The government will soon be issuing a new pricing regulation for biomass power plants to encourage investors to take advantage of the city’s waste for power generation, an official with the Energy and Mineral Resources Ministry has said.
The ministry’s director general of renewable energy and energy conservation, Kardaya Warnika, said the new pricing, which is often called a feed-in tariff, would be applied to waste-fired power plants in cities.
“We previously set the electricity price for city waste-fired power plants at Rp 600 (US 6.36 cents) per Kilowatt-hour (kWh). Now we want to increase it to Rp 900,” he told reporters on Wednesday.
He said the ministry would issue the new pricing policy by the end of next week. “We are working on it. We hope it will be done by next week.”
The ministry, he added, categorized the city waste-fired power plants as special biomass energy because the waste had important utilization value, given that garbage was now a major problem in almost all cities.
Kardaya said the government would invite local administrators, such as mayors and regents as well as developers, to discuss the problems they faced in using the city’s garbage for power generation. “We will try to facilitate them in any way we can.”
The feed-in tariff is a renewable energy policy that obliges energy suppliers to buy electricity produced from renewable resources at a fixed price, usually over a fixed period — even from householders. At present, state electricity company PLN is the main purchaser of electricity produced by independent power producers (IPPs).
The policy is expected to give stakeholders legal guarantees which can ensure their investment security in addition to supporting all viable renewable energy technologies.
The ministry has already issued several feed-in tariffs, such as for hydro, biogas and city waste as well as for other renewable sources, like solar.
The policy is attractive to energy stakeholders because it offers some appealing provisions, such as requiring PLN to buy electricity produced from renewable sources.
The ReforMiner Institute’s vice director, Komaidi Notonegoro, told The Jakarta Post over the phone that the price the government had set to issue was quite competitive in the context of energy sources needed by PLN. “The price [of city waste energy] is still way above the price of fuel energy,” he said.
He added that the price for waste energy, even though it is only slightly different from geothermal which is priced at around Rp 800, should be higher as city waste had added value in being environmentally friendly. From a stakeholder’s perspective, he said, the government should set a benchmark price for each area in Indonesia so that investors could map and calculate their costs in order to obtain a proper margin.
He said that currently the government had several pilot projects for city-waste-fired power plants, “With the government setting a fixed price, it means we’re one step closer to seeing the operation of city waste-fired power plants in Indonesia.”