MINISTRY OF ENERGY AND MINERAL RESOURCES

DIRECTORATE GENERAL OF ELECTRICITY

Indonesia Solar Energy Forum 2017

“Challenges and Opportunities for the Future of Indonesia’s Renewable Energy”

By:

Andy Noorsaman Sommeng

Director General of Electricity

Jakarta, 18 May 2017

 PRESIDENT JOKOWI’S NAWACITA (NINE DREAMS)
Bringing back the government to protect the nation & bringing safety to
all citizens by implementing free & active international politics

Building a clean, effective, democratic and trusting governance

Building Indonesia from the periphery by strengthening outer regions

and villages in a unitary nation framework

Rejecting a weak nation by reforming the system and building a

corruption-free, dignified and trusted law enforcement

Improving Indonesian’s quality of life by Smart Indonesia program with

12 year compulsory education free of charge; Healthy Indonesia program
with health service enhancement; Work Indonesia and Prosperous
Indonesia program by endorsing 9 million ha land reform

Enhancing productivity and competitiveness in the global market

Actualizing an economic independence by driving strategic economic

and domestic sectors

Revolutionize the nation’s character by reorganizing the national

education curriculum

Adhering “bhinneka” (unity in diversity) and strengthening Indonesian

social restoration by reinforcing “bhinneka” & creating an active
dialogue between various social groups

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Kementerian ESDM Republik Indonesia
 NATIONAL ELECTRICITY CONDITION IN 2017
INSTALLED CAPACITY OF POWER GENERATION

59,656 MW
PLN: 41,049 MW IPP: 13,781 MW
PPU: 2,434 MW IO non Oil: 2,392 MW

ELECTRICITY PRODUCTION ELECTRICITY CONSUMPTION

290 TWh 247 TWh

ELECTRIFICATION RATIO kWh PER- CAPITA

92.00 % 956 kWh

LENGTH OF TRANSMISSION NETWORK LENGTH OF DISTRIBUTION NETWORK

49.799 kms 946.101 kms

PLN: State Owned Electricity Company
IPP : Independent Power Producer *) including non PLN
PPU: Private Power Utility
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Kementerian ESDM Republik Indonesia
 ELECTRIFICATION RATIO 2017 (status per March 2017)
ACEH
KALTIM NATIONAL
98,00

92.00%
96.56 JAMBI KALTARA GORONTALO
SUMUT 90,38 88.42
85,99
96.70
KEPRI SULUT MALUT
RIAU KALBAR
76.68 86.90 SULTENG 91.83 98.66
90,37
82.95
PABAR
BABEL 89,09
100.00 PAPUA

SULBAR
48.31
81,00

SUMBAR DKI JAKARTA

JATENG
86.84 97,72 94,15 KALTENG KALSEL MALUKU
74,22 89.73 87.47
BENGKULU
SULSEL
92,25 SULTRA
93,39
75.26
SUMSEL
84.80
JABAR JATIM
LAMPUNG
88.78 98.43 DIY 90,12 NTB NTT
89.92 BALI 78.45 59.20
97.35
BANTEN 93.34 95.15
92.75
91.16
INFORMATION 100.00 87.35
84.35
80.51
> 70 76.56
72.95
50 - 70 67.15

< 50
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Realization Target

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Kementerian ESDM Republik Indonesia
 NATIONAL ELECTRICITY CONSUMPTION PER-CAPITA
• Although electricity consumption (kWh) per-capita of Indonesia is always on the rise, it’s
still considered low – only 956 kWh in 2016.
• Compared to other ASEAN countries, kWh per-capita of Indonesia is lower than
Singapore, Malaysia, Thailand, and Vietnam.
• Target of kWh per-capita: 1,200 kWh by 2019 (RPJM), 2,764 kWh by 2030 (RUKN), and
3,347 kWh by 2034 (RUKN).
Electric Consumption per-Capita in ASEAN Countries Electricity consumption per-capita in Indonesia
10,000
9,145.5 Target
Realization
9,000 8,690 1,200
1,129
8,000 1,058
956
7,000 918
878
kWh per capita

840
6,000 792
737
4,754.8 698
5,000
4,345
4,000

3,000
2,4652,584.3
1,795.0
2,000
1,273
918.6
1,000 730 672 809.0

0
Singapore Malaysia Thailand Vietnam Indonesia Philippines 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Source:
2012 2015
• 2012 data: World Bank, http://data.worldbank.org/indicator/EG.USE.ELEC.KH.PC
• 2015 data: Bienvenido S. Oplas, Jr. (July 2016) 4
Kementerian ESDM Republik Indonesia
 Ministerial
Regulation No
38 Year 2016
ACCELERATION OF INDONESIAN RURAL ELECTRIFICATION
Electrification program up to Renewable Energy Usage
50 MW capacity are given to :
Underdeveloped rural areas
Rural Electrification Acceleration Program
Isolated rural areas
utilizes renewable energy (RE) as a
International border areas
Small populated islands
source of electricity.

Determining The Business Areas :

Minister’s authority to determine which
business area to develop based on each
Governor’s proposal
Minister of Energy assigns companies that
already have Power Supply Business License
(IUPTL)
Governor proposes business area
Governor offers business area to companies
Governors issues Power Supply
Business License (IUPTL)
Procurement Mechanism
Investment
Based on governor’s proposal then
auctioned to corporations that
manage the business area
Assignment
Regional governments can assign
regional owned enterprise (BUMD) if
there are no interested investor
Tariff Mechanism
Subsidy
The government calculates the required
subsidy to be proposed to the
parliament (DPR)
Nonsubsidised with agreed tariff
Tariff is set by the Minister or Governor
based on their respective authority
Nonsubsidised with national’s tariff
PLN based tariff, regional government
can’t set the tariff

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Kementerian ESDM Republik Indonesia
 THE HIGHLIGHTS IN POWER PURCHASE AGREEMENT
Minister Regulation No. 10 Year 2017

BACKGROUND PLN - IPP COOPERATION SCHEME

Equal electricity market risk
between PLN and IPP
Ensure supply reliability
Form of state control on electricity Remark :
provision Based on the legal decision of The Constitutional Court on Electricity
PPA Standard Law in conjunction of state control over electricity

PPA TIMELINE COMMERCIAL OPERATION DATE (COD) STIPULATION

30 Years COD delay Penalty for IPP
At the latest
since PLN’s request to
Incentive for IPP
accelerate COD

CAPITAL INVESTMENT DEPRECIATION TERMS OF TRANSACTION

20 Years If IPP couldn’t supply power based on contract

Minimum due to IPP’s error Penalty for IPP

in determining the
If PLN couldn’t absorb power supply based on contract
Selling price of electricity due to PLN’s error PLN pays penalty to IPP

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Kementerian ESDM Republik Indonesia
 ACTUALIZING A MORE AFFORDABLE ELECTRICITY
PRICE FOR THE PEOPLE
Minister Regulation No. 11 Year 2017
Natural Gas Utilization for Generating Power
Natural Gas Utilization for
Ensuring the availability of gas supply with a reasonable
Generating Power at Wellhead and competitive price, either gas pipeline or LNG
Providing a convenient setting in gas allocation for
could be done by direct electricity power generation
Developing power plants at wellhead either through
appointment direct appointment or general auction

Direct Appointment General Auction

Gas Price ≤ 8% ICP (MMBTU) Gas Price > 8% ICP (MMBTU)

Natural Gas Utilization for Generating

Power other than at Wellhead
If over than Import is allowed as long as the
11.5% Highest price limit for
11.5% highest price is 11.5% ICP/MMBTU
ICP / MMBTU power generation
(Free on Board) ICP / MMBTU (Landed Price)
Remarks:
ICP = Indonesian Crude Price
LNG = Liquefied Natural Gas
MMBTU = Million British Thermal Units

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Kementerian ESDM Republik Indonesia
 Renewable Energy (RE) Utilization
For an Affordable and Environmental Friendly Electricity
Minister Regulation No. 12 Year 2017
Types of Power Plant Renewable Energy Sources
Energy resources from sustainable Solar PV Biogas
source can be managed properly Wind Municipal
such as, geothermal, wind, Hydro Waste
bioenergy, solar, stream & water Biomass Geothermal
fall and layer movement &
temperature difference
The Purchase of Electric Power
Auction based quotas according PLN is obligated to operate power
to RUPTL with a 15MW minimum Solar and Wind plants which utilize RE sources with
total package
a 10 MW must run capacity
Utilizing a pegged price or
through direct selection Hydro, Biomass, Biogas,
mechanism Waste & Geothermal
*BPP = Biaya Pokok Penyediaan
Electricity Purchase Price (Electricity Production Cost)

If the cost of electricity production (BPP) in If the BPP in the local average
Solar Waste
power generation in the local electricity system : electricity system national BPP
Wind Geo
Hydro
National BPP average thermal
Then the purchase price is max 85% Then the purchase price is 100%
Biomass
from local BPP from local BPP
Biogas
National BPP average Based on agreement, if the BPP in Sumatera,
Then the purchase price is 100% Java, Bali or local electricity area average
from local BPP national BPP

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Kementerian ESDM Republik Indonesia
 AFFORDABLE ELECTRICITY PROVISION FOR THE PEOPLE
FROM COAL FIRED POWER PLANT
Minister Regulation No. 19 Year 2017*
*REGARDING THE UTILIZATION OF COAL FOR POWER GENERATION AND THE PURCHASE OF EXCESS POWER

MINEMOUTH POWER PLANT MINE MOUTH REGULAR CFPP

Combined cycle power plant in which
it’s coal supply was guaranteed by the
POWER PLANT
mining company based on PPA
ADVANTAGES : Power purchase can’t be directly Power purchases are made under
appointed PPA, within 30 years since COD
EFFICIENT: Power plant’s location is parallel (BOOT Scheme)
with coal mine’s location thus cutting PT PLN & Power Generation Company
distribution & transportation cost. are obliged to ensure coal supply
based on PPA
ENVIRONMENTAL FRIENDLY: Transportation
infrastructure (roads & river) are exempted from PPA is implemented for 30 years
damage and reduced air pollution since COD (BOOT Scheme)

*BPP = Biaya Pokok Penyediaan
(Electricity Production Cost)
Electricity Purchase Price : Electricity Purchase Price :
If local BPP ≤ national BPP average Larger than 100 MW
the ceiling price is 75% of local BPP National BPP
If local BPP the ceiling price is based
on local BPP

National BPP
the ceiling price is based
If local BPP > national BPP average on national BPP
the ceiling price is 75% of Capacity up to 100 MW
national BPP National BPP
the ceiling price is based
If local BPP on local BPP
Electricity purchase price is set National BPP
with the assumption of 80% the price is based on
generating capacity auction or B2B process
Electricity purchase price is set
with the assumption of 80%
generating capacity

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Kementerian ESDM Republik Indonesia