This document discusses factors to consider for electricity purchase decisions in Indonesia. It outlines electricity generation and pricing in Indonesia, noting heavy reliance on fossil fuels like coal and oil. Grid electricity prices are regulated and subsidized. Expanding generation from renewable sources like hydro, geothermal, and solar is a national goal. The document also compares costs of electricity from the grid versus gas-fired or coal-fired captive power plants for a factory, noting factors like fuel costs and efficiency. Waste heat recovery and use of gas-fired heat pumps can further reduce factory energy costs versus grid or conventional options.

1. ENERGY ANALYSIS PLAYS AN
IMPORTANT ROLE IN PURCHASE
DECISIONS
RSM GC ADVISORY SERVICES (INDIA)

2. Energy Analysis Matrix
Primary Energy
Solid Fuel (Coal/ Pet Coke etc)
Liquid Fuel (HSD/ FO/LDO etc)
Gaseous Fuel (NG/LPG/Coal Gas etc)
Secondary Energy
Conventional Electricity from Grid
Open Access Power
R.E Power
Renewable Energy
Solar (Thermal & PV)
Wind
Geothermal
Alternative Energy
Producer Gas (from Biomass
Gasification)
Biogas (from digestion of bio-waste)
What are the options
available?

3. Important Macro Factors
Present Energy Situation in Indonesia
• Coal Reserve of 120.5 billion tons (146 yrs), 3.69 billion barrels (23 yrs),
101.54 trillion cubic feet (59 yrs).
• The country has significant potential of Hydro power (75,000 MW), mini
hydro (1013 MW), Geothermal Power (28,000 MW – 40% of world
reserve), Solar radiation (4.80 kWh/sqm/day), Wind Speed (3-6 m/s).
• 2013 figures suggest that annual primary energy supply of the country
was 1.61 BOE (barrels of oil equivalent)- Oil 46.08%, Coal 30.90% and
gas 18.26%, Hydropower 3.21%, Geothermal 1.15%, Bio-fuel 0.40% and
rest different biomass from woods and forest.

4. Largest economy in South East Asia
Important Macro Factors in Indonesia
• As per 2015 World Bank data the GDP of the country is US$ 861.93 billion
with an annual growth rate of 5 -6%.
• Being one of the founding member of OPEC, Indonesia left the organization in
2009.
• Energy Prices are highly subsidized in the country. In 2010 the combined fuel
& electricity subsidy was IDR 111.9 trillion (US$ 12.40 billion) out of which
allocation for fuel subsidy was IDR 57.46 trillion ($ 6.37 billion).
• Consequently, energy intensity is also high- 565 toe per million $ GDP
(compared to 439 toe of Malaysia, 191 toe of India and average 139 toe for
OECD countries) .

5. Net Oil Importer
Economic Transition in Indonesia
• Transition from energy export oriented economy to domestic manufacturing based
economy.
• Became net oil importer in 2004.
• However the country is still net exporter of natural gas.
• The Energy Elasticity of the country is also high – for every 1% increase in GDP,
energy demand rise by 1.6%.
• The projected energy demand for the year 2025 and 2050 are 380 and 980 MTOE
respectively.
• Present high oil percentage in national energy mix shall be reduced to half in the
future days.

6. • As per National Energy Conservation
Master Plan there will be radical shift
in energy mix by 2025 compared to
2011 figure.
• Coal generation is expected to go up
by three times.
• Gas generation will be more than
double
• Use of renewable energy will be more
than ten folds.
RKEN target Energy Mix by 2025
Shift from Oil dependency

7. Macro Factors
Energy Requirement of Composite Textile Unit
• Energy cost varies from 7% to 17% of the total
operating cost depending on scale of operation,
type of end products and country of operation.
• Use of Electricity is predominant: 80% or more
• Use of Thermal Energy is less: 8 to 20% only.

8. BUYING FROM THE GRID?
PUTTING UP CPP?
Keep both the options with pre-decided
power mix??
What Should I do for Electricity???

9. Grid Electricity as an option
Electricity
Regulatory
compulsions
Pricing
mechanism, social
& political factors
Reliability of
supply &
Power Quality
Power Mix in the
grid & availability of
primary fuel for
power generation

10. Present Electricity Tariff in Indonesia
Each segment has slabs based on installed power capacity. Highest
tariff is charged above 6600 VA contract demand.
• Low Voltage Consumers (all sorts of domestic, medium scale
commercial & street lighting): Rp 1355 per unit (INR 6.78/ kWh)- Max
• Medium Voltage Consumers (large scale commercial & medium
scale industry) : Rp 1042 per unit (INR 5.21/ kWh)- Max
• High Voltage Consumers (medium and large scale industries): Rp
933 per unit (INR 4.67/ kWh)- Max

11. Present Electricity Scenario
Generation, transmission & distribution is thru Government Utility
company PLN or their Licensees
• Total power generation is around 55,000 MW – out of which 30,000 MW by PLN
alone.
• Out of this 30 GW- 80% electricity is produced from fossil fuel like oil, coal, gas
etc. 18% comes hydropower while balance 2% from geothermal.
• Remaining 25 GW mostly comes from CPP of different industries or PLN
Licensees.
• Diesel generator accounts for around 60% of the total captive power where co-
generation contributes 25% only.

12. Generation Expansion Need of Indonesia (in MW)
Electricity demand is growing on an average rate of 7% per year

13. ADB Estimate & Trend Chart
Generation Cost vs. Tariff vs. Subsidy

14. Forecasting of Grid Power Price
Electricity Price going Up
1) Reducing subsidy by Government.
2) Fund needed for additional generation capacity
(cess etc).
3) Increasing over all power demand- specially
from industrial sector.
4) Grid expansion in remote areas (debt fund).
5) Increase of renewable energy in power mix.
6) Possibility of private participation in generation &
transmission

15. Forecasting of Electricity Price.
1) Shifting from Oil dominance to Coal
dominance
2) Increase in hydro power share
3) Falling Oil price / Coal price
4) Infrastructure funding by multilateral
agency
Electricity
Price going
Down

16. What about CPP based on Natural Gas?

17. Does coal price follow crude oil price??
What about CPP based on Coal?

18. Comparison of various Options
Energy Heat
Value
(Rp/
Kcal)
Net
operative
heat rate of
CPP
(Kcal/kWh)
Other
Operating
Costs
(Rp/kWh)
Cost of
Electricity
without waste
heat recovery
(Rp/kWh)
Cost of
Electricity with
Co-
generation(Rp/
kWh)
Electricity 1.211 - - - 1042
NG 0.4534 2717 181 1392 905
Coal 0.1471 3200 264 660 429
HSD 1.060 2073 116 2309 -

19. Use Gas based Heat Pump instead of conventional Chiller

20. Save Water, Electricity & Cost
Reduce GHG Emission
• Electricity consumption is reduced up to 90%
• Compressor (main load) is coupled with IC
engine which runs on NG
• Elimination of Cooling Tower operation
• Simultaneous production of hot water at no
additional cost- eliminates hot water boiler
• Waste heat of gas engine is also being used to
boost up hot water production.
• Also operates in reverse cycle (heating
application)
• Cut down up to 70% of operating cost.

21. THANK YOU FOR
YOUR TIME AND
ATTENTION