PENGEMBANGAN PEMBANGKIT LISTRIK BIOMAS SKALA KECIL DI INDONESIA

Indonesia Clean Energy Development (ICED) Project

Hanny J Berchmans 5 Desember 2012

Program Pengembangan Energi Bersih Indonesia (ICED) Adalah program yang dibiayai oleh USAID Jangka waktu 3.5 tahun (Maret 2011 September 2014) Target propinsi: terbuka seluruh wilayah Indonesia dengan fokus Aceh, Sumatra Utara dan Riau Pengembangan Proyek Energi Terbarukan yang dibantu: Pembangkit listrik tenaga air, biomas, biogas, angin, solar pv/hybird skala kecil (10 MW) Pengembangan Proyek Energi Efisiensi yang dibantu: di sektor Industri, Bangunan dan Transportasi Hibah (grant) untuk pengembangan komunitas daerah yang memanfaatkan energi terbarukan

ICEDs approach in developing the Clean Energy Sector in Indonesia

Clean Energy Sectors / Market
2
Project Development Provide technical assistance to all stakeholders in developing CE projects

1
Policy & Coordination Enabling a conducive policy environment to develop CE projects

Government / Policy Makers

PLN (Utilities Company)

Private Sectors
ICED Target 3
Capacity Building & Public Outreach Developed capacity to all stakeholders & increase CE awareness

4 million tons CO2e avoided 120 MW installed capacity At least $120 million public and private funding leveraged At least 20 small and medium sized projects implemented 1.2 million persons with increased access to clean energy $250 million in reduced subsidy due to tariff increase and replacement of diesel fuel

Archive number

RE Small Power market is shaped by stakeholders

ICED Partners in Small Power Market
Business
26 Hydro Developers 4 Biogas Developers 2 Biomass Developers 1 EE Consultant 3 Corporation

Observations Limited number of successful operating grid-connected projects Projects are characterized as small but complex in terms of site, resource and technology Growing interest from both domestic and foreign sources of financing

Policy
Ministry Energy Ministry Agriculture Bappenas PLN HQ & Regional Provincial & Regency Gov

Financing
Bank Indonesia 3 Commercial Banks 2 Syariah Banks 5 Non Bank Financial Institutions

Challenges in raising equity and with bank loan collateral requirements

Regulatory uncertainty (Feed in Tariffs) stalling development activities Greater capacity needed in developers, banks/FIs, PLN, Provincial/Regional government

Potensi Biomas di ASEAN (dalam Juta Ton)

50 45 40 35 30 25 20 15 10 5 0 500 450 400 350 300 250 200 150 100 50 0

Kapasitas Terpasang PLTB & PLTBG*

Indonesia Thailand Malaysia Pilipina

Indonesia Thailand Malaysia

Singapura
Pilipina Vietnam
Biomas Biogas Biomas Biogas (Agri (Agri (Non (Non Waste) Waste) Agri Agri Waste) Waste)
Source: USAID-ICED

Vietnam

Agricultural Biomass

Woody Biomass

* Pembangkit Listrik yang tersambung ke Jaringan Listrik Nasional

Current Status Biomass Power Plant

Number of Power Plant Connected to PLN Grid

Number of Power Plant in Planning for 2012-2014

399.5

392

Total 782 MW

54

Total 72 MW

10 3 12

ANAEROBIC DIGESTER

STEAM TURBINE

MSW

ANAEROBIC DIGESTER

STEAM TURBINE

MSW

Excess Power

IPP

Excess Power

IPP

Internal Use

ICED project inventory status by provinces as of September 2012

ICED Project Inventory By Provinces (Number of Projects)
65

ICED Project Inventory By Provinces (In Megawatt Equivalent)

543.7

Total 114 Projects

Total 799.2 Megawatt

26 171.0 16 7 11.8 73.2

ACEH

NORTH SUMATERA

RIAU

OTHER PROVINCE

ACEH

NORTH SUMATERA

RIAU

OTHER PROVINCE

Other Tech

Biogas / Biomass

Hydro

Other Tech

Biogas / Biomass

Hydro

Indonesia has opportunities and challenges in developing small scale RE Projects

Indonesia Condition Abundance of renewable energy resources (rivers, ag. waste, solar etc) Electricity capacity shortages, unserved communities Rising cost of oil, natural gas and coal Government targets for RE, EE and GHG emissions reduction CE Development Opportunities Established feed in tariff rate PLN required to off take electricity GOI direct appointment to developer Standard Power Purchase Agreement Reduces subsidy to PLN by reducing use of diesel Banks, FIs and private equity financing

ICED Approach Improve policy framework at national and regional level Improve PPAs & other agreements Link financing sources with high quality projects and companies Show case success stories, share lessons learned

CE Development Challenges Lack of Project Financing Undercapitalized developers/sponsors with limited track record; Limited operating projects as examples Limited domestic capability in equipment and services

Tantangan didalam pengembangan PLTB & PLTBG

1. 2. 3. INCOSISTENT QUALITY CYLCICAL SUPPLY COMPETITION WITH BIOMATERIAL USED (COMPOST, ACTIVE CARBON, dll) ETC.

Feedstock

4.

1. 2. 3. 4. 5. 6.

UNPROVEN TECHNOLOGY LACK OF CAPACITY LACK OF SUCCESS STORY LACK OF INFORMATION HIGHER MAINTENANCE COST ETC.

1.

Technology

Financial & markets

2. 3.

LIMITED/NO PROJECT FINANCE HIGH RISK & INVESTMENT COST ETC.

Barriers for Developments

1. 2. 3. 4. 5.

BIOMASS FEED IN TARIFF ISSUE INCENTIVES ISSUE PPA ISSUE ELECTRICITY SUBSIDY ETC.

Regulatory Risks

Infrastructure conditions

1. 2. 3. 4. 5.

LIMITED PLN GRID LIMITED ROAD ACCESS WATER AVAILIBILITY LAND AVAILIBILITY ETC.

Characteristics of Biogas Power Plants (Anaerobic Digester Type)

Key Characteristics: Use Reciprocating Gas Engines Can be used as CHP system Complexity: moderate Operational aspect: moderate Typical size < 3 MWe Technology status: Mature/Proven Reliability: High Fuel flexibility: Poor

Characteristics of Biomass Power Plants (Direct Combustion Type)

Characteristic
Electr icity Steam Biom ass Dust Bag Fuel flexibility Technology Status Typical Size Reliability Complexity Operational aspect Thermal Efficiency Lifetime High Mature/Proven > 5 MWe except for cogeneration > 1 MWe High Moderate Relatively easy Small (20% to 27%), but can be as CHP* system (~ 80%) 5 15 years

Value

Ash
Source: Takuma

Boiler

* Combined Heat and Power

Problem umum didalam pembakaran Tandan kosong kelapa sawit tanpa pretreatment) Abu pembakaran tankos meleleh dan membentuk Clinker/Lapisan Kerak Lapisan kerak pada grate akan mengakibatkan terhentinya proses pembakaran dan menurunnya efisiensi boiler

Grate boiler yang bersih

Pembentukan Clinker pada grate boiler Titik leleh rendah + ruang bakar yang kurang bersih pembentukan Clinker Clinker terbentuk di permukaan grate sehingga mengganggu proses pembakaran. Akibatnya, pengoperasian boiler harus diberhentikan berulang kali untuk keperluan servis dan pembersihan. Availibilitas sistem pembangkit akan menurun karena adanya waktu pemeliharaan yang lebih panjang
Source : USAID-ICED

Pretreatment Tandan kosong kelapa sawit sebelum digunakan sebagai bahan bakar
Pabrik Kelapa Sawit
23% berat Tandan Buah Segar

Cangkang g

Serat

Tandan Kosong
Moisture : 65 69%; Calorific Value : 18 MJ/kg (0% m.c.); 4.3 MJ/kg (67% m.c.) Untuk Sumber Energi

Untuk keperluan lain

Tengkulak Tandan Kosong

Pretreatment Tandan Kosong Shredding/Chipping Screw Pressing / Drying

Mengurangi ukuran dan kandungan air Pengurangan Kandungan Air < 40%

Press into bales / pellets

Transportasi
Transpotasi

When project site is at a distance from the biomass source, Project Sponsor may consider the use of fuel pre-treatment technology to optimize transportation cost Transporting feedstock with relatively low energy or high moisture content will be very inefficient Pre-treatment at the palmoil miller or rice miller site will be required: shredding, pressing, and pelletization

Boiler / CHP Plant

LISTRIK

Characteristics of Biomass Power Plants (Gasification Type)

Key Characteristics: Use Reciprocating Gas Engines Can be used as CHP system High Complexity Operational aspect: Difficult Typical size < 3 MWe Technology status: early commercial Reliability: Poor to reasonable

High Efficiency: ~ 47% Fuel flexibility: moderate

Biomass Gasification Power Projects in Indonesia

No 1 2 3 4 5 6 7 Project PLTB Gasifikasi EBTKE PLTB Gasifikasi EBTKE PLTB Gasifikasi EBTKE PT. Navigat Organic PT. Navigat Organic PT. ICPV IIEE & BNI Location Kab. Pelalawan-Riau Kab. Indragiri Hulu-Riau Kab. Siak-Riau Bali Bekasi-Jabar Sei Dadap-North Sumatera Tabanan-Bali Year Operation 2009 2010 2010 2011 2011 2013 2014 Capacity (kVA) 110 150 150 2000 8000 2000 40 Status Stop Stop Stop In operation In operation In planning In planning Note Pilot project Pilot project Pilot Project IPP, MSW IPP, MSW Captive, Palm waste Pilot project, Internal use

Biomass Gasification Power Research & Development in B2TE - BPP Teknologi

Fixed-bed gasification system pilot plant

50 kWthFluidized-bed gasification system pilot plant

Challenges in Gasification Technology Implementation

Gasification is complex and sensitive process Handling residues (ash & tar) is time consuming and dirty work. Reliability of gas cleaning system is often very low. The physical and chemical properties of producer gas such as energy content, gas composition and impurities vary time to time Gasifiers have fairly strict requirements for fuel size, moisture and ash content. Inadequate fuel preparation is an important cause of technical problems with gasifiers. Installation is complex and require substantial investment for low capacity Several manufacturers claim that gasifiers can be operated on all kinds of biomass. But, due to physical and chemical properties variation in the biomass fuel many researches indicate that gasifier is specifically designed for a particular type of fuel. Lack of technology development and manufacture within the country. Some demonstration plants have been scaled up from university pilot projects but they have failed due to problems such as tar condensation, insufficient gas flow rates and gas properties, higher ash content, etc. Lack skill in operation & maintenance of plants is a major hurdle in fast penetration of biomass gasification No proper feasibility study

Summary of small Biomas/Biogas power application

Applications
Technology Prime mover type Steam Turbine Reciprocating engines Reciprocating Engines, Gas turbine Capital Cost Low Medium Medium Medium - High O&M cost Medium Efficiency Low Ramping rate Slow** Reliability High Operational flexibility High Complexity Moderate

Biomass (direct combustion) Biomass (Gasification) Biogas (AD digester)

Medium Medium

High Low

Fast*** Fast***

Low Moderate High

Low Moderate

High Moderate

**Steam turbine plants 1 -5%/min *** Gas Engines 20%/min, Gas Turbine 20%/min

Risk Management in the development of Biomass/Biogas power projects

Identified Issues Fuel Supply Availability, energy content, Physical and chemical characteristics, collection, transportation, cost Reliability, Capital Investment and O&M costs, Space requirement Water Availability for cooling and feed Hydrology Topography Geology (including earth quake) Experience, equity Fuels vs. electricity distribution network Many permits : business, environment, construction. Delay Over budget Unexpected down time, materials used during construction, equipment reliability Payment default Mitigation Long term biomass contract supply: quality, cost, quantity and delivery

Technology Environment & Social

Follow best practice, engineering standard and use the most cost effective technology Technically safe site and ensure environment parameters are respected i.e. air, waste water quality, noise. Public acceptance

Environment Analysis (UKL, UPL)

Experienced management or consortium with experienced partners. Provide enough equity or other source of income to manage risk. Ensure that the location is ideal considering the fuel availability and electricity load. Secure site Ensure all permits are made available Time, resource scheduling and project management. insurance Accurate feasibility study, Optimum engineering design and project management, insurance Implement best practice in operation and maintenance, follow design specifications, insurance Good profit and bankable off taker

Project Developer Location Legal Construction Cost Overrun Operation & Maintenance Off taker

Biomass & Biogas Business Model

Resources Resources Owner Developers
Resources Owner Private/BUMN/ public

Mechanism
Own Project

Biomass waste Liquid organic waste (POME) Municipal waste

BOO

Third Party Project Developer

BOT

Biomass & Biogas Business Structure

Commercial Project Development Stages

6-12months 7-8 months Max 1 Year 1-2 Years

Project Initiation

Feasibility Study

PPA

Financing

Constructi on

COD

Small-scale renewable energy Independent Power Project (IPP) may take 3 to 5 years from the project initiation to commercial operation date (COD), during which Project Sponsor would have to identify project opportunity, conduct feasibility study, obtain all relevant permits, enter into a Power Purchase Agreement (PPA) with PLN as the traditional off-taker, reach financial closure, and implement the construction work. Under the MEMR Regulation No. 14/2012, Project Sponsor may enter into a PPA with PLN through a direct appointment process, using a standard renewable energy Power Purchase Agreement (PPA) for a fixed term (period) and at power purchase prices set by regulated feed in tariff (FIT) under MEMR Regulation No. 4/2012. While purchase price is fixed, it can be levelized or front loaded per guidance from PLN Director Decree. The PPA process has been standardized, and includes interaction with PLN and Ministry of Energy and Mineral Resources

WHAT CAN ICED DO?

PROJECT DEVELOPMENT COMPONENT:
Assisting its partners in realize the potential of small Biomass/Biogas power: Identifying potential projects, reviewing feasibility studies, training in assessing project viability and due diligence GIS mapping of resources, projects, substations and 20 kV network Maintaining an inventory of proposed RE projects under development, sharing with interested banks and investors Supporting the development of standardized PPA(s) and interconnection procedures, guidelines and agreements Facilitating meeting between ICED partner RE developers and Financiers Calculating the contribution of RE projects in terms of capacity, investment, subsidy reduction, access, and GHG emissions Limited cost sharing for RE Feasibility Study, Interconnection Study

WHAT CAN ICED DO?

SMALL GRANT COMPONENT:
Development of pico/micro RE pilot project for community development

OPPORTUNITIES:
Cost sharing on the development of micro scale biomass gasification pilot projects for community development with Financiers/EBTKE-ESDM/Small & Medium Business Enterprise and University

AMOUNT:
Maximum grant: ~ 100,000 USD/proposal.

WHAT ICED HAS DONE?

PROJECT DEVELOPMENT:
1. 2. 3. 4. 5. Provide Technical Assistance (Value Engineering) to 55 RE projects. Capacity Building for 5 Banks and 4 Financial Institutions Develop Pre-FS for Sinar Mas Biogas Projects Develop Pre-FS for Kabupaten Kampar Biogas and Biogas Projects Study tour to Thailand Biogas & Biomass power projects for key stakeholders 6. Supporting PLN on the development of standardized PPA(s) and interconnection procedures, guidelines and agreements 7. Development of GIS layer for 20 kV of PLN Grid in Aceh, North Sumatera and Aceh. GIS inventory of Palm Oil Mills for Kabupaten Kampar 8. And more

SMALL GRANT COMPONENT:

1. Cost sharing with CSR BNI on the development of a micro scale biomass gasification power project in Bali. 2. Green building certification in commercial sector with GBCI

For more information, contact:

Dr. Hanny J. Berchmans. Project Development Manager USAID-ICED Project +628775006229 hannyjberchmans@gmail.com Hanny.berchmans@iced.or.id