Jakarta, November 15, 2018
Directorate of Corporate Planning PT PLN (Persero)
Renewable Energy Penetration:
Challenges for Indonesia
Content
Renewable Energy Development Plan
2
Challenges in the RE Development
3
Concluding Remarks
4
Power Development Plan 2018-2027
1
Power
Development
Plan 2018-2027
01
Electricity Demand Forecast 2018-2027
KALIMANTAN EASTERN INDONESIA
INDONESIA 9,1%
35
TWh
78
TWh
SUMATERA
6,1%
177
TWh 301 TWh
8,5%
NUSA TENGGARA 8,4%
SULAWESI 8,6%
MALUKU 9,4%
PAPUA 8,7%
8,6%
26
TWh 54 TWh
433
TWh
239
TWh
2018 2027 6,86%
11,2%
35
TWh
92
TWh
7,2%
174
TWh
326
TWh
10,8%
26
TWh
64
TWh 480
TWh
234
TWh
2017 2026 8,3%
10,1%
9,9%
11,7%
12,1%
10,5%
Notes:
Blue : RUPTL 2017-2026 Red : RUPTL 2018-2027
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Power Plant Development Plan 2018-2027
(MW)
Fuel Mix Projection
RE portion in 2018 : 12,4% RE portion in 2025 : 23,0%
Renewable Energy
Development
02
Renewable Energy Criteria
Renewable energy development should meet the following requirements:
1. Supply and Demand Balance
2. System Readiness (Grid Impact Study) 3. Financing Capability
4. Economic Feasibility
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Renewable Energy Development Strategies
9
The development of RE power plants shall consider the balance between supply-demand and the readiness of the system as well as the cost efficiency.
PLN will utilize the renewable energy resources from water energy resources, geothermal,
biofuel, wind energy, solar energy, biomass and waste, etc., and will support any effort to create RE-BID (Renewable Energy Based on Industrial Development).
Particularly for PV, PLN would develop centralized PV to electrify isolated areas that relatively far from existing grids. These areas could be undeveloped areas, border areas and outermost
islands. Hybrid system (PV, other RE and Diesel PP) would also be developed for areas that still have less than 12 hours electricity, commonly in the eastern part of Indonesia.
PLN will develop Smart Grid system to increase penetration of intermiten RE and increase reability of power system. PLN would also develop micro grid (usually using PV) for the areas where distribution lines will not be developed in 2-3 years ahead.
PLN will reduce the use of HSD and MFO and encourage the utilization of biofuel.
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Renewable Energy Development Plan
Challenges in the RE
Development
03
Recent Renewable Energy Cost Evolution
Increasing cost for geothermal and hydro.
Decreasing cost for solar and wind power.
But RE cost in
Indonesia is still high
despite of those cost
reduction?
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Solar PV Costs and Performance
13
Wind Power Costs
Wind power cost varies between regions.
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Levelized Cost Comparison of Different Technologies in Indonesia
15 Note: Only for new projects.
Levelized Cost for CNG Power Plant in the range of 10-20 cent USD/kWh as peaker (higher cost in the isolated system).
Range of Levelized Cost of Electricity (cent USD/kWh)
Average Electricity Production Cost
Current RE cost in Indonesia is still relatively high.
It’s expected that RE cost will be cheaper in the future.
MEMR Decree No.
50/2017 to support RE development and reduce electricity production cost.
Renewable Energy Price and Cost of Production
(BPP) 2017 (cent USD/kWh)
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Cheap v Green?
17
Coal will remain as the main fuel to make affordable electricity cost.
Why RE cost in Indonesia is quite high? How to make RE cost in Indonesia cheaper?
Immature market?
Regulatory and policy (including tax)?
Land acquisition cost?
Financing cost?
Low capacity factor? etc.?
It’s expected that Cheap and Green will be in line if the RE cost in Indonesia is lower than fossil fuels.
With the current trend, when RE cost will be cheaper than fossil fuels in Indonesia? After 2025?
Cheaper LNG (for flexibility) and much cheaper RE create opportunities to re-balance the policy strategy towards a greener mix.
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Requirement to Increase Renewable Energy Penetration
Load Frequency Control (LFC)
Automatic Generation Control (AGC) Weather Monitoring System
Flexible (Fast Response) Generation Pumped Storage/Battery Storage
Technical Minimum Loading (TML) for base load unit
Low Voltage Ride Through, Load Frequency Ride Through, “Half” Frequency Control 1
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Concluding Remarks
04
New and Renewable Energy (NRE) Investment
Total investment for the new and renewable energy (NRE) in RUPTL 2018-2027 is about USD 30 billion, accounted for 32% from the total power plant investment*.
PLN encourage private developers to develop NRE, with 77% of those NRE investment was IPP projects.
It’s expected that NRE investment will be cheaper in the future, to reduce electricity production cost.
Government and Lending institutions will have more important roles to reduce the financing cost to have cheaper investment of NRE.
PLN and private developers should have easy access to the cheaper Green Climate Fund to support NRE development.
In the mean time, PLN will continue to strengthen the grid to give more opportunity for the NRE in the electricity system.
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