adhi satriya, pt andritz hydro, 2014 asean-oecd investment policy conference
DESCRIPTION
This presentation by Adhi Satriya was made at the session "Integrating ASEAN firms into global value chains through investment" during the 2nd ASEAN-OECD Investment Policy Conference held on 10-11 December 2014. Find out more at: http://www.oecd.org/daf/inv/investment-policy/2014-asean-oecd-investment-policy-conference.htmTRANSCRIPT
www.andritz.com
Combined REBID, Cluster Development & GVC Strategy
Total Solution for Renewables in SEA
Integrating ASEAN Firms into Global Value Chains Session during the 2nd ASEAN-OECD
Investment Policy Conference, Jakarta, Indonesia, 10-11 December 2014
By Ir. Adhi Satriya M.Sc.
3
Renewables awareness and cost-benefits analysis minded approach
Non-harmonized legal landscape
Renewables long development lead time
Over population and difficulty of resettlement
Remote location and poor access infrastructure
Lack of local technical expertise
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SEA Key Challenges
4
High initial costs for geothermal and PV
Choice of “heat or eat” for biofuel, considering future price up rises
No integrated processing plant for biowaste
Investor-attractive PPA, feed-in tariffs and permitting structure
Limited renewable energy banking experience and know-how
Too high local content (renewables based on R&D, patent costs)
Imbalanced energy mix (non-renewables bigger portion)
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SEA Key Challenges
www.andritz.com5 www.andritz.com
Hydro Energy & Marine Energy
The Future Backbone of SEA & Pacific Renewables Sector
Hydropower and geothermal was prioritized (Source: UNSDSN SEA & Pacific
Regional Hub Workshop, 2014)
Quick win breakthrough in sustainable energy and deep de-carbonization (going off
fossil fuels) under UN Sustainable Development Goals, expected to reduce
Indonesia’s CO2 emission by 26% in 2020 (Source: UNSDSN SEA & Pacific
Regional Hub Workshop, 2014)
Large Hydro and Compact Hydro will remain the dominating segment within the
hydropower market in SEA, new technologies for Low Head Hydro’s and Ocean
Kinetics is a total solution for SEA for utilizing irrigation dam needs cluster
development of state-owned electricity companies in SEA as global impact of
increase of hydropower occurs in non-OECD countries (China, India, ASEAN,
South America)
Incremental renewables-based electricity generation by region in the new
policies scenario, 2008-2035 Source: IEA, World Energy Outlook
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2010-2020 2021-2035
$2
00
9 b
illi
on
Investment in renewables-based electricity generation by technology in the New Policies Scenario
Concentrated Solar Power
Solar Photovoltaic - buildings
Solar Photovoltaic - large scale
Geothermal
Wind - offshore
Wind - onshore
Biomass
Ocean
Hydro - small
Hydro - large
7
Cluster: grouping among small and medium enterprises (SME)
belonging to the same value chain (electricity) and same area (SEA)
linked by relations of cooperation (network, consortiums)
supported by partnership with regional public research institutions
to implement collective projects aiming at developing SEA common
competitiveness
Cluster needs:
elaborating strategy: diagnosis/identification of common challenges,
vision, action plan
management of collective quick win projects, structuring collective
projects with external alliances
Mobilization of research and innovation among SMEs
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SEA Cluster Development
8
Objectives:
technology upgradation
quality and productivity improvement
database development
networking and formation of consortium
marketability improvement
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SEA Cluster Collective Projects
for Development of Minor E/M Equipment
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Strategy 1:
collective diagnosis: SWOT analysis for the different interest
composing the clusters
identification of common problems and challenges
collective vision: to be a global player under cluster strategy and
under consensual projection in the future
selection of goals and collective means to reach
regularly revised and actualized process according to cluster’s
growth in scope and vision
short term, medium term and long term action plan
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SEA Cluster Development
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Strategy 2:
integrated perspective
different themes as per need of the cluster
adoption and promotion of energy efficiency and clean
technologies strengthening policy and institutional structure
supporting capacity building
establish several key clusters and its experiences to be
disseminated to other clusters
e-Management of information
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SEA Collective Projects
for Development of Minor E/M Equipment
11
Assessment of joint implementing collective projects and pilot projects:
common impact, monitoring, economic intelligence, search for value
chain strategy and search for new competitive advantages
Collective short term pilot projects, with the following impact:
New markets
New know how
Scale economies
Productive cooperation
Medium and long term structuring projects, with the following impact:
From global export-orientation to ASEAN Economic Community’s
trade-in value-added
Increased responsible business conduct in global value chains
(GVC)
Research innovation
Breakthrough for provision of infrastructure
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SEA Cluster Development
12
Activities:
diagnostic study
awareness seminars
developing resource person
enterprises upgradation programs
technological workshop
individual counselling
minor equipment manufacturing and outsourcing of small and fast-
moving expendable parts
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SEA Collective Projects
for Development of Minor E/M Equipment
14
GVC is a full range of coordination of activities across geographies that
are required to bring a product from its conception, through design,
sourced raw materials and intermediate inputs, marketing, distribution
and support to end consumers
GVC is basically a production sharing in which different stages of
production process are located across different countries in which
companies:
structure
optimize
their operations internationally through outsourcing and offshoring of
activities is designed
GVC considering the value added by each country in the production of
goods and services wherever the necessary skills and materials are
available at competitive cost and quality
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SEA GVC (Global Value Chains) Development
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Andritz has done GVC in Indonesia since years ago by dividing the
offshore supply and services of major components (from Austria and
India) and onshore services (Indonesia, for automation and installation
services)
As a result of leveraging geographic separation of product design and
manufacturing, Andritz hires 24,126 workers worldwide as of June
2014, while its foreign subcontractors, local manufactures employs
more
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SEA GVC (Global Value Chains) Development
16
Opportunity offered by Andritz’s GVC:
Enables SEA companies to perform some tasks in low added value
services
Accessing global distribution network and markets
Taking advantages of technology innovations
Enjoying global markets due to innovations of developed countries
such as OECD
Benefiting brand images of Andritz
Reducing information costs of reverse engineering and catching up
Plugging into GVC is accelerated way to become industrialized
countries
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SEA GVC (Global Value Chain) Development
2 Approaches for Harnessing Renewables
(way forward)
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Hydro Power Potential
Development Strategy
(RUKN) ͣ
Demand Driven
DevelopmentDemand Creation
Development
Electricity Power
Development Plan by
PLN (RUPTL) b
Hydro Power Developed
4,284 MW
Renewable Energy Based
Industrial Development
(REBID)
Hydro Power Potential
70,692 MW
Future Direction of Hydro Power
Development in Indonesia(a) RUKN : National Electric Power Development Plan
(b) RUPTL : Electricity Planning by National Electricity
Company (PLN)
Sample: Indonesia situation
Combined REBID Cluster GVC Approach
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Characteristics:
Bottom-up paradigm (interested investors come with integrated package with
end-user industries)
Isolated system
Based on supply (electricity creates its own demand for surrounding industry)
Based on private needs
Government role and presence as regulator (now still inexistence)
Consider environmental and spatial zoning (now still inexistence)
Combined REBID Cluster GVC Approach
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Characteristics:
Source of funding from private companies
Not depend on regional state-owned companies’ capital strengthening
High Debt to Equity ratio of regional state-owned electricity companies is not a
concern
Industry as off-taker
Portion of others purchasers beyond state-owned electricity companies is
significant
Breakthrough to overcome realization gap between potential and installed
capacity
VALE (Sorowako, S. Sulawesi, Indonesia)
REBID GVC by Andritz (done)
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Name Karebbe (left) Larona (middle) Balambano (right)
Installed Capacity (MW) 2 X 65 3 x 67 2 x 68
Start of Operation 2011 1979 1999
Turbines Francis Vertical (200 rpm, Head: 70.8 m) Francis Vertical (272.7 rpm,
Head: 140- 142.3 m)
Francis Vertical (214.3 rpm,
Head: 83.5 -86.5 m)
Generator 200 rpm, Capacity: 78 MVA, Voltage: 11,000 V 272.7 rpm, Capacity: 85 MVA,
Voltage: 11,000 V
214.3 rpm, Capacity: 80 MVA,
Voltage: 11,000 V
Planned Hydro
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☒ Iron & Steel
☐ Nitrogen
© Coal
Pet Petroleum
☒ Iron
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Calcium
Cement
Pet
Pet
Pet
Pet
PetPet Pet
Pet
Pet
Pet
Pet
Pet
Pet
Pet
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LNG
LNGPet
Pet
Pet
NG
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G
Total Sumatra
8,000 MW
Tot Kalimantan
15,000 MW
Tot Sulawesi
6,000 MW
Hydro
Port
River
Total Papua 20,000
MW
Hydro Power Potential for REBID Cluster GVC in Indonesia