In order to accelerate Indonesia's green growth and sustainable development, the Ministry of National Development Planning/Bappenas in collaboration with the Global Green Growth Institute (GGGI) will conduct a data assessment of off-grid coal-fired power plants as support in the preparation of the Background Study of the National Medium-Term Development Plan (RPJMN) for the Energy and Mineral Resources sector and produce policy recommendations for the energy sector development plan.

In connection with this, Bappenas and Kadin have held a Focus Group Discussion (FGD) on the Utilisation of Clean Energy in the Smelter Industry held on Monday, 22 April 2024 at Menara Kadin Indonesia, Jakarta.

Indonesia has a formidable challenge to ensure consistent and reliable power supply across the archipelago. Indonesia is rich in energy sources, including coal, natural gas, geothermal, hydro, and other renewables.

Despite having a wide variety of energy sources, the power sector faces problems such as securing fuel supply, power loss during transmission, and uneven distribution of energy resources. As a result, some areas in Indonesia experience frequent power outages or experience uncertainty in electricity supply. Therefore, industries located in remote locations find it difficult to rely on the public power grid for their energy needs. To address this issue, many industrial and commercial organisations in Indonesia that have large energy demands, including smelters, have turned to independent power generation. This strategic move was taken by the industries to reduce dependence on the public power grid and ensure a stable and uninterrupted power supply.

Data from the Ministry of Energy and Mineral Resources (ESDM) reveals that the total number of smelter facilities in Indonesia has surpassed 100. The figure includes smelters that are currently operating, under construction, or in the planning stage. From 2013 to 2023, the captive power capacity in operation has seen a huge eightfold increase, from 1.4 gigawatts (GW) to 10.8 GW1. Most of these smelters rely on captive electricity to fulfil their energy needs.

Kajian yang dilakukan Bappenas dan GGGI adalah untuk melengkapi data mengenai Pembangkit Listrik Tenaga Batu Bara off-grid serta mengetahui penyebab utama sektor perindustrian lebih memilih menggunakan Pembangkit Listrik Tenaga Batu Bara off-grid. Selain itu, kajian ini juga akan menganalisa potensi energi terbarukan dalam industri smelters. Untuk mencapai hal tersebut, kajian ini akan mencakup:

I. Energy Landscape: Assessment of electricity/energy demand by cluster (group of operating smelter units), renewable energy generation potential, and energy demand projections.

II. Policy: assessment of policies/regulations regarding off-grid coal-fired power plants in the context of various sectors such as industry, captive initiative, technology, resources, and best practices from other countries.

III. Technology: in-depth analysis of supply reliability, such as from PLN or other parties. The technology section will also analyse the standard load profile, average power load, voltage/frequency requirements, assess the efficiency of using off-grid coal-fired power plants for the smelter industry through off-grid & on-grid assessment. In addition, the consultant will also record the size (capacity in MW), average power plant load (PLF), and age (and residual life) of coal-fired power plants in the smelter unit.

IV. Economics: evaluate the incentives/disincentives and technology budget, profit potential and feasibility study and cost-benefit analysis comparing the cost of electricity from the coal-fired power plant versus the estimated electricity tariff from the PLN grid.