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Strengthening PV Domestic Industry

Deputy Chairman for Technology of Information, Energy, and Material Agency for the Assessment and Application of Technology

(BPPT)

Unggul Priyanto

05/09/2013 2

INTRODUCTION

Oil 20 %

Gas 30 %

Coal 33 %

New&RE 17 %

Bio-fuel 5 %

Geothermal 5 %

Biomassa, Nuclear, Hydro, Solar, Wind 5 %

Liquid coal 2 %

TARGET ENERGY MIX OF THE YEAR 2025 (Based on the Presidential Decree. 5/2006)

Target contribution of solar PV by 2025 : (0,2-0,3)% ≈ (0,8-1,0) GW The average solar PV installation needs : 65 MWp/year

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Introduction

Application of PV Systems:

1. PV systems for rural electrification program have been carried out by BPPT since the '90s as Solar Home System (SHS) of 50 Wp.

2. Since 2005 the application of PV systems for rural electrification program has increased significantly; as distributed system (SHS) and centralized (hybrid) system (PV-battery, diesel, or wind systems).

3. The current installed capacity of PV systems approximately 27 MWp 4. Balance of Systems (BoS) were produced by several national manufacturers;

partially is still imported (hybrid power controller (HPC), battery). 5. PV module industries in the country have not given a high added value yet

and the level of local content is still low because the main component (solar cell) dependent on foreign products.

6. Uptake of PV products still rely on government expenditure

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Source: various Ministries and PLN

SOLAR PV PROJECTIONS FOR RURAL ELECTRIFICATION UP TO 2025

1.243 MW

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Average of 88,8 MWp/year

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Current status of National PV Industry

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Sumber: berbagai Kementerian dan PLN

Kementerian/ Departemen

Tahun 2005 2006 2007 2008 2009 2010 2011

ESDM 141 1.555 2.131 2.104 3.871 * * PT.PLN 0 0 0 0 0 1.000 1.400 PDT 0 280 405 1.135 908 569 374 DKP 0 0 0 70 272 0 80 Perhubungan 0 0 0 0 67 83 265 Ketenagakerjaan dan Transmigrasi 0 0 0 25 23 13 14 BPPT 11 0 0 0 0 0 532 Total 152 1.835 2.536 3.334 5.141 1.665 2.665

Kumulatif Total 152 1.987 4.523 7.857 12.998 14.663 17.328

*Pengadaan PLTS tidak dilaksanakan

Year Ministry of

EMR Outside of the ministry EMR

PT.PLN Total Cumulative

2012 10 2,47 40 52,47 52,47 2013 10 2,85 50 62,85 115,32 2014 10 3,22 60 73,22 188,54 2015 10 3,59 70 83,59 272,13 2016 50 3,97 70 123,97 396,10 2017 50 4,34 75 129,34 525,44 2018 50 4,72 75 129,72 655,16 2019 50 5,09 80 135,09 790,25 2020 50 5,46 110 165,46 955,71 2021 51 5,84 ** 56,84 1.012,55 2022 51 6,21 ** 57,21 1.069,76 2023 51 6,59 ** 57,59 1.127,34 2024 51 6,96 ** 57,96 1.185,30 2025 51 7,33 ** 58,33 1.243,63 Total 545 68,63 630

PV PROJECTIONS FOR RURAL ELECTRIFICATION UP TO 2025 IN MWP

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No Company’s Name Work-force

Production Capacity

(MWp/year)

Local Content

1 Adyawinsa Electrical and Power, PT 156 20 40,17%- 47.79%

2 Azet Surya Lestari, PT 80 10 40,11% - 40,15%

3 LEN Industri, PT 540 30 40,21% - 41,30%

4 Swadaya Prima Utama, PT 50 25 40,77% - 46,59%

5 Surya Utama Putra, PT 60 20 41,60% - 44,49%

6 Wijaya Karya Intrade Energi, PT 115 15 40,35% - 44,42%

PV MODULE LAMINATING INDUSTRY CAPABILITY IN INDONESIA

Source: APAMSI

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CATEGORY BARRIER SUB BARRIER POLICY INCENTIVES EXISTING

POLICY INCENTIVES LACKING

POLICIES Policy of PV cell technology to be developed has not been established

Technology of PV cell has not been determined

BPPT has conducted a feasibility study of the Nasional PV Industry (end of 2011).

PV for community use policy not yet determined

Study of society have not been able to do

MEMR: Encourage regulation concerning the use of PV system for community use.

Mandatory policies, bonds, quotas, or feed-in tariffs in place to promote PV

Feed-in Tariff for solar PV (MEMR Regulation no.17 of 2013)

FINANCING PV investment less attractive High investment cost Tax breaks and import duty exemption: PMK No 21/PMK.11/2010 PMK No 176/PMK.11/2009 PMK No 154/PMK.01.1/2008

Ministrial of Finance regulation on reduction of tax, investment subsidies, cuts costs,

PV cell components are still imported

State Secretariat: Decree of the national PV Industry Development

High lending rates MoF Regulation on incentive loan rates

Funding systems that are less innovative

Financial institutions see solar PV as a consumer product and not a commodity

MEMR: Cooperation and Socialization

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CATEGORY

BARRIER

SUB BARRIER

POLICY INCENTIVES

EXISTING

POLICY INCENTIVES LACKING

INSTITUTIONAL Limited the number of National Standard on PV systems components

The budget number of the technical team on national standard is limited

Preparation of standard National PV system components. (KESDM, NTSC, BPPT, LIPI, ITB, UI, PT.SEI, BSN, Associations)

Labelling institution on PV system components has not been established

Lack of laboratory facilities Appointment of the National institute on PV system components labeling system (KESDM, NTSC, BPPT, LIPI, ITB, UI, PT. SEI , Kemerind)

Coordination among the implementing relief activities PV system of several ministries is still weak

Unequal ownership of hardware, payment patterns and rural electrification planning at the central level

related institutions: the socialization

CAPACITY R & D and Control Technology weak

Limited R & D of PV system components

Develop the concept of research and development to enhance national capacity in order to ensure the mastery of science and technology in the field of PV (KESDM, KNRT, BPPT, LIPI, ITB, UI, PT SEI)

Cell testing capacity is limited LIPI: Increased capacity of PV cell testing

Testing capacity for PVsystem components is limited

BPPT: Increased capacity PV system components testing

IPR There are currently no local IPR

burden of investment Related institutions: Negotiation

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Strategy for Strengthening PV Industry

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0 200 400 600 800

1000 1200 1400 1600 1800 2000

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

MW

MEMR Other Ministries PLN Yearly growth

1.260 MW

2.200 MW Projection of Cummulative PV Installation Capacity

Roadmap of Application in remote Area (Gov’t Spending)

Potential Application in Grid connected (Private Sector Driven)

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Market

Product

Technology

R&D

Resources

Specific utilization: Telecommunication, etc.

$2/W

Residential, Microgrids

$5/W

Sel surya, Thin Film & PV module

PV Panels, Batteries,controls

and system

PV panels, System control

BIPV panel

Building integrated PV, architectural glass

$1/W

Crystalline Thin film

High Efficiency Thin film

HP Quartz glass

Investment Supply chain Competence

High Eff module

Year 2006 - 2011 2012 - 2015 2016 - 2025

New materials BIPV panel

Hybrid controller dan Inverter

Hybrid controller dan Inverter

Special coating

BIPV controller &

Inverter

Sel Surya

ROADMAP OF PV TECHNOLOGY

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Capacity (MW)

10 45

170 310 850 2,200

Additional Capacity to 250MWp

210

Solar Cell Industry 50MWp

Additional Capacity to

100MWp

Additional Capacity to 200MWp

Master-plan

Installed Capacity (Cummulative)

2009 2011 2014 2016 2021 2025 2015 2017 2020 2022

National PV

Industry

2012 2013

25 40 50

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Vision : 2.2 GW Installed PV Plant Capacity in 2025

Source: PV Industry Development Acceleration Master Plan 2010 - 2025 Interministrial Working Group, 2009

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Technology Thin Film Crystalline

Silicon CPV

(a-Si) (CdTe) CI(G)S a-Si/μc-Si Dye s.cells Mono Multi III-V Multi-

junction

Cell efficiency

4-8% 10-11% 7-12% 7-9% 2-4% 16-22% 14-18% 30-38%

Module efficiency 13-19% 11-15% 25%

Area needed per KW (for modules)

15m2 10m2 10m2 12m2 7m2 8m2

Reduction of Eff in 50C

low low low low 14-15% 14-23%

Strength Ext Fragile

Fragile

Commercial Module Effiency

source: EPIA 2010. Photon International, March 2010, EPIA analysis. Efficiency based on Standard Test Conditions

Solar Grade Silicon

Ingot

Wafers

Solar

Cell

Module

Solar Home System

PV Hybrid Power System

Solar Farm

PV Grid Connected

PV Industry

System/Appli-cation

PV System Installation

Chemical Industry

Aluminium Frame

Industry

Cable Industry

Control System

Industry

Accu/Battery Industry

Importer/ Wholesale

The Market Chain: Market actor & their linkage

Import

Key Infrastructure & Market Support Service

The Market Environment: Institutions, Rules, Norms, Trends

Electricity Tariff Policy

Taxes / Tariff

Fossil Fuel Subsidy

Regulatory Institution

Renewable Policy

Environment Policy

Consumer Trend

Financial Services

R & D Services

Standard Labelling Services

Electric Utility

Raw Materiar Provider

Upgrading Standards

Battery Recyling Services

PV Testing Services

Glass Industry

INFRASTRUCTUR FOR PV INDUSTRY DEVELOPMENT

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BACKGROUND Growth of Local PV Market Lack of National Capacity of PV Industries (Only PV Module Industries exist; Solar Cells, Batteries and Power Controller are Imported)

PURPOSE DAN OBJECTIVE Develop National Capacity on Sustainable PV Industries

RELATIONSHIP TO THE COUNTRY SUSTAINABLE DEVELOPMENT

Support the wide utilization of PV Increase the share of Renewable Energy and Reduce the Fossil Fuel Dependency

PROJECT DELIVERY Develop Local Solar Cell Manufacturer and Supporting Industries

TIMELINE 2013 : Local Solar Cell Industry (Cap 60 MW) >2014 : Add Capacity of Solar Cell Industry and Build the Supporting Industries (Battery and Power Controlller)

BUDGET Solar Cell Industry (60 MW) : ±50 million USD (c-Si Technology) Battery Industry Power Electronic Industry

RESPONSIBILITY AND COORDINATION

Ministry of National Owned Industries, MoI, MEMR, MOF

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BACKGROUND Lack of Capacity for R&D in the field of PV (Lab and Human Resources) Needs of supporting the industrial process of Solar Cell, Develop new and innovative Solar Cell / Module production

PURPOSE DAN OBJECTIVE Develop R&D Capacity on Photovoltaic to support the Industrialization of PV Product Quality Improvement and Local Resource Utilization

RELATIONSHIP TO THE COUNTRY SUSTAINABLE DEVELOPMENT

Support the national capacity Increase the share of Renewable Energy and Reduce the Fossil Fuel Dependency

PROJECT DELIVERY Development of R&D Laboratory for PV Technology

TIMELINE In line with PV Industry Development 2013 : Solar Cell R&D Laboratory >2014 : Supporting Technology R&D (Thin Film Technology, Battery, Power Controlller)

BUDGET 3 million Euro

RESPONSIBILITY AND COORDINATION

Ministry for Research and Technology (BPPT, LIPI)

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BACKGROUND Need of National Standard of PV Products Lack of National Capacity of PV Testing Labs (Only Performance Test, not comply with IEC/ISO Standard)

PURPOSE DAN OBJECTIVE Develop National Standard on PV Components and System Develop PV Testing Lab comply with IEC/ISO Standard

RELATIONSHIP TO THE COUNTRY SUSTAINABLE DEVELOPMENT

Ensure the Effective and Optimum PV Application Protection for the Consumer from Unqualified Product

PROJECT DELIVERY PV Testing Labs Comply with IEC 61215 Standard and Certification Procedure of PV Modules

TIMELINE 2013 : PV Module Testing Lab Comply with IEC 61215 >2014 : Battery Test Lab, Power ElectronicTest Lab

BUDGET PV Module Testing Lab (IEC 61215) : 5 million USD Battery Testing Lab : 3 million USD Power Electronic Test Lab : 3 million USD

RESPONSIBILITY AND COORDINATION

Ministry of Research and Technology, Agency for Assessment and Application of Technology (BPPT), Indonesian Science Institute (LIPI)

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1. Potential application of PV systems is increased significantly up to 2025. The government should immediately issue a policy of PV technology to be applied and encourage industrial development of PV cell and PV systems components.

2. Need more intensive coordination among government agencies involved in the implementation of PV systems and PV industry development in Indonesia.

3. Government needs to build a test lab of PV module and pv system components that meet international standards to ensure the quality of components that are marketed in Indonesia.

4. With the issuance of the feed-in tarrif for solar PV plants by MEMR in 2013 and it is expected that the application of the domestic PV industry will be developed in accordance with the roadmap that has been compiled.

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For your attention