Indonesia Waste to Energy Week

May 19-23

2014

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Table of Contents Summary of WtE Week .............................................................................................. 2

Briefing in Borobudur Hotel, Jakarta 19th May ........................................................ 2

Site visit to Bantargebang in Bekasi, 19th May ....................................................... 3

The Conference in Yogyakarta on 20th May ........................................................... 3

Morning Session ...................................................................................................... 3

The Afternoon Session ........................................................................................... 7

The One-on-one Meeting in Yogyakarta, 21st May ............................................ 8

Site visit to DIY (Sewon and Piyungan) ............................................................. 10

Site Visit to Surakarta, 22nd May ......................................................................... 10

Potential Follow up ................................................................................................ 11

Annex 1: Presentations Waste-to-Energy Week 19 - 22 May 2014 ................. 12

Presentations WTE Week 19 May 2014 ........................................................... 12

Annex 1.1 WTE Week Overview ...................................................................... 12

Annex 1.2 "Renewable Energy Policy in Indonesia" by Mr. Wibowo -

ESDM .................................................................................................................. 13

Annex 2: Presentations WTE Week 20 May 2014 ............................................... 18

Annex 2.1 "Turn your Waste to Value" by Mr. Barbato (Evitec) ................ 18

Annex 2.2 "Energy from Waste: Barriers in Indonesia" by Mr. James Beyer

- Carbon Trust .................................................................................................... 24

Annex 2.3: "The Savoie Dechets WTE Experience" by Mr. Pierre Tournier

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Annex 2.4 "Waste to Energy: Policy and Strategy" by Mr. Danan Secretary general ESDM ................................................................................. 48

Annex 2.5 "Energy Potential from Waste" – by Dr. Anthonie De Wilde ..... 54

Annex 2.6: "Environmental Regulations and Standard for Waste-to-Energy" by Mr. Ujang Solihin Sidik (staff of ASDEP Pengelolaan Sampah, Ministry of the Environment) ........................................................... 59

Annex 2.7: "Challenges of Managing Waste into Energy at Dearah Istimewa" by Kepala Dinas & ESDM .............................................................. 62

Annex 2.8: "Peran KPS dalam Pengembangan WTE"- by Direktur Pengembangan Kerjasama Pemerintah dan Swastah - Bappenas .......... 68

Annex 2.9: Pengelolaan Sampah Menjadi Energi- KEMDAGRI ............... 71

Annex 2.10: Sinergitas KEMEN PU-ESDM dalam pembangunan TPA ... 74

Annex 3: Presentations WTE Week 21 May 2014 ............................................... 78

Annex 3.1: Q2 Presentation - WtE May 2014 ............................................... 78

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Summary of WtE Week This summary captures four days of activities during the Waste to Energy week, one day of briefing and a site visit in Jakarta, one day of presentations in Yogyakarta, one day of one-on-one meetings among the municipalities and companies/ financial institutions in Yogyakarta, one day of site visit in Yogyakarta and Solo, which took place from 19 – 22 May, 2014. The event brought together around 30 municipalities, 42 representatives from companies both from national and EU companies, 8 from financial institutions and 7 embassy representatives namely from Finland, Denmark, Spain, the UK, Czech Republic, Austria, Swedish Trade & investment council, and Poland. The event was designed to establish an understanding on the local situation and context, thus the participants were offered to have first site visit to landfill of DKI Jakarta in Bantargebang – Bekasi, about 40 participants from companies and media joined this first visit.

Briefing in Borobudur Hotel, Jakarta 19th May

Mr. Wibowo’s presentation focused on the Renewable Energy Policy in Indonesia. In the introduction, the current condition of Indonesia concerning energy was focused upon, and it was established that ‘new and renewable energy (NRE)’ in Indonesia has not yet been optimized. He emphasized the need for such an integrated policy, as, at the current economic growth rate of 5 – 6% in Indonesiua, energy consumption will grow by 7 – 8 % and oil reserves are not sufficient to support this. This requires a substantial increase in the installed capacity of energy production. The share of new and renewable energy in Indonesia’s energy production will have to grow from 5.5% now to 23% in 2025. In addition, Indonesia is also still committed to reduce its greenhouse gas emissions in line with the targets set by the president.

1) The government also aims to substitute current uses of petroleum-based fuel and accelerate the access to modern energy (such as micrfo-hydropower plants, solar-photovoltaic power and biogas) for people in rural areas.

Six strategies were discussed regarding renewable energy development and utilization. An example of one of these strategies is the development of Geothermal and Hydro Power Plants in order to improve the Indonesian electricity supply. Within the 10 MW of renewable energy that is currently generated, bio-mass accounts for 17%.

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Mr. Wibowo also described several efforts that are being made in order to increase new and renewable energy utilization. The efforts include creating the market, subsidy on bio-fuels, setting feed-in tariffs for renewable energy, and simpler imports and licensing procedures. Another important topic that was discussed by Mr. Wibowo was the NRE program in which 7 different programs are highlighted that are either privately funded or funded by the government. The private sector will have to play an important role in this, especially in the supply of renewable energy to the grid, the production of bio-fuel and rural off-grid solutions. For further information please consult Annex 1.2.

Site visit to Bantargebang in Bekasi, 19th May There were about 40 participants joining the site visit to the landfill of DKI Jakarta located in Bantargebang Bekasi. The landfill area is about 128 Ha. They have 3 zones in the existing landfill. The gas in zone 1 has been harvested by landfill gas treatment. Zone 2 and 3 are still active cells. The electricity purchased by PLN is 7MW although they can generate up to 8 MW, the 1 MW is for internal consumption. Waste dumped into the landfill is about 6000 tons a day. They have a weighing station. The participants visited 3 main parts in the landfill namely, zone 1 and the powerhouse station, composting centre and recycling centre (plastic bag). There is no sortation in the landfill and the scavengers did it manually.

The Conference in Yogyakarta on 20th May Morning Session The conference began with an opening report by Director of Bio Energy from the Ministry of Energy and Mineral Resources, Mr.Dadan Kusdiana. He reported on the participating local governments, companies and other stakeholders. The first welcoming address was delivered by Mr.Didik Purwadi, the assistant for economic and development of DIY Secretary. He pointed out that waste, if not managed well is like a time bomb. Waste is a problem that is not rural or urban, but covers all aspects of life in the sultanate. Waste from public markets, in villages, and waste from households in cities. When it is properly managed, like during the traditional times in Java, it can be perceived as an economic opportunity. The content of waste now has become more valuable; recycling is not only a necessity because of an environmental and health perspective, but recycling can also bring in more funds and make WtE profitable. Local government has the responsibility to issue and implement regulations to protect the health of people and the environment. The HE Olof Skoog, EU Ambassador highlighted that waste has huge potential in Indonesia to become a major source for power generation – and as such address both potential energy shortage and a growing waste problem. Many municipalities have shown an interest in establishing treatment plans and development in the sector is expected to accelerate within the coming years. Mr. Skoog was delighted to be part of this and looks forward to supporting Indonesia's municipalities in finding the best technological, financial and operational solutions to building Waste to Energy Facilities. Waste to Energy (WtE) is a win-win activity for improved health, environment and financial. The Director General of New Renewable Energy and Energy Conservation, Mr. Rida Mulyana opened the conference. He pointed out that as the population is growing, more energy is needed. Law No 30 year 2007 focused on priority supply and use of renewable energy (diversification). Today the MEMR set targets of 23% for Renewable Energy (RE) by 2025 and 31% by 2050. Currently the energy from oil

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and gas is still 96% so today the contribution from RE is only 4%. Thus, there are 4 priorities called catur dharma, which are as follows:

1) Increase oil and gas production by ease exploration; provide fiscal incentive; improve regulations.

2) Reduce the use and the import of fossil oil by using alternative energy resources; mandatory 10% of Biofuel; clean coal (Carbon Capture); conversion of fossil oil into gas; moratorium of fossil oil based power plant.

3) Massively encourage the development of new renewable energy by utilizing all kinds of power resources: solar; geothermal; biomass; hydro-power; ocean power.

4) Energy efficiency by accomplishing a people movement through “3 M” actions namely “Mematikan lampu“ (turn off the lights if not used); “Melakukan setting AC pada suhu 25” (set the temperature of the AC to 25o C); “Mencabut kabel listrik yg tdk digunakan” (unplug the electricity cable if not used for a long period of time).

In the panellist presentation, the first speaker, the director of bio energy MEMR – Mr. Dadan Kusdiana elaborated in detail the current status of the waste to energy initiative in Indonesia. So far there are 11 project/initiatives that have been starting namely:

1) Bantargebang II Bekasi - Pertamina (120MW); 2) Bekasi Bantargebang II – Ovi Energy (10MW); 3) Sunter Jakarta – DKI Jakarta (14MW); 4) Sumur Batu Bekasi – Gikoko Kogyo (3MW); 5) Gedebage Bandung –Bandung Raya Indah (7MW); 6) Telaga punggur – Batam (14MW); 7) Muara Fajar, Riau - PT Pengembangan Investasi Riau – (10MW); 8) Bangklet Bangli, Bali - PT Charta Putra Indonesia (0,2MW) 9) Benowo Surabaya - PT Sumber Organik (9MW) 10) Putri Cempo, Surakarta- LG Surakarta (7MW); 11) Sukawinatan, Palembang – MEMR (0,5MW)

He emphasized the challenges that WtE development faces, which are:

Off-taker for on-grid electricity from Municipal Solid Waste (MSW). Availability of a consistent tipping-fee distribution in each district. Lack of concerns from Local Government in the utilization of waste to energy

whereas the Local Government is the main actor in the development of Waste to Energy Projects.

Lack of involvement from public institutions in the development of Waste to Energy Projects.

Local Government’s lack of understanding on power purchase mechanisms through procurement.

The second presenter was, Mr. Fabby Tumewa, a representative of Carbon trust and IESR. He pointed out three high-level challenge areas that are causing problems on WtE developments such as: For economic:

Incineration project developers are finding it hard to secure a revenue package – from the Feed in Tariff and tipping fees – that provides a

reasonable rate of return (e.g. IRR of 15%) given their operating and financing costs and,

Investors see Indonesian WtE as a risky market and require high returns on debt and equity and international investors are therefore reluctant to enter an unproven market.

For local capacity and coordination:

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Local governments are relatively inexperienced in WtE development and the project development and contracting process does not always run smoothly, creating uncertainty and risk.

There does not appear to be sufficient shared understanding of the costs of incineration projects between developers and municipalities

For social: General public do not want incinerators (or landfill expansion) in their areas

as they perceive them to be harmful for health and the local environment. Waste pickers need to be factored into development plans.

Based on the results of his study, Mr. Tumewa suggested the following recommendations:

1) To develop an evidence base for project costs based on costed feasibility studies to enable more effective debate about development at municipal level, and to identify how costs can be reduced.

2) Develop demonstration projects to give comfort to investors and to show local public that plants are not harmful to health and the environment.

3) Map the landscape of available finance and develop a plan to attract development finance (from ADB, IFC etc) to fund demonstration and scale up early progress.

4) Evolve the Feed in Tariff rate to create a balanced revenue package with tipping fees, but including protection against excessive subsidy costs/windfall profits.

5) Consider landfill tax to raise cost of alternative disposal routes. 6) Continue awareness raising and involve the public in local waste

management plan development. The third presenter, was Mr. Pierre Tournier, a representative of Savoie Déchets (SD), the waste treatment joint association, a member of CEWEP (Confederation of European Waste-to-Energy Plants). He shared some implementation of WtE plants in Europe, namely:

50% of Paris is heated by 3 WtE plants including the Louvre museum. The WtE plant in Malmö supplies 60% of the heat demand of the city. The Brescia WtE plant provides 75% of the city’s heat demand.

He elaborated different steps that drove Savoie Déchets to use W-t-E:

1) First step: A political commitment. 2) Second step: Criteria to consider to set up a waste policy. 3) Third step : Choice of the Waste-to-Energy technology.

From the experience of Savoie Déchets, we can learn that

In order to be profitable, the W-t-E plant must run at 90% of working time. Operation: 365 days x 24h x 90% = 7,884 hours/years

The reactivity is very important when running a W-t-E plant. The suppliers have to be very reactive and competent.

To develop a concrete project, you must choose reliable, simple, robust technical solutions that are appropriate for the Indonesian context.

Incineration plant employees must have technical training (thermal, mechanical and electrical)

Incinerator regulations are very strict. The aim of the regulations is to guarantee the protection of the following interests: public safety, public health, nature and environment protection

To achieve these objectives, checks are carried out on the design of the W-t-E plant and the construction.

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The last speaker for the morning session was Mr. Marcello Barbato from Envitec Germany. As technology leader of the biogas sector, EnviTec Biogas is driving forward the development of technological innovations. EnviTec Biogas plants employ the newest processes to give the highest possible efficiency. Since 2002, they have built 30 plants where waste is transferred to energy with a total energy output of 31.8 MW. The feedstock is agriculture waste, household waste, liquid manure, and renewable raw material. It is now available in modular support (small scale plant), the design is still on a batch-by-batch basis. Under a controlled, anaerobic atmosphere organic inputs are turned into biogas. The biogas can be used as fuel for a cogeneration unit (electric power and heat), fuel for turbines or boilers in the existing production process, transport fuel and grid gas (in a upgraded form). The residue can be turned into high valuable fertilizers or be treated and turned into valuable solids.

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The Afternoon Session From Bappenas, Mr. Gunsairi represented the role of PPP on WtE development in Indonesia. Bappenas allocated about 50 billion IDR for supporting the PPP on WtE e.g Bandung, Solo, Batam, Bogor (in collaboration with JICA & ADB). He explained the importance of PPP for WtE development as for limited availability of state fund, inadequate understanding on the advance technology for WtE, holistic inefficiency in handling the waste management. Some issues on waste management using PPP scheme are as follows:

Waste management is considered to be a cost centre rather than profit centre for waste utilization

Tipping fee is requested for waste management while waste utilization is not needed

Waste management covers all types of wastes, and waste utilization only captures the commercial values

Waste management is focused on overcoming the city problems instead of creating attractive opportunity for investor to utilize the waste

The feasibiliy of project commercial; minimum waste generation is 500 ton/day, hesitant of local financial institutions as limited “creditworthiness” from local government

Sustainability of feedstock Commitment of local government to allocate budget and tipping fee Availability of land & acceptance by the community surrounding Lacking of understanding from the community towards the security on

advance & proven technology for WtE The next speaker is a representative of the Ministry of public works (MoPW), Mr. Rudi Arifiin, represented the potential synergy between MoPW and MEMR in regard to sanitary landfill development. in the fiscal year 2013, MoPW has supported Municipality of Kendari for having landfill gas treatment. As well as in the fiscal year of 2014, the landfill in Padang (TPA Air Dingin) has been supported. These will be a potential synergy between MoPW and MEMR to realize the WtE development. MoPW supports the DED for sanitary landfill gas and MEMR could take a part on the development of landfill gas treatment. This can be a model for replication in other municipalities. The challenges that are, currently only about 33 landfills have the infrastructure for gas utilization, a limited O and M budget availability, and a lack of human resources capacity. For example, the district of Malang and City of Malang, City of Kendari, City of Bitung have applied this gas utilization on their landfill. The speaker from the Ministry of Environment (MoE), was Mr.Ujang Sidik, he is aware that the MoE has a lot of homework to do, to support the development of WtE in Indonesia. Environmental standards for different technology options (namely incinerators, gasification/pyrolysis) on WtE need to be formulated soon. In addition, the technical requirement for landfill gas treatment and incinerator needs to be developed for providing a licence. The speaker from the Ministry of Home Affairs (MoHA), was Mr.Djatmijko Hadisuwarno who was supposed to present about the role of the local government on the waste to energy initiative. However, he presented some serious constraints in the construction of waste management, namely:

Large infrastructure projects need to be included in the regional RPJPM, otherwise it will trigger a KPK –investigation – if the projects have no program or agenda in the RPJMD;

The legal entity currently used for agencies that are dealing with waste (UPT—Unit Pelayanan Teknis, Technical services unit) does not guarantee long-term capacity building.

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Last but not least, was Mrs. Rani Sjamsinarsi, the Head of Regional office of Public Works and Energy & Mineral Resources of DIY. She presented the challenges to initiate WtE for DIY. The waste services facilities in DIY province are 3 landfills and 19 integrated waste treatment stations (TPST), 1 centralized wastewater treatment plant & 42 communal sewages system. The policies in DIY province for solid waste is to apply 3R approaches from the sources, build more TPSTs, and to minimize the amount of waste sent to landfill. For wastewater, the community should connect to the centralized sewerage treatment services if their house has been in the network of piping system. And to utilize the communal sewage system when the piping is not connected to the centralized wastewater treatment plant. The challenges faced are:

Limited understanding on the waste to energy Provide solutions that meet socio-economic environment (e.g. scavengers

and cows); Limited funding on investment or any other financial contribution to the

solution of waste problem. Inadequate knowledge on the technology options for WtE in landfill area Harmonisation on the national regulation of private investment process

towards the provincial regulation

The One-on-one Meeting in Yogyakarta, 21st May From the identified municipalities, DKI Province & City of Payakumbuh were not participating the one-on-one meeting, or the conference on day 1. The Bali Province, City of Tarakan and Ternate representatives were joining at a different table (they only sent one representative and yet they did not provide a completed questionnaire on their municipal solid waste data). Instead, the city of Pekanbaru with a complete team from a different institution within the City, they formed and request to have one dedicated table for only the City of Pekanbaru. Prior to the One-on-One Meeting, Dr.Dadan Kusdiana provided a short summary of day 1 and his intention to move forward to equip the local government sufficient information on WtE and PPP. He was aware of the presentations from the line ministries that they have different perspectives on WtE development in Indonesia. He considered conducting the training on PPP & WtE for selected local governments especially those who had participated on the one-on- one meeting.

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Generally, the local governments representative met with different technology providers and financial institutions (both national and international agency such as SMI, IFC and KfW). The municipalities received a basic idea on how technology can support their initiative of WtE. However, in-depth discussion to really looking at their actual and current data on waste generation and other relevant data still needs to be done. Having the most exact data can support the technology provider, giving a better idea and estimation on the investment needed. The City of Pekanbaru seems to be very interested to have further communication with Envitec Germany, as the technology offered by Envitec meets the vision of the Pekan Baru Mayor that is going to apply a new local regulation on solid waste sortation (organic waste separation).

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Site visit to DIY (Sewon and Piyungan) The site visit to the integrated sewerage system in Sewon Wastewater Treatment Plant and the landfill in Piyungan have been offered to the remaining participants of the One-on-One meeting. About 20 participants, mostly from the EU technology providers and embassy representatives (Finland and Danida) were joining the site visit. From the picture, it is clearl that the DIY province will face big challenges once the Province decide to start the WtE initiative. They have to deal with social resistance from the community surrounding who send the cows (about 1000 cows/day) to the landfill everyday. Not to mention with the scavengers. Site Visit to Surakarta, 22nd May Initially there were 7 participants listed. They wanted visit the site in the Surakarta landfill. By the time we should have left for Solo (8.15am), only the representative from MEMR – Mr. Pujo was at the meeting point (he is from the accelerated team for renewable energy implementation – MEMR). Both of us visited the office of Surakarta Municipality and the Putri Cempo landfill in Surakarta. Mr.Pujo was very excited to learn about the current status of WtE initiative in Surakarta. The City of Surakarta has been supported by Bappenas for having a PPP scheme on WtE from 2010 until August 2014. Thus far, the PQ has resulted 1 company called PT.Zug Industry Indonesia. It was coincidentally that the director of PT.Zug Industry Indonesia was having consultation to the office of DKP (regional office of cleaning and landscape) Surakarta, so we had the chance to discuss the constraints faced by Surakarta. It was found out that the criteria set up by Bappenas is too strict in the sense that the participating company for PPP bidding should be able to show their capacity and experiences at the same field in WtE. Meanwhile PT.Zug did not prove to have the same experience to treat municipal solid waste into energy. Company profile of PT.Zug can be made available. The City of Surakarta requested support from MEMR, the verbal request was asked to Mr.Pujo. They wanted to be assisted in getting proper appraisal of the existing PQ, to be precise to assess the technology offered by the provider. Having an internal discussion with Mr.Pujo on the way back from the office, he would like to have such workshop inviting relevant stakeholders on a national level (BPPT to provide best available technology for WtE on various types including the implications and technical specifications) and possibility to get international experts providing the proven technology for WtE especially fits with the Indonesian context. He was wondering if TCF can support on providing these experts. The output of workshop could be then considered as list of technology recommended by MEMR that can be referred to any PQ or tender application in the local level. He is as one of the accelerated team for RE implementation that has responsibility to the Minister of

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Energy and Resources Mineral directly, the team is assumed to have easy access to do the breakthrough measures if needed. Potential Follow up Having learnt the obstacles faced by the City of Surakarta and many other cities, it has become apparent that:

There is an urgent need for cities to have a reference on the proven technology on WtE, including its detailed information on technology specifications, standard to be considered, roster of national and or consortium companies providing services/investor on the WtE. Initiative from the MEMR accelerated team to have a workshop with relevant stakeholders can be followed it up.

Training on PPP scheme for WtE can be a follow up activity involving interested participants during the one-on-one meeting. Identification on participants should be made meticulously in order to meet their expectation and providing values on the knowledge and capacity development. The training has been discussed to be in co-operation with SMI (Sarana Multi Infrastruktur – financial institution in national level) in which they have already developed the PPP module. And TCF can provide support for technical substance on WtE.

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Annex 1: Presentations Waste-to-Energy Week 19 - 22 May 2014

Presentations WTE Week 19 May 2014

Annex 1.1 WTE Week Overview

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Annex 1.2 "Renewable Energy Policy in Indonesia" by Mr. Wibowo - ESDM

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Annex 2: Presentations WTE Week 20 May 2014

Annex 2.1 "Turn your Waste to Value" by Mr. Barbato (Evitec)

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Annex 2.2 "Energy from Waste: Barriers in Indonesia" by Mr. James Beyer -

Carbon Trust

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Annex 2.3: "The Savoie Dechets WTE Experience" by Mr. Pierre Tournier

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Annex 2.4 "Waste to Energy: Policy and Strategy" by Mr. Danan Secretary general ESDM

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Annex 2.5 "Energy Potential from Waste" – by Dr. Anthonie De Wilde

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Annex 2.6: "Environmental Regulations and Standard for Waste-to-Energy" by Mr. Ujang Solihin Sidik (staff of ASDEP Pengelolaan Sampah, Ministry of the Environment)

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Annex 2.7: "Challenges of Managing Waste into Energy at Dearah Istimewa" by Kepala Dinas & ESDM

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Annex 2.8: "Peran KPS dalam Pengembangan WTE"- by Direktur Pengembangan Kerjasama Pemerintah dan Swastah - Bappenas

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Annex 2.9: Pengelolaan Sampah Menjadi Energi- KEMDAGRI

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Annex 2.10: Sinergitas KEMEN PU-ESDM dalam pembangunan TPA

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Annex 3: Presentations WTE Week 21 May 2014

Annex 3.1: Q2 Presentation - WtE May 2014

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To obtain the full presentations, please click on the presentation link: http://www.wteindonesia.com/berita/86-wte-week-2014/110-presentations-wte-week-19-22nd-of-may