this slide presentation discuss the fact sheet of fossil based and renewable in Indonesia energy mix. the way to boost renewable energy in electricity system hand in hand with strengthening PT PLN, while maintaining competitive advantage in existing fossil based energy is proposed as new shifting paradigm policy

1. Renewable and Fossil Based
Energy Challenge
Fact Sheet and Shifting Paradigm
Sampe L. Purba
March, 2021
Mar-21 1

2. Summary Points
✓The Government has limited fiscal room and priority for structural
challenge. Subsidizing and allocating fund directly for renewable energy
development to corporation should be as the last resort
✓To boost Renewable Energy need new paradigm, i.e deregulation of Solar
PV and open RE business widely in certain region for Private Public Utilities
✓PT PLN (Persero) main mission is to provide electricity to the people of
Indonesia across the country, at a reliable service and affordable price
✓Fossil based Primary Energy historically proves its role as locomotive engine
and robust backbone to the economy
✓Decarbonization and green energy should be adopted in smooth transition
way to avoid unnecessary disruption
Mar-21 2

3. Macro Economy Context - Global
✓ There is optimism for the growth economy recovery depending on vaccine
success and effectiveness of Government policy response
✓The projected growth varies across the countries
IMF - World Economic Outlook, Update January 2021
Mar-21 3

4. Macro Economy Context - National
BAPPENAS ASSESSMENT MARCH 2021 Ministry of Finance ASSESSMENT MARCH 2021
Mar-21 4

5. Key Messages
• The burden of responsibility of PLN is
very heavy on NON Commercial
Customers Base; More than 90%
customers are households, Consuming
45% of Power, Contributing to 41% of
Revenue
• Industry segment only covers 0.14% of
customers, yet contributing 31% - 32%
of Revenue and Powers
• Java Madura Bali (Jamali) and
Sumatera, contribute circa 85% in
customer and Revenue
FACT Sheet 2019
Realization of 2019;
Mar-21 5

6. Primer Energy Mix
Composition
MW %
PLN 43,187 59,36
IPP 20,463 28,13
PPU (Private) 3,582 4,92
IO (Izin Operasi) 5,465 7,51
EBTKE (govt) 55 0,08
72,751 100,00
Power Generation Capacity as per 2020
✓The majority of Power Generation dedicated to PLN group
✓The out of the box and radically sound policy required to reach the Goal
➔ Shifting Paradigm : Boost the role of Private Corp to Invest and Utilize
RE; PPU and IO
66.3
30
25
16.8
22 24
4.44
25
20
12.46
23
31
0
10
20
30
40
50
60
70
2020 2025 2050
Energy Mix
Existing and Goal 2019 - 2050
coal gas Fuel RE
Mar-21 6

7. Coal Utilization 2020
✓ Coal plays important role in
the economy and electricity
✓ As the world campaign for
decarbonization keep
increasing, domestic
utilization such as
briquettes need to be
seriously handled
Lap. Kinerja sub sektor Batubara
Juta Ton %
Export 429 76.47
Electricity 105 18.72
Others 27 4.81
561 100.00
Mar-21 7

8. PLN Customer
Composition (%)
✓ More than 90% customer base is
household, yet only contribute
around 40% of Revenue
✓ Tight room for business
development without sacrificing its
competitiveness
GWh
Sales
Customer Revenue
Household 42.34 91.99 41.14
Industry 31.74 0.14 30.91
Business 18.97 5.02 21.14
Others 6.95 2.85 6.81
Total 100.00 100.00 100.00
Realization of 2019; RUPTL
Mar-21 8

9. PLN Regional Base
Customer 2019
✓ More than 85% Sales Concentration in
Sumatera, Jamali
✓ On the other hand, more than 65%
primary energy is coal, the majority coming
from Kalimantan
✓ Significant RE potential in Sulawesi,
Maluku, Nusa Tenggara and Papua
➔ Open widely for Private Sector on Private
Public Utility basis to participate in RE
development, in Indonesia EXCEPT in
Sumatera and JaMaLi
Household Industry Business
Sumatera 19.54 8.86 13.76
JaMaLi 65.40 87.41 73.58
Others 15.06 3.73 12.69
100.00 100.00 100.00
RUPTL, 2020 -
Mar-21 9

10. The way BPP is
constructed
✓ Sales, Cost, Losses,
Operational all pooled to
Subsidy and Non Subsidy
Price
✓ Instrument through Tariff
Adjustment and Subsidy
from Govt
✓ KPI, Regulatory Supervision
and Audit Apply
➔ PLN to focus on serving
People
➔ The Government to
provide assistance in
remote and uneconomic
zones
Mar-21 10

11. PLN as a Corporate View on RE
✓ Balance of Supply –
Demand, System Readiness
and Economy viability
✓ System reliability, Price,
Sustainability of Supply
Need to think about :
✓ Development of Renewable
Energy integrated on
industry based
independently of PLN
✓ Deregulation of Solar PV on
mass production
Mar-21 11

12. How to fill the gap
Options to exercise :
Government :
✓ Tariff (Fit-in, selected adjustment)
✓ Volume guaranteed
✓ License and basic infrastructure and limiting
tax
✓ Non Commercial for Community energy equity
Yet :
✓ Limited Fiscal Cushion
PLN :
✓ Encouraged to put on RUPTL
✓ May oversubscribe to demand prediction and Financial
Corporate Burden
✓ Concern of BPP and portfolio strategy
IPP Developer on integrated basis
✓ Grant integrated PPU (Power Generation, Transmission,
Distribution)
✓ Creating New Market Clustered Demand
Yet
✓ Perceived to compete against Govt Corp, or may be
contested against UU Ketenagalistrikan
Mar-21 12

13. Supply – Demand – Infrastructures – Price – Regulation
Issues :
✓ Interconnection – Cluster – Special Economic Region
✓ Renewable is not major and urgent as per RUPTL
✓ How to create demand ➔ End to End : Bring End
Users
Mar-21 13

14. Supply – Demand – Infrastructures – Price – Regulation
• The Potential is there
• The competition and open market will increase efficiency
• Business means rent seeker
• Government need to revisit restricting regulation and maintain equally fair and sound ecosystem
New Paradigm required to implement :
Mar-21 14

15. Quote Figures from National Grand Strategy Energy
• Challenges Ahead
✓Dependence on coal,
crude and gas is
significant
✓Downstreaming Issues
➢Commerciality
➢Demand
✓Renewable Energy
➢PV : Deregulation
➢Hydro + Geothermal
➔ : Integrated PPU
Mar-21 15

16. How to Boost Renewable
Energy
• Upper Graph ( GSE) : RE to growth rely on Hydro – Solar PV –
Geothermal
• RUPTL does not match with GSE (RUPTL assuming max
increase 14 GW of RE in 10 years ahead)
• BAPPENAS : To reach economic growth, Private Investment
has to increase significantly
RE different characters :
Geothermal and Hydro : Big volume (economic of scale issue),
remote location yet reliable as baseload
Solar PV : Volume Size is flexible, available scattered yet
Not suitable as baseload, better as intermittent follower
Policy Suggestion :
1. For Hydro and Geothermal : Open market on integrated and
independence basis for Private Public Utilities Corporations
2. For Solar PV : Open and liberalize market on mass industrial
standard, debirocratise the permit, let the industrial
standard safety to regulate it, open opportunity either as
combination on grid to existing PLN, community cluster, off
grid, or remote area
3. Easines of tax as incentive. Limit and restrict direct subsidy
4. Keep Sumatera and JaMaLi as privilege to PT PLN (Persero)
Mar-21 16

17. The PLN Customer base
Revenue Portrait
Mar-21 17

18. Typical Challenge dan Opportunity EBT
Mar-21 18

19. RE Typical
✓Big Upfront CAPEX
✓Long Term Contract (for baseload
i.e Hydro and Geothermal)
✓Size matter ➔ potential high
capacity low utilization
✓Inter mitten Source of Supply (PV)
✓Relative lower OPEX
✓ Low Business Risk, high Financial Risk
✓ Easier to attract Financing Support
✓ Require reliable strong off taker
Mar-21 19

20. Mapping General Issues of RE
Typical Challenges Policy Suggestion
Solar ✓ PV is limited to offgrid, and non
commercial remote cluster
✓ Link to PLN RPUTL
✓ A very rigid Supply Chain
Ecosystem and Bureaucratic
Permit and Standardization
✓ Open integrated opportunity to all players on a level
playing field basis across the Country
✓ Merevisit PerMen 49/2018 dan perubahannya terkait
PLTS. Regulasi eksisting
- Ekspor listrik ke grid dihargai tidak full, hanya 65%
- Daluwarsa maks 3 bulan atas ekspor listrik ke grid
Geothermal Remote or environment
conservation
High Exploration Risk
High Upstream investment cost
Large Economic of Scale →
(potential over capacity, under
utilized)
✓ Grant Integrated PPU for Private Sectors out of Sumatera
and JaMaLi
✓ Cost consolidation on Energy Corp
✓ NO TAX and LEVY Pre Production Stage. Tax allowance on
reinvestment profit
✓ Strictly limit direct investment by Govt on exploration ➔
Govt Fund to refocus fighting Pandemic
Mar-21 20

21. Mapping General Issues Energi Terbarukan
Typical Challenges Policy Suggestion
Biomass ✓ Continuing Sustainable Feedstock
✓ Considered as carbon neutral (ex
plantation)
✓ Technical (energy quality, Corrosiveness)
✓ Cost of feedstock related to international
✓ Tipping Fee required
✓ Treat as waste management control in rural area
✓ BUMD allowing to all electricity end to end business
✓ No restriction on Wilayah Usaha Pengelolaan
✓ Reassess ketepatgunaan kelompok sasaran penerima
dana pungutan ekspor sawit.
Hydro ✓ Comprehensive Environment Assessment
✓ Highly dependence on Wilayah Usaha
holders(offtaker, transmission and
distribution)
✓ Remote area and no end user market
✓ Open the opportunity to Private or consortium to
develop end to end electricity business and ecosystem
✓ Required Leading Command Agency/ unit for
simplification of license, permit and standardization
✓ A level playing fields with PT PLN and Ultimate
Customers, limited out of Sumatera and JaMaLi
Wind ✓ Intermittent (highly depend on season)
✓ Land Surface Efficiency issues
✓ High Capital Cost
✓ Committed offtaker required
✓ Wind Electricity business as economy driver rather than
source of revenue
✓ SOE to participate in small scale and pilot Project
Mar-21 21

22. Concern Terkait RUU EBT
Rancangan Policy Concern
Supply Side :
- Dibuka secara luas kepada BUMN,
BUMD, BUMDes, Koperasi, Swasta
✓ Keterbatasan Permodalan dan Risk Profile Perusahaan non swasta
✓ Opportunity terbuka luas untuk pemodal besar/ swasta asing ➔ uneven playing field
✓ High Tech… Barang dan jasa procured di luar negeri ➔ literally low domestic multiplier effect
Demand Side :
- Prshn listrik milik negara wajib
membeli listrik
✓ Ultimate demand adalah masyarakat dan industry sesuai pertumbuhan ekonomi
✓ PLN memiliki berbagai sumber energi primer dengan struktur cost maupun commercial terms yang
beragam. Akan mempengaruhi primary energy portfolio yang robust
✓ Tugas utama PLN adalah menyediakan listrik yang handal dengan harga terjangkau kepada seluruh lapisan
masyarakat (non bisnis)
Price Side
- Pemerintah menetapkan Feed in
tarif
✓ Harga yang merefleksikan fairness di sisi supplier dan offtaker, hanya dapat terbentuk dengan kompetisi/
tender di mana PLAYERS suppliers dan buyers seimbang
✓ Pemerintah step-in mengkompensasi Prshn listrik negara sebagai offtaker untuk menjaga keekonomian
supplier listrik → meningkatkan resiko fiskal anggaran negara
Policy Suggestion :
✓ Pemerintah memberi kesempatan yang luas kepada NON Perusahaan listrik negara untuk pengusahaan ketenagalistrikan di sisi mata rantai hilir yang tidak
merupakan baseload
✓ Pemerintah memberi kesempatan yang luas dan seimbang kepada Non PLN untuk Usaha Kelistrikan Terpadu, along the value chain, untuk EBT baseload, di
luar Sumatera dan JaMaLi. Sumatera dan Jawa perlu diproteksi sebagai privilege untuk bisnis PLN agar kuat dan sehat sebagai korporasi dalam mengemban
tugasnya sebagai agent of development and public service obligation
✓ Subsidi Negara hendaknya langsung kepada END USER. INSENTIF dapat diberikan secara selektif kepada Korporasi yang aktivitasnya memberikan Direct
Added Value dan Multiplier Effect terukur di dalam negeri
Mar-21 22

23. Thank you
sampepurba@gmail.com
Instagram : sampe.purba
Linkedin : Sampe Purba
Twitter : sampe purba
Mar-21 23

24. The Things that Matter : Capex, Opex, Volume
Source : Levelized Cost of Electricity Indonesia, IESR 2019
Mar-21 24

25. Bioenergi
Surya
Angin
Panas Bumi Air
Arus Laut
▪ Potensi Sumber Daya :
9,3 GW
▪ Reserve :
14,6 GW
▪ Realisasi PLTP :
2,13 GW (0,49%)
▪ Potensi PLT Bio :
32,6 GW
▪ Realisasi PLT Bio:
1,859 GW (0,42%)
▪ BBN : 200 Ribu Bph
▪ Potensi PLTS :
207,8 GWp
▪ Realisasi PLTS:
0,15 GWp (0,07%)
▪ Potensi PLTA : 75 GW
Potensi PLTMH :19,3 GW
▪ Realisasi PLTA/PLTMH :
5,89 GW (7,85%)
▪ Potensi PLTB :
60,6 GW
▪ Realisasi PLTB:
0.148 GW (0,24%)
▪ Potensi PLTAL :
17,9 GW
▪ Realisasi PLTAL:
- (Tahap penelitian)
Mengurangi
Emisi CO2
• Peningkatan
Pemanfaatan
Energi Setempat
• Peningkatan
Ketahanan
energi nasional
Total
Potensi:
437,5 GW
Pemanfaatan
10,3 GW
(2,3%)
POTENSI ENERGI TERBARUKAN MELIMPAH
http://geoportal.esdm.go.id/peng_umum/
Mar-21 25

26. Selected PLN Statistics
Mar-21 26