Pros & Cons of Accelerating Waste to Energy (PLTSa) Development in Indonesia

The condition of waste management in Indonesia is experiencing development. This can be seen through the issuance of Presidential Regulation Number 35 of 2018 regarding the Acceleration of Construction of Waste to Electrical Energy Processing Installations based on Environmentally Friendly Technology or commonly called PLTSa.. 

PLTSa merupakan salah satu bentuk usaha konkrit pemerintah untuk menyelesaikan masalah sampah dengan melihat peluang untuk memasok kebutuhan energi terbarukan. Selain itu, PLTSa merupakan bentuk waste to energy (WtE) yang dinilai mampu secara efisien memulihkan timbulan sampah yang cukup tinggi di TPA di Indonesia.

Presidential Regulation No.35/2018 concerning the Acceleration of PLTSa Development

PLTSa is a concrete form of government effort to solve the waste problem by looking at opportunities to supply renewable energy needs. Apart from that, PLTSa is a form of waste to energy (WtE) which is considered capable of efficiently recovering the fairly high waste generation in landfills.

Presidential Regulation Number 35 of 2018 determines efforts to establish PLTSa in 12 selected cities and provinces in Indonesia. Currently, of the 12 selected cities, only 1 city has PLTSa, namely the city of Surabaya. The Benowo PLTSa, which was inaugurated by President Joko Widodo on May 6 2021, is the first and largest PLTSa. Processing 1,000 tons/day of waste at PLTSa Benowo is capable of producing electricity with a capacity of 12 MW.

Meanwhile, other cities such as Jakarta and Solo have completed Electricity Sales and Purchase Agreements (PJBL). Furthermore, progress in Palembang and Tangerang has already received developers. The city of Bandung is currently in the auction process. Finally, in Manado, Makassar, Denpasar, Semarang, South Tangerang and Bekasi, progress is still in auction preparation, pre-feasibility study and preparation of OBC/FBC.

Each PLTSa is planned to produce a final product in the form of electrical energy which will be sold to PT. PLN. The electricity purchase price is determined at USD 13.35 cents/KwH with a capacity of 20 mW as well as subsidy assistance from the State Revenue and Expenditure Budget (APBN) of IDR 500,000 per ton of waste towards waste management costs.

Success of WtE Facilities in Other Countries

Data from UNEP in 2019 shows that Japan, China and France are the 3 countries with the most waste-to-energy facilities in the world. Currently, Japan is even expanding its gassification process to convert waste into energy, while other countries are still using the waste-to-energy process using conventional incineration techniques. Nippon Steel Engineering, a Japanese company that has built approximately 50 WtE facilities using gassification, has even implemented the Direct Melting System (DMS) technique which has succeeded in reducing the amount of residual material from Japanese WtE facilities from 15% to 3%.

The rapid development of WtE facilities in Japan cannot be separated from regulatory support. Japan is quite strict about waste management. Local governments are required to provide a waste management plan for the next 20 years, they are also required to manage waste independently. Transporting waste over long routes is strictly prohibited.

Indonesia’s neighboring country which is quite advanced in procuring WtE facilities is Singapore. The area of ​​Singapore is relatively small, only slightly larger than Jakarta. Semakau Landfill is the only landfill in Singapore. Singapore’s waste generation increased 7 times from 1,260 tonnes in 1970 to 8,741 in 2021. However, 4 WtE facilities in Singapore succeeded in converting 90% of solid waste into 2% of national electrical energy. The lack of landfill locations is one of the reasons why WtE facilities are needed to control the negative impacts of waste generation.

Waste Reduction Should Be the Main Solution

The success of countries using WtE facilities could inspire the Indonesian government to focus on completing the construction of PLTSa in 12 cities. However, in reality the waste problem in Indonesia did not just end after the PLTSa was built. Concerns have also arisen regarding the government’s big steps through this regulation, such as the impact on health, the environment and the costs that must be paid by the community.

Before that, we need to remember that in waste management there is an important hierarchy which is visualized in the form of an inverted pyramid as in Figure 1. It can be seen in Figure 1 where the main thing that can be done in waste management is reduction.

Waste reduction can be done from sources of waste producing activities, such as households and non-households. This is the “golden standard” in waste management.

Meanwhile, WtE is the 4th stage in the waste management hierarchy, namely the recovery stage. At this stage an activity should be carried out to extract material from waste to be used as another form of alternative energy source. This is the reason why waste reduction efforts are more important than WtE itself.

PLTSa Need a Lot of Resources

Apart from looking at the hierarchy of waste management, the challenges of WtE in Indonesia are quite large, especially from the need for a lot of resources ranging from financial resources or financing to human resources which are an important part of WtE management itself. These two challenges are often found in WtE management in developing countries. One example is WtE management in India.

With geographical similarities, namely both being on the Asian continent and having the same high level of population density, it is very likely that WtE problems in India will also occur in Indonesia. The country known as Bollywood has the problem of minimal government and private sector assistance to manage the WtE that has been created. In addition, the number of workers with the skills needed in WtE management does not support it. So that by 2022 there will be 5 WtE that will no longer operate in the country.

Something similar has happened in Indonesia. There is a lack of financial support and several stakeholders state that what will happen is a condition of energy surplus but less market demand. Currently the financing scheme for waste management is through Government Cooperation with Business Entities (KPBU). In this case, KPBU is a form of project financing where to obtain optimal capital costs, generally the loan portion from creditors dominates, reaching 80%.

PLTSa Juga Harus Bankable

WtE projects are not only focused on providing returns to investors. In the context of Government Cooperation with Business Entities (KPBU), for a WtE project to be considered feasible, the WtE project must also be eligible to obtain a loan or be bankable.

Collaboration in WtE projects can be carried out through business entities from Indonesia or abroad. PLTSa Benowo in Surabaya collaborates with PT Sumber Organik (SO) as manager. This collaboration is based on the effectiveness required by the Surabaya City Government in managing PLTSa. Another thing is the WtE cooperation that exists in Tangerang. Oligo Infrastructure Group (OIG), which has an investor affiliation with TAEL Partner Ltd from Singapore, plays a role in the technical process of creating WtE together with the Regional People’s Representative Council (DPRD) of the city of Tangerang.

However, it is important to remember that choosing a WtE development partner needs to be done as well as possible to avoid problems that result in the project stalling or stopping. As happened at the Intermediate Treatment Facility (ITF) Sunter which was abandoned by Fortum Power Heat and Oy, a company from Finland. Fortum is collaborating with PT Jakarta Propertindo (Jakpro) in the construction of the WtE project. For one year after the cessation of cooperation, until now the construction of the ITF Sunter has still not been continued. Even though the need for waste management in the capital is urgent.

PLTSa is Not a Solution for All Types of Waste

Carrying out sustainable operations in supplying technology-based energy from waste in Indonesia is a difficult task. One of the obstacles is the composition of organic waste in Indonesia which is still quite high at around 53.14%. Thus, having a relatively high water content has the potential to reduce net energy or even potentially require more energy than is produced (negative net energy).

The right effort to utilize organic waste is to convert it into biomethane through the anaerobic digestion process. Biomethane which can be purified into bioCNG is the newest alternative for converting organic waste into purified biomethane.

Before pursuing the construction of 12 PLTSa in Indonesia, an in-depth analysis of both types of waste, financing schemes and technology needs to be carried out to ensure that PLTSa can truly be a solution. Basically, reducing and recycling waste remains the best solution to maintain sustainability in accordance with the circular economy concept. PLTSa is only a companion solution to control negative impacts that are not handled by 3R (Reduce, Reuse, Recycle) efforts.

Aprilia Harera

Solid Waste Management Consultant Waste4Change

Aprilia is a team of senior consultants who have helped many clients run waste projects in a sustainable manner.