Bbk indonesia cleantech market report by Switzerland Global Enterprise

Market study on Clean Technology in

INDONESIA

OFFICIAL PROGRAMME

MARKET STUDY ON CLEAN TECHNOLOGY IN INDONESIA Language: English Number of pages: 40 Author: Stephan Blocks Anna Brandt Giovanny Tutupoly Chloe Martinez

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Contents

1. EXECUTIVE SUMMARY _______________________5 2. INTRODUCTION _____________________________6 2.1. OBJECTIVE OF THE STUDY __________________ 6 2.2. Methodology _____________________________ 6 2.3. overview of the indonesian economy _____________ 6

3. MARKET ANALYSIS INDONESIA _______________8 3.1. OVERVIEW OF CLEANTECH MARKET __________ 8 3.2. THE 4 CLEANTECH CLUSTERS _______________ 9 3.2.1. Energy efficiency in buildings ________________ 9 3.2.2. Energy Production ______________________ 13 3.2.2.1. National energy mix in Indonesia ___________ 13 3.2.2.2. Photovoltaic _________________________ 14 3.2.2.3. Other solar energy solutions _______________ 16 3.2.2.4. Hydro electric power _____________________17 3.2.2.5. Biogas/Biomass _______________________ 18 3.2.2.6. Geothermal __________________________ 19 3.2.2.7. Other Technology Applications _____________ 21 3.2.3. Solid Waste and Water Treatment ____________ 22 3.2.3.1. Solid Waste Treatment __________________ 22 3.2.3.2. Water Treatment ______________________ 25 3.2.4. Cleantech Services_______________________ 28

4. RECOMMENDATIONS _______________________30 4.1. market entry strategies _____________________ 30 4.2. risk factors _____________________________ 32

5. APPENDIX 1 _______________________________34 6. APPENDIX 2 _______________________________36

List of tables and figures

Table 1: Existing building infrastructure in the Greater Jakarta and electricity consumption ................................. 10 Table 2: Renewable energy potential vs. installed capacity ........................................................................................ 14 Table 3: Feed-in tariff per kWh per region in Rupiah ................................................................................................. 17 Table 4: Feed-in tariff for biomass/biogas plants ........................................................................................................ 19 Table 5: Geothermal energy potential ......................................................................................................................... 20 Table 6: Feed-in tariffs for municipal waste utilization with zero waste technology ................................................ 24 Table 7: Feed-in tariffs for landfill gas utilization....................................................................................................... 24

Figure 1: Structure of Energy Consumption ................................................................................................................ 10 Figure 2: Building envelope energy saving potential ................................................................................................... 11 Figure 3: Estimation of new building developments (in sqm) .................................................................................... 12 Figure 4: National Energy Mix vs. Vision 25/25 .......................................................................................................... 13 Figure 5: Distribution of diesel gen-set capacity ......................................................................................................... 15 Figure 6: Distribution of Indonesian palm oil mills .................................................................................................... 18 Figure 7: Map of Jakarta's fastest sinking areas ......................................................................................................... 26 Figure 8: Project stakeholders - Potential for involvement ........................................................................................ 32

1. Executive Summary With approximately 240 million inhabitants, Indonesia is the fourth-largest country by population in the world and South East Asiaâ&#x20AC;&#x2122;s largest economy, which grows at 6 percent annually. Energy demand is increasing by 9 percent annually. The electricity supply cannot keep up with the demand. Energy efficiency measures need to be taken, but the progress is low. So far the focus has been on the supply side. Two 10,000 MW have been put forward to provide enough electricity to all households and industries. Renewable energy is increasing in importance. Private investors are lured into the development of power plants. The Indonesian government set feed-in tariffs for geothermal, biomass/biogas and hydro energy projects. Energy efficiency in buildings is becoming more important. A new governor regulation in Jakarta expects building owners to conserve energy and reduce CO2 emissions. The Green Building Council Indonesia promotes its certification. So far already 8 buildings have been certified voluntarily. Energy efficiency in buildings is one opportunity to enter the market of clean technology services. Building owners are obliged to conduct regular energy audits and report the numbers to the city government, though without any obligation to reduce energy consumption. In the field of solid waste and water treatment Indonesia has high demand. The sanitary situation is not in-line with international standards. Industrial and household waste pollutes drinking water and groundwater. Solid waste is only treated on a limited scale. However, the city government of Jakarta wants to develop waste treatment sites in Jakarta to get the waste problem under control. In the focus are recycling facilities and power plants with zero waste and landfill gas technology.

2. Introduction 2.1. OBJECTIVE OF THE STUDY The objective of the study was to give an overview of the Clean Technology sector in Indonesia, its developments and expected trends, in order to assess the market potential and business opportunities for Swiss SMEs. The study was conducted for the Embassy of Switzerland in preparation of the OSEC South East Asian Forum 2013. In the focus were the following technology clusters: • Energy efficiency in buildings • Energy production • Waste water and waste treatment • Clean Tech services The information compiled should serve as a guideline for Swiss SMEs interested in entering the Indonesian market. Besides the market assessment, the study provides practical market entry and network information: trade fairs information and contact details of associations and institutions working in the field of Clean Technology and other related sectors.

2.2. METHODOLOGY The information in this publication comprises of the collection and analysis of various publications, newspapers, economic magazines, academic papers, industry reports, and conference proceedings including official data and statistics as well as interviews with industry experts. Several interviews were conducted with relevant government institutions and agencies, as well as sector-related associations and private companies. Further interviews were conducted during two trade fairs:  GREENRIGHT - Green Building Expo and Conference 2013 in Jakarta from 10/04-13/04/2013  INAGREENTECH 2013 - the Indonesia International Green Technology Eco Friendly Products Exhibition and Conference in Jakarta from 02/05-04/05/2013. The information has been produced in good faith and conscience; however EKONID disclaims all warranties as to the topicality, accuracy, completeness or quality of the provided information. Limitations Due to the indications given by the Swiss Embassy in terms of number of pages combined to the large scope of the study, a general market overview has been given rather than a detailed assessment of the Clean Technology sector. The market study focuses on market potential and market access strategies in the identified clusters. Furthermore, secondary sources can be difficult to retrieve: national data is rarely up-to-date and various sectors are still fairly un-known, therefore lacking detailed literature. For the development of the information, insider sources such as expert opinions in the relevant sector were utilized, and might appear biased or not scientifically verified.

2.3. OVERVIEW OF THE INDONESIAN ECONOMY With approximately 240 million inhabitants, Indonesia is the fourth-largest country by population in the world and South East Asia’s largest economy. Fueled by strong domestic consumption and commodity exports, the Muslim-majority country has been experiencing a positive economic growth throughout the last decade, averaging above 6 percent since 2010.

MARKET STUDY ON CLEAN TECHNOLOGY IN INDONESIA

However, insufficient public infrastructure, especially transportation and electricity infrastructure, has prevented Indonesia from an even higher economic growth. According to the Master Plan Acceleration and Expansion of Indonesia Economic Development (MP3EI), the government plans to trigger investments of more than US$ 180 billion to modernize and expand its infrastructure until 2025, focusing on electricity generation, roads and railways. Most of the necessary funding shall be provided by the private sector through public-private-partnerships (PPP). Currently, per capita income stands at US$ 3,500. Even though 13 percent of the population was still living below the poverty line in 2012, economic development has resulted in the rise of a middle class which in 2009 already comprised 50 million Indonesians. This growing middle class has fuelled domestic private consumption, which accounted for 55 percent of the overall GDP in 2012. The middle class population in Indonesia is projected to reach 150 million by 2014, creating the largest consumer market in Southeast Asia. The industrialization is advancing with the manufacturing and construction sectors representing more than one third of the country’s gross domestic product (GDP). The food and beverage industry, automotive and chemical industry are the most important sectors. Approximately one third of Indonesia’s GDP is generated in the primary sector, with a sizeable contribution from the mineral extraction business and agricultural sector. Indonesia is the world’s largest producer of palm oil and rubber and the second largest producer of cocoa. For mineral extraction, Indonesia is the second largest producer of thermal coal and tin. Energy resources are abundant as well, with estimated 3.5 billion barrels of oil reserves, 112 trillion cubic feet of natural gas and 40 percent of the world’s overall geothermal resources.

Foreign trade With 8.9 percent of its overall trade volume, the European Union was Indonesia’s fourth largest trading partner in 2011. Despite the global economic slowdown in 2009, trade volume between EU and Indonesia has reached high single-digit average annual growth rates over the past years. Nonetheless, the EU’s relative importance as a trade partner has been recently slowly declining. For the EU, Indonesia is only a small trading partner, representing only 0.7 percent of the EU’s overall foreign trade. Trade with ASEAN as a whole makes up 5 percent of the EU’s foreign trade. As Indonesia generates around 40 percent of ASEAN’s GDP, there is clearly more potential for the future. Indonesia’s exports to the EU are mostly raw materials and agricultural products as well as manufactured products. Almost a third of the EU’s oil and fat imports originate from Indonesia – a result of Indonesia worldleading palm oil industry. Imports from the EU to Indonesia are almost exclusively manufactured goods. 50 percent are made up by machinery and transport equipment alone, with pharmaceuticals and other chemical products next in importance. Foreign direct investment Indonesia was, in comparison to its neighbors, neglected by FDI from the EU to ASEAN before the financial crisis of 2007/2008. After the crisis, it has become the second largest FDI recipient after Singapore, reflecting the trust of European investors in the Indonesian economy. Indonesia’s stable economic performance and emerging market attract an increasing number of foreign direct investments (FDI). FDI inflows hit a record of 24 billion US$ in 2012, an increase of 26 percent compared to 2011. Driven by the mining, transport and chemicals sector, FDI to Indonesia is expected to grow another 23 percent in 2013. While foreign investments in the services sector are on a decline. FDI in the manufacturing sector has almost quadrupled from 2010 to 2012. In the automotive sector alone, FDI has increased by approximately 370 percent from 2010 to 2012. Investors from ASEAN account for 22 percent of the FDI in 2012. The EU, Korea and Japan with each around 10 percent of FDI are the next largest contributors.

MARKET STUDY ON CLEAN TECHNOLOGY IN INDONESIA

3. Market Analysis Indonesia 3.1. OVERVIEW OF CLEANTECH MARKET The Indonesian market for clean technologies (cleantech) offers interesting business opportunities even though of its early stage of development. Modern technical equipment is not produced locally and thus has to be imported. The strong economic growth of more than 6 percent leads to an increasing demand for energy for electricity production and transportation. Due to Indonesia’s high energy elasticity of 1.65 the current economic growth leads to an increasing energy demand of more than 9 percent annually. Till 2025 energy production has to increase from currently 32 GW to 83 GW. At present the electricity supply cannot keep up with the demand. Blackouts are part of every day life. The country is one of the world’s largest emitters of CO2. Already in 2009 the Indonesian president stated that Indonesia would commit itself to reduce CO2 emission by 26 percent in 2020 through own efforts. With the support from developed countries the number could increase to 41 percent. In order to address the existing energy issues the Indonesian government policies have been focused on energy production so far, which is slated to increase through fossil as well as renewable energy sources in the next decade. To meet the increasing electricity demand, the Indonesian government has recently been pushing forward two 10,000 MW programs, of which the first favors fossil resources while in the second the utilization of large renewable energy resources plays a major role. Being financially weak the country’s government-owned electricity provider PT. PLN (Persero) is unable to provide the funds necessary for the large investments. Therefore, the private sector is expected to step in and invest in the sector on large scale. Even though the electricity market has been partly liberalized, PLN is still producing more than 80% of the total electricity supply in Indonesia. Several policies have been put into place to accelerate especially the utilization of Indonesia’s geothermal, hydro and biomass energy potential. Feed-in tariffs exist for these renewable energy resources. The government has been discussing a more attractive feed-in tariff for photovoltaic solutions for quite some time and is expected to put a proper regulation into place during this or the next year. Several regulations to improve the country’s energy efficiency exist as well. For instance the energy elasticity shall be reduced to a level of an industrial country, below 1 percent by the year 2025. Furthermore the government is preparing a new labeling standard for energy efficient products. However, the enforcement of such regulations cannot always be observed, partly due to their obligatory nature. Private sector investment into energy efficiency is hampered by a lack of incentives and low energy cost. Depending on the consumer group electricity prices vary between EUR 0.04 and EUR 0.1 cent per kWh. Transportation fuel is also subsidized with diesel costing only 50 percent of the actual market price. In total the Indonesian government estimates that it will spend up to US$ 23 billion in 2013 on energy subsidies, though it is expected that the subsidies will be reduced further in the future. Already in 2009 the Asian Development Bank (ADB) estimated that Indonesia would need to invest up to US$ 4 billion to improve the energy efficiency in the real sector to improve its competitiveness. The amount of US$ 3 billion should be invested in industrial energy efficiency, with US$ 1.1 billion for overhauling electrical systems reducing energy consumption by 25 to 40 percent. The remaining amount should go into fossil fuelsystem efficiency improvements, poly generation and waste heat recovery. The ADB estimated there exist a savings potential of up to US$641 million annually.

MARKET STUDY ON CLEAN TECHNOLOGY IN INDONESIA

However, the mix of lack of awareness, not existing or not enforced environmental regulations and a lack of incentives hinders the investment in energy efficiency measures on large scale. Even though the Indonesian industry offers an interesting potential the development for energy efficient buildings is considered to be the more prospective business sector for the time being, though still at an early stage. Already in 2009 the pilot project ECO-Hotel of German company TUV Rheinland showed that hotel owners were willing to pay a service fee to receive a â&#x20AC;&#x153;greenâ&#x20AC;? certification. In total 14 five star hotels took part in project that besides others aimed at reducing electricity consumption and improving the environmental aspects of the hotels. Today certification in energy efficient buildings is done through the Green Building Council Indonesia (GBCI). Municipal waste-treatment in Indonesia is at an early stage as well. Municipal-owned companies collecting the waste, treatment in the sense of recycling is not happening. Scavengers take out all valuable resources before the waste is dumped at the landfill site. Several projects in the field of solid waste treatment have been implemented. PT Navigat Organic Energy manages the integrated solid-waste treatment in Suwung, Bantargebang, and Benowo. Through treatment of organic waste and utilization of landfill gas electricity is produced and sold to PLN for income generation. All supporting activities, such as transporting, composting, etc provide limited economic benefits to its players in those fields due to a small gate-fee. Also municipal solid waste and wastewater treatment has no real development so far with coverage standing at 2.38% of all in Jakarta. There are plans to increase the coverage to 80% by 2030. Since the current facilities are old large infrastructure investments would be necessary to upgrade the system to modern standards. The market is interesting in the long-term if the plans of the municipalities will be carried out in the future.

3.2. THE 4 CLEANTECH CLUSTERS 3.2.1. Energy efficiency in buildings Present status of commercial building development The countryâ&#x20AC;&#x2122;s capital and major business hub Jakarta and its satellite cities Bogor, Depok, Tangerang and Bekasi1 have seen most of the commercial and residential building development in the past. In total almost 13 million square meters (sqm) of commercial building space (office and retail) has been built up (table 1). In addition to that, more than 120,000 apartment units do exist in the area. Most of these buildings were not constructed according to modern energy efficiency measures, hence offering potential for energy savings. As depicted in figure 1, the lion share of electricity consumption in Indonesian buildings goes to air conditioning (AC), in office buildings it represents 47%, while in hotels it can be up to 65% of the energy bill. With 15% of the energy consumption, lightning and outlet are together the second largest electricity consuming appliances.2

1 2

Referred to as Greater Jakarta area in the remainder of the study Jakarta Green Building User Guide Vol. 5 (2013)

MARKET STUDY ON CLEAN TECHNOLOGY IN INDONESIA

Table 1: Existing building infrastructure in the Greater Jakarta and electricity consumption Type

Total Area

Electricity Consumption

Office Sector

6,8 million sqm

250 kWh/sqm/year

Retail Sector

4,15 million sqm

450 kWh/sqm/year

1,94 million sqm

450 kWh/sqm/year

121,255 units

350 kWh/sqm/per year

Retail Sector (Bogor,Depok, Tangerang, Bekasi) Apartment

Source: Colliers International (2013), GBCI (2012a) Figure 1: Structure of Energy Consumption

Governmentâ&#x20AC;Ś

47%

Office Building

25%

55%

Shopping Mall

57%

Hospital

57%

Hotel

65%

Air Con

Lighting & Outlet

22% 27% 22%

16%

4% 5% 14%

15%

Elevator

6% 14% 16% 13% 17%

Others

Source: Own graph with data from JICA (2009), taken from Jakarta Green Building User Guide Vol. 5 (2013)

Estimated energy saving potential According to ADB estimations, US$ 1 billion should be invested in the improvement of the energy efficiency in commercial buildings in Indonesia with estimated annual savings of US$254 million. Through the application of more efficient lighting and air conditioning systems, energy consumption could be reduced by 35 to 40 percent.3 With appropriate lightning solutions alone savings of up to 15% can be achieved. 4 Further savings potential that can be utilized exists in the building envelope (walls and windows). Jakarta buildings are constructed with large windows mostly as architects and building owners seek to attract potential customers with views that increase the value of their premises. With the optimal window-to-wall-ratio (WWR) electricity consumption could be reduced by 8% (figure 2). Further 10% savings could be achieved through the installations of shading applications to reduce the impact of external heat inside the building.

3 4

Sasistiya, R. (2009) Jakarta Green Building User Guide Vol. 3 (2013)

MARKET STUDY ON CLEAN TECHNOLOGY IN INDONESIA

Market development so far Due to a lack of regulations or their proper enforcement, the green building business in Indonesia has remained behind its potential. Since investment in energy efficient technologies is often associated with higher cost compared to conventional solutions, building developers in the past opted for less costly solutions in order to limit the sells price of their apartments or offices. The higher maintenance cost due to higher electricity and water consumption has to be born by tenants or buyers of the apartment or office space. Nevertheless even under the current insufficient regulatory framework, building owners have started to take energy efficiency measures. Since awareness for energy efficiency is increasing (but from a low level) and “go green” initiatives evolve, more often building owners in prime locations started to use green building certification to improve their image. However the more important driver is the demand for such certifications from the customer side.

Figure 2: Building envelope energy saving potential

Wall Insulation Wall Reflectivity

0.3% 0.5%

Daylighting

4.9%

Glass

7.3%

WWR

8.0%

Shading

10.1% Source: Own graph with data from IFC (2011), taken from Jakarta Green Building User Guide Vol. 5 (2013)

Interviews with market participants have shown that the number of customers (tenants, buyers) from building owners demanding the availability of a “green” certification is increasing. Especially if international tenants are supposed to be attracted, building owners are forced to turn more often towards a green building certification. Due to the same reason some building developers have started to use more high quality building materials, e.g. for windows, because customers have been demanding it. One example is the usage of special energy saving flat glass for the envelope of large buildings in Jakarta, which has been increasing rapidly since 2010. According to market insiders the business is growing by 10%15% in average with a current estimated market volume is 800,000 sqm. In the residential sector, the demand for AC systems with low electricity usage is increasing. With 2 million units sold the penetration of energy efficient AC reached 25% in the Indonesian market in November 2012 5 and according to the market leader LG is expected to increase to 30% in 2013.6 Another so far less considered aspect with energy saving potential is building automation. Considering the major developments of highly advanced buildings with sophisticated requirements for every building tenant, this sector is a promising market for energy efficient technology. Currently the market is dominated by a small number of companies. Based on expert references, the industry grows with 15 to 20% annually.

5 6

Kharismawati, O. (2012) Darandono ( 2013)

MARKET STUDY ON CLEAN TECHNOLOGY IN INDONESIA

Especially for the commercial building sector more can be expected from the GBCI, which conducts green building certifications in Indonesia, currently still on a voluntary basis. Till January 2012 two buildings had already received their certificate while 23 others were in the auditing process and further 77 building owners had declared their intention to get the certificate.7 In May 2013 the number of successfully certified buildings stood at eight already.8 Future trends In April 2013 PLN announced an immediate price increase for electricity of 4.3 percent. During the remainder of the year 2013, the tariffs will be increased every three month up to 15 percent in total. 9 This will increase the burden of operational cost for building management as well as building tenants. Energy efficiency is inevitably the logical option in coping with higher cost for electricity as it is also providing a good investment for the building owners and management in managing its annual operational expenditures. Figure 3: Estimation of new building developments (in sqm)

1200,000 1000,000 800,000 600,000 400,000 200,000 ,0 2012

2013

2014

2015

2016

Office Sector Shopping Centers Shopping Centers (Bogor, Depok, Tangerang, Bekasi)

Source: Colliers International (2013)

In the upcoming years several new construction projects are expected to be finished. Within the time period 2013-2016 office space in Jakarta is estimated to increase by a further 2.6 million sqm. In the same time period, new shopping centers in the Greater Jakarta area are expected to add further 800,000 sqm of retail space to the already existing infrastructure (figure 3: Estimation of new building developments). To accelerate the development of Indonesiaâ&#x20AC;&#x2122;s energy efficiency sector, enforcement of already existing regulations or new regulations is essential. In April 2013 the current Jakarta administration issued the new governor regulation No. 38/2012 regarding green building for future building constructions. With this regulation the city government wants to reduce carbon emissions of buildings by 138 MT CO2 (47 MT for commercial building and 91 MT for residential building) annually.10 Alongside with the establishment of the above mentioned governor regulation, the International Finance Corporation (IFC) is dedicated to facilitate

GBCI (2012b) GATRA NEWS (2013) 9 Purwanto (2013): PLN: 10 Jakarta Green Building User Guide (2013). 8

MARKET STUDY ON CLEAN TECHNOLOGY IN INDONESIA

the funding for retrofit projects by cooperating with local banks for financing such projects. 11 This new regulation will be applied to: Office buildings, shopping malls, apartment complexes

> 50,000 M2

Hotels and hospital

> 20,000 M2

Education Facilities

> 10,000 M2

According to this regulation, new buildings have to comply to several energy efficiency standards. For instance, the overall thermal transmittance value (OTTV) for the building shall not exceed 45 watts per sqm. Details regarding the OTTV can be found in the national product standard regulation SNI 03-6389.12 Cooling systems have to provide efficiency according to the national product standard regulation SNI 6390-2011. Chilled water pipes have to be insulated.13 Through the observance of the standards for the building envelope alone expected energy savings between 6 percent and 19 percent shall be achieved.14

3.2.2. Energy Production 3.2.2.1. National energy mix in Indonesia The current capacity of electricity in Indonesia is 32 GW. Twoâ&#x20AC;&#x201C;thirds of this capacity is concentrated in Java, Madura and Bali (Jamali) grid while the remote islands in the Eastern part of the country have much lower electrification ratios. The public access to electricity is still limited with an average electrification ratio of 76.56% (2012), but varying widely between the provinces. Increasing the electrification ratio especially in the remote regions is a main target of the energy strategy in Indonesia. On the production side, Indonesia still heavily depends on fossil energy. While in 2010 fossil energy sources represented approximately 95 percent of the energy mix, the set target for 2025 is to increase the use of renewable energy sources by 25 percent (figure 4).

Figure 4: National Energy Mix vs. Vision 25/25

National Energy Mix 2010 26.38% 1.50% 3.29%

"Vision 25/25"

46.93% Crude Oil Gas Coal

Crude Oil 25% 30% 22%

Gas 23%

Geothermal 21.90%

Hydro

Source: Ministry of Energy and Mineral Resources 11

ibid Jakarta Green Building User Guide Vol. 5 (2013). Jakarta Green Building User Guide Vol. 3 (2013). 14 Jakarta Green Building User Guide Vol. 5 (2013). 12 13

MARKET STUDY ON CLEAN TECHNOLOGY IN INDONESIA

Coal

Overall, the country has immense resources of renewable energy. Indonesia is home to 40 percent of the world’s known geothermal resources and has potential in solar, biomass and hydropower energy production. Today, renewable energy accounts for a small but growing part of Indonesia’s electricity production. The most commonly used, and developed, are the hydropower and geothermal industries, but other sources of energy are more and more being utilized. Table 2: Renewable energy potential vs. installed capacity NON-FOSSIL ENERGY

RESOURCES (SD)

INSTALLED

RATIO KT/SD

CAPACITY (KT)

Hydro

75,670 MW

6,866 MW

8,8%

Geothermal

29,038 MW

1,228 MW

4,2%

Mini/Micro Hydro

769.69 MW

217.89 MW

29,75%

Biomass

49,810 MW

1,618.40 MW

3,25%

Solar Energy

4.80 kWh/m2/day

13.50 MW

Wind Energy

3 – 6 m/s

2.731 MW

Source: Ministry of Energy and Mineral Resources (2012)

3.2.2.2. Photovoltaic Present situation Located along the equator, Indonesia is blessed with 12 hours of sunlight throughout the year. The solar electricity generation potential stands in most regions at 4.8 kWh/sqm/day and up to 5.4 kWh/sqm/day in Eastern Indonesia15. A few first on-grid solar plants have been built, but exploiting the potential of on-grid photovoltaic (PV) is still in an early stage with an installed capacity of only 1.16 MW in 2011. 16 On-grid solutions on Indonesia’s main islands are rather limited due:   

Rather high production costs The absence of an appropriate feed-in tariff The existence of large coal-fired power plants that can provide electricity at low cost.

Currently the potential lies in the off-grid sector as the implementation of several projects has shown. Consisting of 17,000 islands (6,000 inhabited thereof) decentralized electricity grids are needed if electricity shall be provided for every household in the archipelago. Especially Eastern Indonesia consists of rather small islands, which are often (if at all) electrified with diesel gen-sets (figure 5). Due to high transportation costs the electricity generation in regions like Malukku, Nusa Tengara and Papua is very expensive, increasing the competitiveness of electricity generated from PV.

15 16

Ministry of Energy and Mineral Resources (2012), p. 22. ibid.

MARKET STUDY ON CLEAN TECHNOLOGY IN INDONESIA

PLN operates a total of 4600 diesel gen-sets (3,100 MW) outside the main Jamali grid, representing 40 percent of the total outer Jamali generation capacity.17 In addition to that, it is estimated that there are a total of 30,000 small diesel gen-sets in rural areas in use.18

Figure 5: Distribution of diesel gen-set capacity

So far the PV sector is driven by government projects. In the past the government has handed-out solar home systems (SHS) for free: Hundred thousands of these systems have been installed without a sustainable effect. Soon the SHS got broken or spare parts were sold by the villagers. Due to the limited success of those programs, the development of mini-grids using PV is currently in the focus. Market insiders estimate that this year’s government budget for PV solutions is US$ 250 million with 80% planned for off-grid solutions. Tenders are published on the e-procurement website of the ministry of energy and mineral resources. 19 Implementation is done in cooperation with PLN as the buyer of the electricity. On the private sector side especially telecommunication companies are users of PV solutions for the electrification of base transceiver stations (BTS). With an estimated installed capacity of only 2 MW the sector is still small but expanding. Most BTS are equipped with diesel gen-sets. Maintenance and diesel transportation increase the operating costs. Through the additional application of PV modules a hybrid solution is applied that reduces the operating cost.20 It is estimated that 5-10 % of Indonesia’s 150,000 to 200,000 BTS are off-grid and usually powered by diesel gen-sets. Additional PV modules have a peak load of 5-20 kWp. Indonesia’s largest mobile phone company Telkomsel has experience with PV solutions since 2003. In the period 2007-2008 it partnered with Conergy and the Indonesian company Gerbang Multindo Nusantara (GMN) to develop 16 off-grid photovoltaic systems for PT Telkomsel. The total installed capacity was 158.50 kWp. The project sites were located in remote areas around Sumatra, Sulawesi and Irian Jaya (Papua). Status end of 2012: Telkomsel has 4,400 green BTS in operation, which are powered by solar cells and in some cases with hybrid solutions in combination with micro hydro power plants.21 The second largest mobile phone company Indosat employs a hybrid-system consisting of solar cell panels, wind turbines and bio-fueled diesel gen-sets. Status 2012: More than 100 solar-powered BTS in remote areas to reduce reliance on diesel are in operation.22

17 18 19 20

PLN (2010) Differ (2012), p.2

http://eproc.esdm.go.id/eproc/

EKONID (2012), pg. 8. Telkomsel (2012), p. 176. 22 Indosat (2012), p.398. 21

MARKET STUDY ON CLEAN TECHNOLOGY IN INDONESIA

Another, yet less developed market is the captive power sector. Due to the unreliable and ubiquitous supply of electricity through PLN, companies are operating their own power stations (captive power). According to PLN data, a total of 6.4 GW of captive power installations does exist (4 GW outside Java-Bali thereof). These power stations are mostly diesel gen-sets. However the application of PV hybrid solutions is still very limited.23 Future trends The Indonesian government plans to set a feed-in tariff, which will have tiered pricing depending on the region (up to 0.25 USD/kWh in prioritized regions). With an interesting tariff, the on-grid market will become more interesting. PV equipment has to be imported to Indonesia. Locally only assembling is taking place. In the off-grid market especially the upcoming 1000 islands project will be interesting for international suppliers. PLN will continue to equip its existing diesel gen-sets with additional PV modules. Phase I of the project is expected to start at the beginning of 2014 with an initial capacity of 35 MWp scattered across 170 locations. Mini-feasibility studies have been already conducted for all sites. The World Bank and the Kreditanstalt f端r Wiederaufbau (Reconstruction Loan Corporation, KfW) are financing the project with 300 Mio US$ in loans and oversee the tender process. Since sustainability is important the international tender will favor high-quality components. Hence opportunities for Swiss companies do arise.24 There is also high demand for long lasting batteries and inverters for PV systems in Indonesia. Further potential is in the supply of transmission technique, control technology and electricity storage facilities. Another field for international experts is the planning of solar systems and hybrid solar systems in Indonesia. 3.2.2.3. Other solar energy solutions

Solar thermal energy In Indonesia thermal solar heat is used for domestic hot water supply, industrial processes, on-grid thermal power plants and air-conditioning. Due to the tropical climate in Indonesia, solar thermal energy for heating and generating hot water is much less important than in other regions worldwide and limited to private middle-class households, hotels and hospitals25. There are several local suppliers for solar water heating systems, for example PT. Wijaya Karya (brand: Wika SWH), Sanken SWH Indonesia Inc., PT. Indonesia Technology & Energy International (ITEI), PT. Solar system Indonesia and IS Inti Solar. With an increasing household income, demand for solar water heating systems is expected to rise in the future. Another use of thermal solar energy is heat for industrial processes, e.g. for drying goods in industrial processes. But the present situation is that most small industries, especially in the field of agriculture do not use solar thermal energy systems for their applications but use direct sunlight instead. There were plans to install solar thermal on-grid facilities in Indonesia but until today the high investment costs of such plants and the lack of knowledge are barriers. Experts do not expect to see on grid thermal solar plants in Indonesia in the near future

Plant & Suppliers for Solar Cell Production26 Until now there is no production of solar cells in Indonesia. The companies in the photovoltaic business import the solar cells, creating a large market for Swiss technology suppliers to export to Indonesia. Only assembling

PLN (2010) Information is based on an interview with KfW Jakarta. Beerepoot, Milou, Oelz, Samantha (2010), p. 28 26 Content is based on interviews 24

MARKET STUDY ON CLEAN TECHNOLOGY IN INDONESIA

of solar panels is done in Indonesia so far. At the moment there are eight companies in Indonesia that assemble solar cell modules. The Ministry of Energy and Mineral Resources wants five state-owned companies to start a production of solar cells in Indonesia but to date the project has not yet begun. The companies are PLN, Wika, Pertamina, LEN and Jasa Marga. An issue remains on the choice of technology: LEN opts for crystalline while PLN prefers tin film solar cells. Experts have different opinions about a local solar cell production in Indonesia: some tend to think that it is not the right time to build up a own production in Indonesia, due to a consistent lack of knowledge and high competition with China.

3.2.2.4. Hydro electric power

Present market Estimations show that Indonesia has the potential to generate 75,000 MW from hydropower and 770 MW from mini-hydro power plants. The currently installed capacity for hydro electric power stations stands at 6654 MW, which is only 8.8% of the capacity, while in the field of mini and micro hydro power, the installed capacity already covers almost 30% of the resources.27 Most potential sights are located outside of Java. The connection to the Jamali grid is in most cases not possible, which limits the possibility for utilization. Currently approximately 21,000 MW of the existing hydropower potential is considered to be utilizable for energy generation. Generating electricity with hydropower is not only interesting for on-grid facilities, but also for industrial plants in remote areas, like in the mining industry. Independent power producers have to sell their electricity to PLN in most cases. Hydro power stations bigger than 10 MW have to negotiate the purchase price with PLN on and individual basis. For hydro-electric power stations below 10 MW, there is a feed in tariff that varies with voltage and region. For regions outside of Java the basic tariff is Rp. 656 for the connection to the medium transmission line (20KV) and Rp. 1,004 for the connection to the high voltage network are multiplied with a factor varying between different regions, thus resulting in different feed-in tariffs throughout the country as depicted in table 3.

Table 3: Feed-in tariff per kWh per region in Rupiah Region

Factor

Medium Voltage (Rp)

High Voltage (Rp)

Java, Bali

656

1004

Sumatera, Sulawesi

1.2

787

1205

Kalimantan, NTB/NTT

1.3

853

1305

Maluku/Papua

1.5

984

1506

Source: Hasrul (2012)

Ministry of Energy and Mineral Resources (2012), p. 14.

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Future trends The government plans to increase the hydro power capacity until 2025. It is planned to build 100 additional power plants with a total capacity of 13.000 MW. One third of them should be built and financed by private investors. In the sector of mini hydro power plants, the total capacity should be increased by 500 MW. PLN pursues these objectives: in 2012 it signed contracts with 130 private owned mini hydro power plants. Three large hydro power plant projects started with the plants’ construction this year. In total an additional capacity of 1400 MW will be made available with an investment of US$ 3 billion. 3.2.2.5. Biogas/Biomass

Present situation The Indonesian government estimates the potential to be 50 GW with only 1.6 GW utilized at the moment. Energy production from wood in Indonesia is mainly used in rural areas in the form of firewood. Usage in urban areas is rather limited. Firewood and charcoal represent 80% of all biomass energy consumption in Indonesia. Technically more interesting is waste from agricultural production. Feedstock is available in abundance. Indonesia has a large agricultural sector. It is the leading producer of palm oil in the world with a market share of 50%. After the production process 80 percent of the fresh fruit bunch (FFB) remains as a residue in different forms (that all require different treatment) such empty fruit bunches, fibers and shells as well as liquid effluent and waste water with high content of methan gas. According to official statistics Indonesia produced almost 15 million tons of crude palm oil in 2011.28 In 2010 a total of 608 palm oil mills with plant capacity of 34,280 tons FFB/hour were owned by plantation companies.29 Sumatra is Indonesia’s palm oil production area number one, followed by Kalimantan (figure 6). Furthermore, bagasse from sugar cane and rice husk from rice production are sources currently not efficiently used. In 2010, Indonesian rice mills produced 66 million tons of rice with additional by–product or solid residue as much as 13 million tons of rice–husks. Sugar factories in Indonesia are running with crushing capacities ranging from 1,000 to 12,000 metric tons cane per day; processing each ton of sugarcane comes with about 320 – 370 kg of bagasse.30

Figure 6: Distribution of Indonesian palm oil mills

Source: Own graph, data from Ministry of Agriculture (2009), taken from EKONID (2011), pg. 37. 28 29 30

Badan Pusat Statistik, www.bps.go.id Hambali et al (2009), pg. 2. EKONID (2011), pg. 23

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With generating energy from biomass, producers cannot only cover their own demand for electricity, but also sell the surplus production of electricity to PLN, generating additional income. The Indonesian government supports the development for biomass and biogas power plants. For power plants with less than 10 MW, the Indonesian government has set a new feed-in tariff to accelerate the electricity production from biomass, which is higher than the tariff for hydro power plants (table 4). The Indonesian market for electricity is still dominated by PLN, who has still a monopoly for feed-in electricity into the national grid. To extend the capacity, private electricity providers are allowed to become independent power producers (IPP) and to sign power purchasing agreements (PPA) with PLN, in which the terms and conditions for feeding in electricity into the PLN grid are agreed. In the palm oil industry, these IPPs are usually palm oil mills, project developer or joint ventures of both. International equipment suppliers can act as project developers who sell their equipment to the owner of the power plants, which would be in most cases the owner of the palm oil mill or specific project vehicle.

Table 4: Feed-in tariff for biomass/biogas plants Region

Factor

Medium Voltage (Rp)

High Voltage (Rp)

Java, Bali, Sumatera

975

1325

Kalimantan, Sulawesi, NTB, NTT

1.2

1170

1590

Maluku/Papua

1.3

1267.50

1722.50

Source: Hasrul (2012) Future trend At the moment there are 9 biomass plants that feed in 61 MW into the PLN grid in total. Until 2014 another 15 biomass plants with 378 MW from palm oil biomass are planned according to the ministry of energy. With most of the actual potential not yet utilized and the ongoing energy supply issues the sector is expected to expand. However, the experiences in Thailand have also shown that the availability of feedstock can become a problem when the market for biomass and biogas power plants is growing. Currently available palm oil waste will become a resource with a market price. Some palm oil mills may tend to rather sell their production residues instead of producing electricity themselves. 3.2.2.6. Geothermal

Present situation Due to its location along the ring of fire, a volcanic belt, Indonesia has the potential to generate up to 29 GW of energy (table 5: geothermal energy potential), representing 40 percent of the worldâ&#x20AC;&#x2122;s total geothermal resources. With a currently installed capacity of 1,200 MW, Indonesia is the worldâ&#x20AC;&#x2122;s third largest producer of geothermal energy after the United States and the Philippines.

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In 2012, there were five plants running in Java, one in Sumatra and another one in Sulawesi. At the same time the government was preparing additional 54 sights for future exploitation. All projects were implemented under the license of PT. Pertamina Geothermal Energy (PGE), which belongs to the state-owned oil producer PT. Pertamina.31 Currently PGE is in the development stage for 10 more power plants with a total capacity of 962 MW. The investment needed was stated to be US$ 6 billion. In North Sumatra the private company Medco Power develops the â&#x20AC;&#x153;Sarulaâ&#x20AC;? geothermal site. With an estimated electricity generating capacity of 330 MW it is stated to be the largest geothermal power plant in the world. 32 Among foreign companies active in the sector is Chevron Pacific Indonesia. With its plants the company generates 636 MW of electricity.33

Table 5: Geothermal energy potential

Source: Sukarna (2012) In recent years the Indonesian government has been trying to improve the regulatory framework to enhance the exploitation of this abundant clean energy source. But the sector still faces many challenges. Positive was the development of the feed-in tariff to attract especially investors from the private sector. The original purchase price of US$ cent 9.7 was increased to between 11 and 18.5 US$ cent depending on the project location, thus offering a higher return of investment and a shorter amortization of the investment. 34 Other challenges remain. Development of geothermal energy is expensive. For 1 MW of energy US$ 3 million need to be invested. High drilling costs are a risk for developers. Drilling one well can cost between 3 and 5 million US$.35 If the drilling was unsuccessful the investment is lost. Environmental issues prevail as well. About 80% of the geothermal reserves are located in conserved forest areas. In 2009, the mineral and coal mining law listed geothermal exploration as mining activity. Respectively, a presidential decree is required for allowing geothermal exploration in these conserved forests. In 2011, the Government of Indonesia has imposed a two-year moratorium on logging. Besides the ministry of energy also the ministry of environment needs to issue a permit. In addition to that, local governments have their say as well. This complicated bureaucratic process hinders the further advancement of geothermal energy in Indonesia.

Sukarna (2012) Tito (2012) Tito (2013) 34 Tito (2012) 35 Griebeler (2012) 32 33

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Future trends Geothermal energy plays an important role in the long-term Indonesian energy planning. It is understood that it is not only a clean but especially a stable source of energy. 36 According to government plans by 2014 44 new geothermal plants should be installed aiming at an increase in production capacity of up to 4,000 MW. 37 According to the “Vision 25/25” geothermal energy shall generate 9,000 MW by 2025, which would cover almost 11% of Indonesia’s electricity demand of 83 GW by then. This ambitious aim would make Indonesia the world’s leading geothermal energy producer. Business opportunities for international companies do exist in the construction of power plants, joint ventures and consulting services. Foreign investors can own up to 95% of Indonesian geothermal power plants. 38 To limit the risks associated with geothermal development, the Indonesian government announced the establishment of a fund to finance exploration. In total, US$ 300 million will be made available for exploration efforts of local governments. Once a prospective site has been identified the local authorities can tender it. Investors shall then repay the exploration cost to the government directly. 39 3.2.2.7. Other Technology Applications Waste Heat Utilization Waste heat recovery is a relatively new area in Indonesia, but an important project has been implemented in the cement industry. Throughout the cement making process, waste heat is used for decreasing the Cement Plant’s dependence on energy supply from power companies. The Waste Heat Recovery Power Generation (WHRPG) throughout the cement making process in PT Semen Padang, Indonesia is a project jointly installed between the Japanese and Indonesian government whereby a capacity of 8.5 MW is generated. This project decreases the annual CO2 emission of Indonesia by about 40,000 tons40. This project was registered under the CDM mechanism to generate additional income for the project owners. Fuel Cells The market for deploying fuel cells in Indonesia is not well developed compared to other renewable energies. Neither policies nor governmental subsidies stimulating its enhanced operation exist. Furthermore, infrastructural backdrops in Indonesia remain a challenge for suppliers when it comes to logistics. Currently, the amount of suppliers of fuel cell systems is rather low in Indonesia. A major actor is the company Cascadiant that began operating with fuel cells in 2008. They promote dialogs with local telecoms operators for educating features and possible benefits of using fuel cells as backup power systems in case of increasing diesel prices due to decreasing governmental subsidies. However with about 450 of the 900 worldwide installed fuel cell systems, Indonesia is one of the leading nations in fuel cell deployments in telecoms.41 This leading position can be referred back to the partnership between Hutchinson and IdaTech42 as these companies have installed a majority of the fuel cell systems in Indonesia. The telecommunication industry is the main sector where fuel cell systems are used for in Indonesia so far. Fuel cell systems have developed from a potential technology to a commercially viable power solution for power mobile base stations. Throughout recent natural disasters cell fuel backups of diesel generators have 36

Tito (2012) Alard (2010) 38 Tito (2012) 39 Wulandari (2013) 40 JFE Engineering Corporation. 41 GSMA, p. 14. 42 IdaTech is a global leader in developing and manufacturing Proton Exchange Membrane (PEM) fuel cell products for communications and other backup power applications. Hutchinson Telecommunications is a mobile network operator. 37

MARKET STUDY ON CLEAN TECHNOLOGY IN INDONESIA

proven to be very reliable with a 24- hour lifetime during grid outages compared to only 4- hours lasting batteries. Their increasing usage is driven by the aim of reducing costs, reducing environmental impacts and increasing liability. Generally, the Indonesian population shows a high willingness and ability in using and paying for mobile telecommunication services. As political drivers aim at steering the energy generation from fossil fuels to renewable energies, more and more telecom service providers start changing their systems to energy utilization from other sources than diesel generators, including also fuel cells. The electrification of BTS was discussed in the photovoltaic section. Fuel cells re applied in the same field. Since the mobile phone market is increasing the number of BTS is increasing as well. Clean and efficient solutions will be more important, especially behind the background of rising fuel prices. Thus there is a market for fuel cells in Indonesia. 3.2.3. Solid Waste and Water Treatment 3.2.3.1. Solid Waste Treatment

Present situation The demand for solid waste treatment facilities is high in Indonesia. The current waste treatment system in Indonesia is far from international standards. Modern treatment facilities are not existing or very limited. The current legal framework does not attract investors on large scale to get involved. Only limited efforts from the government could have been recognized in the past. The country produces more than 100,000 tons of waste every day.43 In the capital Jakarta more than 700 trucks collect 6,500 tons of waste every day, with on third comprising paper and plastic and the remainder being organic waste. Approximately 90% of this amount is transported to the landfill site in Bantar Gebang in Bekasi. The remaining amount goes to the open dumpsite in Sunter, North Jakarta.44 The waste that eventually ends up at the dumpsite is largely of organic origin. Most of the recyclable parts are taken out before. A study conducted by the World Bank found that only 6.5% of the recyclable waste finds its way into official waste treatment process. An estimated 400,000 scavenger in Jakarta alone collects the lion share of valuables. They collect paper, plastic, metal, glass, resources that can be sold again at 30-200 US$ per ton, e.g. to waste banks that can be found in Jakarta.45 In 2012 the Jakarta government spent every year US$ 40 million on the transportation of the waste to the dump site. A further US$ 25 million was spent on the waste management. With an annual amount of 2.34 million tons of waste the government spends 10-12 US$ per ton on its treatment and US$ 28 per ton if transportation is included. In 2013 the total amount for waste management shall increase to US 93 million. 46 However, the city government pays the private operators of the Bantar Gebang dump site a gate fee (or tipping fee) of Rp. 105,000 (including 10%) VAT per ton. After deduction of the tax Rp. 70,000 (5-6 Euro) are left for the operator. In comparison Singapore spends 60-65 US$ per ton for waste disposal. At Bantar Gebang the companies PT Godang Tua Jaya and PT Navigat Organic Energy Indonesia are operating a waste treatment plant for organic waste and recycling of reusable waste. Besides recycling valuables a power plant is operated fueled by landfill gas, pyrolysis, gasification and anaerobic digestion. The gas combustion has been done with GE Jenbacher gas engines. In the final stage of expansion, up to 26 MW of electricity will be generated in the future. The generated electricity is sold to PLN at Rp. 820 kWh. However, with operating cost estimated to be 25-30 US$ per ton the plant can not be operated profitable currently. Higher income is

43 44

DHV B.V. (2011), pg. 6. Novia (2013) Bagoglu (2011a) 46 Novia (2013) 45

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expected renegotiation with PLN. The feed-in tariff for such projects has been raised last year. The investment to construct the plant totaled US$ 66 million.47 Another example of a private company engaging in waste management is Geocycle, which belongs to the cement producer Holcim. The company collects up to 20,000 t of toxic waste every month. At Holcim after burning at high temperature the ash is mixed with the cement during the production. 48 Additional income is generated from selling carbon emission reduction via the clean development mechanism of the United Nations Framework Convention of Climate Change. On the policy side solid waste management is regulated in law 18/2008, which states that latest by 2013 each municipality has to have a proper waste treatment system in place. Open dump sites have to be converted to sanitary landfills. Until mow little progress has been perceived. The current National Mid-Term Development Plan of the Ministry of National Development Planning and National Development Planning Agency (BAPPENAS) for the period 2010-2014 states the following goals for solid waste treatment: 

Increase waste collection rates and sanitary disposal



Replace local and regional waste dumping with sanitary disposal



Increase solid waste service levels and related budget for solid waste management.



Make all municipalities developing their own sanitation strategies, including solid waste management plans to streamline local, regional, and national efforts.

Future trends Recently the Jakarta city government mandated by the law 18/2008 enacted a new bylaw on waste management. The new bylaw shall be the basis for city’s new master plan for waste management. The new bylaw regulates the application of the necessary technology, community involvement, responsibilities of the private sector and cooperation with the private sector partners. For instance, in the future households have to separate organic from non-organic waste. Residential and office areas have to manage their waste by themselves. Producers will be obliged to manage product packaging that does not decompose naturally. In cases of a lack of compliance fines will be applied. Furthermore the regulation states that the city administration is planning to set up Intermediate Treatment Facilities (ITF) that would apply sophisticated environmental technology to manage waste. Interesting market opportunities for companies providing the necessary technology will arise. The ITF will be set up in Sunter, Marunda and Semanan and are expected to handle 1,500 tons of waste daily. In Cakung Cilincing an ITF started operating in 2011 using a mechanical biological treatment technology. The plant produces 4.95 MW of electricity every day from the organic waste and handles in total 1,300 tons of waste.49 Already in 2012 the state oil company Pertamina signed an agreement with PT. Godang Tua Jaya to develop a 120 MW power plant that shall be fired by up to 2,000 tons of waste from the dump site Bantar Gebang. The necessary investment is estimated at US$ 180 million. Electricity shall be produced and sold to PLN up from 2014. Regarding the solid waste treatment the gasification or combustion of waste will be in the focus for the upcoming years in Jakarta. It can be assumed that other cities will follow the example set by the capital. The existing feed-in tariffs for power plants that utilize the waste or (methane gas derived thereof) for electricity production will provide an incentive for potential investors. The tariffs are shown in table 6 and 7. In case of 47 48 49

Cochrane and Theunissen (2010) Cochrane and Theunissen (2010) Indah and Sita (2013)

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the zero waste technology an additional gate fee of a2 minimum Rp. 100,000 per ton will be paid as compensation to the operator.

Table 6: Feed-in tariffs for municipal waste utilization with zero waste technology Region

Factor

Medium Voltage (Rp)

High Voltage (Rp)

1,050

1,398

Kalimantan, Sulawesi, NTB, NTT

1.2

1,260

1,677.60

Maluku/Papua

1.3

1,365

1,817.40

Java, Bali, Sumatera

Source: Hasrul (2012)

Table 7: Feed-in tariffs for landfill gas utilization Region

Factor

Medium Voltage (Rp)

High Voltage (Rp)

Java Bali , Sumatera

850

1,198

Kalimantan, Sulawesi, NTB, NTT

1.2

1,020

1,437.60

Maluku/Papua

1.3

1,105

1,557.40

Source: Hasrul (2012) Due to prevailing environmental issues and the measures the Indonesian government as well as local authorities are willing to take, interesting business opportunities for Swiss companies arise. Sophisticated equipment will be needed to solve the waste problem. To further support Indonesia’s effort, several foreign countries have pledged their support in developing waste management projects, e.g.: 1.

Japan, as they are planning to invest IDR 1.6 trillion for a solid waste treatment plant in Jatiwaringin, Tangerang with processing capacity/day of 2,500 ton/day 50.

Germany has also offered its cooperation in managing solid waste in five cities, such as Malang, Jambi, Jombang, Pekalongan, and Sidoarjo.51 This project would have a size of US$ 100 million.

In addition to that, several projects have been offered to the private sector in the form of Public Private Partnerships (PPP). The following projects are listed in the Blue Book of the National Development Planning Agency (BAPPENAS): 1. Solid Waste Treatment and Final Disposal – Bogor & Depok (West Java) Project Code No : D - 033 - 22 - 0109 – 26 Project concept: Operation of a sanitary landfill site with household and commercial waste from the district of Bogor and Depok. 50 51

Joniansyah (2013) General Directorate Cipta Karya ( 2013)

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2. Solid Waste Treatment & Final Disposal - Putri Cempo Mojosongo, Surakarta, Central Java Project Code No : D – 033 - 22 - 0210 - 221 Project concept: establishment and operation of an integrated solid waste management at a landfill in Surakarta. 3. Padang Solid Waste Management – West Sumatera Project Code No : D – 033 – 22 – 0111 – 413 Project concept: According to Law No.18/2009, the sanitary landfill system is supposed to be used for a solid Waste Final Disposal System that can produce methane gas. Currently, the Final Solid Waste System in Padang does not use the sanitary landfill system for both solid and liquid waste.

3.2.3.2. Water Treatment Municipal Waste Water Treatment Present situation The current situation of Indonesia’s drinking and wastewater management system is very limited in its outreach, as of insufficient quality and inability to deal with prevailing environmental issues. With an annual rainfall of 2,700 mm, Indonesia is endowed with sufficient water resources. The sector with the highest demand for water is the agricultural sector. However increasing urbanization and the growing size of the manufacturing sector are the driving factors behind the increasing demand for water. The inadequate status of the production and distribution infrastructure prevents a more efficient allocation of water. 52 Government funding for investment into water management infrastructure is considered as limited and financial support from foreign donor organizations cannot compensate the shortfall. Hence, large-scale solutions are required. Currently, various problems arise in the field of wastewater management, such as a weak regulatory environment and a need for modern technical equipment. It is estimated that only 25 percent of the wastewater is being treated while the remaining 75% of wastewater is discharged in rivers or public waters.53 In Indonesia, the local government owned water utilities (PAM) are responsible for water and sanitation services currently. Only twelve cities in Indonesiay have wastewater management facilities and those are limited in their quality: Medan, Jakarta, Bandung, Cirebon, Yogyakarta, Surakarta, Denpasar, Banjarmasin, Balikpapan, Tangerang, Batam, and Manado.54 In Jakarta, PAM Jaya has assigned the company PD PAL JAYA for its wastewater treatment. With regard to drinking water in Jakarta PAM Jaya has assigned the two private companies PT PAM Lyonaise Jaya (Palyja; West-Jakarta) and PT Aetra Air Jakarta (Aetra; Ost-Jakarta). Their networks cannot keep up with the increasing demand. Even though investment has been done in recent years, the existing pipe network is ailing and therefore in high need for a revamp. According to unofficial estimations, the total length of pipes in need for maintenance would be 3,000 Km. So far, piped water is only available in limited areas. This forces households and industries to extract groundwater, which gets polluted by Jakarta’s rivers that are known to contain E-coli bacteria.55 Tap water quality also shows fallbacks due to the fact that it is retrieved from polluted rivers and insufficiently purified. 56 52 53 54 55 56

Bagoglu (2011b) Royal Danish Embassy (2009), pg. 5. Wahyuningsih, Merry ( 2012): DOWNLOAD The Jakarta Post (2010a) The Jakarta Post (2011)

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Household waste, human feces and industrial water are polluting the Indonesian rivers, which lead to bad water quality. In 2007 the Jakarta Environment Management Agency (BPLHD) started to impose a special tax on groundwater extraction. Yet, the official numbers of companies and households on the exact extracted amount of water are unclear and are considered to be falsified. While the official number stands at 22 million cubic meters (cbm), unofficial estimations are calculated to be in the range of 200 to 300 million cbm. The uncontrolled and wasteful groundwater extraction leads to soil compensation and leaves Jakarta sinking by 10 cm each year.57 The fastest sinking areas are depicted in figure 7. Figure 7: Map of Jakarta's fastest sinking areas

Source: Abidin et a. (2009), taken from Irawaty (2010)

Future Trend Government Regulation No.61/2011 set out that the government plans to develop wastewater treatment facilities in 16 new cities between 2010 and 2020. This offers opportunities for businesses to contribute to the development and realization as these projects aim at promoting PPP schemes in the wastewater treatment. Jakartaâ&#x20AC;&#x2122;s local government has recently initiated a roadmap aiming at developing an integrated management system for wastewater, which should eventually cover 80 percent of Jakartasâ&#x20AC;&#x2122; waste-water output by the year 2030. Further development of wastewater infrastructure will be made by dividing the city into various zones.

Irawaty (2010)

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The project in the first zone will start in early 2014 and cover a large part of Jakarta’s downtown area (from Setiabudi to Kota)58. According to the recently enacted bylaw, small waste-water systems will also be needed as a new regulation will soon be issued by the Jakarta government which will put the responsibility of waste water treatment on the industries, the commercial areas and the upscale households themselves. Consultation, construction, provision of technical equipment as well as after-sales service will therefore be required. The required total investment for the first zone is estimated at US$ 470 million, of which funding is expected from Public Private Partnership (PPP) and loans. 14 other zones in Jakarta are planned to be developed before 2050. The total investment is expected to amount US$ 68 billion. The development of Jakarta’s integrated management system for wastewater treatment could become the landmark in this sector in Indonesia. Other cities with large population and important economic growth are expected to follow Jakarta’s initiative. The expansion plan by building an integrated management system for wastewater will surely provide many opportunities for Swiss companies. The groundbreaking event of this integrated management system for wastewater is planned to be held in January 2014 by the municipal government and PD PAL JAYA. This future project will require a significant number of technical equipment such as pipes (in the first phase a total length of 1,766.5 Km). The pumping station will only require one or two pumps since the new masterplan is already considering the land contour of Jakarta and the city’s descending course to the lowest level at the north area59. In the near future, the development program of PD PAL JAYA 60 will offer another chance for international businesses to enter the Indonesian market. The project aims at conducting regular check-ups of waste water treatment plants all over Jakarta.61

Industrial Waste Water Treatment Present situation The development of Indonesia’s industrial sector alongside with the establishment of new factories will significantly challenge the environment. A complete binding regulatory framework has yet to be developed including, among others, an environmental feasibility assessment prior to the actual construction. The current regulatory framework requires private companies to treat their wastewater. International companies based in Indonesia will seek expertise from foreign companies, offering market potential for Swiss experts in this field. The government regulation No. 27 /1999 requires an Environmental Impact Assessment (AMDAL) before construction of new facilities. This certificate is usually mandatory for foreign companies willing to invest in Indonesia, and therefore required by the Indonesian Coordinating Investment Board (BKPM). The applied standard for industrial wastewater treatment can be found in the Act from Ministry of Environment No.51/1995. The industrial areas in Indonesia are ranked according to their regions. Hence, the West Java province produces most of Indonesia’s wastewater, followed by Central Java and East Java 62. Those areas could therefore serve as target markets for international companies looking to penetrate the Indonesian market. PT. Prasadha Pamunah Limbah Industri (PPLi) - Waste Management Indonesia is considered pioneer in terms of industrial waste treatment and possesses 70% of market share63. The government presently owns 10% shares in the company. The wastewater treatment solutions offered by PT Prasadha Pamunah Limbah Industri seem to be a popular choice among industrial estates. Their services for wastewater treatment are both aerobic 58

Suhendra, Zulfi (2013): DOWNLOAD Indardo, Yudi (Director PD PAL JAYA): Interview, 12.06. 2013.. PD PAL JAYA (2012): Concept and Strategy for Wastewater Management of Jakarta, p.15. DOWNLOAD 61 Indardo, Yudi (Director PD PAL JAYA): Interview, 12.06. 2013. 62 Pramesti, Olivia ( 2011): DOWNLOAD 63 Faisal, Tengku (PT Prasadha Pamunah Limbah Industri): interview. 18.06.13 59 60

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and anaerobic treatments. Regarding the sludge treatment, the most common management would be to compact it dump it at the landfill site. Future trend All industry experts agree that prospects in the industrial wastewater management sector are good. With stronger enforcement of already existing laws potential for Swiss expertise will develop. The government regulation No.61/2011 constituted a real breakthrough as for the first time it established a fixed deadline for the improvement of wastewater and solid waste management within the industry. Few highlights from the action plan as stated in the regulation are as follows: 1.

The development for off-site systems in 16 regencies and on-site systems in 11,000 locations of wastewater facilities and infrastructure are scheduled for the period 2010 to 2020.

The Construction of final treatment facility (FTF) in 194 locations from 2010-2020.

3.2.4. Cleantech Services64 With regard to the development of the market for cleantech services in Indonesia is still very recent. In general, there is still a lack of awareness of the advantages of energy efficient buildings and their related services: energy audits, environmental assessments and environmental consultancy. Potential customers often are not aware of the benefits from safety audits and management consultancy. Until 2009 and the government regulation No. 70/2009 (obligation to report energy consumption for large buildings), the market for clean energy services was almost non-existing. Numerous new buildings are currently in the planning as a consequence of Indonesia’s stable economic growth and growing urban population. As an attempt to monitor the energy consumption in Jakarta’s buildings, the Governor’s Regulation No.38/2012 stated that all constructions between 10.000 and 50.000 m2 (depending on the purpose of the building, see part 3.2.1), have to conduct energy audits. Though, interviewed market experts criticized that no clear standards have been defined within the framework of this regulation. Its applicability and outreach is therefore not clear at the moment. The industrial sector consumes approximately 35% of the total energy in Indonesia. The Indonesian government assumes that there is a saving potential of 15-30% as a lot of the plants are old and inefficient. However, saving energy is slow in implementation. The core instrument of the government for the implementation is the PPP on energy conservation, which offers free energy audits for companies. Between 2003 and 2011 almost 700 companies participated in this program. However, only half of the identified savings were implemented due to a lack of investment subsidies from the government. International programs like interest-free loans from the KfW can help but cannot fill the gap completely. Part of the Government of Indonesia’s strategy is to focus on the 200 companies that consume more than 70.000 MWh per year. These companies are obliged to employ energy managers and to carry out energy audits on a regular basis. The lack of implementers for these energy audits and of educators for the energy managers leads to significant market opportunities for European companies. One best practice example is the Eco-Hotel and Resort Management System which certified 14 hotels in Indonesia and was implemented as a pilot project by TUV Rheinland in cooperation with DEG (Germany's Investment and Development Company) and the German Indonesian Chamber of Industry and Commerce. There is no data and statistics available about the whole Clean Tech market in Indonesia. According to market insiders, in Indonesia there are less than 10 middle or large companies that offer cleanteach services. Most of these services are in general provided by independent consultants who offer lower prices than bigger companies. The general trust in the results of audits and environmental assessments is not high as sector experts point out. Everybody can offer services as a consultant and often the quality of the provided service is 64

Information is based on interviews mostly

MARKET STUDY ON CLEAN TECHNOLOGY IN INDONESIA

very low. Due to the lack of concrete profits, building owners forced by the government regulation to buy services like audits try to invest only a minimum. Companies such as SGS, TUV Rheinland and the company Deutsche Far East P.T offer services in this field. Sector-related sources report a huge potential in the Indonesian market, however, there is a poor awareness of the people for Clean Tech services. Customers with a true motivation to save energy do exist, but usually audits are only conducted to fulfill regulations, obtain a certification or for image reasons (for example in the tourism industry). Although the energy audits done by e.g. Deutsche Far East, mention concrete measures to save energy and also provide information regarding the ROI for the recommended investments, often the suggested steps are not implemented. Overall, despite a lack of broad demand, experts see a large potential for the future of Clean Tech services in Indonesia. The mindsets are changing and Indonesiaâ&#x20AC;&#x2122;s fast growing and energy consuming economy will soon demand the technological solutions developed in other countries. The increasing number of multinational companies, regulated by international standards, operating in Indonesia leads to further requests for cleantech services. Hence, they remain to date the best customers for safety audits. Nevertheless, with electricity prices rising, people are forced to become aware of the financial benefit laying in energy saving. Within a year of operation in Indonesia, the currently operating companies receive more inquiries than they can serve. According to market insiders, the demand in Indonesia is expected to increase rapidly in the next years. As a lot of Indonesian companies have a higher trust in services provided by foreigners than in Indonesian consultants, it is assumed that there is a potential market for European companies that want to offer Clean Tech services in Indonesia. Furthermore, the Green Building Council Indonesia is dedicating its activities to providing the necessary education to the community in applying environmental best practices and facilitating the transformation of the global construction industry. All those institutions agree on the market potential for cleantech and buildings services. However, the legal framework needs to be further developed: stronger enforcement of the existing regulations, but are also well high quality for those services.

MARKET STUDY ON CLEAN TECHNOLOGY IN INDONESIA

4. Recommendations To maintain its economic growth and to further develop its national industry, Indonesia urgently needs to improve its infrastructure, and more specifically its energy supply. At a national level, the burden of fuel subsidies on the state’s budget, and at a private level, the un-reliability of the electricity grid, are calling for alternative solutions. Over the years, awareness started to rise and concepts of bio-energy sources and energy efficiency appeared. However, the lack of experience, and sometimes of understanding, of Indonesian companies with those topics is strongly calling for the expertise of foreign companies. Therefore, opportunities for Swiss SMEs providing alternative energy and efficiency solutions are huge.

4.1. MARKET ENTRY STRATEGIES In general, partnering with an Indonesian company is strongly recommended to successfully enter the Indonesian market. Indonesian partners will serve as a necessary liaison with the, sometimes burdensome, Indonesian customs and/or relevant agencies. Either as distributors or project partners, they will also facilitate the contact with potential Indonesian customers. For example, in the renewable energy production sector, Indonesian project developers are very often the trigger for new projects and act as door opener with relatively close industries – i.e. palm oil millers. Answering Indonesian public tenders can also appear very difficult without the support of a local project partner. Moreover, in a country where network is the key, operating with an Indonesian counterpart is often necessary for a better visibility of the Swiss companies’ products and services. Finally, please note that some sectors of activities are limited in terms of foreign capital ownership: an Indonesian partner therefore becomes mandatory by law65. The very recent developments of the market as well as the overall lack of awareness on those questions, call for comprehensive solutions on the Swiss SMEs’ side. Indonesian customers are often looking for integrated systems rather than one piece of equipment. Indonesian project developers are indeed in general more interested in full technology solutions and request maintenance services. Depending on the sectors, the demand for foreign project developers can be sometimes higher than for sole technology providers. After-sales services after completion of the project are one of the major requirements of Indonesian customers in the renewable energy and energy efficiency sectors. Consequently, Swiss companies with an existing presence in Indonesia and/or the region will generally be favored to companies only established in Switzerland. Indonesian project developers can as well require a financial investment in the project (5 to 10%) to ensure the commitment of the foreign partner. European products and services are mostly re-known to be costly but of great quality. Therefore it is important for the Swiss SMEs meeting with potential Indonesian companies for the first time to come with references of their previous projects. It has to be noted that due to the difficulty to obtain loans from Indonesian banks to finance renewable energy and energy efficiency projects, the demand for financing solutions on the Indonesian side is high. Finally, any Swiss company entering the Indonesian market should consider organizing marketing and education seminars in order to contribute to the development of future customers’ awareness.

For more details, please refer to Indonesia’s Negative Investment List: http://www.bkpm.go.id/contents/general/26/negative-investment-list

MARKET STUDY ON CLEAN TECHNOLOGY IN INDONESIA

Sector specific recommendations on market entry strategies are as follows: Solid waste management and waste water treatment Due to the public nature of the service, entering the market could be done via the PPP scheme or through the supply of equipment to the assigned contractors. Therefore a well established local partner is recommendable in order to establish the right contacts and get access to the market. In case the existing environmental regulations for the industry will be enforced more strictly prospective market opportunities will arise. There are already several good examples of large companies that want to apply to international environmental standards. With further regulatory backing the market would develop faster. Also here a local partner is beneficial in order to get access to possible private sector tenders. Energy Efficiency The market of energy efficiency in Indonesia is mostly dominated by multinational companies and could be challenging for SMEs. Brand recognition is of significant importance and a strong marketing strategy will therefore be needed for any new comer. All operating successful firms have built their brand over time and specialized in the niche market of energy efficient products only recently. Entering the Indonesian market of energy efficient products could only be part of a long term strategy and innovative services might be needed to face the competition (e.g. financial services, etc.).

Clean-tech Services The market of Clean-tech services in Indonesia clearly lacks structure and quality standards (poor legal enforcement and incentives, but as well existing â&#x20AC;&#x2DC;expertsâ&#x20AC;&#x2122; who lack qualifications and experience). A Swiss company willing to penetrate the Indonesian market will have to justify of its expertise. Moreover, a comprehensive educational approach would be needed in order for potential customers to understand the benefits resulting from those services and/or products. Energy Production In the field of energy production Swiss companies have several opportunities to get involved. As depicted in figure 8, in line with the Indonesian negative list international companies can partner with a local company and become shareholders in local project companies. There are also opportunities for consultants who can provide technical expertise and advise local authorities on the required equipment and optimal solutions for their specific problems. In a different business model international companies can become subcontractors or only the provider of the technical equipment.

MARKET STUDY ON CLEAN TECHNOLOGY IN INDONESIA

Figure 8: Project stakeholders - Potential for involvement

Source: COGEN III, taken from EKONID (2011)

4.2. RISK FACTORS Despite the great opportunities offered by the Indonesian market, doing business in Indonesia can sometimes be challenging. Indeed the countryâ&#x20AC;&#x2122;s trade and investment climate is often depicted as un-conducive and companies need to be prepared to engage in long-term projects and adapt when necessary. Companies are generally facing challenges, primarily arising from tariff but especially non tariff trade barriers (NTB). Regulatory uncertainties and transition periods which are often too short for the companies to implement the requested changes significantly complicate business activities for foreign companies. Indonesiaâ&#x20AC;&#x2122;s heavy bureaucracy can also become very un-transparent, especially in the case of public tenders. A protectionist glance from the Government of Indonesia is also to be witnessed. Certain activities in the energy sector are limited to foreign capital ownership or have a time limitation (specified on the business/operation license). Companies producing in Indonesia also have to fulfil certain rules in terms of local content (up to 40% of the overall value). Furthermore, for Swiss companies interested in exporting to Indonesia, it has to be mentioned that over the past few years the Government of Indonesia has become much stricter with foreign imports. Initially initiated to stop the flow of cheap Chinese products, European/Swiss companies are now subject to extremely high import duties which can sometimes be topped up by excise taxes. Finally, please note that over the past years, Indonesia has been developing its own national standards across all sectors and products. The compliance to the Indonesian National Standards (SNI) has appeared extremely burdensome for foreign operators. Indeed, the complicated testing procedures and the lack of testing facilities

MARKET STUDY ON CLEAN TECHNOLOGY IN INDONESIA

in Indonesia significantly increase the costs and time for the companies to release their products on the market. A complete updated list of products subjects to SNI can be found on Indonesiaâ&#x20AC;&#x2122;s national standardization agencyâ&#x20AC;&#x2122;s website66. Overall, while doing business in the energy efficiency sector, Swiss companies have to keep in mind the lack of awareness and technical understanding of their Indonesian customers. Competition with cheap Chinese products is high and it is sometimes difficult to make potential customers understand the differences in terms of pricing. Furthermore, due to Indonesiaâ&#x20AC;&#x2122;s great economic ties with Japan, it has to be mentioned that most infrastructure public tenders are won by consortia of Japanese firms partnering with local companies. Sector specific risk factors are as follows: Solid-waste treatment in municipal area The initial investment required for a PPP is high. Waste treatment in industrial area The market of waste treatment in industrial area is very competitive and dominated by some companies with more than 70% market share. Furthermore some market segments are already saturated by existing suppliers. Energy efficiency in buildings The market of energy efficiency in buildings is as well very competitive and dominated by 1) well-known multinational companies, 2) cheap Chinese products. Furthermore, it is still considered as a very small niche market due to the lack of awareness of the building owners. Clean-tech services High upfront investment for potential customers who do not always understand the benefit of the services offered. Energy Production There are some general risk that should be considered. Especialy PV projects experienced a backlash due to onsite issues like vandalism. Therefore the involvement of local communities in remote areas is of high importance to assure sustainability. The potential for energy production out of agricultural biomass is large. Trade in biomass has already started. So far solid biomass is exported to Malaysia or Thailand. As soon as the development of local projects will begin on large scale feedstock availability can become an issue. A scarce resource will increase in price and reduce the profitability of projects. Therefore long-term cooperation with a palm oil mill as feedstock supplier is strongly recommended. The development of geothermal energy is very capital intensive and risks for financial failure high in case the drilling process turns out not to be successful. It can also be challenging to get all necessary permits since geothermal sites are often located in protected forest.

http://sisni.bsn.go.id/index.php?/sni_main/sni/index_simple

MARKET STUDY ON CLEAN TECHNOLOGY IN INDONESIA

5. Appendix 1 Alard, T. (2010), Indonesiaâ&#x20AC;&#x2122;s hot terrain set to power its future. Download. Bagoglu, C. (2011a). Indonesiens Staedte brauchen modernes Abfallmanagement. Technologien fuer Muellentsorgung und Recycling benoetigt. Germany Trade and Invest. Bagoglu, C. (2011b). Indonesiens Wasserwirtschaft steht vor grossen Herausforderungen. Germany Trade and Invest. Beerepoot, M.; Oelz, S. (2010), Deploying Renewables in South East Asia (Trends and Potentials), Download. Cochrane, J.; Theunissen, M. (2010). Green Jakarta: How to dump our dirty, throwaway culture Cochrane, J. (2013), Indonesia struggles to end fuel subsidies. Download. Coordinating Ministry For Economic Affairs (2011), Masterplan for Acceleration and Expansion of Indonesia Economic Development. Darandono (2013), Strategi LG Merajai Pasar AC di Indonesia. Download. DG Trade (2013), EU bilateral trade and trade with the world. Download. DHV B.V. (2011), SCOPING STUDY FOR SOLID WASTE MANAGEMENT IN INDONESIA, Differ (2012), The Indonesian electricity system - a brief overview EKONID (2011), Prospects for Biomass Energy Supply in Indonesia: Waste to Energy Potential in Agroindustry, Federal Ministry of Economics and Technology. EKONID (2012), Zielmarktanalyse Indonesien 2012 - Perspektiven fĂźr die Solarenergie, Federal Ministry of Economics and Technology. Gatra News (2013), Baru 6 gedung ini Berkonsep Green Building. Download. Green Business Council Indonesia (2012). General Directorate Cipta Karya (2013). Indonesia-Jerman Kerjasma Bidang Persampahan di Lima Kota. Download. General Directorate Cipta Karya (2013). management for 5 cities. Download.

The cooperation between Indonesia and German in waste

Griebeler, M. (2012). Indonesia is said to have the world's largest geothermal energy reserves but their potential remains mostly untapped. That could soon change with German know-how. Download. GSMA Green Power for Mobile (2012). Fuel Cell Systems for base stations: deep dive study, p. 14. Hartano, D.:Novita, E.; Hoffmann, M.; Blumenschein, Widanarko, S.; Gusniani, I.; Jager, J. (2010). Development for the implementation of an integrated semicentralized waste management model in Depok, Indonesia. Germany. Hambali, E., Thahar, A., & Komarudin, A. (2010). THE POTENTIAL OF OIL PALM AND RICE BIOMASS AS BIOENERGY FEEDSTOCK. The Seventh Biomass Asia Workshop. Jakarta. Inda, S.; Sita, W. (2013). New bylaw to regulate waste management endorsed. Download. Indosat (2012), Annual report, p.398. Irawaty, W. (2010). Jakarta sinking up to 10cm per year. Download.

MARKET STUDY ON CLEAN TECHNOLOGY IN INDONESIA

Jakarta Green Building User Guide Vol. 5 (2013). Jakarta Green Building User Guide Vol. 3 (2013). JFE Engineering Corporation. Waste heat recovery power generation system, website accessed 25th June 2013. Download. Joniansyah (2013): Jatiwaringin will become the largest waste treatment facility in Asia. Download. Joniansyah, B. (2013). Jatiwaringin Akan Jadi TPA Terbesar di Asia. Download. Kharismawati, O. (2012). Konsumen lebih Senang Pakai AC hemat energi. Download. Ministry of Energy and Mineral Resources (2012). Handbook of Energy and Economic Statistics in Indonesia, p. 92. Ministry of Energy and Mineral Resources (2012). Reliability of infrastructures of Indonesia renewable energy sources, p. 10-22. Mundi Index (2012). Indonesia GDP. Download. Novia, D (2011). City to spend more on waste management in 2013. PLN (2011). PLN Statistics 2010, p.iii. Download . PD PAL JAYA (2012). Concept and Strategy for Wastewater Management of Jakarta p.11 & 19. Purwanto. D. (2013): PLN: Hari Ini Tarif Listrik Naik Lagi. Download Pramesti, O. (2011). West Java is the biggest contributor for hazardous waste in Indonesia. Download. Pramesti, O. (2011). Jawa barat penyumbang limbah B3 terbesar di Indonesia. Download. Royal Danish Embassy (2009). Indonesian water and wastewater sector. Trade Council Denmark. Sasistiya, R. (2009). Indonesia needs USD 4 billion for energy efficiency. Download. Sudrajat, A. (2013). Jabar-Republik Ceko kerja sama pengelolaan sampah. Download. Suhendra, Z. (2013). Minister of Public Works: the waste treatment in Jakarta can be considered as backward. Download. Suhendra (2013). The government will build the IDR 47 trillion wastewater treatment in Jakarta. Download. Suhendra, Z. (2013). Pemerintah bangun system pengelolaan limbah cair di DKI Rp 3,7T. Download. TELKOMSEL (2012). Annual Report 2012, P. 176. The Jakarta Post (2010a): Simamora, A. (2010). Government set to clean 13 dirtiest rivers. Download. The Jakarta Post (2011): E-coli contaminated Bekasi and Jakarta tap water. Download. Tito, S. (2012). Geothermal Progress Slows. Download. Trading Economics (2013). Exports Indonesia. Download. Wahyuningsih, M. (2012). 12 cities in Jakarta having waste-water treatment facility. Download. Wulandari, F. (2012). Indonesia Allocates $302 Million to Back Geothermal Exploration. Download.

MARKET STUDY ON CLEAN TECHNOLOGY IN INDONESIA

6. APPENDIX 2 1.

Trade Fairs

GREENRIGHT - Green Building Expo and Conference 2013 in Jakarta from 10-13 April 2013. Link INAGREENTECH 2013 - The Indonesia International Green Technology Eco Friendly Products Exhibition and Conference in Jakarta from 02-04 May 2013. Link Electric, Power & Renewable Energy Indonesia 2013 in Jakarta from 04-07 September 2013. Link

2. Contact information Professional organizations ď&#x201A;§

Green Business Council Indonesia. Independent organizations (non-government) and nonprofit (non-for profit) fully committed to the education community in applying environmental best practices and facilitate the transformation of the global sustainable building industry. Office Address: Jl. RC Veteran No. 3a/1 Pesanggrahan - Bintaro Jakarta Selatan, 12330 Indonesia Phone : +62 (021) 3777 0037 / 734 3077 Fax : +62 (021) 734 3133 E-mail : info@gbcindonesia.org Website: http://www.gbcindonesia.org/

ď&#x201A;§

Energy Efficiency and Conservation Clearing House Indonesia (EECCHI) A service facility under the Ministry of Energy and Mineral Resources of Indonesia, which aims to promote and enhance energy conservation and energy efficiency in Indonesia. Office Address: Annex Building, 5th Floor Directorate General of Electricity Building, KESDM Jl. HR. Rasuna Said Blok X-2, Kav. 07-08 Kuningan, Jakarta 12950 Phone: +62 (021) 522 4483 Fax: +62 (021) 522 4483 Website: http://www.energyefficiencyindonesia.info/

MARKET STUDY ON CLEAN TECHNOLOGY IN INDONESIA



Indonesia Solid Waste Association (INSWA) Professional organizations engaged in waste management and technology management, was established in Jakarta on October 28, 2003. Office Address: Jalan Letjend Suprapto No 29 N Jakarta Pusat Telp. +62 (021) 426 7877 Fax. +62 (021) 426 7856 Website: http://inswa.or.id/

Regulatory Bodies 

Ministry of Public Works Office Address: Jl. Pattimura 20, Kebayoran Baru, Jakarta Selatan – 12110 You may find the contact numbers in the following link: http://www.pu.go.id/content/contact Website: http://www.pu.go.id/



Ministry of Environment Office Address: Jalan D.I. Panjaitan Kav. 24 Kebon Nanas, Jakarta Timur 13410 Telephone: +62 (021) 8580067-68 (hunting), 8517184 E-mail: edukom@menlh.go.id Website: www.menlh.go.id



Ministry of Energy and Mineral Resources Office Address: Jl. Medan Merdeka Selatan No.18 DKI Jakarta 10110, Indonesia Telephone: +62 (021) 3519881 Fax: +62 (021) 3519881 E-Mail: pusdatin@esdm.go.id Website: http://www.esdm.go.id

MARKET STUDY ON CLEAN TECHNOLOGY IN INDONESIA

ď&#x201A;§

National Development Planning Agency (BAPPENAS) Office Address: Jl. Taman Suropati No.2 Jakarta 10310 Telp: +62 (021) 3905650 Fax: +62 (021) 334779 Website: www.bappenas.go.id

MARKET STUDY ON CLEAN TECHNOLOGY IN INDONESIA

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