FiT Solar Auctions in Indonesia Lessons Learned from Participation of a Local EPC Company German-Indonesia Business Forum on Grid-Connected PV Systems Intercontinental Jakarta MidPlaza Hotel Erik C. Sentosa – Director PT. Suntech Solar System www.suntechsolarsystem.com
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Erik C. Sentosa – Director PT. Suntech Solar System suntechsolarsystem
FiT Solar Auctions in Indonesia Lessons Learned from Participation of a Local EPC Company German-Indonesia Business Forum on Grid-Connected PV Systems Intercontinental Jakarta MidPlaza Hotel. Erik C. Sentosa – Director PT. Suntech Solar System - PowerPoint PPT Presentation
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FiT Solar Auctions in Indonesia
Lessons Learned from Participation of a Local EPC Company
German-Indonesia Business Forum on Grid-Connected PV Systems Intercontinental Jakarta MidPlaza Hotel
Erik C. Sentosa – DirectorPT. Suntech Solar System
www.suntechsolarsystem.com
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List of Contents
• Brief Company Introduction• Conditions of Solar Auctions• Auctions Progress• Lessons Learned• Summary & Recommendations
5 May 2014 Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System
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Brief Company Introduction• PT. Suntech Solar System established in 2007• EPC Company for RE, specializing in PV (On-Grid, Off-Grid and
Hybrid Systems)• Authorized Distributor & Partner in Indonesia for SMA and
Suntech Power• Emphasis on technical expertise, detailed engineering, know-
how, quality components and good installation
5 May 2014 Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System
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Conditions of Solar Auctions
• Regions and system sizes defined by Ministry of Energy and Mineral Resources (ESDM)
• Auctions held by Directorate General of New & Renewable Energy and Energy Conservation (EBTKE)
• Total quota 140MW for 80 locations (regions) with sizes 1 to 6 MW• Ceiling Tariff : USD0.25/kWh for imported modules, USD0.30 for modules with
local content >= 40%• PPA with PT. Perusahaan Listrik Negara (PLN) for 20 years without price
adjustments• Bid language: Bahasa Indonesia• Auction open for state-owned enterprises , local goverment-owned enterprises,
private Indonesian enterprises and bidding consortia• International companies via Project Joint Operation (KSO), JV or Consortium
with private or state-owned enterprises in Indonesia
5 May 2014 Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System
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Conditions of Solar Auctions (Cont’d)
• Online auction: register to http://lelang.ebtke.esdm.go.id• Download tender documents, Q&A sessions, upload of bid
documents, evaluation progress & reasons• Tender documents: 120+ pages, fortunately most are identical
for all locations• Contents: Administrative, Technical, Financial, Draft of PPA• Bid evaluation (elimination): Administrative -> Technical ->
Financial -> Bid Price• Bid Bond 2% and Escrow Account 20% of overall project price
5 May 2014 Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System
5 May 2014 Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System
Example Bid Price Evaluation
Local Modules
Import Modules
Company A USD0.24 USD0.24Company B USD0.25 USD0.20Company C USD0.21 USD0.21
• Tender Download – Upload of Bid: 14 days preparation• Bid Evaluation – Winner Announcement: 2-3 weeks• Make Escrow Account: 15 days after announcement• PPA Signing – Grid Interconnection Study: 60 days after
announcement• Financial Close: within 3 months after PPA• Installation - COD: latest 18 months after PPA
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Conditions of Solar Auctions (Cont’d)
• Purchase price includes all cost of generation to point of grid interconnection
• Purchase price are including VAT (PPN) 10%• Payment in IDR with exchange rate valid on the time of
payment
5 May 2014 Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System
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Auction Progress
• First tender started beginning November 2013• So far total of 11 locations (19.5MW) tendered• 4 locations (4.5MW) out of 11 failed due to tender conditions are
not met by participants• Lowest Bid Price: 18.36 cents US per kWh with imported modules• Last tender announced on March 2014, currently FiT solar auction
program is under evaluation before more locations are to be tendered
• No information when more locations are to be tendered• 70 (+4) locations with volume of 120.5(+4.5)MW are still to be
tendered
5 May 2014 Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System
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Lessons Learned
• Exact locations are not defined by ESDM– Insufficient coordination between ESDM-PLN-Local Government– GPS coordinates are required in bid document, no alternate location– Bid document requires land availability
• Limited preparation time for complete bid documentations• Slightest error in bid documents will result in elimination• Insufficient or no data for grid conditions
– Grid capacity only based on computer model simulation, different from actual at site survey
– Grid connected PV capacity >20% of grid capacity -> prone to grid failure
• Therefore, advanced region choosing - site survey - bid preparation needs to be done prior to tender announcement
5 May 2014 Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System
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Summary
Site Survey after region choosing:• Coordinate with local ESDM – PLN – Local Govt – Local Land
Authority for suitable sites• Make sure of land ownership (certificate) & price, not part of
protected forest or conflicting with land allocation• Close distance to PLN Grid or Substation• Site is disaster-free (flooding, tsunami, landslides, etc.)• Site survey for grid conditions (load, capacity, future grid
expansions)• Transport facility, access to site, handling facility, closest seaport &
airport to siteContinue to bid preparation before tender announcement
5 May 2014 Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System
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Reccomendations
• Improve coordination between ESDM – PLN – Local Goverment – Local Land Authority to define suitable or “perfect” sites and set the land prices at a reasonable predetermined prices for the auction winners to reimburse
• This would avoid a lot of uncertainties and unnecessary efforts, save time and money
5 May 2014 Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System
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Thank You
• Vice-Minister of ESDM and Director General of EBTKE once said “..IPP investors are like heroes and pioneers..”
• Let’s become heroes together and for each other..
Dipl.-Ing. Erik Chandra SentosaDirector – PT. Suntech Solar System