We should really support this
program because the main problem that the government wants to address through
this program is the problem of urban waste which is already very severe. So the
spirit of issuance the Presidential
Regulation No. 109 year 2025 is to overcome the waste problem in all cities in
Indonesia which is very urgent at this time which is different from the spirit
of Presidential Regulation No. 35 year 2018 which is more about the development
of PLTSa (electricity from waste). This
is evident from the terminology used currently with PSEL (Waste Processing into
Electrical Energy) which shows that waste is the first priority of this program
and is different from the previous program with the terminology of PLTSa, where
electricity is the main priority not the waste. In fact, the previous program is less successful because the PPA
(Power Purchase Aggrement) process with PT PLN involves many parties, very
complicated and lengthy aspects. The program with the previous Presidential
Regulation No. 35 of 2018 which targeted 12 cities in Indonesia has not been
successful in promoting the PLTSa program as an alternative energy source and
waste utilization and in actually waste problem is getting worse.
The latest Presidential
Regulation No. 109 of 2025 is considered to simplify the PPA process with PT
PLN, reduce the number of parties involved, and eliminate tipping fees from
local governments and other potential waste producers. This makes waste
management the sole responsibility of the IPP in the landfill area. This is
expected to drastically reduce complaints about the mounting waste by reducing
the volume of waste.
We must support the spirit of
the PSEL program to address the urban waste problem and immediately benefit
from electricity through a simplified PPA system. Furthermore, the PSEL program
is expected to provide a strong momentum for building a "renewable energy
ecosystem" in the energy transition towards sustainable energy
independence in Indonesia.
However, there are many things
we need to improve to achieve that.
With the current electricity
oversupply of PLN, especially in Java Island, where by 2024 alone in 4 GW (Giga
Watt), it will be difficult for PT PLN to absorb PSEL electricity if at the
same time the construction of PLTS
(solar PV) is very intensive even though it is limited by an annual
quota.
The current major waste
problem is more prevalent in large cities on the island of Java and Bali, which
average around 1,000 to 2,000 tons per day of waste production, while DKI
Jakarta is the highest contributor at around 8,000 tons per day. If 1,000 tons
of waste can produce 20 MW (Mega Watt) electricicty, then with a plan of around
33 PSELs and estimated around 20 units on the island of Java, there will be
around 400 MW of additional electricity on the island of Java-Madura-Bali
(Jamali), this is also a large amount for PT PLN Jamali which has a capacity of
around 46 thousand MW but the peak load in 2024 is only around 28 thousand MW
In terms of price, 20 cents
per kWh is very high compared to other electricity sources. This high price
will complicate PT PLN's routine financial management and disrupt its routine
operations. It will also make it difficult for PT PLN itself to invest in
electricity from renewable energy sources. The difference between the purchase
price of electricity from the private sector/IPP (independent Power Producer)
and PLN's electricity cost (BPP) has been addressed through a government
compensation scheme, but the process has been quite lengthy in the House of
Representatives (DPR). The existence of the price compensation component
actually masks the true picture of PT PLN's efficiency; PT PLN's inefficiency
is masked by this compensation. This compensation cost differs from the cost of
electricity subsidies for the poor citizen, where subsidies are related to a
lower selling price than PT PLN's BPP. As of 2024, electricity subsidies are
approximately 73.24 trillion rupiah, while electricity compensation is
approximately 17.8 trillion rupiah.
So, how can we address these
issues?
To create a conducive
investment ecosystem for renewable energy, facilitating investor in development
of renewable energy and maintaining the financial and operational health of PT
PLN (State Electricity Company), We should manage compensation and subsidies
through a special funding agency. This will ensure that PSEL and other
renewable energy development activities are aligned with the available funding
within the agency. This strategy will prevent PT PLN from having to pay
substantial subsidies and compensation for several months.
The existence of this special
fund is in line with the spirit of the EBT ( New and Renewable Energy) Bill. If
the Bill is enacted, it will ensure the smooth implementation of renewable
energy programs that support the decarbonization program in accordance with
Indonesia's Nationally Determined Contribution (NDC) under the Paris Agreement
of 31.89% by 2030.
As stated in Article 56 paragraph
3 of the pending Bill, "The New Energy and Renewable Energy Fund as
referred to in paragraph (1) shall be used for":
a.
Financing New Energy and Renewable Energy infrastructure;
b.
Financing New Energy and Renewable Energy incentives;
c.
Compensation for Business Entities developing New Energy and Renewable Energy;
d. Price subsidies for Renewable Energy where prices cannot yet compete with
non renewable Energy.
Therefore,
given the current situation, a dedicated fund for renewable energy (NRE) is essential
as soon as possible to create a conducive business environment for renewable
energy development and support the energy sector's decarbonization program.
This fund will be effective if the legal framework for the R&D Bill is
enacted immediately.
Currently, deliberations on
the 2022 Renewable Energy Bill have been delayed due to a dispute over power
wheeling and stalled due to the replacement of House members. Deliberations
on the Renewable Energy Bill are now in the hands of the 2024-2029 House of
Representatives (DPR) member for immediate resolution.
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