Sustainability, the Indonesian Energy Transition and the Highly-Anticipated RUPTL

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Sustainability, the Indonesian Energy Transition and the Highly-Anticipated RUPTL

Sustainability in Indonesia reigned supreme as a hot topic at the recently concluded Enlit Asia Digital Festival 2021. Indonesia must make significant progress in renewable energy (RE) projects to ensure the discontinued use of coal, oil, and gas by 2060 and to meet the target of reaching 85% of its energy from renewable sources. These topics were raised repeatedly over the course of the two days of discussions, but which driving forces will appear to support Indonesia’s RE development?

The Illusive RUPTL

Adding to a challenging situation in choosing which path the country takes to decarbonisation, Indonesia’s National Electric Generation Plan for 2021-2030 (RUPTL), which acts as an energy guidebook, has yet to be formally released.

“The challenge from a policy perspective, as an IPP, is that we are all waiting for the RUPTL plan that has been delayed two years now. From a private company perspective, we have always been agnostic. While we are waiting for the RUPLT, we are doing what we can… We are also looking for other opportunities which won’t make us wait for the RUPTL,” Dharma Djojonegoro, CEO for PT. Adaro Power said.

By good fortune, Dharma and other eager power suppliers will not need to wait too much longer. It was announced last week by the Ministry of Energy and Mineral Resources that the RUPTL for 2021-2030 has been completed and signed by Minister Arifin Tasrif.

Now that the RUPTL will soon be in hand, what else will energy providers focus on specifically, and what uncovered trends or news surfaced during the many discussions? As it turns out, quite a bit including betting on waste-to-energy (WTE) and bio-mass as additional solutions to net-zero targets.

The Case for Bio-Mass

Indonesia could utilise bio-mass as a replacement for coal successfully but several items such as government direction, policies, and investing will all need to fall into place before these solutions become widely used. Co-firing biomass with coal is to be the first step in Indonesia’s plan to utilise the fuel source.

“This co-firing programme is an intermediate solution as we determine how to phase out coal power plants,” Chrisnawan Anditya, Renewable Energy Director at the Energy and Mineral Resources Ministry, said.

With regards to biomass, Indonesia’s plans were established this year when the Indonesian National Energy Plan (RUEN) projected bioenergy would be substantial within the power sector. The RUEN target is 5.5 GW by 2025 even though the 2019-2028 Electricity Supply Business Plan (RUPTL) suggested a lesser target of 2.6 GW. According to the plan, with a current bioenergy capacity of 1.9 GW, co-firing could be a potential way to bridge the ‘realization gap’. Also, PLN, the state power company, plans to start co-firing at 52 largest coal power plants and has estimated it could replace 9 million tonnes of coal per year with biomass.

While Dr. Supriadi Legino, Expert Board Member, MKI said, “I think bio-mass is the future, and it is eco-friendly.” Ardi Nugroho, Head of Electricity Technology Development Department, PT Pembangkitan Jawa Bali, agreed with Dr. Supriadi and said that he also feels biomass is promising.

It remains to be seen, however, if biomass will be less expensive than coal. Without affordability, biomass will not be an adequate replacement. However, testing out biomass as a fuel source to see how it fits with Indonesia’s future decarbonisaton plans is a sign of the country’s shifting attitudes as is another focus, wind turbines.

An Indonesian City as a Key to Wind Power Exploration

Indonesia’s journey in wind power started with its first wind turbine power plant which was built in South Sulawesi back in 2018. The turbine was thought to supply around electric power of 900 VA and with this turbine alone, the power could potentially supply electricity to 70,000 residing in South Sulawesi.

According to Rudy Sembiring, Country Head for Vena Energy Indonesia, South Sulawesi continues to be one of the most promising areas for renewable penetration and he suggested expanding the gaze to more than only large cities.

Clearly Indonesia could benefit from the use of wind turbines and other areas within the country are harnessing wind power such is the case with the newest and largest wind farm being built in Sukabumi, West Java by UPC Renewables. Construction is breaking ground soon and is projected to provide 150-megawatts.

Rudy said that although other areas have potential, he suggested that South Sulawesi as viable option. “Instead of investing in Java, invite high tech industries to invest in South Sulawesi because it provides more penetration than Java,” Rudy said.

To continue to progress the implementation of wind turbines, however, Munawar Furqan, General Manager for PT PLN (Persero) UIKL Sulawesi, said “in order to accept more wind turbines in Sulawesi, the first thing we need to see is the demand to grow and also a program [or support] from the government – the economic scale and also economic of the operation of wind power integration. Also, this needs to be further studied on capacities and what is to be connected on the grid,” Munawar said.

Munawar also said mitigating intermittency of wind power plants would need to be contended with first, but the forecasting of the output of the power plant is one of the most important things for the operator’s system providing the mitigation information from wind power assets.

Hydrogen Supporting the ASEAN Energy Transition and Testing the RE Waters

Green hydrogen is not yet a functioning part of Indonesia’s energy mix due to a variety of factors, such as the finance aspect, despite the fuel’s potential. Another aspect of the energy transition puzzle is that the Indonesian government must first incorporate the role of green hydrogen into the region’s decarbonisation plan by considering how to best utilise this process. An integrated strategy must be created and implemented first, but the potential of hydrogen could be substantial once policies are in place.

Matthew Rowe, the Head of Department Power Grids Asia-Pacific for DNV, said hydrogen gas will be cast in a central role in energy mixes after 2050, but the question is how to decarbonise the grid best while the energy makeup is changing or in flux.

“At the moment, we believe about 20% of the world’s energy will be carried by hydrogen by 2050. Last year, I think it was 7%, so we’re getting higher and higher but really hydrogen is going to be the only way in which we can decarbonise. There are certain sectors that we just will not be able to decarbonise without using hydrogen,” he said.

While Matthew praised the possibilities of hydrogen, Aznan Ezraie Ariffin, Chief Strategy Officer, TNB Research Sdn Bhd, said he worried about the cost. However, he confessed he recognises the advantages of incorporating hydrogen.

“Coal prices have gone up whereas the government regulates our gas prices in Malaysia. The pendulum has swung back to gas generation, so gas certainly will play a bigger role but not as big as before and not as big as coal. On top of that, we realise we need to attempt to co-fire with hydrogen, but it’s really expensive right now to use hydrogen,” Aznan said.

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According to Aznan, something TNB must consider as a huge undertaking and is not talked about enough is transportation. The transportation of RE electricity generated must be a part of the conversation because of the location of assets.  

“We are also working on floating storage in Malaysia, but we have to think about a way to transport the hydrogen from production to consumption which they are not co-located. We have to think about the transport mechanism if we are to use green hydrogen,” he said.

Som Shantanu, Regional Engineering Director of GE Gas Power, said of RE integration that it’s better to start small and build on current technologies with government support, which is also a massive driving force.

“Let’s start small and not sit back waiting. We can do something today and can start with a simple cycle. We can reduce the generation mix of coal and start pumping in renewables,” Som said.

Regardless of how Indonesia formulates their RE journey, the planning matters and government and industry leaders will need to work together to ensure decarbonisation is the primary focus. The cost of the energy also is a large roadblock but as Som said, start small and then begin to connect those steps to the future master sustainability plan.

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