What are the challenges in meeting Indonesias energy needs?

Whats the solution and how does it solve the challenges? And I will also show some of
the more extreme implementation examples of projects in Indonesia

A challenge is just an opportunity for you to get a leg up over your competition

Check your ports facilities. Do you need to build your own? Logistics costs in Indonesia is high. Cheaper to send something from Europe to Singapore
than domestic container shipping

Survey the ports, survey the road conditions, survey the location

Dont get too lazy now! You can combine work and play when you get a project in a place like this. But dont do too much playing now. I know
someone whos doing projects in Indonesia and at the same time hes going on vacations to places like this.

Lack of availability of heavy equipment. Is it more economical with hand tools (take more time) or bring in heavy equipment and the infrastructure
around it (maybe quicker, maybe not? For sure more expensive)

Check for flood lines and watermarks. Dont just trust what someone tells ou

Okay, lets get serious now. Those are just things most of you already know and you know how to get around them. Plenty of solutions that are within
your control. Theyre challenges for sure, but you have the solution. You can control how to solve them.

Stakeholders of the electricity market in Indonesia. Which one are you? Whats clear is that as an IPP, PLNs is the most significant stakeholder here

Green Normal condition; Yellow Caution (spinning reserve is less than the largest power plant); Red Deficit (rolling blackout)
This also shows the available capacity of the power plants in the regions Please dont take these numbers as absolute theyre indicative only. And you
can get them from a good consultant with access to PLNs statistics, which are available for the public on an annual basis.

10% from peak load

A recent study by NREL identified that with additional reasonable reserves and resources deployed, Oahu and Maui can reach about 20% penetration
with VRE power plants. USAID-ICED II is currently working with PLN to conduct a thorough study of the grid to determine a reasonable penetration ratio
given current conditions and what it would take to increase the ratio

It can be a very expensive solution. A utility company with very strong financial and revenue model along with other strategies is required to be able to
implement this properly. A very robust supporting mechanisms such as regulations and incentives will be required as well. Lastly, a healthy economy to
absorb the additional costs would also be needed if there is no subsidy mechanisms. Either the utility company pays for it and then charges the VRE
power plants for it, or the power plant integrates BESS and charge a higher tariff to the utility company to recover the cost and to provide a more stable
power. As an option, a hybridized system with thermal power plants and/or hydro or other peaking/load following marginal power plants can be
designed

There are many forecasting companies who can provide fairly accurate 15 minute forecasting. Even IBM is getting into this market with their Hybrid
Renewable Energy Forecasting. The primary use of the forecasting data is coupled with the dispatching standard operating procedure that will allow the
grid to prepare for and to ensure that there is sufficient spinning reserve for the upcoming conditions. In Germany, they use up to 3 different sources
for forecasting, and the worst performing one after the end of the period (1 year) is unable to bid for the next tender. This way the quality of the
forecast from these companies continue to improve.

Where does PLN get its revenue from? Subsidy and tariff income

Tariff increases are difficult in Indonesia. Currently the electricity tariff is only tied to Foreign Exchange rate, Oil prices and Inflation. But it isnt tied to
increasing PLN expenses due to PPAs that are higher than their current production cost

There is a hard limit on the subsidy, on the amount to PLN, and on total deficit to the country. Limited to the consumer group whose tariff is still lower
than required revenue for that consumer group.

Reduce project cost through collaboration with local government or other means, choose locations where the tariff can be lower than the production
cost, try not to increase PLNs production cost.

Last thoughts: Renewable energy projects are long term projects. The benefits are to be thought of in the long term, not just in the immediate
timeframe. Sometimes this provide a conflict between utility companies wanting to reduce their current cost, the need to provide an energy mix that
include renewable energy, but at the same time there is no mechanism to recover the initial cost increase in the short term before the benefits are felt

Last thoughts: Renewable energy projects are long term projects. The benefits are to be thought of in the long term, not just in the immediate
timeframe. Sometimes this provide a conflict between utility companies wanting to reduce their current cost, the need to provide an energy mix that
include renewable energy, but at the same time there is no mechanism to recover the initial cost increase in the short term before the benefits are felt