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Renewable Energy Project Development The last meeting TWG IV Grand Candi the Gallery Hotel Semarang, 09 July 2011 by CASINDO Team West Nusa Tenggara
Renewable Energy Project Development
The last meeting TWG IVGrand Candi the Gallery Hotel Semarang, 09 July
2011
by CASINDO Team West Nusa Tenggara
Outline of PresentationExecutive SummaryMarket analysisProduct descriptionRegulatory settingProject managementTechnical feasibilityFinancial analysisRisk analysis and contingency planning
Executive SummaryWhat are you planning to implement?The proposed renewable energy project to be developed under the Casindo TWG IV in WNT is household biogas.
Where are you planning to implement?Jeruk Manis is the name of the target location chosen for the implementation of the renewable energy project in the program Casindo.
Executive Summary (Cont’)Who will conduct the implementation?To implement the project, the Casindo team in WNT has partnered with Hivos and its BIRU program. The biogas digester contruction will be conducted by BIRU Lombok, in collaboration with construction partner organization, namely “Yayasan Mandiri Membangun Masyarakat Sejahtera (YM3S)” and managed by Casindo project Faculty of Engineering University of Mataram.
Executive Summary (Cont’)How will the project be implemented? With what funds or what funds does it need?Project of biogas technology will build in a self funding from people of meet criteria established by the BIRU program. Then the number of households that are eligible to be selected as the target of the program were 63 families; Nowday, BIRU Lombok not yet getting financial institution to provide the credit in biogas digester construction, so that funds originated from vilagers and subsidy from Hivos.
Executive Summary (Cont’)Why is it desirable for the project to be implemented? What benefits will it bring?If the project to be implemented, very desirable many benefits for poor people in location target and its project suistain for the long time;BIRU program will have broad effects of health conditions and job creation as well as the local economy.
Section 2: Market analysis
Map of selected locationSikur District, East Lombok, WNT.
08o 34'21.50''N 116o25'22.17'' E
Natural resources of selected location
Demographic profile
Village/Sub VillagePopulation
No of HouseholdMale Female Total
Jeruk Manis (total) 991 1.042 2.033 761
Barang Panas 303 320 623 237
Kebun Baru 310 315 625 240
Gawah Buak 378 407 785 284
Number of population and household :
Source: Data villages Jeruk Manis in October 2010
Demographic profileSize of household & Age structure:
Size of household Percent (%)1 – 3 person 30
4 – 6 person 62
> 7 person 8Source: Data villages Jeruk Manis in October 2010
Age structure (year) Percent (%)Children & adolescents : < 17 tahun 25Adult : 18 s/d 50 tahunElderly : > 50 tahun
769
Source: Data villages Jeruk Manis in October 2010
Educational profileNumber of educational facilities :
Source: Data villages Jeruk Manis in October 2010
VillageNumber of Educational Facilities
Elementary Junior High School High School
Jeruk Manis 2 1 -
VillageNumber of villagers with completed schooling
High school Bachelor degree University Jeruk Manis 186 4 8
Number of villagers with completed schooling :
Educational profile
Number of students currently enrolled in schools :
Source: Data villages Jeruk Manis in October 2010
VillageNumber of students currently enrolled in schools
Elementary school
Junior high school
High school University
Jeruk Manis 308 158 50 7
Economic profile
Employment sectors and number of employees :
Source: Data villages Jeruk Manis in October 2010
VillageEmployment sectors
Farmer Trade Government CraftsmanJeruk Manis 391 32 5 40
Economic profileThe unemployment rate in this region has reached 20-25%.Households that serve as the target location for Casindo activities are classified as poor.Average household income is IDR 5.291.222, 00 per year or IDR. 440.935,00 per month.There are 189 households receive government subsidies (BLT) is IDR 200.000,00/families per month.
Economic profile
Average household expenditures :Type of expenditures IDR per year IDR per month
Food 4.125525,30 343.793,70Energy 458.391,70 38.199,30
School fees 0,00 0,00Total 4.583.917 381.993
(Source: Need assesment questionnaire carry out for this project)
Energy profile
The main energy source for cooking is firewood, mainly collected free of charge in the surrounding forest area;The main energy source for lighting are kerosene and electricity; The main energy source for vehicles is gasoline.
Energy use pattern emerged :
Energy profileEnergy expenditures per fuel type :
Energy service
Fuel typeAverage monthly
consumption
Average cost(in IDR, at the
time of writing)
Total monthly cost
Cooking wood 55,8 bundle IDR 0,00 IDR 0,00
Lighting kerosene lamp
13,37 litre IDR 6.000 per litre
IDR 80.220
Lighting Electricity(Solar PV)
0,84 kWh IDR 10.000 per month*
IDR 10.000
Lighting Electricity(MHP)
(100W x 12 hour x 30 day) =
IDR 5.000 per month*
IDR 5.000
* Energy prices are fixed per month, it is not per 1 kWh
Current energy provisionEnergy supply and its historical growth rate :
Type of energy Energy supply (bundle/litre/watthour) Remark
Wood 18,6 bundle per month x 761 families
cooking
Kerosene ± 10, 187 litre per month
cooking &lighting
Electricity (solar PV) 650 Wpeak x 8 hour lighting
Electricity (MHP) 18 kW x 12 hour lighting
Estimate of total demand for the proposed technology
The technology proposed to be developed in Casindo TWG IV is household biogas.The total demand for energy comes from 761 households.There are 63 families which have 3 or more cows and 137 families have 1 – 2 cows.So the percentage of people who use firewood and kerosene remains large at 73,72%.
Estimate of total demand for the proposed technology
No. Village/Sub-village
Number of families have cows Total Families3 or more
cows1 - 2 cows Nothing
1 Barang Panas 7 18 212 2372 Kebun Baru 34 65 141 2403 Gawah Buak 22 54 208 284
Total 63 137 561 761
Section 3: Product description
Introduction of the productThe product proposed under Casindo TWG IV in WNT is household biogas; Household biogas digesters convert animal dung and various other organic materials into combustible methane gas know as biogas;The proposed technology would be implemented in partnership with Hivos (BIRU program)
Introduction of the product (Cont’)The BIRU program promotes the use of biogas to fulfill the daily needs of fuel for cooking. Meeting the family cooking fuel needs with biogas is very satisfying, it can replace the role of firewood or kerosene. Reactors owners are no longer spending time looking for firewood in the forest and not spend money to buy kerosene.In July 2010, the BIRU program started running in WNT. By July 2011, the program has been able to build about 100 biogas reactors on Lombok Island.
Technology descriptionThe reactor components :
Technology descriptionThe installation of a biogas reactors :
Technology descriptionThe technical design of a typical biogas reactor :
Technology description
The model used is based on the model of cement biogas digester used in Nepal (SNI Indonesia). The household size reactors can be of 4, 6, 8, 10, 12 m3.
With proper care, biogas reactors are expected to stay safe for 20 - 30 years
Model, size and lifetime :
Technology descriptionEstimated cost of the biogas reactor :Sizes (m3) 4 6 8 10 12No of Cows 3 4-5 6 7-8 9Total kg of manure per day 30 45 60 75 90Gas produced (m3) 1 1,5 2 2,5 3Duration of use to stove (hour) 4 6 8 10 12Construction cost (IDR million) 5,7 6,3 7 8 8,8Subsidies from Hivos(IDR million) 2 2 2 2 2The cost to be paid by user/household (IDR million) 3,7 4,3 5 6 6,8
Construction processThe construction sequence of a biogas digester :
Construction processThe construction sequence of a biogas digester :
Construction processThe construction sequence of a biogas digester :
• Availability of skilled builders for the construction of the reactor is a key condition of the BIRU program. In every area of work, BIRU carries out training for local builders by a professional trainer. The goal is to have in each work area professional local builders who have ID cards. In Lombok, BIRU has 31professional builders and 9 supervisors.
Economic benefitsThe biogas digesters installed through the BIRU program will have broad effects on health conditions and job creation as well as the local economy, including:
Strengthen the integration of agriculture and cattle breeding for the improvement of agricultural resources
Creating jobs in the biogas construction sector
Strengthen food security by improving agricultural output through the use of biogas slurry
Reducing deforestation
Controlling greenhouse gas emissions from livestock and organic waste disposal
Recycling of nutrients and restore soil fertility
Promoting environmental awareness and link it to economic advantage
Social benefitsReducing the burden of women to collect firewood;Improving sanitation and reducing diseases associated with poor sanitation;Reducing air pollution from smoke generated by burning firewood for cooking;Improving sanitation and hygiene education.
Section 4: Regulatory setting
Relevant policies :Policies / Programs
Policy objectives ImplementationPolicy
objective likely to be achievedMain obj. Secondary obj. To date Future
National level :Substitution of kerosene with LPG;Phase-out subsidy for kerosene & provide (free of charge) LPG system to the poor.
Lower the cost of subsidizing fuel (for the government)
To reserve the kerosene for use in transport (instead of cooking); to support the use of gas, which is the more abundant fuel in Indonesia
In Lombok, this measure should start in 2010 with 500 000 households.(256 households in Jeruk Manis)
Will likely be fully implemented
Yes, in the longer term it will cost the government less to subsidize gas than it would cost to keep subsidizing kerosene.
Relevant policies (Cont’) :Policies / Programs
Policy objectives ImplementationPolicy
objective likely to be achievedMain obj. Secondary obj. To date Future
Regional or local level :Self-sustain energy village (Desa Mandiri Energi): 60% of the community energy needs is provided by local resources
To provide energy supply for underdevelop communities , to diversify energy source, to introduce productive activity, increase job opportunities.
To reduce fuel oil
20 target location of DME until 2013
Will be implemented
Mixed result
Relevant policies (Cont’) :
Policies / Programs
Policy objectives ImplementationPolicy
objective likely to
be achieved
Main obj. Secondary obj. To date Future
Regional or local level :A million cows ( BSS)
Program acceleration the development of animal farms with more priority to the empowerment of local resources with the aim that as soon as possible to achieve the optimum population in accordance with the carrying capacity of the region.
o Rural income, meet the needs of national meat.
o Meets the demand for cows for other regions.
o Meet the needs of meat consumption in the region
One million cows population in 2012
Will be implemented
Section 5: Project management
Description of the project champion
Mr. Umar is Coordinator of the BIRU program in Lombok, WNT;The BIRU program are managed and implemented by Hivos and SNV Netherlands Development Organisation;The BIRU program is run by a small team of professionals consisting of a Coordinator, Quality Auditor, Promoter, as well as administration and finance staff.
Mr. Umar has experience working in Care Indonesia from 1992 until 2010. His experience in the field of renewable energy is to build the biogas in East Nusa Tenggara province;Since July 2010 up to now join with Hivos in BIRU Lombok.
His experience :
BIRU program Lombok targets 256 unit digester in 2011.Additional of a new CPO and training professional builder and supervisor.Extending the work area in North Lombok regency, also new district in previous regency.
His motivation in BIRU program :
Description of the project teamBIRU representatives in Lombok consist of a Coordinator, Quality Auditor, Promoter as well as administration and finance staff;Construction partner organisation (CPO), in East Lombok, Hivos cooperates with an NGO named YM3S (has 3 supervisor and 10 professional builders);Casindo team from University of Mataram provided support to the program by conducting pre-preparation and socialization in Jeruk Manis village.
Organization of the projectBIRU
(Biogas Rumah)Construction Partner Organisation (YM3S)
TURMUZISupervisor
Mr. UMARCoordinator BIRU
Lombok
CASINDO Project
M. ALI IKHSANPromotion Staff
USER
ABDUL NATSIRPIC TWG IV
Section 6: Technical feasibility
Technical requirements of the technology
Cattle dung 20-30 kg per day (at least 3 cows) for a biogas reactor of 4 m3 and 6 m3 and the availability of adequate water for manure and water ratio (1: 1)
Sizes (M3) 4 6 8 10 12
Space requirement (M x M) (3 x 6) (3,5 x 7) 4 x 8 4,5 x 9 5 x 10
Input requirements
Space requirements
Technical requirements of the technology
Maximum allowed distance is 200 meters between biogas reactor with a kitchen. Closest distance ever is 12 meters, but in the implementation of the reactor can be done under the kitchen.Biogas reactor can work at ambient temperature, best at a temperature of 35oC.
Other requirements
Availability of input requirements in the selected location
There are 63 households which have 3 or more cows.Water availability in the selected location is also sufficient. The households have sufficient space to install the digesters
OutputUnder normal conditions, a BIRU biogas reactor will produce gas that has a gas pressure of 50 - 80 cm of water (measure unit of biogas pressure). 2 days after full charging has begun to burn, and cook with blue flame and faster than kerosene stove.
Section 7:Financial analyses
Capital costs (are Planning and Construction or Pre-operation costs)
BIRU program is covering the planning and pre-operational cost including final enginering design and also worker training.There are no additional planning costs related to the installation of biogas digesters
Operating costs
Estimated number of digesters to be installed each year :
Year 1 Year 2 Year 3 Year 4 TotalNumber of digester (unit)
25 25 10 3 63
Operating costs OPERATING COSTS Year 1 Year 2 Year 3 Year 4
1 General and Administrative Costs 17,650,000
17,500,000
7,000,000
2,100,000
2 Labor costs27,060,000
26,625,000
10,650,000
3,195,000
3 Material costs87,842,000
86,675,000
34,670,000
10,401,000
TOTAL 132,552,000
130,800,000
52,320,000
15,696,000
Grants and subsidiesGrants and Subsidies Year 0 Year 1 Year 2 Year 3 Year 4
1 Casindo pre-operation support
2 Hivos subsidies
50,000,000
50,000,000
-
-
Subtotal
-
50,000,000
50,000,000
-
-
TOTAL all years 100,000,000
Revenues Revenues Year 1 Year 2 Year 3 Year 4
R1 Revenue from 4 m3 71,104,000 80,800,000
52,320,000
15,696,000
Units 22 25 10
3
Revenue per Unit 3,232,000 3,232,000 5,232,000
5,232,000
R2 Revenue from 6 m3 11,448,000 - -
-
Units 3 - -
-
Revenue per Unit 3,816,000 3,816,000 5,816,000
5,816,000
REVENUES 82,552,000 80,800,000
52,320,000
15,696,000
Cash flow TOTALS Year 0 Year 1 Year 2 Year 3 Year 4
COSTS (& GRANTS/SUBSIDIES) 2010 2011 2012 2013 2014
Capital Cost Cc 0.0 0.0 0.0 0.0 0.0
Capital / pre-operation grants Gc 0.0 0.0 0.0 0.0 0.0
Operating costs Co 0.0 132,552,000.0 130,800,000.0 52,320,000.0 15,696,000.0
Operating grants Go 0.0 50,000,000.0 50,000,000.0 0.0 0.0
TOTAL COSTS TC = (Cc-Gc)+(Co-Go) 0.0 82,552,000.0 80,800,000.0 52,320,000.0 15,696,000.0
NPV TOTAL COSTS (discount rate = 12%)
NPV TC = TC / (1+disc rate)t; t = year of operation 12% 185,335,842.5 0.0 73,707,142.9 64,413,265.3 37,240,342.6 9,975,091.8
BENEFITS
Revenues R 0.0 82,552,000.0 80,800,000.0 52,320,000.0 15,696,000.0
NPV revenuesNPV R = R / (1+disc rate)t; t = year of operation 12% 185,335,842.5 0.0 73,707,142.9 64,413,265.3 37,240,342.6 9,975,091.8
Interest
Taxes
Depreciation
NET INCOME NIt = Rt -TCt 0.0 0.0 0.0 0.0 0.0
Accumulated Income* AIt = AIt-1 + NIt 0.0 0.0 0.0 0.0 0.0
NPV NET INCOMENPV NI = NI / (1+disc rate)t; t = year of operation 12% 0.0 0.0 0.0 0.0 0.0 0.0
Benefit/cost Ratio B/C ratio = NPV R / NPV TC 1.000
Section 8: Risk analysis & contingency
planning
Completion riskThere are several things that can cause delays in the construction of the biogas digesters although funds were available, including:
The cost of cement: cement is a very significant material in the construction of a biogas digester, and if cement prices increase by the run cause delayed biogas digester construction. Some of the professional mason (trained for this job) might go after another job that is more promising (where cost of labour is higher) compared with standard from HIVOS.CPO or Hivos could be late in responding to users who are interested to build a biogas digester.
Technology riskThe biogas digester technology used in the BIRU program gets a warranty for 3 years. The BIRU program is almost 100% successful in building biogas digesters which are operating properly on the Lombok island. Thus the risk of the technology not performing well is negligible. So far, the BIRU program in Lombok only had problems with 1 user, where the inserted cow manure did not produce gas for 7 days. That means that the only plausible technology risk is possible wrong mixing of manure. This risk can be eliminated with a proper socialization process and a user manual.
Supply riskThe materials needed to build a biogas digester are available in adequate quantity around the location, so there is no risk of supply shortage of construction material.A more possible risk is delay of delivery of components for biogas stoves. Biogas stoves are imported from outside the area (Bandung).
Economic riskThere is a real risk that people in the village can not the pay for the biogas digester, because the price to build a biogas digester is 3 million IDR and more (after the subsidy). Average income per month of the villagers is very low, so most households cannot afford it. The Hivos subsidy is not sufficient to build a biogas digester.Economic risk would be smaller if there are support from the government, cooperatives, banks, other financial institutions to build a biogas digester through soft loans or credit.
Financial riskChanges in interest rates would cause financial risk to occur. Historical growth shows that interest rates in Indonesia are relatively stable (constant) so that the financial risk is very small.
Political riskThe political framework at the regional level in WNT did not change rules and regulations relevant for the implementation of the BIRU program in Lombok. Instead the local government is supporting the implementation of the biogas digester program, because the government's main priority now is the utilization of renewable energy.In addition, local governments have a program which aims to achieve one million cows population (BSS) in WNT, which fits well with the BIRU program.
Environmental riskBiogas digesters have no negative environmental impact on the community or a user, but several positive impacts, including:
dirty cages and cows that used to disturb the environment, are now clean, tidy and do not represent a health hazard.The smoke from wood stoves and fuel oil which can harm the health, is now replaced by a clean and safe cooking fuel.Less pressure on forests around the village which are harvested by residents looking for firewood.
Social riskImplementation of biogas can be burdened by possible social risks for some people, namely:
Residents who have not obtained the education and socialization of the benefits of biogas still think of it as a taboo / unclean use of cow dung. So that important to carry out more socialization.The implementation schedule can create jealousy with those that cannot afford a digester, or towards those that get it first to etc.
Force majeure riskForce majeure risk that may occur is the occurrence of earthquakes, volcanic eruption, or landslide. Generally, often occurrence of earthquakes in Lombok island, but the scale under 5.0 SR and the occurrence of volcanic eruption or landslide not occur in last 10 year.
The next activityMany efforts to find credits institution to build biogas digester.Communicate with our government related funds to build biogas digester, especially with Regional Development Bank (WNT Bank).Communicate with Newmont Nusa Tenggara (NNT) related their CSR in renewable energy.Etc…
Thank you for your attention
