Pertukaran Pengetahuan Mendorong Indonesia Mengembangkan Pasar Energi Terbarukan.
Pada tahun 2017, USAID mengundang pejabat Badan Perencanaan Pembangunan Nasional, Kementerian Energi dan Sumber Daya Mineral dan Perusahaan Listrik Negara untuk mengunjungi California, Amerika Serikat. Mereka menyaksikan perekonomian kuat yang digerakkan oleh 30% energi terbarukan.
Pada tahun 2018, USAID memfasilitasi kunjungan balasan bagi perusahaan pembangkit listrik dan regulator Amerika Serikat. Selama kunjungan ke tiga kota di Indonesia, mereka bertukar pengetahuan tentang sistem operasional pembangkit listrik. Terutama pembangkit listrik tenaga bayu dan solar yang bersifat tidak tetap (variable)
Govt upbeat investment in electricity will reach US$14 billion
Sharp increase in investment partly due to simplification in licensing procedures
The Energy and Mineral Resources Ministry is upbeat that investment in the electricity sector will increase more than 15 percent this year given the significant investments in the sector during the first five months of 2019.
Jisman Hutajulu, the ministry’s director of supervision for electricity programs, said in Jakarta on Tuesday that the government was upbeat that investment in the electricity sector would reach US$14 billion or 16 percent higher than the initial target.
“We are optimistic to reach our investment target of $12.04 billion, which could even reach $14 billion due to new power plants, transmission infrastructure and other efforts to ease the business process,” he said Tuesday.
As of May, the ministry recorded that investment in the electricity sector reached Rp 68.73 trillion ($4.74 billion) or a 34.65 increase from the figure recorded in the same period last year.
The ministry’s director general for electricity Rida Mulyana said the sharp increase in investment was partly due to the simplification in licensing procedures. “We see there is an increase every month. It could be due to the improvement in the administration process that is simpler, quicker, clearer and cheaper,” he said at the press conference.
About $1.13 billion of the investment was for the development of state electricity firm PLN’s power plants and the other $1.82 billion or 38.53 percent was for the development of power plants owned by independent power producers.
“About $165 million comprised investment from integrated private power plants or known as private power utility [PPU],” Rida of the ministry said. Furthermore, investment also came from the development of transmission, substation and distribution networks at $625 million, $264 million and $729 million respectively.
However, Fabby Tumiwa, the executive director of energy watchdog Institute for Essential Services Reform was not impressed with the amount, saying it was only “natural” growth.
“If there’s an improvement in investment realization, it was only because some projects in the 35 gigawatts [GW] program have finished construction or from those auctioned in 2017 and 2018,” he told The Jakarta Post in a text message.
“It is part of the natural business cycle that investment funds are disbursed in the construction phase. The bottom line is that for me the investment is still below its full potential,” he said.
There are at least seven new power plants that will be commercially operational by the end of this year, one of which is a 55-megawatts (MW) PLTP in South Sumatra.
The unit, which goes by the name PLTP Lumut Balai 1, is owned by Pertamina Geothermal Energy, the power subsidiary of state energy holding company Pertamina.
“From the 35 GW power plant projects, we expected to have another six units by year-end with 2.2 GW in power capacity, making a total of 5.8 GW new capacity this year,” Rida of the ministry said.
The other six projects consist of three coal-fired power plants (PLTUs), which if combined have a power capacity of 2.1 GW, namely Kalsel in South Kalimantan, Jawa-7 in Banten and Jawa8 in Central Java.
The remaining are the Air Putih hydropower plant in Bengkulu with a power capacity of 21 MW, Sukawinatan waste-to-energy power plant in South Sumatra with capacity of 0.5 MW and Maumere gas power plant in East Nusa Tenggara with capacity of 40 MW.
The 35 GW project was launched in 2015 by President Joko “Jokowi” Widodo and has reached 10 percent progress or around 3.6 GW, government data shows.
However, the deadline was then revised to 2028 due to a slowdown in electricity demand, the ministry said.
Closing the year with only 5.8 GW power capacity from the 35 GW project was also a contrast with what Energy and Mineral Resources Minister Ignasius Jonan said in March 2018. “We target to close 2019 with 10 GW of power capacity from the 35 GW project,” he said back then.
Commenting on this, Jisman of the ministry acknowledged that the government had revised the target because of the adjustments with the realization of electricity demand.
“We are not canceling the projects [in the 35 GW program], but only delaying when they will begin operation. We will adjust it with the demand for electricity,” he said.
More than three years after the government launched a program to add 35 gigawatts (GW) of power generation capacity to national supply, only 3.6 GW have been realized, data from state-owned electricity firm PLN shows.
The initial target was to wrap up the entire 35 GW program in 2019, the final year of President Joko “Jokowi” Widodo’s first presidential term. That deadline has since been moved back to 2024 or 2025, because of slower than expected growth in electricity demand.
PLN, which is directly responsible for contributing 10 GW or 28.5 percent to the planned new capacity, said most of the projects were still in the construction phase. These accounted for 20.11 GW or 57 percent of the total 35 GW.
PLN’s acting president director, Djoko Abumanan, said power purchase agreements for another 27 percent of the total capacity, or 9.5 GW, had been signed, but construction had yet to begin.
“The projects that are in the procurement phase [make up] 4 percent or 1.4 GW, and those that are still in the planning phase [account for] 2 percent or 732 megawatts,” he said in a hearing at the House of Representatives on Thursday.
PLN’s projects within the 35 GW program that have reached the operational stage account for 2.2 GW, while those of independent power producers (IPPs) account only for 1.3 GW.
However, IPPs has more capacity in the construction phase at 15.7 GW, while PLN has only 4.3 GW.
PLN noted several challenges for the completion of the 35 GW program, starting from the initiation phase to the phases following construction.
During the initiation phase, which is before a power plant project is agreed on, PLN has to synchronize it continuously with the demand stipulated in the electricity procurement business plan, which is renewed every year.
Djoko said the operation of new power plants next year could bring down basic electricity prices thanks to lower operating costs.
“When the new power plants from the 35 GW program enter operation, they are supposed to [bring down prices], as the operating costs are lower [for coalfired power plants],” he said.
According to the firm’s data as of March, 61.82 percent of the firm’s electricity comes from coal, followed by gas at 21.01 percent and hydropower at 7.51 percent.
As of March, coal-fired power plants accounted for 29.02 GW or 49.7 percent of PLN’s generating capacity of 58.39 GW, while gas power plants added 17.17 GW.
The new projects, however, have pushed up the company’s debt, with data showing that loans from December 2015 to March 2019 totaled Rp 160.7 trillion (US$11.3 billion).
PLN finance director Sarwono Sudarto explained that the firm’s outstanding debt as of March totaled Rp 394.2 trillion. “We will raise up to $2 billion from new loans this year to finance our investment, which stands at around $6.3 billion a year,” he said, adding that the firm would seek the loans before the end of the year.
Sarwono said the company was open to various types of debt, including global bonds and bank loans. The final decision on the type of loan would depend on the market situation.
In early June, rating agency Standard & Poor’s (S&P) upgraded the rating for PLN to BBB/ stable from BBB-/stable, saying it took into account the fact that PLN had an important role for the government.
PLN expects compensation for impact of external factors PLN sells electricity below supply costs
State-electricity firm PLN hopes the government will allow it to make a price adjustment or continue its compensation scheme next year to offset financial losses.
PLN finance director Sarwono Sudarto said after a hearing with the House of Representatives in Jakarta recently the compensation scheme would be needed if the government did not allow the company to raise electricity prices next year.
“We hope there will be a compensation if there is no rate adjustment. Without the compensation it will be hard for us to deal with the impact of external factors [global crude price, inflation and currency exchange],” he said. PLN sold its electricity below the electricity supply costs (BPP) following a request from President Joko “Jokowi” Widodo in 2018.
The low price policy was criticized by observers as part of Jokowi’s populist policy to win votes in the May presidential election. As a consequence, PLN booked Rp 18.50 trillion (US$1.22 billion) in losses as of the end of the third quarter of 2018.
The government disbursed compensation of Rp 23.17 trillion in the third quarter to cover the losses.
The company expects to receive similar compensation this year as it has to maintain its current price until the end of 2019. However, the government has not decided whether the compensation will continue next year.
Sarwono of PLN further said that without a compensation scheme, the only way to reduce the financial deficit would be to improve efficiency such by improving the net plant heat rate.
The heat rate is the amount of energy used by a power plant to generate 1 kilowatt-hour (kWh) of electricity.
“Besides that [net plant heat rate], we also hope that the ICP [Indonesian crude price] will decline and the US dollar will weaken against the rupiah,” he added.
Djoko Abumanan, PLN acting president director, also concurred that a rate adjustment would be a better option for the company rather than taking compensation from the government. “We will be happier if we are allowed to make a price adjustment,” he said.
According to PLN data, the national electricity supply cost (BPP) in 2018 stood at Rp 1,406 per kWh, but the firm sold electricity to customers for Rp 1,127 per kWh or 19.8 percent less.
Previously, the head of the Finance Ministry’s Fiscal Policy Agency, Suahasil Nazara, said the government was seeking a more appropriate scheme to compensate PLN because the current one carried high fiscal risk.
“The compensation is of course for the interest of the people, but on the other hand, there is high risk for the state budget,” Suahasil said during a meeting with the House of Representatives’ budget committee last Tuesday.
“The policy guidance in the future is to reduce the compensation that will affect state finances,” he added.
Gerindra Party lawmaker M. Hekal, who sits on Commission VI overseeing state-owned enterprises, questioned on Thursday the existence of compensation in PLN’s financial report, saying that there should be an explanation on the difference between compensation and a subsidy.
He said PLN should be transparent and disclose its cost structure so that the public was aware of its financial conditions, he said.
The Energy and Mineral Resources Ministry and House Commission VII, which oversees energy, have agreed to cut the diesel fuel subsidy next year and channel the savings to provide more gas to the people.
The subsidy for diesel fuel, sold under the Solar brand, is to be cut to Rp 1,500 (11 US cents) per liter next year in order to increase the volume of subsidized liquefied petroleum gas (LPG).
Lawmaker Maman Abdurrahman from the Golkar Party said during House of Representative hearing on June 20 that the decision was made in consideration of the high demand for subsidized LPG and people’s difficulty in accessing it.
“Looking at the Solar fuel subsidy, one cannot separate it from the ongoing efforts to convert kerosene to gas. Hence, we proposed transferring [a portion of the] Solar subsidy, some of which is enjoyed by non-eligible consumers, to subsidize the 3 kilograms LPG canisters,” Maman said.
The hearing ended with both the government and the House agreeing to a fuel subsidy of Rp 1,500 per liter of Solar next year.
They also agreed to increase the 2020 quota for subsidized diesel to 15.31 million kiloliters, up 5.5 percent from this year’s quota of 14.5 million kl.
The final figures are lower than the ministry’s initially proposed subsidy rate of Rp 2,000 per liter and proposed quota of 15.58 million kl for subsidized Solar.
Meanwhile, the two sides also agreed on a maximum quota of 7 million metric tons (mt) for subsidized LPG — which is sold in 3 kg canisters — a slight increase from last year’s realized quota of 6.8 million mt.
The ministry’s oil and gas director general, Djoko Siswanto, said the proposed subsidy rate of Rp 2,000 per liter was the maximum rate and not the baseline, so it could be reduced depending on the global price of crude.
“Hence, if the crude price falls, the subsidy can [also] be reduced,” he said.
“We have no problems [as long as] the country can save Rp 500 per liter, so Rp 1,500 per liter is no problem for us,” he added .
Besides, said Djoko, the lower subsidy rate for Solar would be fine because the 30 percent biodiesel mix (B30) policy would be implemented next year, which would reduce the consumption of diesel.
Once the B30 policy is implemented next year, the Indonesian Biofuel Producers Association (APROBI) estimates that national consumption of Solar, which is already mixed with biofuel, would increase about 60 percent from the 2019 consumption target of 6.12 million kl.
The government and the House also agreed on six other assumptions for next year’s energy budget during the hearing: Indonesian Crude Price (ICP) of $60 per barrel, oil and gas lifting of 1.89 million barrels oil equivalent per day, cost recovery at $10-$11 billion and an electricity subsidy budget of $4.14 billion.
The budget assumptions are now to be discussed further by the government and the House budget committee.
The United Kingdom has granted Indonesia 13 million pounds (US$16.3 million) to finance a plan to involve provincial administrations in developing renewable energy across the nation.
The grant will finance the Indonesian government’s Low Carbon Development Initiative (LCDI) to improve efforts to reduce carbon emissions and help the country reap the benefits of renewable energy.
The initiative will help provincial administrations formulate plans on renewable energy through technical support, such as policy planning assistance and funding.
National Development Planning Minister Bambang Brodjonegoro said on Tuesday that, so far, only Central Java, West Java and South Sulawesi had joined the initiative.
“The next step is to encourage more provincial administrations to join,” Bambang said after signing a memorandum of understanding (MoU) on UK-Indonesian cooperation on Sustainable Development Goals (SDGs) and the LCDI with UK Ambassador to Indonesia Moazzam Malik.
Under the agreement, the two governments will cooperate on several things, such as increasing agricultural productivity, reducing deforestation, improving sustainable energy and lowering pollution.
Bambang expressed appreciation for the UK government’s commitment to improve cooperation between the two countries. He stressed that the cooperation would be helpful for the government’s campaign on environmental programs at the provincial level, as it would boost economic growth.
“The initiatives are our effort to boost economic growth while at the same time [preventing] environmental degradation,” Bambang said at the Bappenas office.
Later in the afternoon, Bambang and West Papua Governor Dominggus Mandacan signed an MoU on LCDI with the province aimed to lower carbon emissions by 15 percent against the emission baseline in 2020.
The government issued its inaugural LCDI study in March, which states that the country could reduce its greenhouse gas emissions by about 43 percent by 2030, while still growing its gross domestic product by 6 percent per year until 2045.
Meanwhile, Malik called Indonesia’s role in the SDGs and lowering carbon emissions crucial, saying that, while Indonesia was the world’s 17th largest economy, it was the fifth-largest emitter of greenhouse gases.
“Should [the government] fail to control emissions, [it is] not only dangerous to the people, as the country is prone to climate change and disasters, but also [dangerous] to the world,” he said in Indonesian.
In February, the UK provided a grant of $19.5 million to the Energy and Mineral Resources Ministry to accelerate the development of low-carbon energy, with pilot projects focused on eastern Indonesia.
Renewable energy, as of 2018, contributed only 12 percent to the total national electricity supply.
Other than that, the UK would focus on future cities program, with UK Embassy officials to help big cities of Indonesia solve problems through renewable energy.
“We started with Bandung and Surabaya [on the future cities program], as we put our colleagues in both cities and we’re discussing with them to see how we can help,” Malik said.
Presidential regulation prepared to incentivize electric vehicle production
Regulation, adjusted tax to help RI compete with neighboring countries: Minister
The government has said that Indonesia has the potential to become an exporter of electric vehicles in the future, even though regulations on the industry are not yet in place and production will not begin anytime soon.
A proposed presidential regulation (Perpres) on electric vehicles (EVs) is the main reason for the government having such a dream. The upcoming regulation will incentivize the use of EVs by changing the luxury goods tax (PPnBM) calculation for vehicles so that it is based on carbon emissions rather than engine capacity.
The Finance Ministry and Industry Ministry brought the proposal to the House of Representatives earlier this week, saying that it would spur the country’s automotive exports.
Industry Minister Airlangga Hartarto said on Wednesday the regulation was expected to be established by the end of the first half of 2019. Its implementation and the subsequent commercial production of EVs, meanwhile, were targeted to begin in 2021.
The two-year gap, said Airlangga, gives automakers time to prepare, as Japanese and European manufacturers, which dominated Indonesia’s automotive market, had agreed to the transition period.
“We aim to manufacture 400,000 electric vehicles in 2025, which is about 20 percent of the overall installed vehicle production capacity,” Airlangga said on the sidelines of a Trade Ministry meeting. “We are encouraging any investments that can support this export-oriented policy.”
The automotive sector is one of the priority sectors in Indonesia, contributing 10 percent to gross domestic product (GDP) in 2018.
However, both domestic and foreign sales of Indonesian automotive vehicles have stagnated over the past several years for various reasons, such as a lack of vehicle variety, fiscal constraints and an inability to meet higher international standards.
This year, the Association of Indonesian Automotive Manufacturers (Gaikindo) has set a sales target of 1.1 million units. It is unchanged from the 2018 target and is even lower than that year’s sales of 1.15 million units.
Gaikindo did not reveal its export target this year but pointed that the exports of completely built-up (CBU) vehicles had increased by 14.4 percent to 264,553 units in 2018.
With the presidential regulation and adjusted luxury cars tax, Indonesia would be able to compete with neighboring countries that also produced EVs, such as Thailand, which had already ratified a trade agreement with Australia, India and Japan, said Airlangga.
He mentioned the recent signing of the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), saying it could provide Indonesia access to Australia’s vehicle market of 1.2 million units per year.
“Automotive vehicles could be our top export to Australia, because they have a market of 1.2 million cars but they have closed down all of their automotive manufacturers […] as they were not profitable enough,” he said.
Additionally, the planned reg- ulation would stipulate a 35 percent local content requirement for locally made EVs.
Therefore, said Airlangga, his office would ensure the availability of industries that supported the production of EVs, such as batteries and electric motors.
Finance Minister Sri Mulyani Indrawati refrained from confirming whether the regulation would be issued soon.
“We have consulted the House so we will wait and see what happens,” Sri Mulyani said separately. “We will surely take into account the feedback from the lawmakers and industrial [players] regarding this tax.”
Gaikindo chairman Yohannes Nangoi said automakers had acknowledged the importance of advancing with EV technology and had thus appointed a new, additional cochairman in the association to oversee the matter of future technology.
“The development of automotive technology, ranging from hybrid, plug-in hybrid and electric [vehicles], is going rapidly, and Gaikindo believes it is necessary to keep on delving into these future technologies and get Indonesia ready to partake in it,” Yohannes said in a recent statement.
The continuous decline in oil prices that has led to a lower contribution to national revenue should be a wake-up call for the government to immediately kick off fiscal reform that would speed up the use of renewable energy, a recent discussion said.
According to a new report released by the Canada-based International Institute for Sustainable Development (IISD), most revenue from the oil and gas sector was indirectly allocated for fossil fuel consumption.
Based on the research that looked into the 2014-2016 fiscal years, the average contribution of the oil and gas sector stood at Rp 190 trillion (US$16 billion) annually or 18 percent of government revenue, but 14 percent of which was later channeled for fossil fuel subsidies.
“As revenue from fossil fuels declines, it is more important than ever for this clean energy transition to be accelerated. Indonesia’s past shows it can grow its economy without expanding fossil fuel extraction,” IISD senior policy adviser and lead for Indonesia Philip Gass said.
Without increasing revenue, the fossil fuel subsidy would only encourage the wasteful consumption of energy, leading to faster depletion of Indonesia’s oil, gas and coal reserves, the report further stated.
The institution believes that further fiscal reform on fossil fuel subsidies is also possible as past experiences of cutting off the fuel subsidy in 2014, which saved around Rp 200 trillion, was a success story that could be repeated again.
“In 2014’s fuel subsidy cut, the government was able to make greater investments in infrastructure and provide greater support for communities and social assistance programs. […] More subsidy reform will push for cleaner energy,” IISD Indonesia coordinator Lucky Lontoh said.
The report recommends that the government phase out various energy subsidies and push for the greater role of renewable energy. The experts said in the report that developing renewable energy was suitable for Indonesia not only because it was more and more cost competitive but also because the country had plenty of clean energy resources like geothermal energy.
The contribution of clean energy power plants in 2018 stood at around 12 percent, while coalbased electricity stood at more than 50 percent and will likely do so until 2027.
The Energy and Mineral Resources Ministry’s director for new and renewable energy, Harris, said earlier that Indonesia had a lot of untapped clean energy potential.
“To date, we have only utilized 2 percent of our renewable energy potential, but luckily our geothermal energy has become one of the world’s biggest producers,” he said recently.
Based on the ministry’s recent data, Indonesia has 442 gigawatts of renewable energy capacity, but only 9.42 GW or 2 percent has been installed.
Furthermore, the fiscal transition toward cleaner energy faces a challenge from the relationship between the government and its people that dictate policy, said energy expert from Jakarta-based Paramadina University Emanuel Bria.
“We have learned that our targets on clean energy, such as in the National Medium-Term Development Plan, were always missed. And it is because the market dictates our policies, such that this year coal production exceeded the initial plan,” he said.
The IIDS acknowledged that a radical fiscal transition in the energy sector would be hard to attain, so they believe that the transition is a long-term goal with small steps that could be taken soon, such as increasing the use of abundant natural gas.
Source: Jakarta Post, 21 February 2019
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