How does PLN Successfully Transition to Smart Grid & 4.0 Technologies

How does PLN Successfully Transition to Smart Grid & 4.0 Technologies

PT Perusahaan Listrik Negara (PLN) is trekking the digital path as part of its New Paradigm. While some of its digital projects have been postponed due to the pandemic, digitalisation still makes up the majority of its plans. Advanced metering infrastructure (AMI) has been gaining traction in Indonesia, increasing confidence in the possibility of transitioning to Smart Grid.

In a combined interview and panel discussion last week, Haryanto WS, Director of Jawa Region at PLN (Pesero), Dr Ir Marzan Azis Iskandar, IPU, Rector at Institute of Technology Indonesia and Member of Expert Group at MKI, Dr Zainal Arifin, Team Leader of Smart Grid at PLN (Pesero), and Charlie Richardson, Utilities Lead for the Asia Pacific at Accenture tackled the advantages, challenges, investment opportunities, and strategies for PLN’s transition to Smart Grid.

PLN, as Indonesia’s national utility provider, aims to “increase reliability and efficiency, reduce losses, and enhance productivity and sustainability,” Haryanto emphasises, and Smart Grid is seen as a solution to achieve these objectives. Allowing two-way communication between PLN and consumers, Smart Grids make electricity transmission more efficient and more reliable. Richardson suggests that Smart Grids can push the shift of utilities to becoming more resilient organisations, considering the increasing severity and frequency of weather-related events today, the heightened occurrence of cyber-attacks, and the ongoing COVID-19 pandemic. Likewise, Smart Grids help utilities to reduce operational costs, and consumers to “maintain their consumption and help them reduce electricity bills,” Iskandar notes. There is also increasing support for Smart Grids to help Indonesia realise its 23% renewable energy goal by 2025.

However, PLN recognises that establishing a good business case for this transition does not come easily. For one, the return on investment for smart meter rollout, which is a key part of Smart Grids, is quite challenging to prove, Richardson finds. Nonetheless, PLN remains confident that the financial aspect is “very promising”, especially for smart microgrids in Indonesia, says Arifin, sharing that the company has already done several relevant projects and feasibility studies, including an Asian Development Bank (ADB)-funded pilot project that combined photovoltaic (PV) solar and battery, to study the financially related aspects of the program.

With this confidence, PLN has already identified at least 59 locations in the country to implement Smart Grids. Of course, the utility is open for collaborations to make the transition possible. Its current partners for the Smart Grid project in Indonesia include the International Energy Agency, US Agency for International Development, ADB, and the Ministry of Energy and Mineral Resources (MEMR). Hence, it is clear for PLN that the transition to Smart Grids has to be done step by step. Arifin explains that the first step is always to do a Proof of Concept to select the communities and the technology in relation to the needs to be addressed. After this comes the development of a business model, which in PLN’s case is inspired by what India uses considering that technologies from Europe and the US do not really complement the Indonesian consumers’ needs.

The Smart Grid is included in Indonesia’s 2019-2028 Electricity Supply Business Plan (RUPTL), and PLN’s roadmap for the project is estimated to be completed this year. Currently, PLN works on the smart community in Karawang Industrial State and Smart Micro-Grid toward ‘Sumba Green Island’, as part of the country’s Strategic National Program 2020. It has already started in a few islands through introducing a hybrid system of existing diesel generators and renewable power plants, according to Haryanto. Meanwhile, by next year until 2024, PLN’s plan is to deploy AMI to reach 1 million customers in Jakarta, build digital substations (Sapatan I and Teluk Naga II), and complete four Smart Grid projects in Selayar, Tahuna, Medang, and Semau.

Still, PLN acknowledges the challenges that are along the way, including Indonesia’s topography, human capital readiness and research, government regulations and standards, and investments. Indonesia has more than 17,000 scattered islands, which makes it difficult for Smart Grid rollout. PLN, however, plans to overcome this difficulty by prioritising the implementation according to “the most important goal,” Haryanto remarks. Specifically, priority will be given to small or isolated systems, like those in the eastern islands of Indonesia, so as to “reduce operation cost of the isolation system.”

Human readiness, too, proves an issue to be addressed, as aligning the perspective of all stakeholders on the Smart Grid is crucial to its rollout. Not all of PLN’s engineers are sufficiently educated about the Smart Grid, Arafin says, which can ruin the overall adoption of this technology. PLN continues to do capacity building for its young engineers to study all about the Smart Grid to address this issue.

Supportive government is likewise essential in pushing Smart Grids forward. Iskandar suggests an improved price regulation for PV so that it can be expanded for other prosumers. Additionally, policies regarding grid operations must be reviewed. Haryanto explains that PLN “cannot do a demand response if the electricity tariff is not yet dynamic” because if the tariff is still flat, the role of parties such as PLN as a utility company “to strengthen the grid will be less effective.”

Furthermore, the transition cannot be possible without considerable investment, as the cost of Smart Grid’s rollout is high. One factor that PLN sees is the lack of awareness about the advantages of Smart Grids, like AMI, which discourages international lenders in financing the projects. For Richardson, however, PLN can get more investments by thoroughly defining resilience and defining a set of metrics and key performance indicators to determine where investments can be made.

The realisation of the transition to Smart Grid is possible with the right technologies. PLN’s current Smart Grid projects use Automatic Dispatch System, Distributed Energy Resources, and energy storage. Electric vehicles (EVs) are also included in PLN’s Smart Grid programs, it already has an Internet of Things platform that it plans to scale up to connect all EV chargers in Indonesia by the end of this year, Arifin reports. In the coming years, PLN is looking to use Artificial Intelligence (AI) in system operation and to roll out an Advanced Control Centre including Phasor Management Unit and Energy Management Systems.

Even though PLN believes there is “no single bullet for communication technology for the Smart Grid,” the utility considers numerous options. For example, it looks at using Programmable Logic Controller, radio frequency, cellular or GPRS, and optical cable, which of course fits a specific need of the Smart Grid’s communication process. Presently, PLN works with ICON+ to develop the company’s communication network. It also works intensively with government agencies to protect its cyber assets, given the threats that come with digitalisation.

PLN’s readiness to transition to Smart Grid is apparent. There might be some necessary improvements and ongoing adjustments, however the utility is confident that the project will not only benefit PLN, but also the consumers, prosumers, and even investors.

To hear a full recording of the discussion on “How does PLN Successfully Transition to Smart Grid & 4.0 Technologies?”, click here.

Speakers included:

  • Haryanto WS – Director of Jawa Region, PT PLN (Pesero)
  • Dr Ir Marzan Azis Iskandar – IPU, Rector Institute of Technology Indonesia and Member of Expert Group, MKI
  • Dr Zainal Arifin – Team Leader of Smart Grid, PT PLN (Pesero)
  • Charlie Richardson – Utilities Lead (APAC), Accenture
  • Claire Volkwyn – Editor, Smart Energy International (Moderator)

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