Bigger Share Given to Renewables in 2021-2030 Electricity Procurement Plan

Tuesday, 5 October 2021 - Dibaca 12072 kali

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 351.Pers/04/SJI/2021

Date: 5 October 2021

Bigger Share Given to Renewables in 2021-2030 Electricity Procurement Plan

The Ministry of Energy and Mineral Resources (EMR) validated the 2021-2030 Electricity Procurement Plan (RUPTL) of state utility PLN, giving a bigger share to new, renewable energy power plants.

The renewables target set in the National Electricity Master Plan (RUKN) is 23% by 2025, while the realized amount until the end of 2020 hit around 14%. Therefore, the government pays special attention to this issue when providing electricity in the future, Minister of EMR, Arifin Tasrif, has said during a webinar titled 'Dissemination of the RUPTL of PT PLN (Persero) of 2021-2030' held on Tuesday (5/10) in Jakarta.

"The 2021-2030 RUPTL of PLN is a 'greener' RUPTL because renewables power plants receive 51.6% of share, bigger than the share of fossil power plants of 48.4%," said Arifin.

The Indonesian government, continued Arifin, is actively participating in the fulfilment of the Paris Agreement goal. According to the Nationally Determined Contributions (NDC), Indonesia's energy sector is committed to reducing Greenhouse Gas (GHG) emission from Business as Usual (BaU) condition by 29% on its own and 41% with international support by 2030. To honor the commitment, Indonesia has formulated a roadmap to Net Zero Emission (NZE).

The global demands that industries use green energy and that electricity is generated by low-carbon sources have posed a challenge in Indonesia's energy provision. Additionally, the Covid-19 pandemic has created negative impacts on economic growth, and consequently on electricity demand. Large regional grids such as the Java-Bali and the Sumatra grids will likely experience an oversupply.

"The growth rate in the previous RUPTL does not reflect current condition. Therefore, an average growth of 4.9% is projected in the 2021-2030 RUPTL, from previously 6.4%. The 35,000 MW program will continue, and in the next two years, there will be an additional capacity of 14,700 MW, mostly from coal-fired power plants. Moreover, at the end of June 2021, the national Electrification Ratio had reached an average of 99.37%. However, special attention should be given to several provinces, namely East Nusa Tenggara, Maluku, and Papua," explained Arifin.

These challenges were taken into consideration in the preparation of the 2021-2030 RUPTL. After a series of lengthy discussions between the government and PT PLN (Persero) and taking into account the inputs from the relevant state ministries and agencies, the 2021-2030 RUPTL of PLN was set out in Decision of Minister of EMR Number 188.K/HK.02/MEM.L/2021 of September 28, 2021.

"By taking into account of PLN's condition, the 2021-2030 RUPTL of PLN can tackle any problems in the electricity subsector," added Arifin.

To fulfil the target for an additional capacity of 40.6 GW in the next ten years while considering PLN's limited capability to invest, the government has decided the RUPTL will provide Independent Power Producers (IPP) with a bigger role to develop renewables-based power plants. The new RUPTL does not contain any plans for new coal-fired power plants except those already reached financial close or under construction. This opens larger room for renewables development to replace the coal-fired generation plan existing in the previous RUPTL.

"With the cost of building solar power systems is becoming lower and construction time faster, to fulfil the 23% target of renewables mix by 2025, the share of solar power systems is increased than in the previous RUPTL. In addition, the renewables mix target will be met by biomass co-firing at coal-fired power plants with due consideration of the environment when providing feedstock," Arifin said.

Arifin also said that to improve reliability and increase the penetration of renewables which energy sources were far from demand centers, the government encouraged the development of electricity intra-island and inter-island connections.

"In 2024, the intra-connections of Kalimantan Island and Sulawesi Island are expected to complete as part of the government's plan for the interconnections of all large islands, namely, Sumatra, Java, Kalimantan, and Sulawesi. Next, studies will be conducted of the inter-island connections called the Super Grid, which will join large islands in Indonesia. This way, (the Super Grid) improves reliability as well as addresses an oversupply if it occurs in a large system," Arifin emphasized.

The government has also made efforts to ensure all villages in frontier, outermost, and least developed (3T) regions have electricity access to help meet the 100% Electrification Ratio target in 2022. Moreover, the government gives attention to villagers who cannot afford installation cost. Under the New Electrical Installation Aid (BPBL) program, a total of 80,000 electrical connections will be installed in 2022 with the State Budget allocated to the Ministry of EMR.

To increase the share of renewable energy and the distribution of electrical power for communities in 3T regions who have been served by diesel power plants, the government promotes a de-dieselizing program. De-dieselizing is conducted by replacing diesel plants with renewables plants according to the local renewables potential. Furthermore, the government encourages rooftop solar program to increase consumer participation in the use of clean energy.

"Finally, we ask all stakeholders to build synergy, to work together to create electrical installations that are safe, reliable, environmentally friendly, and greener according to the 2021-2030 RUPTL of PLN. We ask PLN to perform the RUPTL according to plan; it is a waste if the jointly agreed RUPTL is not followed through with procurement stage and realization. Please make sure all infrastructure planned in the RUPTL can start COD on time," Arifin concluded.

Transmission Also Given Special Attention

On the same occasion, Director General of Electricity, Rida Mulyana, said that in addition to generation plan, the government paid special attention to transmission plan. This is done to improve reliability, reduce Electricity Supply Costs (BPP), distribute electrical power from areas with an oversupply to those in deficit, and distribute power to Industrial Zones, Special Economic Zones, Smelters, etc.

"The government also focuses on how to increase the use of renewables resources to demand centers because renewables potential is usually far from these centers. Plans to develop distribution networks to communities without electricity access and increase active hours to 24 hours at isolated systems have also become the concerns of the government and PLN," Rida continued.

Rida emphasized that the government and PLN were very circumspect in preparing the 2021-2030 RUPTL of PT PLN (Persero), in terms of electricity demand, generation planning, transmission, and distribution. Considering its limited investment capability, PLN is encouraged to focus more on investing in the development and strengthening of power distribution system and the improvement of customer service.

In a similar vein, President Director of PT PLN (Persero), Zulkifli Zaini, said that PLN would make efforts to increase demand through aggressive marketing programs such as promoting the use of induction stoves and electric vehicles (EV) as well as other attempts in cooperation with the government to boost economic growth to create new demands in Industrial Zones (KI), Special Economic Zones (KEK), Priority Tourist Destination (DPP), Super Priority Tourist Destination (DPSP), etc.

"On the infrastructure side, PLN will minimize capacity addition of new infrastructure and relocate gas/combined-cycle power plants to needy areas to minimize investment cost and increase asset utilization as well as negotiate re-scheduling, with both IPP and fuel suppliers," continued Zulkifli.

The development of electricity infrastructure as planned in the RUPTL needs synergy between PLN and all stakeholders. The private sector, Independent Power Producers (IPP), and financial institutions play a major role in supporting the provision of large investment needed to realize safe, reliable, and environmentally friendly electricity installations.

For more information about Decision of Minister of EMR Number 188.K/HK.02/MEM.L/2021, visit the RUPTL PT PLN (Persero). (IY)

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