Aurelia Micko - USAID Indonesia Clean Energy Development Programs
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7/31/2019 Aurelia Micko - USAID Indonesia Clean Energy Development Programs
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USAID Indonesia Clean Energy
Development Programs
ADB Asia Clean Energy Forum
Manila, June 8, 2012
Business Opportunity In Small Scale Renewable EnergyDevelopment
(Hydro, Biogas and Biomass)
7/31/2019 Aurelia Micko - USAID Indonesia Clean Energy Development Programs
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Topics
• Overview of Indonesia’s clean energy opportunities and
constraints
• Overview of USAID Indonesia Clean Energy Portfolio• Overview of USAID Indonesia Clean Energy Programs
Development (ICED)
• ICED approach in project assistance
• ICED Inventory & Pipeline of renewable energy projects
• Financing consideration in renewable projectdevelopment
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Republic of Indonesia
• 17,500 islands, 33 provinces, 246 million people
7/31/2019 Aurelia Micko - USAID Indonesia Clean Energy Development Programs
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Indonesia Condition – Abundance of renewable energy
resources (rivers, ag. waste, Solar etc)
– Electricity shortages, unservedcommunities – Rising cost of oil, natural gas and coal – Government targets for RE, EE and
GHG emissions reduction
CE Development Opportunities – Attractive feed in tariff rate – PLN as the single buyer – Standardize and clear Power Purchase
Agreement (PPA) terms and condition – Reduces subsidy to PLN by reducing
use of diesel – Banks, FIs and private equity financing
CE Development Challenges – Lack of Project Financing – Undercapitalized developers sponsors
with limited track record; – Limited operating projects as examples – Limited domestic capability in equipment
and services
USAID Project Approach – Assist in improveing policy framework at
national and regional level – Standardize PPAs & other agreements – Link financing sources with high quality
projects and companies – Show case success stories, share
lessons learned
Indonesia has opportunities and challenges in developing CE Projects
7/31/2019 Aurelia Micko - USAID Indonesia Clean Energy Development Programs
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GOI Priorities in Energy Sector GOI Key Policies• Energy Security :
• Dependence on fossil fuels innational energy supply
• High growth of energy demand(7%/year) and electricity
demand (9%/year)• Limited access to energy:
electrification ratio in 2011 isstill around 73%.
• Energy Diversification to increase renewable energyshare in the National Energy Mix from 5% in 2011 to17% in 2025.• Energy Law No. 30-2007 – emphasis on new and
renewable energy.
• Electricity Law No. 30-2009 – allows greaterinvolvement of private sectors (Independent PowerProducers or IPPs).
• Feed-in tariffs for small renewable energy IPPsand excess power (<10 MW) and set PLN’s
obligation as buyer• New vision of 25/25 – 25% renewable energy in
2025
• Reduce carbon emissions fromenergy sector to meet GOIcommitment of 26%
• RAN-GRK – Presidential Regulation 61/2011 onNational Action Plan to Reduce GHG Emission (NAPGHG Emission).
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GOI Priorities USAID Activities
• Increase renewable energy sharein the National Energy Mix from5% in 2011 to 17% in 2025.
• Increase electrification ratio from73% in 2011 to 95% in 2025
• Development of renewable energy sector (under 10MW) through:• Facilitate project implementation:
• Resource mapping in three geographic focusarea (Aceh, North Sumatra, Riau) using GIStechnology
• Technical assistance to small scale projectdevelopers in project implementation
• Match-making between project developers,investors and financiers
• Build local capacity:• Support local government’s programs on
renewable energy development• Capacity building for financial institutions on
project assessment for investment decision• Enabling environment:
• Gap analysis on current GOI policies andincentives
• Support PLN in PPA standardization
• Support improvement of coordination at locallevel (i.e. through energy working group)
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USAID Indonesia Comprehensive Partnership
GCC/Clean Energy Portfolio
Programs Period of
Implementation
Implementing Partner Total Planned
Budget
CDCP - Private Financing Advisory Network(PFAN)*)
2010-2011 ECO Asia/Winrock $700K
Indonesia Clean Energy Development (ICED) 2011-2014 Tetra Tech ES. $16 million
Grant - Capacity for Indonesian Reduction of Carbon in Land use Energy (CIRCLE)
2011-2014 Winrock Intl. $1.4 million
Grant - Climate Change Mitigation (to beawarded)
2012-2014 TBD $1.1 million
University Partnership - GeothermalEducation Capacity Building Program
2011-2014University of SouthernCalifornia & ITB (with
support from Star Energy)$640K
TBD Energy Program/Credit Guarantee TBD TBD $2.2 million
Note: *) completed in June 2011; results: facilitated 4 projects (2 hydropowers, 2 biomass) to financialclosure with total capacity 77 MW and financing leveraged $88 million.
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USAID Programs Key Deliverables by September 2014
• ICED • 120 MW clean energy generated• 4 million tons CO2-e emissions from energy sector avoided• 1.2 million people get access to clean energy• 20 clean energy projects installed• $120 million public and private funding leveraged• 20 institutions strengthened
• CIRCLE • 3 Palm Oil Mill Effluent (POME) – methane capture to powerprojects installed
• Feasibility study for another 8 POME-methane captureprojects
• Promote sustainable certification practices in palm oilindustries
• University Partnership – Geothermal EducationCapacity Building
• Strengthen ITB Master Degree program for GeothermalEngineering
• Help produce 40 graduates per year• Provide scholarship to 10 students• Initiate link between geothermal industries and education
program
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Clean Energy Project Sites
Legends: ICED Project Sites
CIRCLE Project Sites
University Partnership
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ICED offers a variety of services to stakeholders :
ICED
Governments / PublicClean Energy Project Dev.Assistance Facility
PLN
Clean Energy InformationExchange
Private Grants
Stakeholders ICED Services
National
Provincial Regional (Kabupaten) Communities
Project Developers Companies / Project Owners Banks / Financial Institution
PLN Headquarter PLN Regional Office
CE Project feasibility On-grid / Off-grid RE Project dev. Energy efficiency Project dev.
Community Based CE Projects Innovation application of CE Activities knowledge sharing
CE financing networks
CE project database and GIS Capacity building & awareness
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ICED project takes a “project implementation driven” approach to increase investment and utilization of clean energy.
Viable CE
Projects
Adviseproject
developers
Buildcapacity of
banks
Addresspolicyissues
Increaseawarenessof CleanEnergy
ICED
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Currently, ICED is assisting to 22 renewable energy projects and 1 energy efficiency project:
• ICED identified 95 CE Projects in Indonesia (mainly N Sumatera,Riau and Aceh) representing estimated 539 MW equivalent;
• Approximately 52% of identified projects are Mini Hydro Power Plantwhere mostly located in North Sumatera;
• Average size of mini hydro power plant and biomass power plant is 3to10 MW, while biogas power projects are below 3 MW;
• Average Investment for mini hydro power plant is in a range of US$1,500 to US$ 1,000 per Kilowatt install; Whilst for Biomass PowerPlant is in a range of US$ 900 – US$ 1,500/kW and Biogas PowerPlant is in a range of US$2400-2700/kW
• Average project development cycle is less than 1 year for
biomass/biogas, 2-3 years for mini hydro power projects
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ICED Project Inventory categorizes CE projects into 5 stages of development
Planned
Project identified from primary data Some interest showed from project sponsor to developed CE Projects;
Preliminary Assessment has been done (Pre-feasibility Study)
Potential
Project identified from secondary data (PLN, BPS, local government) No study has been done No sponsor identified
UnderDevelopment
Final Feasibility Study has been done; Process of acquiring permits is started; Process of acquiring PPA is started
Operating
Construction completed Projects installed and commissioned
Energy produced/saved, GHG emissions reduced
I C E D
P R O J
E C T I N V E N T O
R Y
1
2
3
4 PPA and permits are completed Financing is established Start construction process
FinancialClosure
5
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4
2 2
4
16
12
24
Hydro
42
Biomass
28
3
18
1
Biogas
24
1
7
ICED Project Inventory(Number of Projects)
Operating
Financial Closure
Under Development
Planned
Potential
2534
14
14
134
161
Hydro
343
Biomass
175
12
44
93
Biogas
17
3
Planned Financial Closure
Under Development Operating
ICED Project Inventory(In Megawatt Equivalent)
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44
9
8
37
15
14
2
Hydro
42
0
1
Biomass
280
Biogas
25
1
ICED Project Inventory by Province(Number of Projects)
North Sumatera
Aceh
Rest of Indonesia
Riau
ICED Identified Projects Location by District (Kabupaten)
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ICED supports viable CE projects to create replicable models for future development…
• Work with multiple partners with vested interest in successfulproject development (project developers, banks, industries,
PLN, local government) to create ICED portfolio.
• Provide critical “pre-financing” technical assistance and transfer
analytical tools to decision makers to ensure viability ofprojects.
• Integrate CE projects in order to meet energy and systemplanning, GHG emissions reduction, rural access, and privatefinancing objectives.
• Create “commercial” project development models, including
standard agreements, that can be applied and replicated
throughout Indonesia.
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ICED Findings
CE projects moving from CDM to
commercial financing models; Sufficient financing available, but not
the right financing products;
Developers and banks/FIs do not fullyidentify, mitigate and allocate risks indeveloping, constructing and operatingprojects
Private equity sources looking forholding companies, not individualprojects
Developer/sponsor equity tied up in pre-financing studies and/or financing firstproject
Future Needs
Increase familiarity with non-recourse,
and limited recourse project financing Remove limitations on commercial bank
lending;
Build capacity in stakeholders to betterassess viability of CE projects, inparticular risks;
Channel “donor development funding” tocomplement commercial financing (e.g.,reduced interest rates, longer term)
Build inventory of “financeable” projects
and developer/sponsors
Additional incentives in tax treatment,infrastructure (e.g., transmission
interconnection)
Findings and future needs in financing for Clean Energy Projects:
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For more information, please contact:
Aurelia Micko, USAID/Indonesia Environment Office Deputy
Director, [email protected]
Retno Setianingsih, USAID/Indonesia Environment Office,Energy Specialist, [email protected]
TERIMA KASIH