Considerations for selecting
an additional province for developing a NAMA proposal
Michiel Hekkenberg
Lachlan Cameron
Xander van Tilburg
March 2013
ECN-E--13-013
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ECN-E--13-013 3
Contents
1 Introduction 5
2 Practical minimum conditions for selection 6
2.1 Readiness 6
2.2 Demand 6
2.3 Data availability 7
3 Prioritizing benefits to Indonesia 8
3.1 Mitigation potential 9
3.2 Other development benefits 9
3.3 Experience and learning 10
4 Conclusion 11
4
ECN-E--13-013 Introduction 5
1 Introduction
Under the project MitigationMomentum1, ECN provides technical assistance to the
government of Indonesia with the development of a NAMA2 proposal in the province
North Sumatra. In Indonesia, NAMAs are developed against the background of the
national and provincial climate change action plans (RAN/RAD-GRK).
Additional support from CDKN allows ECN to provide technical assistance to develop a
NAMA proposal in an additional province, expanding the scope of the existing work
beyond North Sumatra and providing the opportunity for both additional visibility of the
NAMA within Government of Indonesia and learning from NAMA development
experiences across different provinces. The intended scope for the second NAMA
proposal is the same: small and medium scale, grid-connected renewable electricity
options.
This note provides background information to facilitate the province selection process
by the Ministry of Energy and Mineral Resources (ESDM) and the Ministry of Planning
(BAPPENAS). It offers criteria that may feed a discussion on how to maximize the
benefits to Indonesia of extending the project scope. The first step narrows down the
number of considered provinces based on a set of practical minimum conditions, the
second step uses several possible selection criteria based on benefits for Indonesia.
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1 MitigationMomentum is supported by the German government through the International Climate Initiative (ICI)
2 Nationally Appropriate Mitigation Action
6
2 Practical minimum
conditions for selection
Since the primary aim of the technical assistance is the development of a NAMA
proposal, the selected province should have a minimum level of capacity to “absorb”
the NAMA development process and accommodate its future implementation. If these
minimum conditions are not met, it may prove difficult to develop a NAMA proposal
with sufficient buy-in, ownership, and potential for successful implementation. The
minimum conditions may therefore serve as first selection criteria:
Readiness for and engagement with the RAD-GRK process
Evidence of interest by project developers and suppressed energy demand
Data availability and data quality.
2.1 Readiness
To date, 29 out of 33 provinces have completed RAD-GRK (Riau, East Nusa Tenggara
(NTT), Papua and West Papua not yet). 27 provinces include energy actions (Jambi and
South Kalimantan do not mention actions for energy), 20 mention “renewable energy”
so could be relevant for selection. However, actions are often described in limited
detail; e.g. “provide and manage RE”. 8 Provinces mention specific RE electricity
technologies (South Sumatera, Bengkulu, Lampung, Banten, West Nusa Tenggara (NTB),
East Kalimantan, Central Sulawesi, West Sulawesi).
2.2 Demand
The first aspect to consider, is whether project developers have expressed interest in
developing small and medium scale renewable energy projects. Evidence of this could
be obtained either from applications for the Feed in Tariff, or demands for grid
ECN-E--13-013 7
connection. A second aspect is that of so-called suppressed demand, where the current
energy supply is insufficient to service the potential demand. A NAMA would be
suitable to (partially) address a situation of suppressed demand by removing barriers
through policy interventions. An appropriate indicator for suppressed demand
(specifically for small scale RE projects) is currently lacking. Planned additional
production capacity in provinces may provide a proxy indicator of additional electricity
demand in general, which may also provide opportunities for small scale RES
production.
To provide sufficient value in terms of energy production and GHG emissions a NAMA
would typically aim to realize several hundreds of megawatts of renewable energy
capacity or more, and therewith relate to total investments in the order of $ 0.5 – 1
billion or upwards. Potential emission reduction could be in the order of 0.5 – 1 Mt
CO2-eq./year or higher. There are 14 provinces with a planned capacity increase of
>500MW in the 2010/2014 period3. The provinces with the largest additional capacity
planned were North Sumatra, South Sumatra, Banten, Jakarta, West Java, Central Java
(including Yogyakarta), East Java, East Kalimantan and South Sulawesi.
2.3 Data availability
In general, data availability on the provincial level in Indonesia is limited. In order to be
able to assess costs and benefits of the NAMA, data will be needed on e.g. expected
economic development, renewable energy potentials, financial indicators and relevant
existing policies. Collecting the relevant data will require close cooperation with the
provincial government and likely require additional local research. The selected
province should ideally be able to supply a basic dataset, and be willing to use some
resources to further refine it.
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3 Master Plan Pembangunan Ketenagalistrikan 2010 – 2014, summarized on http://repit.wordpress.com/
8
3 Prioritizing benefits to
Indonesia
There are three main benefits that may be pursued by expanding the work into a
second province:
Mitigation potential: reducing greenhouse gas emissions though implementing the
NAMA.
Development benefits: additional economic, social, and environmental benefits
associated with the implementation of the NAMA.
Experience and learning: how the process of developing the NAMA proposal can be
replicated and scaled up, both within and across provinces.
Each of these benefits may materialize to some degree in each province, but provinces
differ with regard to which benefit will be most pronounced, and their expected
magnitude. National and provincial development priorities determine the weight given
to each of these expected benefits. The province selection process is therefore not
merely a ‘scoring exercise’, but rather a dialogue in which the national and provincial
government, and other stakeholders, weigh the various benefits. An indication of
provinces scores towards expected benefits is provided below.
Each of these benefits may materialize to some degree in each province, but provinces
differ with regard to which benefit will be most pronounced, and their expected
magnitude. National and provincial development priorities determine the weight given
to each of these expected benefits. The province selection process is therefore not
merely a ‘scoring exercise’, but rather a dialogue in which the national and provincial
government, and other stakeholders, weigh the various benefits. An indication of
provinces scores towards expected benefits is provided below.
ECN-E--13-013 9
3.1 Mitigation potential
The mitigation potential in the different provinces depends on, inter alia, the following
factors :
Current and projected energy consumption and GHG emissions
Renewable energy resource potential
Possibility for IPPs to connect to the grid.
Energy consumption and GHG emissions are generally highest in the provinces with the
largest economy and population. These provinces could host a large(r) number of
projects that fit within the intended NAMA scope. The abatement potential however,
also depends on the current activities and alternative energy sources (i.e. what would
be business as usual). As a consequence, as long as a minimum energy demand exists, a
province would be eligible for selection. A ‘rough’ proxy could be obtained from
province population. The 2010 census4 identified 9 provinces with a population of over
5 million; North Sumatra, Riau, South Sumatra, Lampung, Banten, West Java, Central
Java, East Java, South Sulawesi.
Most provinces have a significant renewable energy resource potential. The islands of
Sumatra, Kalimantan, Sulawesi and the province of West Nusa Tenggara (NTB) are
identified as having > 50MW small scale hydro potential (<10MW) remaining
undeveloped, and large potentials for large scale hydro5,6
. Biomass and solar potentials
are considered significant in many provinces in Indonesia. Note that more densely
populated provinces may have difficulty finding suitable locations to harvest renewable
resources.
Possibility for IPPs to connect to the grid: For a NAMA targeting grid-connected small
and medium scale renewables to be successful, the existing grid structure and
penetration to the village level, is a good proxy for IPP market potential. The
electrification rate is generally a good sign for economic activity. West Sumatra, Bangka
Belitun, Banten, South Kalimantan, North Sulawesi, Bali and all provinces on Java have
village electrification rates above 99% and general electrification rates above 60%.
3.2 Other development benefits
Additional renewable energy production capacity may provide benefits in systems with
a low current capacity, e.g. by improving access to modern energy sources. In systems
that are not interconnected through large high voltage grids, this benefit of additional
capacity may even be more pronounced as the system cannot fall back to importing
power from another region. Apart from the technical benefits, pursuing policy
interventions for supporting renewable energy (through a NAMA) may build
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4 http://www.bps.go.id/eng/index.php
5 Investment Opportunities EMR Sector, Ministry of Energy and Mineral Resources, 2011
6 Renewable Energy Action Plan of West Nusa Tenggara Province 2010-2025, Casindo Team, 2011
10
institutional capacity and awareness with stakeholders. Developmental benefits are
likely have highest impacts in the lesser developed provinces. This presents a balance:
whereas the impacts are highest in least developed provinces, there is a need for a
minimum understanding of energy systems, GHG emissions, and mitigation options to
ensure the NAMA-concept to be taken up successfully.
3.3 Experience and learning
The additional province may lead to most learning effects when situational differences
exist. Given the different provinces on Sumatra may be relatively alike, e.g. with regard
to geography, economic situation and the that the electricity system of the provinces on
Sumatra is interconnected, the learning process may be a reason to select a province
outside the island of Sumatra.
ECN-E--13-013 11
4 Conclusion
This note provides possible criteria for selecting a second province to develop a NAMA
proposal to support small and medium scale renewable energy projects. If most focus is
given to maximizing technical (mitigation) aspects of NAMA implementation, the
presented selection criteria provide arguments to consider selection of the provinces of
South Sumatra, Banten, East Java, South Sulawesi or East Kalimantan. Each of these
province has characteristics that make it potentially interesting for selection, but each
also has potential drawbacks. Based on initial discussions with Bappenas and ESDM,
regarding cross-provincial learning, development benefits, and expected provincial buy-
in, West Nusa Tenggara (NTB) can added to this list.
It should be noted that this first selection is based on limited data, without taking into
account provincial buy-in or institutional capacity.
Table 1: summary of considerations for selection of an additional province
RA
D-G
RK
men
tio
ns
spec
ific
RE
op
tio
ns
Sign
ific
ant
cap
acit
y
dem
and
po
pu
lati
on
>
5M
Hyd
ro p
ote
nti
al
hig
h
elec
trif
icat
ion
rate
lear
nin
g
ou
tsid
e
Sum
atra
Oth
er
dev
elo
pm
en
t
ben
efit
s
South Sumatra X X X X
Banten X X X
X X
East Java
X X
X X
South Sulawesi
X X X (X) X X
East Kalimantan X X
X
X X
West Nusa Tenggara (NTB)
X
X (X) X X
12
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