Sunday, 3 January 2016


Ministry of Energy and Mineral Resources (MEMR) could not accommodate the proposals of various bioenergy associations and developers on electricity transactions with US Dollar (USD) exchange rate. MEMR must coordinate with Bank Indonesia for the proposal on the use of USD in every transaction. “With the bioenergy association and developers, we are already at the stage of finalization of Regulation of Minister of Energy and Mineral Resources. But, suddenly there is Bank Indonesia policy stating that transaction should use rupiah currency “Director of Bioenergy of MEMR, Tisnaldi, told Business News (August 24).

One of the Clauses of the Regulation of Minister of Energy and Mineral Resources is about currency conversion from Rupiah to USD. If this clause is not removed, investors may be more motivated to manage bioenergy. But the conversion did not automatically change the value of every of electricity transaction. “The conversion, it is not for all transaction of type (source) of bioenergy. For example, urban waste, the developers are still playing with Rupiah.”

Changing of transactions has an impact on tariffs. Bioenergy developers and investors will  definitely calculate the economic benefit of beach business transaction. Bioenergy players of urban waste type, almost all of them are local players. “As long as biioenergy management activities are strategic, we will liberate the use of currency. Whether they choose rupiah of US Dollars, it is not a problem for us. But, the value is in Rupiah”.

Electricity purchase by PT PLN (Persero) continues to be driven, either by MEMR or various associations. Electricity generation can be powered by biomass, biogas and others. Bioenergy-Based Electricity Producers Association (APLIBI) jointly with MEMR will continue to corporate to guarantee the purchase of electricity. “For biomass type, investment is mostly in US dollar waste, due to economic considerations. But for urban waste, most of the transactions were in rupiah. Investors worried if the fluctuations in the US dollar could not be anticipated.”

Biomass energy is a type of fuel made from the process of conversion of biological materials, such as plants. Organic materials can also be obtained from animals and microorganism. Plants produce food with the help of sunlight through photosynthesis. The energy is then transferred to animals and humans when they eat plants. “Now there have been discussions between investors and farmers. This is certainly encouraging, because it will lead to more intense management of bioenergy. We started to leave oil and gas. So we will cultivate bioenergy management with Pertamina. If this works, we will prepare the regulation. We also need to know first about the conditions in the field, including the potential for biomass. We will also continue to ask for input from associations, farmers and all stakeholders.”

Biomass includes ten potential sources, i.e. sugarcane, rubber, coconut, rice husks, maize, cassava, cow manure, urban waste and palm oil. But from all source, oil palm is the most potential and prospective for energy (electicity). “We recorded that there are 750 bioenergy management centers in Indonesia. The overall potential of bioenergy reached 32 gigawatts, and one third is derived from palm oil. Our calculation is that oil palm produced 12.6 gigawatts or one third of the whole.”

Some energy crops are also commercial through farmers’ aquaculture activities. The scale can be enlarged to produce fuel. Various sources of energy, such as wheat and soybeans produce ethanol, methanol, propanol and biodiesel. MEMR will map oil palm potential with the existing PLN (state electricity company) network. If the location and management of oil palm plantations is far away, it would be difficult to synergized with PLN’s transmission lines. “But if the location of oil palm management is close to the location of transmission, it becomes our priority. If there is no IPP (Independent power producer), we will try. We’ve set engineers to various regions, and there is a special allocation fund (DAK). If investors cannot access it, we will seek DAK.”

MEMR has socialized about bioenergy investment prospects. MEMR assured that the technology is relatively simple for the management of oil palm. During this time, in oil palm management, the company is often faced with the Ministry of Environment and Forestry. Officer of the Ministry of Environment and Forestry overseas the management of oil palm waste. But, with the implementation of mandatory program on the use of primary energy mix for electricity generation, waste is no longer a treat. “Oil palm companies are being helped in managing waste into electricity. They are getting more enthusiastic. But, in the downstream, we need PLN to purchase electricity. Everything is new renewable energy, including bioenergy, solar energy, wind, and hydro energy, which will encourage the achievement of targets of electricity of 35 thousand megawatts. We could be on-grid (management) with existing PLN networks.”(E)

Business News - August 26, 2015

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