Energy Transition - A comprehensive approach
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The document discusses Indonesia's energy transition towards a zero-carbon future, emphasizing the need to reduce CO2 emissions through renewable energy and efficiency. It outlines challenges in achieving renewable energy targets despite governmental commitments and existing regulatory frameworks. Key elements for a successful energy transition include supply and demand management, infrastructure development, pricing, and regulatory support, along with the impact of global trends and the COVID-19 pandemic on energy strategies.
Energy Transition - A comprehensive approach
- 1. Energy Transition A comprehensive approach Sampe L. Purba Presented in Webinar Talks – METI 19 June 2020
- 2. Energy Transition defined • What : Pathway toward transformation of the global energy sector from fossil based to zero – carbon, by the second half of this century • Why : Reducing energy-related CO2 emissions for climate change • How : Renewable Energy and Energy Efficiency • Instruments : Information Technology, Smart Technology, Policy Frameworks and Market Instruments https://www.irena.org/energytransition June 20 2
- 3. Indonesia supports Energy Transition • Energy Law nr. 30, 2007 • National Energy Council Established • Some Regulations Enacted • Government attending and committing to Climate Change Conferences • Policy set, Programs planned and realized (i.e National Energy Policy, National Energy General Planning, etc) YET ==➔ Renewable Energy Mix Target Realization is still below expected plan June 20 3
- 4. Potrait of Our Energy Mix Jun-20 4 • 2015 - 2019 ✓ Total Energy Increased by Quantity 182 MTOE → 219 MTOE = 20,33% ✓Renewable Energy - Increased by Qt 8.03 MTOE → 20.04 MTOE - % Increased doubled 4.4% → 9.15%
- 5. The Five Elements Required to The Energy Transition Ecosystem Successful Implementation The Five Elements ISSUES 1 Supply of Primary Energy Capacity Factor, Energy Efficiency, Availability, Continuity/ sustainability of Feedstock Supply, Transferability 2 Demand for energy Monopsony or multi buyers , Sensitivity to Economy trend, Substitutive, Elasticity, buyer’s credibility, End user 3 Infrastructures On Grid, Cluster, stand alone, off grid 4 Price and Commerciality PPA Terms, Competitiveness, Affordability, 5 Regulatory and Policy Protecting Industry, Market or Consumers ? Incentive Policy, Govt Priority and Capability; Established market interestJune 20 5
- 6. Typical issues Primary Energy - simplified Energy Primer Issues Hydro Complex Feasibility Study, Land access and permit, Environment Conservation, Forestry, cultural heritage, transferability (evacuation power), Civil work risk, Financial Support Geothermal High Exploration Risk, Land access and permit, Remoteness from Consumers, PPA Commercial Terms; Investment cost issues Solar and Wind Farming field required, Technology, production industrial scale, Local content (substance and how to meet), local partner credibility, intermittent, Financial Support Biomass, Biogas, Waste Feedstock continuity – communal or industrial level Waste : Tipping Fee, continuity, Local Partner issues, City clean healthy or energy issue June 20 6 1
- 7. Cost structure of several power generation primary – energy-related-source • Different cost structure, drives commerciality - PPA Terms - Financing Model - Off taker - Take or Pay - Volume Source : Levelized Cost of Electricity Indonesia, IESR 2019 Jun-20 7 Cost Electricity Cent/ KwH
- 8. Cost Structure of Generation Cost Jun-20 8
- 9. Demand For Energy ✓Monopsony or multi buyers ✓ Sensitivity to Economy trend ✓ Substitutive ✓ Elasticity ✓ Off takers’ credibility ✓ End users June 20 9 2 For Highly Regulated and Imperfect Market Competition, a proper policy, regulatory framework and professionalism of the Industries are called for
- 10. Pattern and Trend of Global Primary Energy Across the region • Fossil (Coal, Gas, Oil) dominate across the region • Trend and pattern grows steadily • Asia : Dominant using Coal, Oil and Gas (Competitiveness, Availability, Multiplier effect) • Europe balance (Nuclear, Renewables dan Hydro) → Energy transition is technology matter. Affordability and availability no more issues • US, Canada maintaining a balance combination of Fossil and and Renewable Energy → Realistic Jun-20 10Source : BP Statistical Review, 2020
- 11. Infrastructures Sumatera : Source abundant, Customer rare. Potential Energy Java - Bali : Infrastructure ok, Power Generation ok, Primary Energy from outer islands Kalimantan : Gas, Coal, Crude Sulawesi – Nusa Tenggara : Need massive infra structure connecting to source Maluku – Papua : Infrastructure required, Population rare June 20 11 3 • Geographically wide spread • Imbalances of Infrastructures – Primary Energy – Demand for energy • Existing Electricity System Power Generation
- 12. Our Electricity Chain • Issues : ✓Supply – demand ✓Economy growth ✓Variety of Customers ✓BPP - Power Generation Cost ✓Losses ✓Electricity Prices ✓Reliability ✓Expansion of grid June 20 12
- 13. Ends – Ways - Means • A sound energy mix policy has to take into account : ✓ Existing Power Generation, Technical and Economical age ✓Utilization of domestics Primary Energy ✓Gradual Shifting to increase proportion of RE ✓Reliable, compatible and affordable RE Technology Jun-20 13 ENDS : An affordable energy price, accessible and Reliable. Renewable Energy getting higher in the energy mix Irwandi Arif, 2019
- 14. Opportunity Market Creation for Renewable Energy • Utilization of Renewable Energy Has been the Global Concern ✓Technology ✓Funding ✓Market ✓Green Certificate ➔ as smelter will be developed more in Indonesia, there is an opportunity to increase the utilization of RE June 20 14 Indicative Energy required for 52 Smelters
- 15. Price and Commerciality Rule of Thumb : Long term and healthy Partnership can only long last when fairness exist Price ➔ Reflection of Economics (wide consideration), commerciality and Bargain Position Bargain Position : ➔ Reflected in Terms PPA (Right and Obligation, Take/ Deliver or Pay; Quantity Adjustment; A,B,C,D Components; IRR, Transfer of Asset; Settlement Dispute Mechanism, etc). Urgency, Relevance and Soundness of the Industry Ecosystem along the value chain June 20 15 4
- 16. Price - The Things that Matter ✓Fossil Energy (Coal, Gas) - Indonesia can play a role in global energy - Competitive Price - High multiplier effect (employment, State and Regional Revenue, Services industry and feedstock) ✓Renewable Energy - Access to Funding and Market for product - Diversification of source - Energy ResilienceSource : Levelized Cost of Electricity Indonesia, IESR 2019 Jun-20 16
- 17. Clustering and categorizing Strategy (Large – Medium – Small) Hydropower and Geothermal (L): Solar and Wind (M): Biomass (S) • The Things That Matters ✓Technology ✓Cost ✓Output volume ✓Risk ✓Price ✓Benefit June 20 17
- 18. Regulatory And Policy ✓Protecting infant industries ✓ Maintaining Competitiveness on Existing Strength ✓Legal Protection on Pilot Projects and innovation ✓Creating the market Incentive and affirmative policy to Renewable Energy considering : ✓Roadmap Industry Development ✓Regional Development Economy Plan ✓Financial and Fiscal Capability of State ✓The ability of PT PLN to maintain a sound electricity tariff within the range as directed by Government, and to provide reliable service June 20 18 5
- 19. Global Economy : Pandemic Covid 19 Effect ➔ Priority for people protection (health, economy, social) June 20 19
- 20. Risk Should Commensurate With Return • Who bear the cost and absorb the risk • Who take benefit • How robust the sponsor is • How to prioritize the limited fund resources ➔ Reflected in supply of energy and price June 20 20 Conceptual Risk Model On Geothermal Project, Robertson – Tait et al. 2015
- 21. Increase electricity ratio Refocusing and Prioritizing Quality ✓RE to develop in line with available local energy, electricity infrastructures and demographic spread ✓To integrate with economy cluster. ✓Inter Ministerial and Corporation collaboration to enhance ✓To Regulate the Market and Players→ Economy of scale and fair competition among the same level playing field Jun-20 21
- 22. Gov’t to refocusing on Quality Program for Energy Resilience and Cleaner Energy ➔ On the right track Programs to study and being implemented Oil Bio Fuel Program; Gas CNG, Iso tank, LNG For Transportation; Conversion of Diesel to Gas for Power Generation Coal Syngas to down streaming; Relocation of Coal Fire Plant approaching the Source (mine mouth or to industry); Enhancing Source reliability Solar PV Renewable Energy Based Economics Development for Frontier, outermost for frontier; rooftop for public buildings; Hydro and Geothermal Self use Power Generation and Connected to grid Wind Connected to grid, create the industrial complex New Energy Downstream of minerals for battery development June 20 22
- 23. Concluding Remarks : ✓Based Assumption on Energy Mix Formulation ➢ Economy Growth (size, structure and strength) ➢ Demand for electricity growth ➢ Regulatory framework (National Energy Policy, Govt Reg, Pres Order etc) ✓Energy Transition : Ends – Ways – Means ➢Ends : Sufficient available and reliable energy at affordable price ➢ Ways : Electricity Infrastructures, Primary Energy mix to optimize ➢ Means : Regulatory, Fiscal, Security and Better Bureaucratic Services ✓Competitiveness of Fossil Base Energy is a reality at present time ✓Renewable Energy is necessary to enhance our Energy Resilience and Sustainability, by taking into accounts : ➢ Technology proven, compatible and widely available ➢ Existing Power Generator ➢ Benefit to the community, industry and Our Nation Jun-20 23
- 24. Thank you – Namaste – Terima kasih • Sampe L. Purba • Instagram.com/sampe.purba • linkedin.com/in/sampepurba • Twitter.com/sampepurba • Independent.academia.e du/SampePurba June 20 24 Disclaimer : Data yang ditampilkan diambil dari presentasi presentasi yang dapat diakses Publik