International Conference For Future Energy and Environtment (ICFEE 2013)-Rome Italy

EVALUATION ON GOVERNMENT POLICY ISSUES ABOUT OBLIGATION OF SOLAR HOME SYSTEM INSTALLATION
(STUDY CASE : INDONESIA) Eki Farlen Engineering Physic, Gadjah Mada University, Yogyakarta-Indonesia Email : ekifarlens@yahoo.com
Abstract - Problems electricity happened in indonesia especially in household sector make government must find new strategic to solve it, In respond to government policy issues which will release new rule that every luxury home which will be built in indonesia in 2013 whose have power capacity more than 6600 VA (R3 Class) must invest 20% from total cost of their home for solar home system installation, this paper aims to forecast and evaluate the government policy issue by using LEAP simulation method for long term from 2013 till 2025 in order to know how much government will save the energy electric consumption if the policy be aplicated. Based on result of simulation , if 61% of new and old home from total of 36838 luxury home in 2025 will have been used SHS, PT PLN and government will save energy electric consumption 21767.3 GWh or equivalent with 6.8 US$ billion and percentage of electrification ratio increased to 2%. Index Term: Solar Home System, LEAP, Energy electric consumption, Government Policy issues

One of government policy issues is solar home system installation for luxury home which will be built in indonesia in 2013 whose have power capacity more than 6600 VA (R3 Class) must invest 20% from total cost of their home for solar home system installation[9], this paper aims to forecast and evaluate the government policy issue by using LEAP simulation method for long term from 2013 till 2025 in order to know how much government will save the energy electric consumption if the policy be aplicated. 2. PROBLEM ELECTRICITY IN NDONESIA PT PLN (electric company nation) is one of state-owned enterprise which produce and distribute electricity in Indonesia, at last December 2010, total of power plant capacity and generation unit of PT PLN reach 29,268.16 MW and 5269 unit, there are five sector which get electricity from PT PLN ; industry sector , household sector , commercial building sector, government office sector and sector public service sector etc. For household sector is divided into three class, classified based on power load in each home, In Indonesia, R1 class for common home,R2 class for middle class, and R3 for high class or luxury home. look at table (1).
Table 1. Classification of Class Source: statistic PT PLN[1]

1.

INTRODUCTION The usage of fossil energy caused negative effect like concentration of greenhouse gas raise up in the atmosphere that make global warming and climate change, over consumtion of fuel like coal, oil, gas and the other fossil is the main case. Fossil energy is used for generating the electricity, the increasing cost of fuel in Indonesia cause PT PLN (electric company nation) as provider and distributor electricity in Indonesia become less capable to fulfill requirement the electricity in all sector, moreover, PLN must shuts down alternately in some district because of power capacity is limited. Right now, Total of power plant capacity in Indonesia just 30000 MWatt, increased 8,82% than before at last December 2010, PLN invest 86% from total capacity and the remain from other private company [1]. Moreover, growth rate of electricity demand will always increase toward density population growth and economy growth(GDP) , growth rate of electricity demand is predicted 7-8% until 2025. Although electrification ratio still low with amount of Indonesia population 241133700 people , from total 59778200 household in urban and rural just 42577542 household which has gotten electricity, it means percentage of electrification ratio still 71,23% [1 ]. Not only because of fossil fuel limitation and low electrification ratio but also subsidies distribution unfairly that make Government should have find strategic management to overcome this case as soon as possible.

Sector Household

Code Class R1 R2 R3

Power 450VA-2200VA 3300VA-5500VA 6600VA

Electric household sector is the most dominant in consuming electric energy (GWh) than the other sector, the second is industry sector and then commercial building sector and government office sector.
Table 2 Number of customer and energy consumtion

Class R1 450VA2200VA R2 3500VA5500VA R3 6600VA

Household 41867936

Connected (MVA) 33.048,87

Energy (MWh) 58.275.799,72

572923

2.371,85

4.337.254,21

135959

1.761,80

2.495.810

International Conference For Future Energy and Environtment (ICFEE 2013)-Rome Italy
Problem electricity in household sector is distribution the subsidies unfairly among the three of household class.
Table 3. Cost of subsidy

Class R1 450 VA 2200VA R2

Household

Total subsidy/year 1983.95 US$ Million 416.7 US$ million 224.79 US$ million 58.54 US$ million

Subsidy/house per month 8.34 US$ 20.569 US$

19821375 1688262

568912 135705

32.92 US$

So, problems electricity happened in indonesia as described before which make government should release strict new policy about obligation of solar home system installation for luxury home or R3 class in 2013 as mentioned in Constitution of law Indonesia (UU) no 30 year 2009 about planing of power plant in indonesia that government have obligation to regulate energy electric policy[8]. Luxury home which will be built in 2013 should invest 20% from total cost of their home for solar home system and will not get electricity from PLN again. For example : Before people who will build luxury home and their homes power load more than 6600 VA, they must fulfill agreement with government rule whether they afford invest for solar home system and will not get electricity from PLN at all. 3. POTENTIAL AND STRATEGY Indonesia have many opportunity because as tropical countries in which passed by khatulistiwa line and irradiated by sun more than 6 hours per day (Peak Sun Hour) or approximately 2400 hour per year. In order that, Indonesia have a big potential to generate electricity using PV, with radiation intensity from sun 4,8 KWh/m2 or equivalent with 112.000 GWp, PT PLN has produced only 1,23 MW or 10 MWp in 2011 and just installed in remote area [1]. Ministry of energy (ESDM) published roadmap of improvement power plant solar in Indonesia have capacity more than 0,874 GW at 2025 with total investment 27895 US$ million to creat modul solar cell without import [8]. So, all aspect must be integrated to support optimalization PV for solar home system which will be trend among rich people as popular as communication/gadget technology right now. According to the research of Standard Chartered Bank said that a number of rich people in Indonesia who have income 25000-5200 US$ per year reach to 4 million person or 9% of amount rich people in asia, a number of rich people in Indonesia are bigger than korea (3,2 milion person, Taiwan (1,8 million person), Malaysia (1,6 million person) and predicted over 10 year will be much bigger 3 times .in addition, Growth rate of sale luxury home will always increase from 15% in 2011 to 20% in 2012 . Moreover, cost of PV is predicted by using MARKAL method will decrease till 2030, there are two scenario in analysis of potency PV, (BASE CASE) scenario and (PVCOST) scenario. Base case is scenario where all condition according in the year of 2000. Whereas in PV COST scenario assumed according to the research in united state America that prediction cost of investation pv will decrease in the year of 2030, not expensive like now.[5] In the year of 2010, capacity installed of PLTS (Power Plant Solar) from both of scenario just 0,0075GW (1,600 US$/Kw) , Whereas in 2015 capacity installed of PLTS from both of scenario increased into 0,02 GW and in 2030 increased into 15,15 GW (1,600 US$/Kw) at base case scenario and 66,07 GW (0,96 US$/Kw) at PVCOST scenario. See fig 3.

R3

35.935 US$

(1 US$ = 9,600 rupiah) In Indonesia, electricity enjoyed by most of rich people whose home have power load more than 6600 VA [2], while some people in rural life still not yet enjoyed electricity access from PT PLN, based on table (3), for R3 class every home get the subsidy 35.935 US$ per month whereas for R1 class every home just only get 8.34 US$ and 20.56 U$ per month , off course it is not fair, Governments plan will erase subsidy for R3 class to minimize budgets country and give it to the people in rural life who still not yet get electricity from PT PLN and subsidy from Government.In addition, energy intensity consumtion (GWh) by R3 is most significant (figure 1).

Fig 1

Fig 2

Eventhough a number of R3 customer only 0,31% , R2 0,13% and R1 98,35% from total 42576818 household in 2011 (see fig 2) , but R3 class is most significant in consuming electricity energy from PLN 18.36 MWh/household per year, whereas R1 class only 1.39 MWh/household [1]. As we know that rate of electrification still not enough to cover up electricity demand with total population 241133700 people and 42577542 of 59778200 household which has enjoyed electricity from PLN, electrification ratio still 71,23% and growth rate of electricity energy consumtion(GWh) about 7,78% each year whereas growth rate of household about 4,4% each year, it mean that Indonesian people still spendthrift in consuming energy and only have 655,21 kWh/capital in 2011 [1].

International Conference For Future Energy and Environtment (ICFEE 2013)-Rome Italy
Table4. Official Statistical Data has been validation

2007

2008

2009

2010

2011

Source

Household R1,R2,R3 Energy (GWh) Rupiah/kwh

34684540 47,324.91

36025071 50,184.17

37099830 54,945.41

39324520 59,824.94

42577542 65,111.57

PT PLN PT PLN

571.76

588.01 471.26

589.33 540.27

615.92 700

617.95 820

PT PLN www.bps.go.id

GDP 420.00 ( (US$ billion) 1 (1US$ = 9,600 rupiah)

Fig 3. Output MARKAL Source : BPPT. Out put model MARKAL

= Cost of investment at BASE CASE = Cost of investment at PVCOST = Capacity Installed at BASE CASE = Capacity Installed at PVCOST Growth rate of capacity installed as long as 15 year amounted 55,6% per year at BASE CASE scenario and 71,7% per year at PVCOST scenario, capacity installed growth fastly and it will be rational If Indonesia can produce PV modul by it self ,without impor from other country and also optimalization efficiency of Modul PV. 4. LEAP SIMULATION LEAP is an integrated modeling tool that can be used to track energy consumption, production and resource extraction in all sectors of an economy. It can be used to account for both energy sector and non-energy sector greenhouse gas (GHG) emission sources and sinks. In addition to tracking GHGs, LEAP can also be used to analyze emissions of local and regional air pollutants, making it well-suited to studies of the climate co-benefits of local air pollution reduction . 4.1 Modeling In LEAP In this simulation, planning and forecasting electricity demand use growth rate method . This approach is particularly suitable for projection of efficiency energy . there are two variable for demand analysis , activity level (household) and energy intensity (MWh/household). Base year in 2012 according to last data in 2011, and first scenario in 2013 and end year in 2025, based on governments master plan[8].

There are two scenario in this simulation, reference scenario and shs scenario. Reference Scenario is a condition in which no energy policy that will happen , Based on the statistical data of PT PLN at 5 last year, growth rate of electric energy consumption (GWh) about 7,5%, while growth rate of household about 4%, according to the vision and mission of the Indonesian economy in 2025, Indonesia optimistic will improve GDP into 4.5 US$ trillion [7]. This condition allows changes in activity levels, population R2 class also will switch to R3 class, it mean in 2012 the percentage of R1 class at 98% will decrease into 97%, R2 and R3 class increased from 1,36% and 0,319% into 2% and 0,5%. SHS scenario is a condition in which the new energy policy has been applied such a obligation of using solar home system for R3 class that began in early 2013. In 2012, luxury homes (R3) in Indonesia amounted 135822 household, growth rate of R3 class homes in Indonesia about 4% per year and it is estimated become 10400 new homes in 2013 and 222526 new homes in 2025 that have potency to be applied SHS. For R1 and R2 are not applied energy policy , so the energy intensity consumption from PLN will continue to grow if there is no policy change (monetary crisis, energy conservation programs, etc.), whereas the energy intensity consumption from PLN for R3 class will be reduced gradually until in 2025 because a number of SHS user will increase among new home and old home. 4.2 Analysis Output Analysis output of LEAP simulation is needed to know how much cost-benefit of an energy policy that will be simulated. Electric PLN in green color means that consumption of electric energy from PLN is used by R3 class reached to 2493800 MWh in 2012, whereas electric SHS in blue color means that some luxury home (R3) has been installed SHS start from 2013 till 2025 and R3 class will not get electricity from PLN again (shs scenario). In 2013, 10400 new homes or 6% of total existing homes (156767 homes) will has been installed SHS and will save electricity consumption from PT PLN about 128500 MWh (see table 5), electric PLN decreased from 2.75 to 2.43 GWh in the year 2020 because some old home will has been installed SHS. a number of SHS user increased from 6% into 61% from total 368363 houses in the year of 2025, although there are still 39% of homes are still not using SHS.

International Conference For Future Energy and Environtment (ICFEE 2013)-Rome Italy
Table 6. Energy Consumption by R1, R2, and R3 with two scenario

Year 2012 2013 2015 2020 2025 Total Save

Reference (Million MWh) 65.1 70.8 83.2 121.4 172.3 1,576.00

SHS (Million MWh) 65.1 70.8 83.1 121.1 171.8 1,572.90

3.10 Million MWh

5.
Fig 4. Energy Consumption by R3 Class

In reference scenario, total of electricity from 2012-2013 that must have distributed by PLN to customers amounted 58716.5 GWh , but, in shs scenario PLN just distribute electricity amounted 36949.2 GWh, it mean that luxury homes with a capacity above 6600VA in Indonesia who are already using solar home system can save electricity consumption amounted to 21767.3 GWh, equivalent to 6.8 US$ billion, assuming electricity cost for R3 class at last 10 years has increased 1% per year, estimated electricity cost in 2025 rise to Rp 3000 /kWh which from Rp 1200/kWh in 2012.
Table 4. Energy Consumption BY R3

Year 2012 2013 2014 2020 2025 Total Save

Electric PLN (Thousand MWh) 2,493.80 2,566.80 2,630.70 2,754.70 2,348.70 36,949.20

Electric shs (Thousand MWh) 0 128.50 278.40 1,748.30 4,015.60 21,767.30

CONCLUSION Obligation of SHS installation for luxury home supported by many aspect in Indonesia, there are 3 reason why government must have regulate that policy as soon as possible: 1. Government policy issues about obligations of SHS installation for luxury homes(R3) in Indonesia supported by potency of radiation intensity of sun 4.8 KWh/m2 or equivalent with 112.000 GWp 2. Growth rate of GDP in Indonesia grow fastly and rich people in Indonesia who have income 250005200 US$ per year reach to 4 million person or 9% of amount rich people in asia, a number of rich people in Indonesia are bigger than korea (3,2 milion person, Taiwan (1,8 million person), Malaysia (1,6 million person) and predicted over 10 year will be much bigger 3 times. 3. Cost of PV is predicted by using MARKAL method will decrease, in 2000 5800US$/Kw decrease into 1,600 US$/Kw at base case scenario and 0,96 US$/Kw) at PVCOST scenario And also it has many positive impacts for government and PT PLN : 1. If 61% of new and old home from total of 36838 luxury home in 2025 will has been used SHS, PT PLN and government will save energy electric consumption 21767.3 GWh or equivalent with 6.83 US$ billion. 2. PT PLN will has saved electricity production for the household sector about 3.10 Million MWh during 12-year. 3.10 million MWh are used to distribute electric for 1.4 million homes in rural area where the electricity not yet existed .so the percentage of electrification ratio increased 2%.

15181900 MWh

Changes in energy electricity consumption of R3 class have a little impact when compared to the total of household sector (R1 and R2). Until 2025, different value of energy electricity consumption between shs scenario and reference scenario only 3.10 Million MWh, it mean that PT PLN has saved electricity production for the household sector about 3.10 Million MWh during 12year. 3.10 million MWh are used to distribute electric for 1.4 million homes in rural area where the electricity not yet existed .so the percentage of electrification ratio increased 2%.

REFERENCE
[1] [2] Statistic PT PLN indonesia 2011. 2012. Jakarta; Secretariat of PT PLN Fabby, Rationalisation of electricity cost toward right subsidies", workshop at Bogor cityIndonesia, 2012 (30/10/2012) Detik Finance Pos, 8 april /2012, obligation of shs installation is suitable for luxury home Dumai Pos. 9 March. 2011. Rich people in Indonesia increased dramatically

[3] [4]

International Conference For Future Energy and Environtment (ICFEE 2013)-Rome Italy
[5] Raharjo, Irawan. Analysis potency of PV in indonesia,Jakarta:Publication:Journal Paper, 2005 ISBN 979-95999-5-4 Growth rate of GDP, Center Institute of Statistic Indonesia , official web www.bps.go.id Hatta Rajasa, occasion and challenge economic in indonesia,on Guest lecture at ITB, Bandung ,2012 Indonesia Ministry of Energy and Mineral Resources. Handbook of BLUEPRINT NATIONAL ENERGY MANAGEMENT 20062025, Jakarta: Indonesia Ministry of Energy and Mineral Resources, 2006 Tumiran, City Colorfull : the city for its people, presented at National Seminar University of gadjah mada, Jogjakarta, Mey 2, 2012

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[8]

[9]

BIOGRAPHY

Eki Farlen was born In Serang-Indonesia, 24 March 1991, still study at University of Gadjah Mada Faculty of Engineering, Department Engineering Physics, especially focused on Renewable Energy and Intrument C Author has experience as Private teacher physic class for senior high school in Jogja(2010-2011), Lecture and Mentor video e-learning (physic) at gongsin m-class for (2012) and has been invited call for paper in University Of Indonesia with theme "how make physics easy as enjoy as play".