Keynote Speech

PROGRESS ON BIOMASS UTILIZATION FOR ENERGY IN INDONESIA

HEAD OF BPPT (THE AGENCY FOR THE ASSESSMENT AND APPLICATION OF TECHNOLOGY) At 7TH BIOMASS-ASIA WORKSHOP Theme: BIOMASS AS SUSTAINABLE ENERGY

BPPT, JAKARTA, INDONESIA

Jakarta, 29 November 2010

Distinguished Speakers, Honorable Participants, Guests, Delegates, Ladies and Gentlemen, It is a pleasure for me to be here this morning to deliver a keynote speech at this very important event namely the 7th Biomass-Asia Workshop with the theme: Biomass as Sustainable Energy. In this opportunity, allow me to extend my great thanks and heartfelt appreciation to all of you, especially all speakers, guests and participants attending this important workshop.

On behalf of the Government, I wish to congratulate all parties involved in coordinating and facilitating this event, particularly the National Institute of Advanced Industrial Science and Technology (AIST), Japan, Biomass-Asia Research Consortium, Japan, New Energy Foundation (NEF), Japan such that the 7th Biomass-Asia Workshop could be performed successfully. Distinguished Participants, Ladies and Gentlemen, In the last ten years Indonesias energy consumption increases at an average of 7% per annum. At the end of 2008, oil still dominates the national energy mix, reaching almost 50%. Meanwhile the Government recently launched the 25/25 vision, whereby the Government has targets of increasing its renewable energy share up to 25% by 2025. Therefore, the Government has big challenges and tasks to reduce the share of oil in its energy mix to achieve such target.

Global attention to support the development of alternative energy based on renewable energy sources have increased. The potential

of renewable energy to reduce dependency on conventional energy has been given serious consideration in recent years. Biomass is regarded as a renewable energy resource that offers potential opportunity to contribute to the Indonesian energy supply. The reason why biomass currently attracts attention is its renewability, potential for decentralized production and more importantly its carbon neutrality and hence its role to mitigate climate change. Furthermore, it can be transformed into electricity, heat and power, and used in forms which are more convenient.

In addition to fossil energy sources, Indonesia is blessed with relatively abundant potential of renewable energy. According to the data, geothermal potential is about 27 Giga-Watts (GW), hydro power is about 75 GW, and biomass is around 50 GW. However, the utilization of renewable energy in Indonesia is still very low compare to its huge potential.

It is estimated that Indonesia produces 180 million tons of biomass per year. The main source of biomass energy in Indonesia can be obtained from residues of rice, palm oil, rubber wood, sugar, plywood and veneer, logging, sawn timber, coconut, and other agricultural wastes.

Biomass cogeneration are mostly installed in industries based on biomass i.e. palm oil, wood and sugar industries. Most palm oil mills generate combined heat and power from fibers and shells, making the operations energy self efficient. However, the use of palm oil residues can still be optimized in more energy efficient

systems. Sugar mills that have their own steam generating facilities are generally equipped with old, low-pressure systems. Upgrading to highly efficient, high pressure systems with higher capacities can be an interesting option from a commercial standpoint. It is estimated that palm oil and sugar production will be the sector where the demand for biomass energy technology will increase considerably in the future. The palm oil industry is one of the agro-based industries in Indonesia that attracts many domestic as well as international investors. Installed capacity of biomass power plant in palm oil and sugar industries and other industries are around 1,650 MW.

In the last decade, several new approaches to power plant implementation and technology have also been introduced. Despite these challenges, the regional potential for plantation, agricultural and wood based multi-fuel biomass power plants is high and the market is attractive. The highest potential in Indonesia exists in the palm oil industries sector, followed by sugar, and wood industries and multi-fuel biomass power plants. The most common and predominant biomass power plant fuels used in Indonesia are: palm shell, palm fiber, bagasse, wood waste and coconut shell and fiber. Apart from these fuels, unconventional materials such as empty fruit bunches, coconut shell and fiber, saw dust and bark and such like are also increasingly being used.

To perform the task, the Government has to prepare various measures, such as:

x Develop domestic capabilities to construct and build small scale electricity generation using renewable energy, including biomass power plant; x Develop large scale privately funded bio-fuel mostly for transportation. x Develop biogas utilization used for household. The government's commitment to prioritize the development of new & renewable energy and energy efficiency has been followed by establishing a Director-General of New & Renewable Energy and Energy Conservation, through a Presidential Regulation No. 24 Year 2010, 14 April 2010, the Government launched 2525 Vision (25% renewable energy share in 2025).

In the future, the two main issues in energy production are clean fuels and higher efficiency in energy conversion. In the supply of energy from biomass, technology will play an important part that will determine the success of energy development from biomass.

The key technology that supports biomass energy development in the future will be bio-refinery that encompasses biomass to liquid production and biomass gasification. In addition, technologies for biomass processing and handling as fuels will support biomass energy development in the electricity sector.

Biomass energy will play an important role in the future, not only as an alternative fuel through 2nd and 3rd generation bio-fuels, but also as fuels for generating heat and electricity power. However, the 1st

generation bio-fuels will still be developed and will be optimized in conjunction with developing the 2nd and 3rd generation since most of our sources are based on palm fruit. In power generation, in addition to being fuels for the large scale power plants, biomass will serve as an important fuel in remote areas. In the long run, it is expected that the application of biomass can increase the electricity ratio for the whole country.

To implement the above concept, an important action plan will include developing and establishing partnership in field biomass energy development as industrial and transportation fuels and electricity technology. Currently, the National Innovation System (SIN) has been adopted to promote partnerships among all stakeholders within Indonesia. We hope that this system can be extended and reach wider stakeholders beyond Indonesia. This will promote the development of bio-refinery technology, biomass processing and handling technology, energy conversion

technology that adapts to biomass fuels, biomass cogeneration technology.

Distinguished Guests and Participants It is my expectation that this workshop will bridge an exchange of information on technology options and economics in biomass energy utilization which should be considered in our strategy toward biomass as a sustainable energy. I also expect that this event will bridge an exchange of experiences from international biomass stakeholders and create cooperation with Indonesias

biomass stakeholders, such that the application of biomass as energy can meet and satisfy the code applied in Indonesia.

In closing, may I express my sincere hope that the exchange of views and discussions to be held in this forum will be successful and fruitful and may I also hope that this workshop will come up with sound recommendations that will be beneficial to create conditions required to rapidly develop a biomass utilization of energy that are beneficial to the environment, society, and economy.

Ladies and Gentlemen, Now I would like to declare this workshop open, and I wish all participants a very fruitful and enlightening meeting, and for all our overseas participants I wish you an enjoyable stay in Indonesia. Jakarta, November 29th, 2010

Dr. Ir. Marzan Aziz Iskandar