Bioenergy Development concept
for Remote Areas in Indonesia
Jaya Wahono
Chairman of Permanent Committee on New and Renewable Energi
at Kadin
May 2024
Kadin’s Collaboration with WEF and RE100
In 2022 Kadin, WEF and RE100
established a working group of
Indonesians to explore solutions
to unlock capital for clean
energy investments in Indonesia.
The final report was launched
during B20 Summit Bali. This
policy recommendation was
aimed to attract the $150-200
billion in annual investments of
Renewable Energy.
6 Policy Recommendation
Policy message #1: Renewable energy tariff regime, Create a level playing field for renewable
electricity to compete fairly with fossil fuel-based electricity
Policy message #2: Regulatory environment, Remove regulatory barriers and implement stable
frameworks to facilitate the uptake of corporate renewable electricity sourcing
Policy message #3: Power purchase agreement (PPA) practices, Create an electricity market structure
that allows for direct trade between corporate buyers of all sizes and renewable electricity suppliers
Policy message #4: Legislative implementation mechanisms, Work with utilities or electricity suppliers
to accelerate the growth of renewable energy infrastructure
Policy message #5: Incentive mechanisms, Substantiate renewable energy incentives to improve the
investment environment
Policy message #6: Renewable energy certificates (RECs) and tracking system, Enhance the
transparency, sustainability and additionality of renewable energy certificates (RECs)
Indonesia: Energy Rich, yet Electricity Poor
Hongkong
Singapore
Java is Shining Bright,
What about the Others?
Jakarta
Timor Island, NTT
4 4
Indonesia will still need to increase electricity per capita
Source: Wordbank (2021)
Indonesia is unique and we need a “fit for purpose”
solution as the biggest archipelago in the world:
• The energy source is renewable and can be obtained
locally
• The effect of the harvesting process of the energy source
to the ecological system must be minimal and must
involve reforestation effort (protection of watershed area,
landslide mitigation and flood prevention mechanism).
• The generation system must be dispatchable and scalable
• The electricity produced must be equitable, reliable and
affordable
Benefit of Renewable Energy based Microgrids
Conventional System 1. Centralized and unreliable
Diesel fueled power generations
2. Prone to disaster and
disturbance
3. Expensive to operate
4. Negative social and
Diesel gensets
environmental impact
Disruptive System 1. Decentralized
Local renewable energy based power generations
2. More resilient to natural
Bioenergy disaster
3. Cheaper to operate and
Micro Hydro
higher economic impact
4. Inclusive, Green and Resillient
Small wind or Solar PV
Principles for Bioenergy Development in remote areas
Land concession will be on community’s hands in order to guarantee the
sustainability of the project in the long term
PLN operates and maintains the grid in order to guarantee universal access of
electricity to population
Communities get payment from power plant and use the proceed to pay
electricity bills
If using bioenergy source, it will be directed to restore degraded and
marginal lands in order to increase productivity on the lands available in the
area
Guaranteed sustainability – universal access of electricity – resilient
landscape
Development Scheme
Indonesia is targeting to produce
140 million ton CO2e by 2030 of
tradable credits from FOLU
• The community acts as electricity consumer as well as
primary energy/biomass producer.
IEF/BPDLH • With the income from supplying biomass, the
community can afford electricity for productive
economic activities
• This model will help the population in underdeveloped
regions to get additional income despite their
Incentives for social/educational status .
communities
• PLN benefits from lower cost of local electricity
generation .
• Carbon credit payment actually delivers direct benefits
Power Producer such as local employment and universal access of
electricity to the local population .
Biochar as carbon removal credit
Example: Siberut Aggregated Biomass Power Plant
Project
https://youtu.be/-JgIPgZ6TDM?si=LsJxCLmo7MttrAWz
Key Messages
• Bioenergy strengthens the economic
incentives to private sector and
community groups to undertake
restoration efforts,
• With 4R approach – bioenergy can
boost farm production, and support
climate and development goals
– Right crops in right landscape
– Right business model
– Respecting rights
• The potential competition for land
and for raw material with other
biomass uses must be carefully
managed.
Potential Impact is enormous
Presidential Decree on RE Poverty
tariffs and carbon trading will
25,000 villages with Alleviation
help accelerate biomass power unreliable and
plants deployed all over the inequitable access of
Archipelago electricity
Co ic
m om
att merc con
rac iall
tiv y igh E pact
e H im
BEST
Locations where
diesel gensets causes Highest 14 million Ha of
Savings
high cost of electricity For degraded and
generation (2000 – Utiltity marginalized lands
Co.
4,000 MW) in Indonesia Carbon
Energy Sequestration
Resilience
Just Energy Transition
2020 What will be considered as just:
• Jobs creation as priority
• Energy self sufficiency for all
regions in Indonesia.
• Less reliance on subsidies
from government
The Government aims to bring 2030
universal access of electricity to
Indonesia by the end of this year
and increase Renewable Energy
mix to 23% by 2025.
Local renewable energy will be key
Kadin’s strategic planning for remote areas electrification
• Develop a commercial pilot project for island electrification in
Indonesia in order to power an island with 100% RE.
• Develop industrialization strategy for capturing the potential market:
2000 MW or $ 3 billion.
• Improve skills and technical competence of local labor in Renewable
Energy and Circular Economy sector
• Expand the use of renewable energy to help the country generate
equal economic growth all over Indonesia.
