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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.

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Presentation on theme: "FiT Solar Auctions in Indonesia Lessons Learned from Participation of a Local EPC Company German-Indonesia Business Forum on Grid-Connected PV Systems."— Presentation transcript:

1 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

2 List of Contents Brief Company Introduction Conditions of Solar Auctions Auctions Progress Lessons Learned Summary & Recommendations 5 May 2014Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System2

3 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 20143Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System

4 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 20144Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System

5 Conditions of Solar Auctions (Cont’d) Online auction: register to 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 20145Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System

6 Conditions of Solar Auctions (Cont’d) 5 May 20146Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System ExampleBid PriceEvaluation Local Modules Import Modules Company AUSD0.24 Company BUSD0.25USD0.20 Company CUSD0.21 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

7 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 20147Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System

8 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: 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 20148Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System

9 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 20149Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System

10 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 site Continue to bid preparation before tender announcement 5 May Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System

11 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 Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System

12 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 Sentosa Director – PT. Suntech Solar System 5 May Lessons Learned from Participation of FiT Solar Auctions in Indonesia – PT Suntech Solar System


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