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INDONESIA SPECIAL
Renewable energies
iin Indonesia
74 Sun & Wind Energy 2/2007
INDONESIA SPECIAL
Indonesia is a country with an extremely
diverse geography and culture, and the
picture is no different when it comes to re-
newable energies. Geothermal power has
a good chance to surpass cheap coal-fired
generation in the not too distant future.
A new law on grid inputs and remunera-
tion has opened up a whole new market
for the small-scale hydropower sector.
Economically counter-productive and eco-
logically damaging, however, is the mas-
sive subvention given to biofuels by the
government, and the solar branch is also
lagging far behind its enormous potential.
Photos (5): Jörg Böthling/agenda
Sun & Wind Energy 2/2007 75
INDONESIA SPECIAL
T
he year 2007 got off to an appalling start for
Indonesia: First landslides and earthquakes,
then a series of plane crashes and ferry acci-
dents, and finally the flood catastrophe in Ja-
karta in February. With so much bad news in
such quick succession, even the stoic and cri-
sis-proven Indonesians began to lose some
of their in-born optimism. To help restore the shaken
spirits of his citizens, president Susilo Bambang Yud-
hoyono, a pragmatic politician with a certain techno- MHPP in Bandung has
cratic touch, resorted to a rather unusual measure at proved the nucleus for a
the beginning of March this year. Accompanied by his small-scale hydropower in-
whole cabinet, he turned up to the Friday prayers in the dustry whose know-how
Istiqlal Mosque in the centre of Jakarta – to pray public- is in demand all over the
ly (and in a perfect media spotlight) for an end to the world.
series of natural disasters. Photo: Entec
We should not expect too much divine assistance
from this action, however, as most of the disasters
(apart from the earthquakes and tsunami) are in reality
attributable to human causes: The ferry accidents and
plane crashes are consequences of negligence and mis-
management – and Jakarta’s flood disaster was quite
obviously a pay-back for years of unrestrained settle- Sadly, it is also very probable that Indonesia will suf-
ment and forest clearance in the catchment area of the fer further ecological catastrophes in the coming years.
city’s rivers. The population explosion (the country currently counts
241 million inhabitants, and this number is increasing
Controversial energy source: by a further 3 million every year) is exerting incredible
The massive expansion of oil pressure on the region’s natural resources. Exploitation
palm plantations for biodie- is already today expanding at an alarming rate. Greed
sel production is endanger- for profit and rampant corruption are accelerating the
ing the natural rainforests of process.
Borneo and Sumatra. It is unfortunately the tropical rainforest which is suf-
Photo: BPPT fering most. According to the Global Forest Resources
Assessment of the UN Food and Agriculture Organisa-
tion (FAO), some 4,900 hectares of forest are being lost
every day – for the most part through illegal slash-and-
burn clearance to expand arable land. It is not the small-
scale local farmers who are playing with fire, however,
but major corporations looking to make a killing with
enormous plantations. Comparisons of satellite photos
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76 Sun & Wind Energy 2/2007
INDONESIA SPECIAL
On-grid in the future? Most
small-scale hydropower in-
stallations in Indonesia are
off-grid systems supplying
remote villages – but new le-
gislation now allows electric-
ity to be fed into the public
grid.
Photo: Entec
Mark Hayton (left), Entec‘s
by environmental organisations have proven that exten- Although, curiously enough, an OPEC member, Indone- project manager at MHPP in
sive monocultures, mostly palm oil plantations, are sia has for a number of years actually been a net impor- Bandung, a real expert of
soon to be seen wherever deliberate fires destroy vast ter of oil products. To reduce the dependence on imports, small hydropower visits an in-
areas of rainforest. the government is now pushing the biofuels sector. Re- stallation in the village Curug
fineries are being built and land is being released for Agung near Bandung, Java.
Sacrificing rainforest for biofuels cultivation on a large scale. Not only for oil palms, but Photo: Jörg Boethling
also for jatropha cultures (see S&WE 1/2007, page 152),
The oil palm has long since ceased to serve exclusively another important biodiesel plant, a total of 7.6 million
as a source of edible oils, and is instead processed abo- hectares are to be made available up to 2010 alone – an
ve all by the Indonesian biofuels industry – for the pro- area corresponding to the whole of Ireland, for examp-
duction of biodiesel. This market is set to experience le. Figures which are quite literally devastating for the
enormous growth. In 2006, president Yudhoyono passed rainforest are taken as indicators of progress by Indone-
a decree which declared biofuels to be an integral part sian scientists. »Big is beautiful« is the motto: »We want
of the national energy supply strategy. By 2025, they are to become the biggest producer of crude palm oil (CPO)
to cover 5 % of the total primary energy demand in In- worldwide,« says Marzan Iskandar, head of the energy
donesia. This ambitious target (the biofuel contribution department at the Agency for the Assessment and Ap-
is at present still only marginal) must be placed against plication of Technology (BPPT), the national research
the background of the country‘s dwindling oil reserves: centre in Jakarta. Malaysia is still the world leader, but
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Sun & Wind Energy 2/2007 77
INDONESIA SPECIAL
Vehicles running on bioethanol (here an example
from the fleet of the Ministry of Energy) are still rare
on Indonesia‘s roads. Photos (2): Bernhard Brand
Population 241 million
Primary energy supply (2003) 159,500 ktoe
Electricity production* 120.2 TWh
Electrification rate (2006) 56 %
Total electricity generation capacity* 25,218 MW
Geothermal generation capacity 855 MW
Hydroelectric generation capacity* 4,300 MW
Misleading label: The Indone-
Wind power installed** 250 kW
sian »biodiesel« already used Indonesia boasts proudly that it is ready to overtake.
by many municipal buses in Crude palm oil is already an export product, and also Accumulated PV power installed*** 10 to 20 MW
Jakarta contains only 5 % fuel ends up in Germany, where the EEC (European Econo- * 2004 data, source: PLN, IAEA
of vegetable origin. mic Community) guidelines even subsidise its use in ** experimental plant on Bali
*** estimation, exclusively off-grid systems
power generation as »climate-friendly«.
An absurd situation, because the climate balance for Factsheet Indonesia
this Indonesian »green gold« is no less disastrous that the
immediate ecological damage. The clearing of the rain- Geothermal power: soon competition
forests for plantations produces enormous quantities of for coal-fired generation?
carbon dioxide, and furthermore a terrible »haze« which
shrouds vast areas of Borneo and Sumatra and even Contrary to the controversial situation with biofuels, the
reaches as far as Singapore. The latter complains regu- ecological balance for geothermal power is positive. The
larly to the Indonesian government about this heavy only real deficit for the second most important source
smog, but the ensuing fire-fighting measures are rather of renewable energy in Indonesia is the fact that it is not
half-hearted. In fact, it is scarcely possible to bring the being fully utilised. It is true that Indonesia occupies
fires under control, as they have long since set the peat fourth place behind the USA, the Philippines and Mexi-
beds smouldering in the forest undergrowth. Experts es- co in international comparisons of installed geothermal
timate that the burning of these gigantic peat beds, one power generation capacity (reference year 2005), but
of the greatest carbon reserves in the world, releases 6.5 compared to its population figures – and the immense
times as much carbon dioxide as the whole of the Indo- potential – there is still not enough happening. Geother-
nesian economy. On top of all this, the rotting waste af- mal electricity currently contributes approx. 6 % to the
ter pressing of the oil produces huge amounts of meth- country‘s total power generation, accounting for approx.
ane – a climate killer 21 times more potent than CO2. 1 % in the primary energy balance. A generation capac-
»Climate-friendly« is actually one of the last descriptions ity of 855 MW is installed at seven different locations
earned by biodiesel from Indonesia. But despite the around the country. Most of the power stations are to be
scathing criticism of environmental organisations such found on Java, the most densely populated of the Indo-
as Greenpeace and the WWF, the Indonesian government nesian islands, where the electricity demand is highest
is sticking unerringly with its biofuels programme. and the geothermal potential is thankfully very high.
There are already 180 outlets for biodiesel in Jakarta The largest geothermal power station is in Gunung Salak,
and its surroundings. The fuel sold, which currently con- some 70 km south of Jakarta, with a nominal output of
tains only a 5 % addition of »real« biodiesel, is market- 330 MW. It is operated jointly by the US oil giant Chev-
ed by the Indonesian petrochemical corporation PT Per- ron and the state power generation corporation PT Pe-
tamina under the fine-sounding label »BioSolar«. Many rusahaan Listrik Negara (PLN). Normally, one of the state
of Jakarta’s municipal buses are already running on Bio- energy corporations PLN or Pertamina is always involved
Solar. Some Indonesian petrol stations are also offering where geothermal energy sources are harnessed, even
»bio«-petrol (with bioethanol additives). The raw mate- though a special »Geothermal Law« since 2003 has also
rials for ethanol production are cassava and molasses opened the doors for wholly private power station op-
from sugar cane. Bioethanol production is at the mo- erators. Private investors are in fact bitterly needed, be-
ment still a minor niche, but here, too, there could well cause the state and its energy corporations are not able
be an explosion soon, with no less questionable ecolog- to finance the building of new power stations alone.
ical consequences. This became painfully clear during the Asian economic
78 Sun & Wind Energy 2/2007
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INDONESIA SPECIAL
Indonesian standard: 50 W
is the typical size for solar
home systems under the go-
vernment programme.
Photo: DGEEU (Directorate General of
Electricity and Energy Utilisation)
crisis in the late 1990s, when the expansion of geother- duced to below 5 $Ct/kWh. Therefore it will be the price
mal power generation came to a complete standstill. factor which determines the rate of expansion. The out-
Today Indonesia is doing what it can to make up the lost come of the race is still open, but geothermal power is
ground. Countless new projects are planned, and gov- not to be written off by any means.
ernment targets specify the installation of 9,000 MW by
2025 (geothermal power would then contribute the same Wind energy: minimal potential
5 % to Indonesia‘s primary energy as biomass). But there
is still room for further expansion beyond the envisaged With the whole energy branch geared to the cheap coal
9,000 MW. The economically viable geothermal poten- prices, it is all too understandable that the market op-
tial is quoted at a gigantic 27 GW – one positive aspect portunities for other, decentralised power generation
of the country’s location around one of the world‘s vol- options based on renewable energies are limited. The
canic and tectonic hot spots. Geothermal energy is best cards in this respect are still held by wind power,
available without complex deep drilling practically eve- which is a proven producer of electricity at competitive
rywhere in Indonesia, and that makes for relatively fa- prices. Unfortunately, the outlook for wind farms in In-
vourable investment and electricity generation costs: donesia is rather slack: In the inner tropics, where the
The price lies at present between 7 and 8 $Ct/kWh. Coriolis effect is reduced by the proximity to the equa-
That is still too high for the state power company tor, no major wind systems are able to develop as at
PLN. »We are still too benchmarked to coal generation medium latitudes. It is at best possible to make use of
prices,« explains PLN primary energy management spe- local sea-breeze effects on certain Indonesian islands,
cialist Dasnulmadi. A coal-generated kWh costs only 4.5 which is expressed in a few smaller projects, for exam-
$Ct and means that investments in conventional coal- ple a 250 kW wind farm on the holiday island Bali.
fired power stations are still more attractive. Over 40 % There is also little legislative tailwind for the efforts of
of Indonesia‘s electricity is generated in coal-fired pow- the »small renewables« to gain a foothold on the Indo-
er stations. The question as to whether this share can be nesian electricity market. It is true that there are two
reduced in favour of geothermal energy in the future government decrees dating from 2002 and 2006 which
will be dependent above all on whether or not the price define the connection of small and medium-scale pow-
can one day be brought down below that of cheap coal- er stations to the national grid and even specify remu-
generated electricity. The scientists at BPPT are confi- neration rates for the power input. But this still falls far
dent. They are currently working on ways to use the re- short of providing genuine incentives. On the contrary:
sidual heat from existing geothermal power stations in The remuneration system even places renewable ener-
a second circuit to generate additional electricity by the gies at a disadvantage. Both ordinances, the older PSK
so-called Kalina process. In this way, according to Marzan (»Pembangkit Skala Kecil«) on small-scale generation,
Iskandar from BPPT, the generation costs could be re- for installations up to 1 MW, and the newer PSM (»Pem-
Reliable performance simulation
polysun 4.0 �������������������
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* Component catalogues using measured performance parameters, including global weather data
* Dynamic building simulations taking into account building geometry, insulation and glazing
* Company templates: True-to-detail systems according to verified specifications from producers
80 Sun & Wind Energy 2/2007
Indonesian energy policy: presidential decree
to map the route
Indonesia’s energy supply stands on shaky foundations. Demand
has increased more than tenfold over the past 30 years and the
rapidly growing, but sadly equally energy-inefficient economy
continues to drive massive expansion of the supply capacities.
Warnings of bottlenecks have been circulating for some time, but
it was only in 2004, when it was realised that the country could no
longer satisfy the demand for oil, one of the most important ener-
gy sources, from its
own resources,
Geothermal 1%
that politics finally Coal 11%
awoke. The gov- Biomass**
ernment hastily in- 21%
troduced its first
energy-saving Hydro-
measures, for ex- power
3%
ample the gradual
discontinuation of
Oil*
diesel subsidies. 43%
Last year, when Natural gas
Decree 5/2006 was 21%
signed by presi-
dent Yudhoyono, Primary energy supply in Indonesia in
the country at last 2003 – by energy sources.
received an official * oil, diesel, petrol, kerosene
framework for its ** mainly domestic fuel for rural households
future energy poli- Source: Ministry of Energy and Mineral Resources (2003),
cies. Two main www.esdm.go.id, figure: S&WE
objectives are de-
fined: improved energy efficiency and a modified primary energy
mix. The target for energy efficiency is that, from 2025, energy
consumption is not to increase faster than national economic
growth. The energy mix goals also refer to 2025, and are formulat-
ed as percentage shares of primary energy consumption.
Significant changes are planned compared to the present situ-
ation (see figure). The most important aim: reduction of the
dependence on oil to below 20 %. The chosen alternatives are bio-
fuels (planned 5 %), as well as fuels obtained through coal lique-
faction (2 %). The government has assigned coal an important
role in the future energy mix. Its share is to be expanded massive-
ly and is to grow to over 30 % of the total energy consumption – a
clear confession in favour of a fossil fuel which is still to be found
in abundance in Indonesia. Gigantic new power stations are plan-
ned near the mining areas on the island of Sumatra – the electric-
ity is to be sent via submarine cable to the main island Java and
even exported to Malaysia. Nuclear power is also called upon to
secure the national electricity supplies. Officially, a 4 GW power
station is to go into service on the island Muria off central Java in
2015. Observers, however, are sceptical as to whether the govern-
ment plans can really be implemented that quickly. It is more like-
ly that gas-fired power stations will be contributing even more
significantly to power generation. After all, Indonesia can still
draw on seemingly unlimited natural gas reserves: According to
the targets, the gas contribution to primary energy consumption
is to increase to 30 %. The planned 5 % for geothermal power by
2025 – actually quite an ambitious goal – represents rather a
modest share of the Indonesian energy cake along side the slices
held by fossil fuels.
Sun & Wind Energy 2/2007 81
INDONESIA SPECIAL
Great potential: The Indonesi-
an GSM telecommunication
providers are expanding their
infrastructure. In rural areas,
more and more PV or PV-die-
sel hybrid systems are in use.
Photo: PT Gerbang Multindo Nusantara
nities with a grid connection are also able to operate a
small-scale hydropower station – at the same time ge-
nerating income for the village coffers from the sale of
excess electricity.
The option of feed-in opens up whole new markets.
Currently, a mere 20 MW of small-scale hydropower is
Perfect rural reputation: Small- installed in Indonesia, of a national potential estimated
scale hydropower consumes to be over 500 MW. When compared to the major dam
no natural resources and re- power stations with a total 4.3 GW of installed capacity
mains unobtrusive in the envi- and an estimated potential of 75 GW, the contribution
ronment. of small-scale hydropower to the country‘s energy sup-
Photo: Entec plies appears almost negligible – but it does have one
important advantage: Nature conservation is on its side.
bangkit Skala Menengah«) on medium-scale genera- Small-scale hydropower projects, after all, are considered
tion, for installations with a connected capacity of up to both ecologically and socially sustainable, as they re-
10 MW, offer a grid input remuneration amounting to quire little intervention in the natural environment and
80 % of the regional electricity generation price of the are furthermore operated generally at local level.
state power monopoly PLN. The intention is no doubt to The main player in the Indonesian small-scale hydro-
grant access to the grid only to those renewable ener- power business is MHPP (Mini Hydro Power Project) with
gies which are able to compete with the pricing of con- offices in Bandung, a university city in West Java. Bene-
ventional power generation. The result is somewhat un- fiting no doubt from the intellectual environment – Ban-
fair, but it is still not an absolutely hopeless situation, as dung is home to the most prestigious engineering col-
the PLN generation costs are not equally low through- lege in Indonesia – MHPP was set up here in 1991 by the
out the whole country. In some areas, especially in German Society for Technical Cooperation (GTZ). It sees
sparsely populated regions and on small islands, the elec- itself as a long-term project to promote small-scale hydro-
tricity grid is fed exclusively from diesel generators. In power projects in Indonesia and is managed on behalf of
such cases, the costs are around 24 $Ct/kWh – which ac- GTZ by the Swiss hydropower consultants Entec from
cording to the 80 % rule means that PLN must pay an Sankt Gallen. Mark Hayton, Entec‘s project manager at
feed-in tariff of over 19 $Ct. That is indeed an opening MHPP, revealed that another installation is about to be
for renewable energies, and the first IPPs (independent hooked up to the grid under the PSK remuneration
power producers) have already ventured into business scheme. It is to be a relatively large 340 kW installation
on the basis of the PSK and PSM schemes. on the island of Sumatra, with Entec for the first time
acting as an IPP and selling electricity to the state mo-
Small-scale hydropower: success at a nopolist PLN.
modest level The years of commitment to small-scale hydropower
seem to be paying off in the meantime. Since its found-
The pioneers are to be found in the hydropower branch. ing, MHPP/Entec has established and supported over
The first PSK project was connected to the grid in Selo- 200 small-scale projects. Most of these are already stand-
liman in East Java in 2003. The 25 kW generator, which ing on their own feet, and a small professional hydro-
is driven by a cross-flow turbine, is operated by a coo- power industry has developed in Bandung: planning of-
perative founded by the inhabitants of the local commu- fices, turbine manufacturers and generator suppliers.
nity. Even though the power, according to the local PSK Indonesian hydropower systems are also being export-
rates, can only be sold to PLN for a meagre 5$Ct/kWh, ed – to the other Asian countries, to Africa and even to
the project is considered a milestone in the Indonesian Europe. Only recently, as Mark Hayton proudly reports,
hydropower scene. To date, the small-scale installations a turbine from one of his partner companies in Band-
(defined in Indonesia as anything below an output of ung was installed in a small-scale hydropower station in
200 kW) had fed exclusively off-grid systems in regions Switzerland, the country from which the know-how
without existing electrification. Now, however, commu- was transferred to Indonesia just a few years ago.
82 Sun & Wind Energy 2/2007
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��������������� ���������������������������� �����������������INDONESIA SPECIAL
Solar water heating is consi-
dered a luxury for wealthy
households in Indonesia – as
here on Bali.
Photos: Bernhard Brand
1980s under president Suharto. He demands that admin-
istration of the government funding be placed in the
hands of local NGOs, which can then assume the role of
a bank in their dealings with the SHS users. Chayun Bu-
diono, managing director of systems supplier PT Gerbang
Multindo Nusantara (GMN) in Jakarta, also favours a busi-
ness-style approach, with the PV customers paying – at
least in part – for the solar systems. GMN seems to steer
clear of the thankless business with solar home systems.
The company prefers to work in the private sector, for
example with the Indonesian mobile telecommunica-
tion providers, who are currently expanding their net-
works in the rural areas and use solar energy to power
their distributed transmission stations. Chayun Budiono
Solar thermal installations, also sees opportunities for PV mini-grid systems in the
mostly thermosiphon sys- Solar energy: photovoltaics on a low flame more remote villages, particularly since the increasing
tems, are few and far-bet- fuel prices have been raising the costs of conventional
ween in Indonesia. The total The solar branch, too, is able to point to companies diesel generation.
market for such systems is whose products are successful on the world market. In Remuneration which discriminates against green
estimated to be only around the PV sector, PT Sundaya from Jakarta is known the electricity, and a rural electrification programme which
15,000 systems per year, world over as a supplier of plug-&-play solar home sys- is ruining the reputation of photovoltaics: It almost seems
due to a high value-added tems. Sundaya‘s simple-to-install SHS solutions are used that renewable energies are undesirable in Indonesia. It
tax of 20 %. in rural electrification projects in developing countries, is the large-scale projects which are courted, among
but at the same time also in Europe in the camping and them geothermal power, but above all the highly ques-
leisure sector. It is only in Indonesia itself that the mar- tionable biofuels. The situation is in some ways reminis-
ket situation is rather dim. The figures are languishing cent of the Suharto era, in which mammoth technology
at no more than 1 MW installed capacity per year. projects, for example the establishing of a national avi-
Industry observers attribute this above all to the ation industry, were placed on the agenda in total disre-
poorly planned government electrification project, which gard for the country‘s true development interests. When
distributes tens of thousands of solar home systems to it comes to renewable energies, today‘s government
the rural population free of charge each year. As no main- similarly seems to have lost all sense of proportion. ✹
tenance structures exist, these systems very soon give Bernhard Brand
up the ghost, lie around to rot, or else are simply broken
down into their components and sold on by the recipi- Further information:
Ministry of Energy and Mineral Resources: www.esdm.go.id
ents before they are even used. Over the years, it is esti- BPPT (Ministry of Science research centre): www.bppt.go.id
mated that around 30,000 of the 50 W solar home sys- Electricity company PLN: www.pln.co.id
tems have shared this fate. The whole photovoltaic
Non-government organisations (with focus on renewable energies):
branch is suffering the effects of these catastrophic gov- YBUL: www.ybul.or.id
ernment projects. »PV will never prosper if you just give PELANGI: www.pelangi.or.id
it to the people for free,« is how Lolo Panggabean from Indonesian Renewable Energy Society METI: www.meti.or.id
PT Gerbang Multindo Nusantara: www.gerbangmultindo.co.id
the non-government organisation YBUL comments the PT Sundaya Indonesia: www.sundaya.com
failed SHS programmes, which already began back in the Mini Hydro Power Project: www.mhpp.org
84 Sun & Wind Energy 2/2007You can also read
