As Indonesia carves its path towards transitioning to renewable energies, the government plans to make co-firing biomass in power plants mandatory.
Co-firing is the combustion of two (or more) different types of materials at the same time. One of the advantages of co-firing is that an existing plant can be used to burn a new fuel, which may be cheaper or more environmentally friendly.
Indonesia currently generates 60 percent of its electricity from coal power plants. The government believes that mandating co-firing in its power plants will help reduce carbon emissions, as well as boost the growth of energy plantations in the country.
The rise of coal prices in the international markets also triggered the government to push for more co-firing of biomass in power plants.
According to data from the ministry of energy and mineral resources (ESDM), trials for co-firing biomass in power plants have been conducted in 41 locations out of 52 targeted plants, per May 2021. Of the 41 plants, 13 have started commercializing the businesses.
According to the government’s roadmap on renewable energy production, co-firing of biomass in power plants is expected to generate 8,783.1 GigaWatt hour (GWh) power capacity in total from 2021-2024.
In the next phase, this figure is expected to increase to 10,601 GWh per year starting 2025-2035. In a bid to produce such power capacity, the country needs 7.54 million tons of biomass, and of that figure, 4.68 million tons will source from plant-based biomass, which will come from energy plantation forests.
This is expected to stimulate investment in energy plantation forests.
In January 2021, a Memorandum of Understanding between state firms, involving state electricity company PT Perusahaan Listrik Negara (PLN), state-forestry company Perum Perhutani and state-agribusiness company PTPN III, was signed to help the procurement of biomass to fulfill the need of the co-firing plants.
There were also collaborations between PT Inhutani III, a consortium between Indoplas Energi and Cipta Energy Lestari to fulfill the biomass needs for power plants in West Kalimantan. These collaborations were signed on December 20, 2021.
The collaborations will be proceeded with feasibility studies to determine certain aspects, including the volume of biomass to be supplied, the capacity of co-firing biomass plants, economic impacts, and commercial aspects. For this, Inhutani III has prepared a 5.000 hectares of concession area in Nanga Pinoh, West Kalimantan.
There was also a pre-feasibility study to develop energy plantation forests in Indonesia, which is targeting to produce up to 1 million tons of wood pellets in West Kalimantan.
This project is run by PT Indika Energy Tbk and The Indonesian Society of Biomass Producer (MEBI).
PLN’s subsidiary, Indonesia Power, is also developing energy plantations, built on 382 hectares of land, which seeks to plant up to 1.9 million trees.
President Director of Indonesia Power, M. Ahsin Sidqi said the local community will be involved, whether in the process of planting or producing biomass. The company ensures the outputs will be set on national standards.
“So this will be community-based. The locals will be taught lessons on how to produce plantations that fit the national standards. This will help the people’s welfare as well as preserve nature,” Ahsin Sidqi said on Wednesday, January 19, 2022.
Indonesia Power is targeting to provide up to 10 percent of biomass needed from the total nation-wide demand, which is equivalent to 2.5 million tons per year. In a bid to meet the 10 percent target, they need up to 12.500 hectares of land.
In the short term, Indonesia plans to have up to 23 percent of the energy mix of fossil fuels and renewables by 2025, which will be then increased up to 48 percent as time goes on.
Trois Dilisusendi, the Coordinator for Bioenergy Preparations at the ministry of energy and mineral resources said co-firing programs are expected to help boost renewable energy use.
He believes this program will not require hefty investments and it can use existing power plants.
“If 5 percent of power plants implement co-firing at their units, this will produce up to 900 MegaWatt of renewable-based power. That will be equivalent to 0,9 percent of the targeted energy mix,” he said.
Operational Director 1 at PT Pembangkitan Jawa Bali, a subsidiary of PLN, said his company has successfully implemented co-firing in a number of power plants.
“The trial results have proven effective in reducing greenhouse emissions and sulfur oxide emissions. So, they are environmentally more friendly,” he said.
Coal prices
Indonesia’s move to accelerate energy plantation forests is in line with the government’s plans to set up a new coal procurement scheme at PLN.
Under the current scheme, PLN buys coals sold by miners under the domestic market obligation scheme at a capped subsidized price of $70 per metric ton.
DMO forces local coal miners to supply part of their coal production to the domestic market first, especially for coal-fired plants run by PLN in a bid to secure the nation’s power supply.
A new plan has been laid out, but not yet implemented, that PLN will have to buy its coal supply at the market rate. Currently, the coal price at the global markets is hovering at around $150-$170 per metric ton.
This means the price of biomass produced from energy plantation forests will be more competitive compared to coal.
Indroyono Soesilo, the Chairman of the Association of Indonesia Forest Concession Holder, also known as APHI, said the co-firing program must be supported by feedstocks from energy plantation forests. This is an important factor to ensure the economic price of forestry-based biomass remains competitive, he said.
“Woods, in the forms of woodchips, is considered to have economical prices, to be used as materials in co-firing, especially [for power plants] in Java,” he said.
According to APHI’s calculations, the competitive price of woodchips would have to be at a range of Rp 666,000 to Rp 995,000 per tons.
On the island of Java which is supported by good infrastructure, the price of woodchips will not be burdened by logistical costs.
Outside Java, in line with the government’s new scheme for procuring coals by PLN, it is expected producers have to meet the economic prices.
The government is currently forming a development team for co-firing of biomass in power plants in the country. This team is set under the ministry of energy and mineral resources. APHI is involved as part of the team members.
According to data from the Ministry of Environment and Forestry, as of December 2021, there were 567 registered companies that secured the permits to utilize forests. They control about 30.5 million hectares of land. However, not all of them are actively utilizing their permits.
Indroyono said he expects the government can offer some benefits to permit holders so they can be facilitated to be involved in the development of energy plantation forests under the multiple-use forest management scheme.
The permit holders, for example, can plant a number of plants potential to produce biomass-based renewable energy, including kaliandra (Calliandra calothyrsus), gamal (Gliricidia sepium), and acacia (Acacia Decurens).
Those trees produce high calories and are able to be converted into wood-based biomass. They are not less competitive as compared to coals.
According to a 2006 study from KLHK’s Research and Development Department, kaliandra-based biomass produces 4.617 calories, gamal woods 4.548, while acacia 4.462.***
