On November 30, 2019, GGGI presented a business case for community-based biomass to energy in the NTT Province of Indonesia at the Global Landscape Forum (GLF) in Luxembourg. Ingvild Solvang from GGGI Investment and Policy Solutions Division participated in a panel discussion with the Indonesian National Planning Agency (Bappenas), Clean Power Indonesia (CPI), European Forest institute (EFI) and Center for International Forest Research (CIFOR) in effort to present a compelling business case for bamboo based biomass as a more sustainable alternative to diesel driven electricity generation.
Dr. Yahya Rachmana Hidayat from Bappenas stated that a shift towards renewable energy alternatives is aligned with the National Energy Strategy and Low-Carbon Development Initiative (LCDI), which are aimed at sustainably achieving energy access for all. Large parts of the Indonesian population still lack access to sustainable energy services particularly in remote and rural areas. With the experience of CPI, CIFOR, GGGI and EFI, the event focused on bamboo as a financially viable alternative to diesel and other energy sources, which also carries significant environmental and social benefits.
CPI and CIFOR presented their business cases from bio-based power generation in Mentawai and Lampung. These projects have successfully engaged with the national utility company, PLN, to provide off-taker guarantee and power purchase agreements (PPA) to an independent power plant. These projects are generating lessons that GGGI is building on in its pre-feasibility studies for a similar case in Ponu Village in West Timor, NTT. Social assessments and a pre-feasibility study carried out by GGGI shows that using bamboo or other local biomass has great cost saving potential compared to diesel and hybrid alternatives. The additional benefit of biomass is that it generates income opportunities for local communities as suppliers of biomass feedstock. A 2.2 MW power plant would need 40,000 tons of bamboo from 1300 ha of degraded land estimated worth 1.14 million USD. In addition to PLN subsidies on electricity, this would present a compelling economic case for local communities to participate in the project.
Maria Wahono of CPI focused on lessons Mentawai that highlights the importance of applying a holistic approach to economic development with aim to increase the demand for energy for productive use. This will strengthen the business case as it drives up daytime energy use. GGGI’s studies have identified potential sectors in NTT including palm sugar production and fish processing. This would create additional jobs and stimulate increased welfare and prosperity in a part of Indonesia with high poverty rates.
“Decent green jobs creation is one of GGGI’s strategic outcomes, and GGGI has initiated work to assess job creation under National Determined Contribution (NDC) targets. GGGI hopes to expand this to a specific study on the job potential of biomass to energy in Indonesia. Being explicit about socio-economic co-benefits is key to generate political will and public demand for climate action particularly where policy makers need to balance short term demand for jobs with more abstract climate targets,” Ingvild Solvang said.
While the debate about biomass as a sustainable alternative to fossil fuels is ongoing globally, particularly on palm oil and wood pellets from natural forests that carry large environmental risks, CIFOR, CPI and GGGI highlighted the potential of bamboo. Tropical bamboo is found across Indonesia and is culturally appropriate to most Indonesians. It grows easily in different soil types, including degraded land where it does not come into conflict with food production also because it is well-suited for inter-cropping. Bamboo does not contribute to deforestation, and its fast-growing nature and short rotation cycle mean fast re-sequestration of carbon. The roots also sequester large amounts of carbon in addition to retaining water and prevent soil erosion, overall increasing soil productivity. These eco-system services have positive mitigation and adaptation impacts.
Biomass to energy are cross-cutting, innovative solutions in the energy – sustainable landscapes nexus, which covers two of GGGI’s four thematic areas. If done well, these projects will meet multiple objectives. Acknowledging the potential for positive impacts, the Indonesian government plans to scale bamboo-based biomass to energy to 500 MW. Collaboration between agencies will be key to a successful energy transition. “The clear government policy contributes to de-risking these types of projects, and the opportunity to bundle projects will bring biomass projects to scale and attract
investments. Instrumental is also the positive engagements with PLN with business models that could scale up nationally,” Solvang said.
The session was moderated by Dr. Michael Allen Brady, CIFOR. Dr. Georg Winkel represented the European Forest Institute.