Proposed Policy Approaches and Programmes to Deliver
Affordable and Accessible Sustainable Energy Options
G.M.Pillai
Project International Consultant, APCTT &
Director General, WISE
Consultative Workshop on ‘Indonesia National Strategy to Increase Affordability of Sustainable
Energy Options and South-South Cooperation’ 12-13 May 2014
Approach to Policy Recommendations
Identify necessary strategies to address
challenges associated with sustainable energy
options.
Suggest necessary policy actions to accomplish
these strategies.
Suggest general policies for affordable
Strategy I: Improved Coordination among Various
Government Ministries and Departments
• The committee will comprise top level representatives from three ministries
• The Ministry of Energy and Mineral Resources
• The Ministry of Forestry
• The Ministry of Agriculture
• Role of the empowered committee will be:
• Examination of laws of various ministries.
• Identification of conflicting clauses in various laws of different ministries.
• Taking decisions to remove these conflicting clauses.
Empowered
committee on
renewable energy
chaired and
coordinated by the
National Energy
Council
• This will allow resolution of the disputes one by one without much hassle.
Sequential sign-off
on regulatory areas
Strategy II: Expedite License and Permit Procedures
Provide greater information dissemination about the
one-stop service (OSS) opened up by the Indonesia
Investment Coordinating Board.
Allow investors to clearly communicate problems they
face with the OSS so that necessary changes can be
made in the system.
Allow project proponents to provide constructive
Strategy II (Contd.): Increase the Education and Capacity of
Personnel Engaged in Management of the Licence and Permit
Procedure Efficiently
Training of personnel employed for
licensing
The government should arrange for training of personnel
through workshops and training programmes to enhance
the capacity of the staff.
Private sector should be encouraged to pay for training
programmes and workshops.
The payment by the private sector may be
Strategy III: Creating a Level Playing Field for
Renewable Energy Technologies
Incorporate the cost of
externalities of fossil-fuel-
based energy in the cost of
conventional energy.
Educate people on adverse
effects of fossil fuel subsidies
using print and electronic
media.
Taper off fossil fuel subsidies
over the years by reducing the
gap between international
and domestic oil price.
Use instruments such as direct
cash transfer to protect poor
households from immediate
effects of price rise
Strategy IV : Encouraging Use of Solar Energy by the
Urban Population through Grid-interactive Mode
Implementation of net metering for encouraging urban electricity
consumers to install their own system, generate electricity for
their own consumption, and supply excess (generation over
consumption) electricity generated to the grid of the distribution
utility.
Actions for implementing net metering
Set aggregate generation capacity limits in order to protect the utility from
revenue loss and address concerns around grid stability.
Set an interconnection procedure with a well defined process of approval.
Classify customers into three categories
–
residential, commercial and industrial.
Strategy IV (Contd.): Encouraging Use of Solar
Energy by the Urban Population through
Grid-interactive Mode
Consider the ownership of any potential carbon credits generated
from the installation of renewable energy technologies in designing
price determination rules for net metering.
Approve third party ownership of on-site RE generation. This will
benefit entities who cannot claim tax credits, and those who lack
initial investment capital.
Set specifications for electrical equipments, and allow consumers to
connect to the grid only if these specifications are followed.
Appoint qualified and competent entities who should be in charge of
installation, inspection and approval of grid connected systems
through standardized, transparent and efficient procedures.
The utility should be mandated to submit net metering data regularly
Strategy V: Encouraging Private Participation in
Promotion of Solar Home Applications in Rural
Areas
Private participation in promotion of SHS Clearly declare grid expansion plan and identify regions for SHS. Prepare a phase-wise target for deploying SHS in identified regions. Establish a cost-sharing mechanism among stakeholdersin a PPP model. Ensure product quality standards for increasing reliability. Provide subsidy to reduce upfront
Strategy VI: Encourage Community Participation in
Promoting Off-grid Technologies
• Educate stakeholders about the benefits of such projects and their sustainability.
• Disseminate awareness among private and community stakeholders .
Awareness building about community-based projects
• Provide information to the private sector about the regions suitable for these projects, and possible impacts of these projects.
• Green financing option should be tapped to provide finance to the private sector.
Facilitating private participation
• Provide subsidy to reduce capital cost of the project.
• Taper off the amount of subsidy over time to increase self-sufficiency of these projects.
Strategy VI (Contd.): Encourage Community
Participation in Promoting Off-grid Technologies
Community Cooperative
NGO
Private entity
Joint Venture
Knowledge dissemination and
capacity building
Strategy VI (Contd.): Encourage Community
Participation in Promoting Off-grid Technologies
The management model
Private entity
Community
cooperative
NGO
• Enters into a joint venture with the community cooperative.
• Responsible for installation,
operation and maintenance of the project.
• Responsible for loan repayment • Enters into a joint venture with the
private entity
• Responsible for tariff collection which includes O&M cost,
replacement cost, and return for private entity and cooperative. • Responsible for knowledge
dissemination among end users. • Facilitating the capacity building of
cooperative members in managerial works
•The joint venture receives loans from bank, and subsidy from government.
•The joint venture will be responsible for loan repayment.
Strategy VII: Promote Use of Biofuels especially in
Small-Scale Isolated Electricity Production and in Transport
• There should be a land management plan to maintain balance between food production and fuel crop production.
• An independent and accessible store of web-based information on land-use pattern, land availability, land rights, and biodiversity for universal access should be created.
Preparation of a land management plan
• Coordination among various government departments should be increased. This will help in building up a harmonized policy for biofuel development and use.
• Coordination among various biofuel research organizations should be increased to prepare a consolidated biofuel research agenda.
Increase coordination among departments and institutions
• Local administration should be entrusted with the responsibility of providing information on appropriate feed stocks and technologies.
Strategy VII (Contd.): Promote Use of Biofuels especially in
Small-Scale Isolated Electricity Production and in Transport
• Build up adequate infrastructure, and improve the existing infrastructure of potential areas of biofuel feedstock supply.
Provide adequate infrastructure
• Promote social programme through mass campaigning, grants, and subsidies for large-scale dissemination of biofuels for electricity and transport sector.
Programme to meet demand for energy
• Provide training for capacity building of government institutions on remote sensing techniques and GIS, collation of existing methodologies and tool-kits on policy making, techniques for developing a data repository for key country databases on biofuels, and providing long-term secure storage of these data.
Strategy VIII: Ensure Sustainable Use of Biomass
Resources
Zoning of biomass projects
A specific radius should be defined around each biomass
project based on availability of biomass.
Permission for new projects should not be given within the
specified radius.
Laws to restrict biomass export
The government should bring in stringent laws to restrict
export of biomass.
There should be a strict enforcement mechanism to
Strategy IX: Development of Domestic
Manufacturing Sector
Domestic
Manufacturing
Financial incentives
Tax incentives
Local content requirement R,D&D
programme Certification
Need for Scientific Resource Assessment
Need for GIS-based maps at the country or regional
level.
Higher resolution data covering narrower geographic
zones is necessary for precise decision-making.
Initiatives for resource assessment with DANIDA for
wind power projects and ESMAP for all other projects
may be helpful as initial level resource assessment.
Resource maps and data should be made publicly
Promotion of Off-grid Energy Systems
Target setting and
identification of
regions
DGNREEC will set phase-wise targets
DGNREEC will identify regions suitable for these technologies and build up a database on
suitable regions
Development of
supply chain for
off-grid systems
Introduce delivery models of distribution like renting, leasing and
BOOT
Create enterprise development programme to develop entrepreneurs delivering
RE applications and services locally.
Off-grid system
development and
demonstration
programme
MEMR shall carry out R&D programme,
development, demonstration, and commercial application of off-grid technologies
Program for Solar Deployment Promotion
Solar photovoltaic
system for rural home
lighting
Government shall encourage private participation to promote
solar PV
Solar PV programme will be implemented through
appointment of ESCOs
Solar thermal
application for
cooking and industrial
heating/drying
DGNREEC shall initiate a programme for solar cooking/improved stove
DGNREEC shall initiate a time-bound programme for
utilization of CSP for industrial applications
Solar thermal system
for water heating
DGNREEC shall initiate a nation-wide programme on solar water heating
DGNREEC shall formulate a time-bound programme to amend building laws,
bye-laws or rules and regulations to facilitate the
Financial and Fiscal Incentives
Financial
and fiscal
incentives
Existing
incentives
Income tax reduction
Accelerated depreciation
Tax reduction on dividends for foreign investors Exemptions on import
duty
VAT exemption
Proposed
incentives
Property tax incentives Production tax
credit
Personal income tax incentives
Sales tax incentives
Pollution tax exemptions
Creation of Fund to Finance RE/Market for RE
Carbon- tax on fossil fuels
Tax on carbon emitters Traffic congestion fees Eco-taxes
Creation of a specialized financial institution within the government to leverage private capital Domestic public financing
Human Resource Capacity Development
Need to revise curricula of educational and training institutions
Revision should be done at all levels of education as given below:
General RE courses at school level
Technician-level programme for skilled workers (9 months to 1 year)
Diploma-level programme for supervisory staff (1 to 2 years)
Engineering and graduate courses
Post-graduate courses
Doctoral-level courses
Management institutions for Masters in Energy Management (with emphasis on RE)
Training institutes in the govt and non-govt sector for on-the-job training, offering certificate courses up to 3 months and providing training of trainers
Laboratory infrastructure should be created.
Awareness about green jobs should be created to attract talents in this
Promote Formal Regional Business Incubators
Development of entrepreneurs in sustainable energy
business
Instruments to promote business incubators
Tax benefits
Low-cost loans
Promoting public-private partnership
Facilitating private sector in technology tie-up
Ensure Product Standards
Formulate regulations on product standards
and requirements for manufacturers and
installers.
Ensure strict enforcement of these
regulations.
Support and promote testing and
Possibilities of South-South Cooperation: Rural
Energy Development Programme of Nepal
Nepal Indonesia
Technologies
Micro hydro technology
Solar home systems
Improved cook stoves
Biogas
Promotion through REDP
Potential applications
