B3. Syahrul-SET Innovation Presentation

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Preliminary Assessment of

Enabling Environment and Technology Innovation

Ecosystem for Sustainable Energy in Indonesia

By

Syahrul Aiman and Team

Indonesian Institute of Sciences

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content

I. Background of the study.

II. Indonesia Statistics.

III. Energy Issues and Policy

IV. Business Enabling Environment and Technology Ecosystem

a) Supply and Consumption b) Sustainable Energy and c) Electricity Condition.

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I. Background of the Study

UN Secretary General, Mr. Ban Ki-moon (2011),

–

vision

for making

Sustainable Energy for All

a reality by

2030.

–

launched

SE4ALL

(in Indonesia :

Energi Berkelanjutan

untuk Semua)

as a global initiative; and action from

all sectors of society in support of 3 (three) interlinked

objectives:

 providing universal access to modern energy services;

 doubling the global rate of improvement in energy efficiency; and

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Background of the Study..

Indonesian Institute of Sciences (LIPI) responses:

Study on ‘Enabling Environment and Technology Innovation Ecosystem for SE Options in Indonesia’.

 The study is supported by APCTT.

 Objectives :

• to get a picture on how the efforts (government and community) to fulfill energy (esp. electricity) need of people at rural / remote area (off-grid areas).

• policy recommendation to provide electricity for rural area /off grid areas.

 Data :

• Potency, demand, incentives, and challenges to utilize RE for power generation.

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II. Indonesia Profile

 The population :

– (2012) : 251.8 Millions,

• 51.4 % (M) and 48.6 % (F)

• 56 % lives in Jawa Island (7 % of land of Indonesia)

• Increasing Rate : 1.49 % per year (since 2000)

• 34.4 % at the productive age (17 – 35 years).

• lives in Urban - 54 % , rural - 46 %.

– (2013) : 11.5 % of population, still living at below poverty line. Territory Area : 7,788,810 km2

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Indonesia Profile continued)

A. SOCIO ECONOMY (2011)

Household : 60,2 millions Household

B. ELECTRICITY CONDITION (2011) :

(2012) Electrification ratio 71 %.

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III. Energy Issues.

1. highly dependency on fossil oil.

–

Increasing fuel oil consumption.

–

increasing rate of the energy demand : 7 % / year.

2. possess abundant renewable resources, but utilization is

still limited.

3. the effort to increase RE utilization

4. role of community.

5. Role of local technology.

6. Electricity :

– Shortage of electricity suppllied by PLN in many provinces.

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Energy Policy

1. Energy law : no 30/2007 drive to use energy resources efficiently, and the National Energy Conservation Master Plan.

2. President Regulation P 5/2006 : National Energy Policy

– Mentioned target energy mix 2025 – reduce dependency on fossil oil. – use energy resources efficiently – utilize renewable resources. – provides incentives.

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Energy Mix 2011 and Target 2025

oil Gas Coal NRE oil 46.93 Gas, 21.9 Coal, 26.38 NRE, 4.79 2011 Oil Gas Coal NRE

Energy % Oil 23 Gas 22 Coal 32 NRE 23

2025

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IV. Business Enabling Environment and Technology

Innovation Ecosystem

a. Sustainable Energy Options

1. RE for Electricity Generation :

 Geothermal.

 Hydro power.

 Solar

 Wind.

 Biomass (direct combustion or through biogas) 2. Liquid Fuels :

• BIOMASS :

– Biodiesel oil : diesel fuel substitute.

» Currently 10 % Biodiesel and 90 % diesel oil (Biosolar). – Bioethanol : for gasoline (Premium, RON 88) substitute.

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Primary energy supply share in Indonesia (2011)

Regional Oil (%)

Natural gas (%)

Coal (%) Hydro power (%)

Geo

thermal (%)

Java (*) 19 6 0 6 34

Sumatera 69 55 50 21 47

Kalimantan 9 14 50 29 0

Sulawesi 1 2 0 14 8

Others 2 24 0 31 10

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The trends primary energy supply per capita, and

final energy consumption per capita.

1,00 2,00 3,00 4,00 5,00 6,00

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Final Energy Consumption per Capita *) BOE/capita

Primary Energy Supply per Capita *) BOE/capita

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Distribution share of final energy consumption by region (*).

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b. Electricity : Potency and Installed Capacity (*)

No Renewable Energy Potential (MW)

Install Capacity

(MW)

Ratio (%)

1 2 3 4 5=4/3

1 Large Hydro 75,670 5,705.29 7.54

2 Geothermal 29,038 1,189 4.00

3 Small Hydro (Microhydro)

769.69 217.89 28.31

4 Biomass 49,810 1,618.40 3.25

5 Solar 4.80

kWh/m2_/day

13.5

-6 Wind 3-6 m/s 1.96

-7 Sea 43,000 -

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Feed-in-Tariff



To increase utilization of RE sources for electric power

generation by private companies :

–

Feed- in- tariff policy for renewable energy sources, the

tariff:

•

Depend location (Jawa - Bali, Sumatera, Kalimantan,

etc ).

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c. Biomass :

Background of Indonesia Biofuels Development Program

1. High bio-diversity in Indonesia, including biofuel feedstock.

2. Land availability for plantation and biofuel development.

3. Proven biofuel technology by local potential (Engineering, Research and Development).

4. Biofuel industry allows community participations, including farmers.

5. High number of unemployment that could be employed in biofuel industry.

6. Biofuel is renewable, and potential for fossil oil substitution.

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Facilities and incentives for Biofuel Development

1. Government regulation no 1/2007 : on income tax for

investment in certain business or/and certain area.

–

Biofuel development included in certain business : is

given income tax facility in form of net income reduction,

30 % of total investment.

2. Government regulation no 8/2007. It is set up Indonesia

biofuel fund.

–

Seed capital for Indonesia Biofuel Fund : US $ 220

millions.

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Facilities and incentives for Biofuel Development

(continued)

3. Minister of Finance Regulation 117/PMK 6/2006. On credit

of Bioenergy development and Plantation Revitalization.

–

Credit for bio-energy development and plantation

revitalization is prepared in order to support funding for

biofuel feedstock development program and plantation

revitalization.

–

Plantation development that could be funded by the

program includes plantation expansion, rehabilitation and

rejuvenation.

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Biofuel development progress

1. Availability of biofuel development regulation

and standard.

2. utilization of biodiesel oil and bioethanol as

substitute of fossil oil (Premium and Diesel

Oil/Solar).

3. Development of Energy Self Sufficient Village

(ESSV) utilizing biofuels, currently more than

130 ESSV.

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Biofuel for Rural Communities

Small scale bio energy projects :

 PPO (Pure plantation oil) blend of jatropha oil with Diesel Fuel : Rural tractor , Water Pump, rural transportation, fishing boat engine.

 Government grant for superior

seedling/nursery, small scale pilot plant, pilot projects. (e.g. Jatropha Nursery Center at West Java)

 Jatropha plantation was around 50,000 Ha. (2008)

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Location of Facilities for Bioethanol Production (2007-2011) :

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Locations of Facilities for Biodiesel Production (2007-2011)

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LIPI’s Pilot plant for 2

nd

generation Bioethanol

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d. Geothermal

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e. Solar Power

A. Challenge :



main challenges for solar energy utilization is

solar energy availability and variation of

intensity.



(2012) : the biggest PV based power system

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LIPI’s CSP (concentrated solar power) research

facility

 Location : G Kidul.

 Cap : 10 kW (end 2014).

 Operating

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f. Wind Power Electricity Generation

• low wind speed.

• appropriate technology to rural condition.

• LIPI’s prototype :

• up to 3 kW / unit.

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g. Community Participation on (Utilizing) RE

Many community (ethnic, association) groups participate, develop their own program to utilize RE to support or to fulfill their energy need, and hence contribute to the government program. Examples :

Association

1. METI (Masyarakat energi terbarukan Indonesia). Member : industry, academic, researcher, etc.

2. Wind Energy Society (MEAI).

3. Aprobi ( biofuel producers association)

NGOs :

1. IBEKA.

2. AMAN (Asosiasi Masyarakat Adat Nusantara = Association Indigenous Peoples of the Archipelago) :

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V. Summary

Challenges in driving, facilitating Environment and

Technology Innovation Ecosystem for SE Options :

1. high dependency on fossil fuel, and community get used for

huge subsidy oil, gas and electricity.

2. lack of infrastructure energy for RE,

3. low investment for RE development and NRE researches.

4. due to the huge subsidy, hence price of energy in market is

not reflect the economic price of energy sources.

5. Utilization energy resources in several sectors is not yet

efficient.

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Summary (continued)

The government effort:



The GOI facilitate and promote to increase utilization of

RE



the GOI set up target, road map, provide incentive,



RD Institutions, Universities, and Community Group

participate, but the effect is still limited.

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Suggestion : National Tech Innovation for SE

 A : Academic side

 B : Business side

 G : Government.

 C : community

 Incentive, approach, program for B and C : should be

different.

 Support from A need to be focused to C

G

B

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