Indonesian state-owned utility PLN has been steadily increasing the co-firing of biomass at a number of its coal-fired power plants as part of the country's broader plans to reduce emissions.
But biomass uptake has been relatively slow because of insufficient supply, prompting the company to look for alternative sources of biomass for its fuel needs, PLN said.
To address the issue, PLN is looking at other sources of biomass from industrial plants such as rice husks and rice straw. It is also studying the use of waste sugarcane from sugar production. Having multiple sources of biomass supply that is both renewable and sustainable will be key in ensuring that the country's co-firing efforts can expand and reach its targets, PLN said.
The bulk of PLN's biomass currently consists of palm kernel shells (PKS) and wood sourced from private companies and through state-owned forest and plantation management companies Perhutani and Perkebunan Nusantara. But supply remains unstable because of the long process of replanting and harvesting, PLN said.
PLN also noted that PKS prices are higher than coal prices. Argus last assessed Indonesian PKS prices at $122.34/t fob east coast Sumatra on 6 September for material with a CV of NAR 3,500 kcal/kg. Indonesian GAR 3,400 kcal/kg (NAR 3,000 kcal/kg) coal prices were last assessed at $31.45/t fob Kalimantan on 8 September.
PLN said that its existing biomass suppliers are expanding their production volumes to fulfill its demand. Perhutani in 2021 developed 31,136 hectares of calliandra and gamal wood for biomass use and this is expected to increase to 65,000 hectares by 2024. But the increase in production is being outpaced by a rise in biomass demand, PLN said.
Emission reduction plans
Indonesia's biomass co-firing programme — which was announced in 2020 — aims to have at least 52 of the country's coal-fired plants using a mix of biomass and coal for its fuel needs by 2025. The programme is currently implemented in 37 coal-fired power plants, marking an increase from the previous year's 36 plants. Indonesia's new and renewable energy capacity has reached 12.7GW so far this year, the ESDM said, with bio-generated power plants accounting for 3,118.3MW of total capacity.
PLN is projecting biomass consumption of roughly 10.2mn t/yr to be able to reach this level of utilisation. In contrast, biomass consumption as of the end of August this year was recorded at 542,000t, with the total consumption for 2023 expected to be below 1mn t, PLN said.
Biomass can be obtained from a variety of raw materials, including forests, plantations, and agricultural waste. A government-commissioned study found that a potential of 991,000t of forest waste, 24mn t of sawdust, 789,000t of wood chips, and 12.8mn t of palm kernel shells (PKS) could be harnessed in the country, according to the ESDM.
Indonesia is the world's largest PKS exporter. The country shipped 4.62mn t in 2022, up from around 4.2mn t a year earlier. PKS demand is growing in Japan as new biomass power plants begin commissioning this year. Indonesia exported 1.03mn t of PKS to Japan during April-June, up by 26pc from a year earlier and accounting for 91pc of total exports. New biomass power plants began commercial operations in Japan while some also came back on line in June, supporting PKS demand.
PLN has announced a series of measures to increase its new renewable energy mix, as part of the country's path to net-zero emissions by 2060.
Indonesia is the world's largest thermal coal exporter and a major greenhouse gas emitter. Coal made up the largest share of its power generation mix at 59pc in 2019, although the report sees coal's share falling to a still significant 38pc after renewables such as hydropower, biomass and biofuels reach 43pc by 2050 under its low-carbon scenario, which is compatible with the Paris climate agreement.
By Antonio delos Reyes and Andrew Jones
