FUTURE ELECTRIFYING LIFESTYLE, FUTURE PLN BUSINESS

Dimas Kaharudin
PRESENTATION CONTENT

1.0 Change on Future Electrifying Lifestyle

2.0 Impact Analysis
3.0 Strategy
4.0 Conclusion
SECTION 1

CHANGE ON FUTURE ELECTRIFYING LIFESTYLE

CHANGE OF LIFESTYLE

• Change of lifestyle are inevitable in many aspect

of life. From education, transportation,
consuming media, fulfilling daily needs, and up
to anything.
• Change of Lifestyle can be caused by many
things. Convenience, Cost, Technology,
Perception of Value, global disaster / pandemic,
and more
• Change of lifestyle can create a radical change in
the related business, industry and services.
• Some can create a positive impact (growth),
some can create a disruption of the business.
CHANGE OF LIFESTYLE ON ELECTRICITY -1-

• Change on Electricity Lifestyle are triggered by

change on Perception of Value on Sustainability
• Perception of Value on Sustainability creates many
innovation on the field. Some of the innovations
are quite radical and can disrupt current business.
• Currently, there are 2 (two) technology innovation
that can make a disruption in the energy industry.
They are: Solar PV and Energy Storage
• Solar PV & Energy Storage is a disruption for
industry because:
• Cheap, and going more cheaper
• Scalable, Convenience and can be installed
everywhere

DISTRIBUTED SELF GENERATION

 CHANGE OF LIFESTYLE ON ELECTRICITY -2-

• Distributed Self Generation using solar PV &

Residential Energy Storage grows very quickly.
• In many location in the world, residential solar PV
growth can grow up to 30% of total local system
installed capacity for less than 7 years.
• Combined with increasingly energy efficient
household appliance, residential solar PV can
significantly decrease energy demand from the
grid.
• Bad news for Electricity Producers?
CASCADE EFFECT OF INNOVATION

• Advancement of technology on Energy Storage

open new product, service, and opportunity that
previously not possible.
• One of that new opportunity is related to
transportation industry. Especially personal vehicle.
• Advancement of battery technology makes
consumer grade, affordable & practical Electric
Vehicle become possible.
 CHANGE OF LIFESTYLE ON (ELECTRIFYING) VEHICLE

• Electric Vehicle become a new (electrifying) lifestyle for

modern people.
• At first, it become a novelty and luxury item. But sooner
or later, it will become a norm. It will almost fully
replace gasoline-based vehicle in 10 – 20 years.
• Good News for Electricity Producers?

?!
WHICH ONE IS MORE DOMINANT ?

Increasing Electricity demand Decreasing Electricity demand

due to EV penetration due to PV penetration

>
=
<
SECTION 2

IMPACT ANALYSIS
HOW SEVERE DSG-PV WILL DISRUPT PLN BUSINESS? -1-

Premise used: How many PLN customer that

met with this criteria?
I. PV on grid is already cheaper than PLN grid. PV +
Storage will be cheaper soon. The main limitation I. 10%
of consumer not to migrate is merely because of
II. 30%
available space, not cost
III. 50%
II. Rooftop PV can supply full electricity demand for
its consumer if met this criteria: IV. 70%
• The building is 2 stories or less V. 90%
• Consumer is not highly energy intensive VI. 100%
HOW SEVERE DSG-PV WILL DISRUPT PLN BUSINESS? -2-

If Currently PLN has 70 GW of installed Customer and

50% of them will ultimately migrate to PV rooftop
sometime soon, then PLN will lose about

35 GW
ELECTRICITY DEMAND GAIN FROM EV PENETRATION -1-

INDONESIA VEHICLE COUNT Postulate used:

120
I. 70% Indonesian Vehicle eventually will
98.88 migrate to EV while 30% won't be able
100
to migrate
80
II. Average travel distance for motorcycle
60
is 25 km / day and car is 50 km / Day
40
with specific consumption is 5 kWh /
13.48
20 6.6 2.4
100 Km for motorcycle and 20 kWh /
0 100 km for car
Motorcycle Personal Car Cargo Bus / Mass
Vehicle Transport
ELECTRICITY DEMAND GAIN FROM EV PENETRATION -2-

70% of EV penetration will increase

electricity demand equal with

11 GW
WHICH ONE IS MORE DOMINANT ?

Increasing Electricity demand Decreasing Electricity demand

due to EV penetration due to PV penetration

<
11 GW 35 GW
NETT MARKET LOSS

-14 GW
of market loss due to
Distributed Self Generation PV

=
Rp. -95 T / Year
of market loss due to Distributed Self
Generation PV
ANOTHER GREATER PROBLEM -1-

• PV Penetration will require PLN to highly upgrade

their grid capability. This will add new cost to PLN
up to Rp. 60 Trillion
• Also, losing its customer will reduce PLN’s power
plant utilization and thus will increase PLN cost of
generation.
• Significantly Increasing Cost while significantly
losing revenue is a double unfortunate.

Rp. 60 T
Cost to Upgrade Grid due to Distributed Self
Generation Penetration
ANOTHER GREATER PROBLEM -2-

• Expands into EV market require huge investment

on Charging Infrastructure.
• Charging Infrastructure itself is Cost Center. It is
hard for Utility to make money on EV Charging
Infrastructure
• Utility is always mandated by Government to
provide EV Charging for the market.

Rp. 113 T
Cost to provide mass EV Charger that
cover 10:1 car / charger ratio
HOW TO FILL THE GAP?

Rp. 113 T
Cost to provide mass EV
Charger that cover 10:1 car / Rp. 95 T / Year
charger ratio
of market loss due to Distributed Self
Generation PV

Rp. 60 T
Cost to Upgrade Grid due to
Distributed Self Generation
Penetration
SECTION 3

STRATEGY ANALYSIS
HOW TO FILL THE GAP?

Retiring
Search for new underutilized Create New
Customer infrastructure Business
CHANGE THE LANDSCAPE OF INDUSTRY
 CREATING NEW BUSINESS, IN WHAT INDUSTRY?

Create New New Business Related with Past

Business Era of Electric Industry (Centralized
Generation Scheme)
Postulate:
I. Create new Business in the industry
that grows rapidly
II. Create new Business in which PLN
Brand is still highly recognizable by
customer
III. Create new Business that have New Business Related with Future
most net value (Gain vs Risk) Era of Electric Industry (Distributed
Generation Scheme)
CREATING NEW BUSINESS, IN WHAT INDUSTRY? -1-

Distributed
Generation / Solar
PV Market

Electric Vehicle
Market
DISTRIBUTED GENERATION MARKET & INDUSTRY -1-

UPSTREAM MIDSTREAM DOWNSTREAM

• Solar Modules Manufacturer • Equipment Sales • Maintenance Services

• Balance of System Manufacturer • EPC Services • Operation Services
• Battery System Manufacturer • Financing • Energy Sales
 DISTRIBUTED GENERATION MARKET & INDUSTRY -2-

Rp. 4897 T
DG MARKET VALUE CHAIN *)

upstream
23%
Rp. 1107 T
Moderate Value, and
instantly achieved at instant
but pose mid term risk
Rp. 2894 T
Biggest Value, but takes downstream
59% midstream
15 years to get and pose
long term risk 18%

Rp. 895 T
Moderate Value, and
achieved at year 10 and
pose long term risk
*) 105 GWp (35 GW x 3) market potential. USD 0.78 / Wp Capital Cost
 WHICH BUSINESS WE SHOULD GO IN DG-PV MARKET?

Feasibility
Sales margin, 2.4% Postulate:
Study, 0.0%
I. Create new Business in the industry
Financing, 12.9% that grows rapidly
II. Create new Business in which PLN
Brand is still highly recognizable by
Energy Sales,
customer
51.2%
Solar Module , III. Create new Business that have
11.5% most net value (Gain vs Risk)

Solar Inverter,
2.6%
1. Energy Sales
Balance of System, 2. Main Equipment Manuf.
5.3%
Engineering & Design, 3. Financing
0.1%
Construction & 4. EPC
Comissioning, 3.7%

Operation
5. O&M Services
Cleaning, 2.7%
Administration, 2.0%
Replacement, 4.3% Maintenance &
Monitoring, 1.5%
EV MARKET & INDUSTRY -1-

UPSTREAM MIDSTREAM DOWNSTREAM

• EV Manufacturer • Equipment Sales • EV Maintenance Services

• Balance of System Manufacturer • Vehicle Financing • EVCS O&M Services
• Battery System Manufacturer • EVCS EPC Services • Energy Sales
• EV Transport Services
 EV MARKET & INDUSTRY -2-

Rp. 43.078 T
EV VALUE CHAIN*)
upstream
19%
Rp. 7975 T
Moderate Value, and
instantly achieved at year 1
but pose mid term risk

Rp. 28.495 T
Biggest Value, but takes downstream
10 years to get and pose 66% midstream
long term risk 15%

Rp. 6608 T
Moderate Value, and
achieved at year 5 and pose
mid term risk
*) 70% of Indonesian car migrate to EV. Single EV cost is USD 35.000
 WHICH BUSINESS WE SHOULD GO IN EV MARKET?

Electric Vehicle Postulate:

EV Transport Services, System, 11.0%
I. Create new Business in the industry
60.1%
Balance of System , 2.7% that grows rapidly
II. Create new Business in which PLN
Brand is still highly recognizable by
Battery System, 5.5%
customer
III. Create new Business that have
EV & Infrastructure
Sales, 4.8%
most net value (Gain vs Risk)

Vehicle Financing,
6.7%
1. EV Transport Services
EVCS EPC Services,
0.5% 2. EV System & Equipment
3. Battery System
EV Maintenance
Services, 3.8% 4. EV & Infrastructure Sales
EVCS O&M Services, 5. Financing
0.7%
6. Energy Sales
Energy Sales, 4.0%
FILLING THE GAP

Rp. 4.897 T Rp. 43.078 T

• DG-PV and EV market are very huge and create a

big opportunity for PLN to tap new big revenue by
• Rp. X T / Year • Rp. A T / Year expanding business into them.
• Rp. Y T • Rp. B T
• Revenue from this new market can easily fill the
gap of PLN losses due to New Era of Electric Power
Industry & Future Electrifying Lifestyle.
• How much revenue that PLN could get from this
two market is depend on how serious PLN is to
expand in this new market

Rp. 95 T / Year
Rp. 60 T + Rp. 162 T
SECTION 4

CONSLUSION
FUTURE ELECTRIFYING LIFESTYLE …

• Future Electrifying Lifestyle is mainly driven by

Distributed Generation and EV penetration into
Grid.
• This open into New Era of Electric Power Industry.
In which, landscape of how industry works is totally
changed.
• This change can pose big threat into existing
industry player, including PLN.
… IS FUTURE PLN BUSINESS

• PLN can mitigate the risk by expanding its portfolio

into new business related with Future Electrifying
Lifestyle. They are Distributed Generation & EV
Business.
• To maximize revenue as possible, PLN should enter
that new business from all stream. From upstream
CURRENT PLN BUSINESS LINE to downstream.
• This new business are aligned with new PLN
transformation motto

FUTURE PLN BUSINESS LINE

Future Electrifying Lifestyle, Future PLN Business
Innovation Beyond kWh
Thank You

PMSE 2020 | Ver. 1 | pmse.com