part 1: overview of cogeneration and its status in asia - Fire

58 Part II: Cogeneration experiences in Asia and elsewhere
Lately, the Ministry of Power has been involved in simplifying procedures by persuading SEBs
to allow third-party sale of electricity, buy-back surplus power at higher rates (close to Rs 2.25
per kWh in most instances), and offer clear and transparent wheeling and banking policies.
SEBs are now more receptive to the idea of captive power generation and are encouraging
proposals for cogeneration facilities. Some state governments are also providing incentives
for cogeneration, such as capital cost subsidies and exemption from generation taxes (see
Table 1.5).
1.5 Indonesia
In Indonesia, cogeneration technology has been traditionally associated with major process
industries having high steam demand, such as paper, chemicals, refineries, and food and
beverage industries. However, not many industries are presently utilizing cogeneration
technology due to two main reasons. The industrial decision-makers are little aware of the
technology and its economic merits. Secondly, the energy price does not reflect its actual
cost.
On the other hand, captive power plants are commonly employed in Indonesia due to the
geographical characteristics of the country and inability of the national grid system to supply
the amount of energy required by the users. The share of energy from captive power plants
represented 36 per cent of the total in 1990. According to projected figures, the share of
captive power plants will be 9,000 MW, or 29 per cent of the total 20,000 MW in 1998-99.
Majority of cogeneration facilities established in industries is located in East Java. Adopted
mostly by textile and paper industries, the total installed capacity of 11 cogeneration plants in
operation exceeds 530 MW. The units, with capacities ranging from 4 to 38 MW, employ
either coal-fired steam turbines or natural gas fired gas turbines with heat recovery boilers. 6
According to the information available with the Indonesian power utility, PLN, there were about
10 plants under construction at the end of 1996, using steam and gas turbines, reciprocating
engine and combined cycle, with a total capacity exceeding 360 MW.
1.5.1 Institutional initiatives and policies for promoting cogeneration
There are two relevant documents that reflect government’s policy on cogeneration. The first
regulation issued in 1993 allows the IUKU holder (the one who has the license to provide
electricity to the public) to allow the industries to adopt cogeneration technology for their own
use within utility’s concession area, and sell the excess power from the cogeneration facility
to the utility. The Ministry of Mines and Energy published the tariff for purchase of electricity
from small power producers. After power generation from solar, mini-hydro and wind
energies, cogeneration from agricultural and industrial wastes was given the next priority,
allowing sale of up to 30 MW for Java-Bali grid system, and up to 15 MW for the other grids.
The third priority was given to cogeneration using conventional fuels, followed by power
generation alone with conventional fuels.
In line with the energy policy, government will look into some factors while issuing permits to
private generators and cogenerators who intend to produce energy for their own use and for
selling excess to others. These include the local grid capability, primary energy source used,
pricing mechanism, security of energy supply, and environmental impact.
6 M. Oetji, “Electric Power in Indonesia: Public-private partnership and opportunity for cogeneration”,
Paper presented at the 1996 Cogeneration in Asia Conference, AIC Conferences, Singapore, 25-27
November 1996.