Ministry of Economy, Trade, and Industry (METI), Japan; Institute of Energy Economics, Japan (IEEJ); and The Foundation of Indonesian Institute for Energy Economics (IIEE) collaborated in conducting “Indonesia-Japan Workshop on VRE System Integration, Hydrogen and Low Carbon Technologies 2021” conducted on January 12–13, 2021. The workshop aimed to promote the integration of variable renewable energy (VRE), hydrogen, and other low carbon technologies into Indonesia’s electricity system.
Due to the Covid-19 pandemic, the workshop was conducted in a combination of online and limited offline participants in Bogor and implemented by enforcing health protocols. On Indonesia’s side, the workshop was attended by representatives from the Directorate General of Electricity (DGE) and Directorate General of New & Renewable Energy, & Energy Conservation (DGNREEC) of Ministry of Energy & Mineral Resources (MEMR), Indonesia Power, PLN, Ministry of Marine and Fisheries, Indonesian Electricity Society, Indonesia’s Renewable Energy Society, National Energy Council, ITS, ITB, IT-PLN, Swiss German University, and IPB. From Japan’s side, there were representatives from METI, Mitsubishi Corporation, Nichicon Corporation Under NECST (Nichicon Energy Control System Technology) division, Toshiba Energy Systems & Solutions Corporation, Kawasaki Heavy Industries (KHI), IHI Corporation, Mitsubishi Power, Organization for Cross-regional Coordination of Transmission Operators (OCCTO), Tepco Power Grid Inc., Sumitomo, and Kyudenko. The workshop was performed by four speakers from Indonesia and eleven from Japan.
The 2-day panel discussion was led by Dr. Kaoru Yamaguchi, Senior Researcher Fellow, Electric Power Industry & New and Renewable Energy Unit of The Institute of Energy Economics, Japan (IEEJ) and Ir. Senda H. Kanam, M.Sc., Head of Sub-directorate for Electricity Cooperation, Directorate of Electricity Program Supervision of Directorate General of Electricity, Ministry of Energy and Mineral Resources, Republic of Indonesia. During the workshop, the speakers both from Japan and Indonesia side shared information regarding each country’s VRE development, its potential, and challenges.
Lectures from Indonesia Side
The workshop was opened by a remark from the Directorate General of Electricity (DGE) of Ministry of Energy and Mineral Resources, the Republic of Indonesia, which was delivered by the Secretary of DGE, Ir. Munir Ahmad, stated that the Government of Indonesia will increase the share of new and renewable energy (NRE) in the energy mix of electricity generation by around 23% by 2025 to ensure national energy security in the electricity sector. Acceleration of energy diversification is achieved through the conversion of non-renewable fossil energy to renewable energy, for instance, PLTU (coal-fired power plant) co-firing system with biomass or through primary energy conversion, such as the conversion of PLTD (diesel) to NRE generators.
Currently, the energy mix for electricity generation until 2020 is still dominated by fossil energy, namely coal at 66.17%, and NRE around 14.03%. With the Covid-19 pandemic conditions, the electricity demand decreased and resulted in an excess supply of electricity in which disrupted the NRE development. Another problem related to NRE development is renewable energy plants with adequate capacity factors (hydro, micro-hydro, and geothermal), generally located in conservation areas, resulting in a relatively long development permit process and constraints on supporting infrastructure.
Tony Susandy, S.T., MBA (Head of Sub-Directorate for Various NRE Program Preparation of DGNREEC), in his presentation “Renewable Energy Related Electricity Policy in Indonesia”, stated that bioenergy, hydro, and geothermal dominate the renewables achievement where within last two years, the realization of installed capacity tends to increase due to the decrease of PLTS (solar power) and PLTB (wind power) technology’s cost. Intermittency will also be no longer becoming issues and the proven technology supporting NRE power plants could be utilized as base-load or peaker power plant. Current research of ocean energy, like oscillating water column (OWC), heaving device, ocean thermal energy conversion (OTEC), and sea current technology are also still ongoing.
The last five years’ data shows renewable energy & coal deployment tend to increase and oil & gas tend to decrease. Therefore, to accelerate renewable energy development, it requires a fast-track program to reach 23% by 2025 by focusing on quick installation and competitive price (low-cost productions) of renewable energy technology.
In the effort of CO2 emission reduction, the energy sector was targeted to contribute to reducing greenhouse gas (GHG) emissions for 314 million tons of CO2 by 2030, or 11% from the total BAU level of GHG emissions. Also, NRE utilization and energy efficiency programs are the main contributors to emission reduction.
In the issue of the energy transition, NRE development acceleration needs to consider the real energy demand, the fair economical value by giving the first opportunity to renewable energy resources, as well as minimizing intermittency factor. This is in line with the 5K principle of the Directorate General of Electricity in providing electricity to the community, as expressed by Ir. Jisman P. Hutajulu, M.M. (Director of Electricity Program Supervision, DGE) through his presentation. The 5 K’s are, Kecukupan (Adequacy), Keandalan (Reliability), Keberlanjutan (Sustainability), Keterjangkuan (Affordability), and Keadilan (Fairness).
To accelerate renewable energy, several steps need to be taken:
- Primary/Final Energy Substitution by using the existing technology; B30-B50, Co-firing, RDF Utilization
- Fossil Primary Energy Conversion, power plant technology needs to be replaced/converted. Diesel power plant (PLTD) or coal-fired power plant (PLTU) shall be replaced by NRE power plants and also the development of biogas and pellet for cooking.
- New NRE Installed Capacity to fulfill the demand by focusing on Solar Power Plant (PLTS)
- Non–electricity/Non-biofuel Utilization, such as briquette, agricultural product drying, and biogas.
Nevertheless, PLTU co-firing are now at the stage of testing and is expected to fill the 3% out 23% NRE achievement by 2025, said Dr. Ir. Muhammad Ahsin Sidqi, M.M., the President Director of PT Indonesia Power in his presentation. Rooftop solar PV, as one of the main objectives of NRE development (2020-2035), is targeted to be installed at a capacity of 2,904 GW. The total installation comprises of government buildings (42.9 MW), building and SOE Facilities (742 MW), industry and business (624,2 MW), household (648.7 MW), and PLN’s customers and social category (68.8 MW). The installed capacity among residential customers is 18.19 MWp (2,556 customers).
PLN, as stated by Ferdinan Manullang, S.T., M.Sc. (Engineer at PLN’s NRE Division), on the other side, has several strategies to develop NRE:
- The development shall consider the balance of supply-demand, system readiness, and economic feasibility
- Encourage the growth of demand especially for areas with very high reserve margins and accelerate the development in the deficit areas
- The synergy between parties who contributed to RE development between the regulator, developer, financing institution, and related stakeholders
of RE pipeline project:
- Diesel conversion program to NRE
- Co-firing (biomass) program on PLTU
- Hydro, geothermal, solar PV, wind, biomass, etc
As NRE usually has common challenges to be developed, here in Indonesia, PLN also considered the following issues that hampered the development of RE plants:
- Intermittency of variable renewable energy; which needs at least Grid code enforcement, is an additional cost for IPP and PLN.
- Optimization of local support; hence the readiness of local industries needs to be accelerated
- Limited sources to low-cost funding; to provide attractive conditions and affordable rates
- Low ease of doing business; due to constraints of licensing and land acquisition
Lectures from Japan Side
The opening speech from Japan side was delivered by METI regarding the condition of Japanese travel and electricity and the energy transition process in Japan which is carried out to reduce dependence on nuclear and encouraging energy efficiency and conservation, penetration of renewable energy, and efficient thermal power plants. Japan establishes a 3E + S policy on energy management with targets: Energy Security, Economic Efficiency, and Environment, and Safety as top priorities. Concerning energy security, Japan will achieve the fulfillment of domestic energy sources with a share of 25%, higher than before the Fukushima earthquake. In setting the 3E + S target, renewable energy is targeted in the long term towards energy independence economically and this plan will be reviewed periodically. The types of renewable energy that are the main targets are solar and wind.
To deal with the problem of network limitations, it is approached in a way to maximize efficiently the existing network. The Japanese “Connect and Manage” method is a solution to maximize the utilization of the network worked by OCCTO.
Japan will aim at increasing power generated by renewables up to 22-24% by 2030 and will make renewables primary generation sources. However, to develop renewable energy, the 3 main challenges that Japan must face are higher cost, grid constraints, and more flexibility. The price of renewables in Japan is decreasing, but it is still higher than the average world market price, therefore people need to pay a surcharge for the excess price. To overcome the higher cost of renewables, Japan implemented 2 (two) tariff systems, namely FiT and FIP. FiT refers to a fixed price, while FIP is based on market prices.
The VRE model requires a balanced pattern in times of low electricity demand which can be supplied from generators that produce excess electricity via the grid. Various solutions are offered such as a combination of hydrogen and battery or through the energy management system (EMS) to a hybrid model of a combination of energy sources including PV, wind power, small hydropower, biomass as introduced by Kyudenko. Toshiba specifically designed hydrogen energy management system throughout the whole business chain from production to utilization and introduced the hydrogen-based autonomous energy supply system, called “H2One”.
Also, V2X technology, which is applied in the form of electric car batteries that can be connected to housing, buildings, and networks, is an option to overcome the ups and downs of the production of renewables electricity stored in batteries as presented by Mitsubishi Corporation and the specific Vehicle to Home (V2H) Technology by Nichicon. NECST Nichicon developed both battery system and EV charging/discharging system developed according to market demands such as portable battery, virtual power plant (VPP) battery for V2G, large battery or systems for agriculture and offices. Utilizing a VPP to regulate the use of IoT-based remote electricity supply for users and suppliers is also a solution to overcome the instability of renewable energy systems.
Emphasis on developing hydrogen is in line with Japan’s energy policy to create a “hydrogen society”. In December 2017, Japan has established a basic strategy to make hydrogen a key contributor to achieving decarbonization, energy security and industrial competitiveness. Hydrogen is prioritized because of its non-toxic and odorless nature, no CO2 emissions when used (only water is emitted), and nothing to produce but electricity and heat.
Hydrogen sources can come from various types and in general are by-products of other types of energy such as by-product of oil refining (naphtha) process or gasification of brown coal stored in CCS called as blue hydrogen and through electrolysis process of renewable energy surplus, which is called as green hydrogen. Production of hydrogen at a low cost from unused/recyclable fossil fuel resources namely natural gas or coal can be a way to achieve a stable energy supply while suppressing the CO2 emissions which become the pilot projects of KHI in Australia, utilizing the Victorian brown coal into liquified hydrogen. KHI covers the value chain throughout the production, storage, and transport, as well as the utilization.
IHI Corporation and Mitsubishi Power, on the other hand, promote the use of blue hydrogen over green hydrogen technology through the use of fuel ammonia, due to the higher cost of producing green hydrogen. Fuel ammonia, as an energy carrier, contains the highest hydrogen per unit volume and can be used directly in a pulverized coal-fired power plant (CFPP) through the co-firing system with coal.
On the workshop, METI also stated that the effort to diversify the Japanese energy system is in the context of achieving Carbon Neutral by 2050 as stipulated by the Japanese PM in 2020. This decision was emphasized by Minister Kajiyama (METI) who stated the 2050 Carbon-Neutral Green Growth Policy, that carbon neutrality will lead to future corporate profits, creating a positive cycle of economic growth and environmental protection which will be achieved majorly through the use of hydrogen, storage batteries, carbon recycling, and offshore which will be achieved through setting concrete targets and target deadlines, development of systems such as regulatory standardization, and support measures to promote wide implementation, such as tax budgets, information, international collaboration, etc.
Possibility of Collaboration between Japan and Indonesia
During the workshop, there was a mutual discussion related to the exchange of information on the development of VRE in each country. The discussion also unveiled some collaboration possibilities between the Japanese companies and the Government of Indonesia, particularly the Directorate General of Electricity as well as Puslitbang Teknologi Ketenagalistrikan, Energi Baru, Terbarukan dan Konservasi Energi – P3TEK (Research and Development Center for Electricity Technology, New Energy, Renewable Energy, and Energy Conservation).