Paradox of Waste-to-Electricity Project in Indonesia

    Medcom - 15 April 2021 17:42 WIB
    Paradox of Waste-to-Electricity Project in Indonesia
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    Singapore: All big cities across Indonesia have been facing serious problem of waste. Thus far, the existing and common practice of managing waste is dumping it in the landfill. In line with its population and economic growth, every big city continues to confront with piling up of waste within limited spaces. The only option is process waste properly based on environmentally friendly technology.  

    In coping with the problem, Government has issued Presidential Regulation No.:58/2017 on Accelerating the Implementation of National Strategic Projects. Among National Strategic Projects listed are 8 waste-to-energy projects (in Jakarta, Tangerang, Bandung, Semarang, Surakarta, Surabaya, Denpasar and Makasar). 

    Furthermore, it expanded by inserting 4 other projects (South Tangerang, Bekasi, Palembang, dan Manado) through the issuance of Presidential Regulation No.: 35/2018 on the Acceleration of Waste-to-electricity Projects based on environmentally friendly technology. 

    These two regulations using different term of processing waste. Waste-to-energy project refers to general way of processing waste to several form of energy such as biogas, briquettes and electricity. While waste-to-electricity refers to specific way of processing waste to generate electricity. 

    Article 6 Presidential Regulation No.: 35/2018 stipulated that in accelerating waste-to-electricity project, governor or mayor may assign Regional-owned Enterprises or involving private sector. 

    If there is no private sector interested in the project or do not pass the selection, and there is also no Regional-owned Enterprises capable of doing it, the Minister of Energy and Mineral Resources may assign State-owned Enterprises. 

    The project can only be assigned to the State-owned Enterprises after governor or mayor: (1) provide pre-feasibility study, (2) allocate budget for transporting and processing (tipping fee) of waste, and (3) allocate necessary land. 

    So far, only two projects have been initiating. First, project in Benowo, Surabaya by local government in cooperation with private sector, PT Sumber Organik that estimated to processes about 1.000 tonnes of solid waste daily to produce 12 megawatts of electricity. Second, pilot project in Bantar Gebang by Jakarta Government in cooperation with the Agency for the Assessment and Application of Technology that estimated to process about 10.000 tonnes of waste to produce 783 megawatts of electricity.  

    Other cities continue to analyse various factors, especially cost structure and its economic benefit. Besides the important of waste treatment, several waste-to-electricity projects receive lukewarm respond either from Regional-owned Enterprises, State-owned Enterprises or private sector because they consider that it is too expensive. 
    Article 11 (1) of the Presidential Regulation No.: 35/2018 stipulated that electricity generated from waste shall be sold to the State Electricity Firm (PLN) for US$ 13.35 cent/kWh (Rp. 1.869,- assuming US$ 1 equivalent to Rp. 14.000,-). Meanwhile, electricity generated from steam power/coal and gas are much cheaper, about US$ 5.5 cent/kWh and US$ 7 cent/kWh respectively. 

    On the other hand, PLN basic electricity price for customer is determined by Government. For instance, basic electricity price in the first quarter of 2021 is still cheaper than electricity generated from waste: small household (0 – 450 V) = Rp 169/kWh and big household (> 6.600 VA) = Rp 1.444,70/kWh; small business (0 – 450 VA) = Rp 254/kWh and big business (> 200 kVA) = Rp 1.114,74/kWh; small government office (0 – 450 VA) = Rp 575/kWh and big government office (> 200 kVA) = Rp 1.035,78/kWh. 

    Because of the fix and expensive electricity from waste, several local governments are reluctant to start the project. Likewise, there is only a few (if any) private sectors interested in the project because it considered as loss-making business.  

    Moreover, on 5 March 2020 Corruption Eradication Commission stated that waste-to-electricity project is expensive, posed more burden to the local government and hypothetically lead to government budget loss.    

    As a comparison, Singapore that facing similar waste problem with many big cities in Indonesia, especially Jakarta has been applying waste-to-electricity technology since 1979. Limitation of dumping site makes Singapore continue striving for finding the most effective ways in managing waste. 

    Solid waste across Singapore is sent to four waste-to-energy plants in Tuas, Senoko, Tuas South and Keppel Seghers Tuas Waste-To-Energy Plant (KSTP) for incineration. The process reduces the volume of solid waste by around 90% and produces steam that runs turbine to generate electricity. So far, total power from waste-to-electricity project is around 3 %.  

    Waste-to-electricity project in Singapore involving private sector. KSTP was developed under a Design, Build, Own and Operate (DBOO) scheme and commissioned in 2009 to replace Singapore's first waste-to-energy plant at Ulu Pandan, which was closed in August 2009 after 30 years operation. Senoko Incineration Plant also divested to the private sector in September 2009. 

    Interestingly, the two above private sectors have completely took over whole operation and ownership of the projects. Even, Keppel Electric and Senoko Energy capable to over a competitive electric price for their customer of SG$ 18,38 cent/kWh compared to basic Government electric price SG$ 24,13 cent/kWh. 

    Compared to average electricity price in several ASEAN member countries, Indonesia electricity generated from waste is still relatively more expensive. Malaysia US$ 9,9 cent/kWh; Philippines US$ 10,8 cent/kWh; Thailand US$ 12 cent/kWh and Vietnam US$ 7,7 cent/kWh.

    However, various challenges on waste-to-electricity project in Indonesia should not hamper efforts in solving waste problems. Managing waste through environmentally friendly process may also lead to other products such as compost, biogas and briquette.   

    If waste-to-electricity project should be continued, at the initial stage it is not necessarily always look for economic benefit. Government still has responsibility to manage waste and spend money for it. 

    Poor waste management will lead to poor public health. Disrupted public health will be much more expensive because of medical costs and intangible damage in quality of life and productivity. 

    Finally, in order to make waste-to-electricity project more visible, research and development to find out the best technology and most economical way to process of waste should be continued. Last, but not least President Regulation No.:  35/2018 should also be revised.  

    Otherwise, development on the field of environment, efforts of inviting investment and creating job in the said sector as mandated by law No.: 11/2021 on the Job Creation cannot be achieve efficiently.    

    *Written by Didik Eko Pujianto, Deputy Chief of Mission of the Embassy of the Republic of Indonesia in Singapore


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