Erik C. Sentosa – Director PT. Suntech Solar System suntechsolarsystem

FiT Solar Auctions in Indonesia

Lessons Learned from Participation of a Local EPC Company

German-Indonesia Business Forum on Grid-Connected PV Systems Intercontinental Jakarta MidPlaza Hotel

Erik C. Sentosa – DirectorPT. Suntech Solar System

www.suntechsolarsystem.com

2

List of Contents

• Brief Company Introduction• Conditions of Solar Auctions• Auctions Progress• Lessons Learned• Summary & Recommendations

5 May 2014 Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System

3

Brief Company Introduction• PT. Suntech Solar System established in 2007• EPC Company for RE, specializing in PV (On-Grid, Off-Grid and

Hybrid Systems)• Authorized Distributor & Partner in Indonesia for SMA and

Suntech Power• Emphasis on technical expertise, detailed engineering, know-

how, quality components and good installation


4

Conditions of Solar Auctions

• Regions and system sizes defined by Ministry of Energy and Mineral Resources (ESDM)

• Auctions held by Directorate General of New & Renewable Energy and Energy Conservation (EBTKE)

• Total quota 140MW for 80 locations (regions) with sizes 1 to 6 MW• Ceiling Tariff : USD0.25/kWh for imported modules, USD0.30 for modules with

local content >= 40%• PPA with PT. Perusahaan Listrik Negara (PLN) for 20 years without price

adjustments• Bid language: Bahasa Indonesia• Auction open for state-owned enterprises , local goverment-owned enterprises,

private Indonesian enterprises and bidding consortia• International companies via Project Joint Operation (KSO), JV or Consortium

with private or state-owned enterprises in Indonesia


5

Conditions of Solar Auctions (Cont’d)

• Online auction: register to http://lelang.ebtke.esdm.go.id• Download tender documents, Q&A sessions, upload of bid

documents, evaluation progress & reasons• Tender documents: 120+ pages, fortunately most are identical

for all locations• Contents: Administrative, Technical, Financial, Draft of PPA• Bid evaluation (elimination): Administrative -> Technical ->

Financial -> Bid Price• Bid Bond 2% and Escrow Account 20% of overall project price


http://lelang.ebtke.esdm.go.id/

6



Example Bid Price Evaluation

Local Modules

Import Modules

Company A USD0.24 USD0.24Company B USD0.25 USD0.20Company C USD0.21 USD0.21

• Tender Download – Upload of Bid: 14 days preparation• Bid Evaluation – Winner Announcement: 2-3 weeks• Make Escrow Account: 15 days after announcement• PPA Signing – Grid Interconnection Study: 60 days after

announcement• Financial Close: within 3 months after PPA• Installation - COD: latest 18 months after PPA

7


• Purchase price includes all cost of generation to point of grid interconnection

• Purchase price are including VAT (PPN) 10%• Payment in IDR with exchange rate valid on the time of

payment


8

Auction Progress

• First tender started beginning November 2013• So far total of 11 locations (19.5MW) tendered• 4 locations (4.5MW) out of 11 failed due to tender conditions are

not met by participants• Lowest Bid Price: 18.36 cents US per kWh with imported modules• Last tender announced on March 2014, currently FiT solar auction

program is under evaluation before more locations are to be tendered

• No information when more locations are to be tendered• 70 (+4) locations with volume of 120.5(+4.5)MW are still to be

tendered


9

Lessons Learned

• Exact locations are not defined by ESDM– Insufficient coordination between ESDM-PLN-Local Government– GPS coordinates are required in bid document, no alternate location– Bid document requires land availability

• Limited preparation time for complete bid documentations• Slightest error in bid documents will result in elimination• Insufficient or no data for grid conditions

– Grid capacity only based on computer model simulation, different from actual at site survey

– Grid connected PV capacity >20% of grid capacity -> prone to grid failure

• Therefore, advanced region choosing - site survey - bid preparation needs to be done prior to tender announcement


10

Summary

Site Survey after region choosing:• Coordinate with local ESDM – PLN – Local Govt – Local Land

Authority for suitable sites• Make sure of land ownership (certificate) & price, not part of

protected forest or conflicting with land allocation• Close distance to PLN Grid or Substation• Site is disaster-free (flooding, tsunami, landslides, etc.)• Site survey for grid conditions (load, capacity, future grid

expansions)• Transport facility, access to site, handling facility, closest seaport &

airport to siteContinue to bid preparation before tender announcement


11

Reccomendations

• Improve coordination between ESDM – PLN – Local Goverment – Local Land Authority to define suitable or “perfect” sites and set the land prices at a reasonable predetermined prices for the auction winners to reimburse

• This would avoid a lot of uncertainties and unnecessary efforts, save time and money


12

Thank You

• Vice-Minister of ESDM and Director General of EBTKE once said “..IPP investors are like heroes and pioneers..”

• Let’s become heroes together and for each other..

Dipl.-Ing. Erik Chandra SentosaDirector – PT. Suntech Solar System

Email: [email protected]


Documents

Erik C. Sentosa – Director PT. Suntech Solar System suntechsolarsystem