this Paper discuss that a transition energy can be reached by the lining streaming of Supply, Demand, Infrastructure, Commerciality and regulation. However, any transitional energy has to consider the technology, existing power generation and the ability to absorb and competitiveness

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
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