These are the strategies of major Indonesia energy companies. PT Pertamina, PT PLN, and PT Bukit Asam are state owned companies, while PT Medco Energy is coming from private sector.
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INVESTOR DAILY SUMMIT 2021
Pertamina, PLN, Bukit Asam, and Medco Commit 100% Clean Energy
Thursday, 15 July 2021 | 08:15 WIB
Ayu Retnaningtyas ,
By Rangga Prakoso
JAKARTA , Investor.id - PT Pertamina (Persero), PT PLN (Persero), PT Bukit Asam Tbk, and PT Medco Energi Internasional Tbk are 100% committed to producing clean energy and implementing the principles of environmental, social and governance sustainability
( environmental ,
social ,
and governance / ESG).
For this reason, Pertamina, PLN, Bukit Asam, and Medco will continue to increase the portion of new and renewable energy (EBT) to support the utilization of NRE by 22% in 2040 and
carbon neutral in 2060 as targeted by the government.
On the other hand, the government is currently drafting a number of regulations to encourage the development of EBT, including a presidential regulation (perpres) on the purchase price of renewable energy electricity by PLN and a presidential regulation on economic value or carbon trading (
carbon trading ). Apart from that, the government and the DPR are currently drafting the EBT Law (UU).
The government is also preparing a ministerial regulation (permen) of energy and mineral resources (ESDM) on rooftop solar power plants (PLTS), as well as a regulation on the assignment of conversion and hybrid diesel power plants (PLTD) by PLN.
This was revealed in the discussion on day 2 (session 5
) of the 2021 Investor Daily Summit (IDS) entitled
Unraveling Barriers to Renewable Energy Investment in Jakarta, Wednesday (14/7). IDS 2021 with the theme
Accelerating Growth Momentum will be held on July 13-15 2021 as a series of commemoration of the 20th Anniversary of
Investor Daily .
The event presented the Director General of New, Renewable Energy and Energy Conservation (EBTKE) of the Ministry of Energy and Mineral Resources Dadan Kusdiana, President Director of Medco Energi Internasional Hilmi Panigoro, President Director of Bukit Asam Suryo Eko Hadianto, President Director of Pertamina Nicke Widyawati, and PLN President Director Zulkifli Zaini.
Target NRE power generation
Three Pillars of Business
Pertamina's President Director, Nicke Widyawati, revealed that Pertamina has outlined three business pillars in the future when Indonesia has entered the era of clean energy or
net-zero emission , namely petrochemicals, gas and EBT.
“These three
lines will become Pertamina's pillars in the future. The finished refinery produces petrochemicals with extraordinary prospects, gas will still exist but will go downstream, then NRE. We will not abandon the company's
core in upstream oil and gas, but will be equipped with downstreaming," said Nicke.
According to him, once we enter the era of clean energy, it does not mean that fuel oil refineries (BBM) will be retired. The company is currently integrating its refineries with petrochemical plants. The reason is, even in the era of
net-zero emissions , the need for petrochemical products will continue to grow.
“The demand for petrochemicals is tremendous in all sectors. So we built a petrochemical plant in the refinery area to mitigate the risk of
fuel (BBM) business continuity ," he said.
Nicke explained, through PT Pertamina Power Indonesia (PPI), his party will develop an EBT power plant. In detail, by 2026, PPI targets the development of solar energy,
biomass , biogas,
smart grids , and others by 1.9 GW, geothermal 1.1 GW, clean energy plants such as 6 GW of gas, and other initiatives, such as the vehicle ecosystem. electricity, and 1 GW of hydrogen.
Nicke Widyawati, President Director of PT Pertamina, in discussion session 5 on day 2 of the Investor Daily Summit 2021 forum, Wednesday (14/7/2021). IDS 2021 with the theme Accelerating Growth Momentum is a series of 20th Anniversary of Investor Daily. Photo: Investor Daily/David Gita Roza
The use of gas, said Nicke, is still being carried out because it is an intermediary for the transition from fossil energy to renewable energy. In addition, if the entire energy supply is sourced from renewable energy, its development will take a long time. On the other hand, there is a need for reliable supply, where gas generators can be the base load bearers.
"Indonesia has huge gas reserves, so gas development as
primary and downstream must also be increased," he said.
He added,
net-zero emission does not mean there are no more greenhouse gas emissions. However, the resulting emissions can still be
offset by the use of green energy or other efforts. In the Grand National Energy Strategy (GSEN) prepared by the Ministry of Energy and Mineral Resources, there is still a portion of gas.
"Pertamina's vision is to
unlock the potential of Indonesia's resources. Because after energy security, we also have to realize energy independence and sovereignty,” said Nicke.
Carbon Management
Meanwhile, the President Director of Bukit Asam, Suryo Eko Hadianto, presented the concept of Indonesia's carbon management in responding to the
Paris Agreement . With this concept, carbon reduction must be taken into account, not just a carbon tax, but also a carbon credit transaction. Companies that have purchased carbon credits get a tax reduction or reduction. In contrast, companies that do not seek to reduce carbon are subject to high taxes.
"If we make a
carbon trading system , I believe that Indonesia's carbon reduction will be well
managed . All companies that produce carbon emissions will be moved by themselves," he said.
Suryo revealed that Bukit Asam had turned post-mining land into a solar power plant (PLTS). Thousands of hectares of former mining land are now planted with solar panels to generate electricity. It is recorded that around 430 megawatts (MW) of energy will be harvested every day from the field.
Suryo Eko Hadianto, President Director of PT Bukit Asam Tbk, in discussion session 5 on the 2nd day of the Investor Daily Summit 2021 forum, Wednesday (14/7/2021). IDS 2021 with the theme Accelerating Growth Momentum is a series of 20th Anniversary of Investor Daily. Photo: Investor Daily/David Gita Roza
The three ex-mining areas are located in West Sumatra, South Sumatra and East Kalimantan. The mining lands were converted into PLTS locations as a form of mine reclamation. "To generate 1 MW requires one hectare of land. Many investors are interested, this is the future of Bukit Asam," he asserted.
Suryo said the land in Ombilin, West Sumatra is capable of producing 200 MW. Then in Tanjung Enim, South Sumatra can produce 200 MW of solar energy. Meanwhile in Bantuas, East Kalimantan, it produces 30 MW.
The cost of construction and solar panels for 1 MW reaches Rp 10 billion. These costs do not include land. If the land acquisition component is included, the PLTS costs will swell. "Our strength in developing PLTS is because the land has been acquired," he said.
The solar power business, according to Suryo, is nothing new for Bukit Asam. Since last year, the company has installed PLTS in collaboration with PT Angkasa Pura II (AP II) with a capacity of 241 kWp. Bukit Asam is also exploring with other airports.
In addition, the company will build a floating solar power plant in Inalum's Sigura-Gura DAM. In fact, Bukit Asam is exploring PLTS cooperation with toll road operators. "This is our effort to support the energy
mix target of 23 percent in 2025," said Suryo.
Pertamina's energy mix
Legal certainty
President Director of Medco Energi, Hilmi Panigoro, said that investment in EBT projects is large and long-term. "Therefore, there are three important things that must be maintained, namely legal certainty, ease of doing business, and economic value," he said.
Hilmi explained, the entire NRE community really misses seeing the EBT Law which is credible, consistent, and is followed by legal instruments and easy-to-understand implementation.
“It needs to be consistent, because
historically it often changes. Sometimes the energy minister changes, policies change again, so investors are a bit scared. I hope that the EBT Law really provides legal certainty, is credible, and is easy to understand. We also hope that the department that handles EBT will implement a one-stop-shop policy like SKK Migas," he said.
Regarding ESG, Hilmi Panigoro emphasized that ESG is a must for energy companies such as Medco. “Many of our projects are still being financed with debt securities. We sell to the international market, if we don't have a comprehensive ESG program, we can't
deliver the milestones consistently, so the
cost of funds automatically increases. So, in order for our projects to be economical and
sustainable , ESG is a must," he said.
Hilmi admitted that he was amazed by Pertamina's efforts to conduct a study of
carbon capture storage (CCS)
utilization and that the
pilot project had been carried out. CCS is one of the global warming mitigation technologies by reducing CO2 emissions into the atmosphere. He is confident that in the next 3-5 years it will be successful, so that the lifespan of a clean but fossil power plant can be extended.
"We as an energy company are committed to helping the government towards
carbon neutral 2060. Hopefully it can be faster," said Hilmi.
Hilmi Panigoro, President Director of PT Medco Energi International Tbk, in discussion session 5 on day 2 of the Investor Daily Summit 2021 forum, Wednesday (14/7/2021). IDS 2021 with the theme Accelerating Growth Momentum is a series of 20th Anniversary of Investor Daily. Photo: Investor Daily/David Gita Roza
He emphasized that Medco is committed to becoming a
carbon neutral company . "We have been preparing for the
sustainable development framework since 2015. Although the government has determined that it will achieve
carbon neutrality by 2060, Medco hopes that the achievement will be faster," he said.
Hilmi also revealed that Medco applies renewable energy for internal use (
renewable energy to internal ). One of them is building solar PV in the company's operational areas. Other initiatives are gradually starting to replace all operational vehicles with electric vehicles (
electric vehicle / EV).
Through the Medco Power platform, according to him, Meco is focusing on building clean energy. “Which has already been running, among others, in Bali, we built a 50 MW
solar power plant and
geothermal .
The ongoing
geothermal is in Ijen, with a capacity of 110 MW. Then together with Pertamina Power, we are working together to see the potential for a 1,000 MW
geothermal project ," he said.
Regulatory Improvement
According to the Director General of EBTKE at the Ministry of Energy and Mineral Resources, Dadan Kusdiana, the ministry is currently drafting a number of regulations to boost NRE development. "We are finalizing the preparation of a presidential regulation on the purchase price of EBT electricity by PLN," he said.
In addition, according to Dadan, the government is currently drafting a presidential regulation on the economic value of carbon or
carbon trading . “It is in the final process of initialing the ministers. This will provide support for NRE.
Carbon trading has also been discussed to encourage renewable energy,” said Dadan Kusdiana who represents the Minister of Energy and Mineral Resources Arifin Tasrif.
He added that the ESDM Ministry is also preparing a ministerial regulation (permen) of ESDM regarding rooftop solar power plants (PLTS). Another regulation that is still being drafted is a regulation concerning the assignment of conversion and hybrid diesel power plants (PLTD) by PLN. At the same time, the DPR is also drafting the EBT Bill.
Dr. Ir Dadan Kusdiana MSc, Director General of New, Renewable Energy, and Energy Conservation in discussion session 5 on day 2 of the Investor Daily Summit 2021 forum, Wednesday (14/7/2021). IDS 2021 with the theme Accelerating Growth Momentum is a series of 20th Anniversary of Investor Daily. Photo: Investor Daily/David Gita Roza
"We have discussed several times for further processes, so that this law can be submitted to the government for later discussion and finalization," he said.
Not only regulations, he said, the government has also provided a number of incentives for NRE development, such as tax relief (
tax allowance ), import duty (BM) facilities, and tax exemptions for a certain period of time (
tax holiday ). There is also an attractive funding offer from PT Sarana Multi Infrastruktur (Persero).
“We see that renewable energy has the potential to be exported to neighboring countries. So, we are reviewing the use of large PLTS and PLTA which can be an economic driver and sold to neighboring countries," said Dadan.
The government, according to him, targets the development of renewable energy to increase by 38 gigawatts (GW) in 2035. Currently, the utilization of renewable energy is only 10.4 GW of the potential that reaches 417.8 GW.
Bukit Asam NRE Plan
Regulatory Support
Pertamina President Director Nicke Widyawati said that the acceleration of EBT development requires government support in the form of regulations that guarantee the project's economy and supply of raw materials. Moreover, some of these types of energy are still in the stage of being developed.
In the past 2-3 years, according to him, the development of geothermal energy potential is quite slow because its development is constrained by economic constraints, namely the selling price of geothermal electricity to PLN. If it is too high, the price of green energy electricity can increase the cost of production (BPP) of PLN electricity.
“This requires a breakthrough in the revision of the presidential regulation (regarding the price of EBT electricity) so that the geothermal potential of 28 gigawatts (GW) can be developed. The same thing is needed in the development of hydrogen," he said.
For biodiesel development, Nicke said that Pertamina is ready to increase the portion of the mixture to 40% (B40). However, once it has entered B40, it is necessary to guarantee the continuity of biodiesel supply.
Currently, the company is collaborating with PT Perkebunan Nusantara (PTPN) to develop biodiesel from upstream to downstream to improve the economy and guarantee supply. However, government support is still needed regarding supply guarantees.
For the utilization of
Carbon Capture, Utilization, Storage (CCUS) technology, according to Nicke, Pertamina plans to apply it for upstream oil and gas operations, especially for advanced
oil recovery (EOR) activities. With this technology, carbon emissions from upstream oil and gas operations can be reduced, but oil and gas production can still be increased.
Nicke Widyawati said, to anticipate the growth of the share of NRE in Indonesia's energy mix, Pertamina developed a number of projects and activities to add to its green energy portfolio. There are eight Pertamina strategies.
First, he said, Pertamina will increase its PLTP capacity from the current 672 MW to 1,128 MW in 2026. Currently, the company is working on three PLTP projects, namely Sungai Penuh 1x55 MW, Lumut Balai Unit-2 55 MW, and Hululais 2x55 MW.
In addition, Pertamina is conducting exploration in several of its geothermal blocks, namely Seulawah, Hululais Extension, Gunung Lawu, and Kotamobagu. Pertamina is also developing green hydrogen (
green hydrogen ). "We are currently reviewing the roadmap for the development of
green hydrogen and
blue hydrogen ," he said.
Pertamina is also building a green hydrogen plant with a capacity of 22-100 kg per day in the Ulubelu Geothermal Block with a target for commercial operation by 2022. Third, Pertamina is also joining the Indonesian Joint Venture Battery Company to produce electric vehicle batteries of up to 140 gigawatt hour (GWh) by 2020. 2029.
The company will also build an electric vehicle battery ecosystem, in the form of a battery exchange and recharge station. "We hope to provide the development of increasing electric vehicles in national transportation," said Nicke.
Fourth, according to him, Pertamina will carry out gasification. Not only expanding the use of gas, the company will encourage downstream gas production by producing methanol. Pertamina will build a methanol plant with a capacity of 1,000 kilo tons per year (
kilo tonnes per annum / KTPA) with a target of operating in 2025.
Fifth, said Nicke, Pertamina will build a
green refinery with a total capacity of 6-100 KTPA by 2025. Three Green Refinery projects, namely Cilacap Refinery Revamping Phase-1 utilizing RBDPO with a capacity of 3,000 bpd and Phase-2 6,000 bpd, and The Green Plaju refinery will process crude palm oil (CPO) with a capacity of 20 thousand bpd.
Sixth, according to Nicke, the company will increase the use of bioenergy. Pertamina will build a biomass or biogas power plant with a total capacity of 153 MW by 2026, develop biodiesel and biogasoline, and produce green crude oil from algae and ethanol with a capacity of 1,000 KTPA by 2025.
Seventh, Pertamina will implement a
circular carbon economy in several areas,
recycle (recycling), namely through the use of
biomass and biogas,
reduce (reduce emissions) by developing PLTS, electric vehicles, and LNG bunkering, and
reuse (
reuse ) CO2 for dewatering. advanced oil (EOR) and methanol.
Pertamina is also involved in the development of a
dimethyl ether (DME) plant that can replace imports of 5.5 million tons of liquefied petroleum gas (LPG) per year in 2025. :Then, we will build a number of renewable energy-based power plants in 2020-2026, namely power plants based on solar 4-910 MW, wind 225 MW, and water 200-400 MW," he explained.
Pertamina, according to Nicke, will increase the share of new and renewable energy in the company's energy mix to 17 percent by 2040. This step is taken to support the government's policy for the portion of new and renewable energy to reach 22 percent in the same year.
"Assuming an average energy demand growth of 2.1 percent, Pertamina will contribute 71% of energy supply or 5.3 million
terra joules ," he said.
To realize this initiative, his party has allocated a total
capital expenditure (
capex ) of US$ 92 billion for 2020-2024.
PLN Focus on EBT
On the other hand, the President Director of PLN, Zulkifli Zaini said, the development of EBT is aligned with the level of electricity
supply and
demand . As a result, the state-owned electricity company prioritizes the development of EBT in eastern Indonesia.
According to Zulkifli Zaini, the condition of electricity supply in Sumatra, Java, and Kalimantan is oversupplied until 2028. As a result, EBT plants built in these areas will further increase the oversupply condition. Especially now that the Covid-19 pandemic has reduced electricity demand.
"EBT development should pay attention to the alignment of
supply and demand . This means that if in one area there is more electricity supply, we will not build NRE there, because it adds to the
oversupply ," he said.
Zulkifli Zaini, President Director of PT PLN in discussion session 5 on the 2nd day of the Investor Daily Summit 2021 forum, Wednesday (14/7/2021). IDS 2021 with the theme Accelerating Growth Momentum is a series of 20th Anniversary of Investor Daily. Photo: Investor Daily/David Gita Roza
Zulkifli revealed that the discussion on renewable energy development that had been held so far was more focused on supply. On the other hand, there is little that discusses the question of demand. “Supply cannot exist without demand. Therefore, the campaign for the use of induction cookers and electric cars is an effort to increase electricity demand," he said.
Zulkifli explained that the development of EBT power plants will be prioritized in Sulawesi, Maluku, Papua and Nusa Tenggara. It is estimated that there is a potential of around 17 MW that can be developed.
"We should not impose EBT in places that are
over-supply , because the end must be paid for by the state. We can make an EBT Law which in the end does not take into account the alignment of
supply and demand , and PLN is obliged to buy it. That's an option," he said.
Zulkifli Zaini also hopes that there will be more and more domestic industries engaged in EBT equipment. The reason is that until 2060 around 230 gigawatts (GW) of electricity supply will come from EBT plants.
Solar electricity is getting cheaper as solar panel technology is getting more sophisticated. However, PLTS is intermittent which produces electricity as long as the sun shines. This means that the energy storage battery is needed which will be distributed at night.
"The cost of PLTS could be cheaper but the cost of the battery is now US$ 15
cents per kWh. The total cost can be up to US$ 20
cents per kWh. In the end, it is expensive," said Zulkifli.
Zulkifli Zaini revealed that the battery's ability to store energy gradually decreases every year. In the end in the fifth year had to undergo a change. Things like this are PLN's concern in considering the implementation of 100% renewable energy.
“Renewable energy that is intermittent in nature must be complemented by energy that is
baseload . If we force NRE without the capability of the domestic industry, we will become the biggest importer. We must be able to develop the capabilities of NRE equipment. Don't become an EBT importer," he said.
Editor :
Abdul Aziz (
abdul_aziz@investor.co.id)
Source: Investor Daily
Pemerintah tengah menyusun sejumlah regulasi untuk mendorong pengembangan EBT.
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