Update on renewables
by Scott Younger
Many countries are investigating how they can generate some of their electricity requirements using one or several of the renewable sources currently being tried. Among these there are those which have been around for a long time, such as hydro and, in a limited number of countries - including Indonesia - geothermal.
Over the past decade considerable investment has been put into sourcing power from solar sources, at different scales from small to large, and wind energy, a source that is not suitable to all parts of the world.
The use of waste, whether generated or not from biomass, has been receiving more attention, as has wave or tidal energy. This latter remains not much beyond the development stage, but would be more predictable than wind in operation.
I have been intrigued at the considerable debate generated in the British press over whether or not to expand investment in wind farms, particularly with the country having just faced its coldest December in a hundred years.
One of the features of a very cold spell is the lack of wind. Accordingly, there has been a growing protest over why so much credence is being put into wind energy, and why politicians promote wind turbine output without discounting the very considerable downtime and unreliability of this source except as a back up to a strong healthy constant base load from coal-, oil-fired or nuclear stations.
It also surprises me that so little is made of the fact that the technology exists to minimize not only the nitrogen and sulphur waste gases but also very significantly also the carbon-based ones, as practised with due care where strong environmental standards are properly enforced. There is an increase in cost, of course, but this compares favorably with the accepted additional costs that are necessarily invoked in most renewable solutions.
Beneficial environment
Europe is very committed to renewable forms of energy, and good tariff levels are usually tabled that provide encouragement to the range of possibilities currently under consideration.
A growing interest is developing in the use of waste to energy which, if done properly, can solve two issues at the same time, namely removal of an environmental hazard while providing power off-take.
Indonesia has started to invest in converting waste from landfills but much more remains to be done. In addition, there is much sense, particularly for small- to medium-sized conurbations, to be able to take their waste directly to a treatment plant.
There is a need for this sort of facility in Indonesia, but much more enlightened thinking and decision-making over tariff structures are required compared with what has been shown so far.
European tariffs include an item for acceptance of the waste by the waste treatment power provider, offset against the cost that would otherwise be incurred by trucking to a landfill site, and this makes a significant positive contribution towards underwriting the investment.
Geothermal, hydro
As is often not fully appreciated, Indonesia is blessed with two major sources of renewable energy, geothermal and hydro. It has capacity for up to 27 GW of geothermal power – about 40% 0f world reserves – and over 75 GW of hydro.
Even without tackling the more difficult schemes and turning only 50% of the potential into reality would make a strong statement of Indonesia’s intent to reduce its large, albeit necessary dependence on fossil fuels for electricity production. And the type of production required can often be balanced with population distribution and industrial demand.
So far Indonesia only generates some 1,100 MW of geothermal power representing 4.2% of the total potential, but the government has declared that it wants to significantly increase this modest level of output. The president himself made a strong commitment to the world’s geothermal community during the World Geothermal Conference in Bali last year, stating that he wished Indonesia to become the world leader in this sector, an achievable goal.
The development of geothermal energy is costly and risky, in many ways similar to that for the oil and gas sector. Both sectors encounter considerable upstream costs associated with exploration and steam development but, once found, geothermal energy can be used to generate competitively priced electricity with a renewable source of ‘fuel’ that is clean and environmentally friendly.
A developing political will to remove some of the barriers to entry for the private sector to invest in this important field has been seen over the past year or so. In particular, the government has targeted 40% of its second ‘fast-track’ power program of 10,000 MW to come from geothermal sources by the end of 2014, with 90% of this emanating from independent power projects.
With the recent potential increase in allowable tariff for private producers to 9.7 cents per kWh, there is perhaps a greater opportunity for both foreign and domestic investors to enter. The key to make this happen will be for the political will to be sustained.
Well over 100 hydro schemes of different types and sizes have been identified, from main reservoir to small- to medium-sized run-of-river arrangements. A good number have been studied to a various degree, but almost none is developed to provide adequate comfort to attract lending against an acceptable return on investment.
The pre-feasibility or feasibility studies for these projects usually show an incomplete appreciation of the engineering and environmental issues, nor do they present a robust evaluation of the off-take payback arrangements, with any political issues adequately addressed.
In many cases the tariff structure, which varies according to whether the location lies on or off Java, remains insufficient to attract funding. Three hydro projects are listed within the scope of the second 10,000-MW fast-track program. Two are large, the Asahan 3 (174 MW) and Upper Cisokan (1,000 MW pump storage) and one smaller at 30 MW. Further, while hydro also featured in the first fast-track program, implementation has not been any more successful than many of the program’s coal-based power station projects.
Nuclear is receiving attention, as in many other countries, where there is a pressing need to adopt this solution because of the absence of other realistic alternatives, but in reality Indonesia’s plentiful supply of natural renewable resources, including judicial application of solar power, is more than enough to complement to a significant extent the large resources of coal for its base-load power requirements.
Again, these coal-powered units could be constructed so that production of carbon emissions is reduced, albeit at additional cost. But how does one really evaluate the impact on the environment? To date most writings on the subject are only based on half-baked analysis.
“A growing interest is developing in the use of waste to energy which, if done properly, can solve two issues at the same time”.
Scott Younger is the president commissioner of Glendale Partners and Nusantara Infrastructure.
(source: Globe Asia, February 2011)