incentive for Biomass & Biogas
Region
F
Price (Rp/kWh)
Java, Madura, Bali and
Sumatera
1.0
1,000
Kalimantan, Sulawesi,
NTB and NTT
1.2
1,200
Maluku and Papua
1.3
1,300
Incentive for Municipal Waste
Region
F
Price (Rp/kWh)
Java, Madura, Bali and
Sumatera
1.0
1,100
Kalimantan, Sulawesi,
NTB and NTT
1.2
1,320
Maluku and Papua
1.3
1,430
Biomass Resources Ready to be
Developed as an Electricity
1.
2.
3.
4.
Palm oil, total area +/- 7.50 Million Ha
Rice husk, total area +/- 12.87 Million Ha
Bagasse, total area +/- 448.75 Ha
Municipal Waste
Thank You
email : asenoaji17@yahoo.com