GIZ WORKSHOP POLICY AND REGULATION OF RENEWABLE ENERGY IN INDONESIA

Transcription

1 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 :

2 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

3 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.

4 A COUNTRY WITH ISLAND

5 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

6 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

7 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 4. Ministerial Regulation No.31/2009 on Small and Medium Scale Power Generation using Renewable Energy 5. Minister of Finance Regulation No. 21/PMK.011/2010 and 24/PMK.011/2010 on Renewable Energy Incentives 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. 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 Tax facility for renewable energy In the form of Income Tax, Import Duty and Tax Holiday, Tax Exemption etc.

8 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

9 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

10 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 Value Added Tax Import Duty Tax Borne by Government 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 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

11 National Energy Mixed CURRENT POSITION VISION 25/25 Coal 30,7 % Gas 21 % Coal 32 % Gas 23 % NRE 4,4 % Oil 43,9 % NRE 25 % Oil 20 % By Directorate General of New RE and Energy Conservation, MEMR

12 ENCOURAGEMENT OF RE UTILIZATION President decree no 5/2006, Target RE for national energy mixed of 17% by 2025 Coal 33% Gas 30% Oil 20% N&RE 17% Bio fuel 5% Geothermal 5% Biomas, Nuclear, Hydro, Solar Power, Wind Power 5% Coal Liquefaction 2%

13 RESOURCES AND EXISTING CAPACITY NO NEW/ RE RESOURCES INSTALL CAPACITY RATIO % = Hydro Power 75,670 MW 5, MW Geothermal 28,543 MW 1,189 MW Mini/Micro Hydro MW MW Biomass 49,810 MW 1, MW Solar Power 4.80 kwh/m²/day 13.5 MW - 6 Wind Power 3 6 m/s 187 MW - 7 Nuclear/Uranium MW (e.q.24,112 ton) for 11 years* * Only at Kalan West Kalimantan 30 MW 1.00 Source: EBTKE-KESDM

14 RUKN GW ~ 4.5 Times TWh Kebutuhan tambahan daya Kapasitas existing *) Beban Puncak Kebutuhan tenaga listrik Source: DJLPE-KESDM

15 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

16 Incentive for Biomass & Biogas Region F Price (Rp/kWh) Java, Madura, Bali and Sumatera Kalimantan, Sulawesi, NTB and NTT 1.0 1, ,200 Maluku and Papua 1.3 1,300

17 Incentive for Municipal Waste Region F Price (Rp/kWh) Java, Madura, Bali and Sumatera Kalimantan, Sulawesi, NTB and NTT 1.0 1, ,320 Maluku and Papua 1.3 1,430

18 Biomass Resources Ready to be Developed as an Electricity 1. Palm oil, total area +/ Million Ha 2. Rice husk, total area +/ Million Ha 3. Bagasse, total area +/ Ha 4. Municipal Waste

19 Thank You [email protected]