United Nations Development Programme Country: Indonesia GLOBAL ENVIRONMENT FACILITY PROJECT DOCUMENT

Project Title: UNDAF Outcome(s): Wind Hybrid Power Generation Marketing Development Initiatives (WHyPGen) UNDAF 2006-2010 Outcome # 1: By 2010, improved life chances and livelihood opportunities for all through enhanced government commitment to the MDGs, institutional support for achieving the MDGs and empowered community engagement in the achievement of the MDGs with a special focus on HIV/AIDS. CPD 2006-2010: By 2010 improved environmental living conditions and sustainable use of energy in Indonesia, and establishment of sustainable living conditions in the poorest provinces.

UNDP Strategic Plan Environment and Sustainable Development Primary Outcome: UNDP Strategic Plan Secondary Outcome: Expected CP Outcome(s):

By 2010, improved environmental living conditions and sustainable use of energy in Indonesia and establishment of sustainable living conditions in the targeted provinces in Indonesia.

Expected CPAP Output (s): Executing Entity/Implementing Partner: Implementing Entity/Responsible Partners: Agency for the Assessment and Application of Technology (BPPT) United Nations Development Programme

Brief Description
This project aims to promote the adoption of Wind Hybrid Power Generation (WHyPGen) technology through the facilitation of commercial on-grid WHyPGen systems for on-grid power supply within the Indonesian market, and when and where possible pass on the replication to the electricity markets in other countries such as those in the ASEAN region. The project is on the promotion, development, application and facilitation of the commercialization of a cost-effective system of utilizing Indonesias wind energy resource. It focuses on costeffective and potentially commercially viable grid-connected wind-diesel hybrid power generation. The project is comprised of several barrier removal activities which would substantially reduce any risk in the adoption of WHyPGen technology. It is designed to facilitate close coordination and consultation of the relevant stakeholders in each of the project activities. The activities include those aimed at enhancing the local technical capacity to improve understanding and implementation of all aspects of WHyPGen designs, financing, installations and operations; building effective awareness programs targeted to optimize technology diffusion; enhancing the confidence of financing institutions to reduce risks of loans to finance WHyPGen projects; and enforcing developed policies and regulations to reduce the regulatory efforts of WHyPGen project implementations.

Programme Period: Atlas Award ID: Project ID: PIMS # Start date: End Date Management Arrangements PAC Meeting Date

2009-2014 00060776 00076672 4223 February 2011 June 2014 NIM February 2011

Total resources required Total allocated resources: UNDP Other: o GEF o Government (KPDT) o In-kind (BPPT) o Private Sector

$39,640,800

$150,000 $2,156,200 $19,500,000 $1,334,600 $16,500,000

Agreed by (Government):

Date/Month/Year Agreed by (Executing Entity/Implementing Partner):

Date/Month/Year Agreed by (UNDP):

Date/Month/Year

Table of Contents

Acronyms .............................................................................................................................................. 4 Section I: Situation Analysis Context and Global Significance........................................................................................................ 6 Threats and Root Causes .................................................................................................................... 8 Barrier Analysis ............................................................................................................................... 13 Stakeholder Analysis and Baseline Analysis ................................................................................... 16 Section II: Strategy Project Rationale and Policy Conformity......................................................................................... 19 Country Ownership .......................................................................................................................... 20 Alternative Scenario ......................................................................................................................... 21 Project Objective, Outcomes and Outputs/Activities ....................................................................... 24 Key Indicators, Risks and Assumptions........................................................................................... 41 Section III: Project Results Framework .......................................................................................... 45 Total Budget and Work Plan................................................................................................................ 53 Section IV: Management Arrangements ......................................................................................... 58 Section V: Monitoring Framework and Evaluation ....................................................................... 61 Section VI: Legal Context ................................................................................................................. 64 Section VII: Annexes Annex A: Historical and Forecast Electricity Demand in Indonesia ............................................... 65 Annex 1: Risk Analysis .................................................................................................................... 66 Annex 2: Agreements ....................................................................................................................... 68 Annex 3: Detailed CO2 Calculations and Assumptions .................................................................. 75 Annex 4: List of Demonstrations ..................................................................................................... 78 Annex 5: Schedule of Activities....................................................................................................... 66 Annex 6: Linkages of Activities....................................................................................................... 68 Annex 7: Sample of Wind Measurement Report ............................................................................ 68 Annex 8: Budget Analysis................................................................................................................ 75 Annex 9: Co-Financing Analysis ..................................................................................................... 78 Annex 10: Annual Targets ............................................................................................................... 79

ACRONYMS
Acronym ADB APBN APR/PIR ASEAN A&P RCU BAPPENAS BBTE/B2TE BPPT CO2 DFO DG DGEEU DJLPE GDP ExA FI GEF GEF/SGP GHG GOI GWe GW, GWh HPP IA IC IDR IPC IPP ITB Jabotabek Kep.Men KUBE KEN KPDT kWh LFA M&E MEMR MOV MTI MW NAC NEX NGO NPD NPM NSS Meaning Asian Development Bank Anggaran Pendapatan Belanja Negara (National Development Budget) Annual Project Review/Project Implementation Review Association of South East Asia Nation Asia-Pacific Regional Coordination Unit Badan Perencanaan dan Pembangunan Nasional National Development Planning Agency Balai Besar Teknologi Energy (Energy Technology Center) Badan Pengkajian dan Penerapan Teknologi Agency for the Assessment and Application of Technology Carbon dioxide Domestic Fuel Obligation Distributed Generation Directorate General for Electricity and Energy Utilization Direktorat Jenderal Listrik dan Pemanfaatan Energy, DGEEU Gross Domestic Product Executing Agency Financial Intermediary Global Environment Facility Global Environment Facility / Small Grant Programme Greenhouse Gas Government of Indonesia Gigawatt electricity, 1000 Mwe Gigawatt, 1000 MW, gigawatt-hours Harga Pokok Penjualan Cost of Electricity Supply Implementing Agency International Consultant Indonesian Rupiah International Project Coordinator Independent Power Producer Institut Teknologi Bandung ( Bandung Institute of Technology) Jakarta Bogor Tangerang Bekasi State Minister Decision Kebijakan Umum Bidang Energi (General Guidelines on Energy Policy) Kebijakan Energy Nasional (National Energy Policy State Ministry for the Development of Disadvantaged Regions Kilowatt hour Logical Framework Analysis Monitoring and Evaluation Ministry of Energy and Mineral Resources Means of Verification Ministry of Trade and Industry Megawatt, 1000 KW National Advisory Council National Execution Non-Government Organization National Project Director National Project Manager National Strategy Study on the Clean Development Mechanism

Acronym O&M OP-7 PDF-B PLFD PLN PMO PPM PSKSK PSK TERSEBAR QPR R&D RE SMOC/SME SME TA TOR TPR TSCF TWG UNFCCC UNESCAP UNDP USAID UU YBUL

Meaning Operation and Maintenance Operation 7 Project Development Facility Block B Project Logical Framework Design Perusahaan Listrik Negara (State-Owned Electric Company) Project Management Office Project Planning Matrix Pembangkit Skala Kecil Swasta dan Koperasi (Small Scale Generation by Private and Cooperative Enterprises) Pembangkit Skala Kecil Tersebar (Small Distributed Generation) Quarterly Progress Report Research and Development Renewable Energy State Ministry of Cooperative, and Small and Medium Enterprises Small Medium Enterprise Technical Assistance Terms of Reference Tripartite Review Terra Standard Cubic Feet Technical Working Group United Nations Framework Convention on Climate Change United Nations Economic and Social Commission for Asia and the Pacific United Nations Development Programme United States Agency for International Development Undang-Undang (Law) Yayasan Bina Usaha Lingkungan (Foundation for Environmental Development)

1. SITUATION ANALYSIS 1. Indonesia is a thriving economy at the intersection of the Pacific and Indian oceans, and between the continents of Asia and Australia. Together with the China, Brazil and, Philippines it is among the only four countries that escaped a contraction in economic growth as a consequence of the Global Financial Crisis of 2008-2009 which saw the advanced economies of United States, Japan, Korea, Taiwan, Singapore, Thailand and European Union countries experience negative Gross Domestic Product (GDP) growth rates. Indonesias economy grew by 4.3% in 2009, in line with the countrys 3 - 6% growth rate since the Asian financial crisis of the late 1990s. Future growth is likely to accelerate as the world recovers from the global recession. Per capita energy consumption is placed at 3.0 barrels of oil equivalent (BOE). As of 2007, however, only 60.9% of Indonesia is electrified. 2. Indonesia is an agricultural country and exporter of raw materials, food and agricultural products. It is also rich in fossil fuel resources, and exports coal and natural gas (LNG). Since 1990, however, its manufacturing industry began to become a significant contributor to its economy. The industrial and residential sectors currently account for bulk of the countrys energy demand and have the highest growth rates in energy usage. From 1990 to 2006, the industrial sectors share of total final energy demand (TFED) rose significantly from 21.1% to 38.0% alongside the residential sectors consumption reaching 38.8% in 2008. 3. Recent policy actions have emphasized energy pricing reforms and energy sector management. Preserving the broad philosophy that energy should remain affordable to different segments of society, the government has removed some fuel subsidies for power generation and industry as well as for high octane road transport fuels such as gasoline, while leaving subsidies in place for diesel used in freight transport, household kerosene, and certain classes of electricity. Very recent newspaper reports indicate that available subsidized motor fuels will be depleted by November 2010 necessitating further painful policy reforms such as the elimination of the sale of subsidized gasoline to motorists with car models manufactured later than 2005. Reforms have also been undertaken for energy sector management and investments aimed at improving the production environment, including an overhaul of the regulatory authority in coal mining concessions, oil and gas tendering reforms, and electricity market restructuring. Context and Global Significance 4. Since 2000, Indonesia transitioned from a robust energy exporter to an importing nation that, for the first time, is concerned with rising production costs, energy subsidies, and climate change. The transition has spurred a new commitment to renewable energy, domestic production, and environmental sustainability. In 2008, fossil fuels provided 93% of the economys total energy capacity (29.5 GW). But unlike previous years when excess energy was exported to neighboring markets, aging wells and limited investment forced Indonesia to import oil and to eventually remove itself from the Organization of the Petroleum Exporting Countries (OPEC). Similarly, Indonesia was once the worlds leading exporter of natural gas, but now ranks 56th because investment restrictions and contract uncertainty caused new production to go undeveloped. 5. Indonesia is endowed with both renewable energy and conventional fossil fuel resources such as crude oil, natural gas and coal. At current extraction rates, however, it is expected that its total proven and potential reserves of crude oil and natural gas would be depleted in the near future, about 10 - 32 years, while coal is expected to last longer at 65 years (See Table 1). Very few countries could match the gigantic renewable energy potential of Indonesia. The country is the home of 40% of the worlds known geothermal resource and offers great

opportunities in hydropower, solar, wind, biomass, and biogas. The country recently generated tremendous interest in harnessing tidal currents, wave and ocean thermal energy conversion (OTEC) as well as nuclear energy (See Table 2). Table 1: Energy Potential of Indonesia - Conventional Energy Type Crude Oil, million bbl Natural Gas, trillion scf Coal, billion mt Energy Source Crude Oil Natural Gas Coal Proven 4,867 95 6.5 Potential 4,825 75 31.5 Total Production Capacity 500 2.9 1 Life Time, years 10 32 65

9,692 170 38.11 Location Central Sumatera, West Java & Kalimantan Natuna, Kalimantan, Sumatera, &Java Sumatera, & Kalimantan

Table 2: RE Potential and Installed RE-based Energy Capacity in Indonesia Resource Potential 845 x 10^6 BOE 219 x 10^6 BOE Potential Capacity, MW 75,670 27,510 500.00 4.8 kWh/m2/day 3 - 5 m/s 156,487 9,190 49,810 684.83 35 319,886.83 3,000 Installed Capacity, MW 4,264 1,052 86.1 12.1 1.1 445 10 0 5,870.30 % Resource Utilization 5.63% 3.82% 17.22% 0.008% 0.012% 0.89% 1.46% 0.00% 1.84%

Energy Type Hydro Geothermal Mini-hydro, Microhydro Solar PV Wind Biomass Biogas Tidal, Wave, Ocean Thermal Energy Conversion Total Renewable Energy Nuclear

Source: PLN presentation to the United States Energy Association.

6. Unfortunately, its high growth of population coupled with rapid expansion and economic growth in the countrys residential, industry, transportation, agriculture, commercial and public services sectors have led to rapid rise in energy consumption. Even though Indonesia is endowed abundantly with various energy sources such as fossil fuels and renewable energy, many areas that need such resources are not served because of absence of distribution networks and high cost of energy and limited power subsidies. 7. To appease local energy consumers, the government has maintained high energy subsidies for the countrys energy consumers. When supply was high and demand was low, the subsidies stimulated economic growth with low, stable energy prices. But as demand began to outpace supply, the subsidies became a burden on the nations fiscal budget and low energy prices became a deterrent to investments in cleaner, renewable resources. In 2008, subsidies exceeded $20 billion. As oil prices declined, subsides decreased to $10 billion in 2009 but are expected to increase again in 2010. In addition, Indonesias fuel subsidies have the negative

consequence of making growth itself an unaffordable expense to the Government of Indonesia (GoI), which must pay more money for every new unit of electricity sold - money that is not spent at all to support economic growth or social programs. 8. Fossil fuels have been the major energy resources in the power, industrial and transportation sectors of the country for decades. Considering the reserves of oil and gas are finite, and with oil presently dominating the countrys energy consumption mix, the GoI encourages the substitution or replacement of oil with other indigenous sources of energy. 9. Annex A shows the historical and forecast electricity demand in Indonesia (population, GDP, demand growth to GDP growth elasticity ratio, electrification ratio, energy sales demand by account type, number of customers by account type, gross generation (production) from the state PLN, private IPPs and captive sources, net generation (energy requirement), station use, transmission & distribution line losses, pump storage & other losses, peak load, reserve requirement and installed capacity. Threats and Root Causes 10. Indonesia emitted 116 million metric tons (mt) of GHG emissions in 2008 and will increase further to 270 million mt by 2018 per RUPTL report. This represents 0.43% of the worlds emission in 2008. However, a study by the Energy Institute of Japan places a higher estimate of 1.3% of world CO2 emission totaling 26,693 million mt (26.7 billion mt or 26.7 giga tonnes). Table 3: GHG Emissions in Indonesia Location Total Indonesia Jawa-Bali Others (Luar Jawa-Bali) Annual GHG Emissions, MtCO2 2008 2018 116 270 94 213 22 57 World Total (2008) 26,693 MtCO2/year 0.43% 0.35% 0.08%

Source: 2008 Economic Statistics Bulletin, Institute of Energy Economics, Japan

Table 4: GHG Emission Factor of Indonesia Location Total Indonesia Jawa-Bali Others (Luar Jawa-Bali)
Source: RUPTL PT.PLN (2009-2018), p. 62

GHG Emission Factors, ton CO2/MWh 2008 2018 0.787 0.741 0.798 0.744 0.745 0.732

11. Indonesias growing population requires that it develop its economy which will raise demand for energy particularly electricity. With a high proportion of finite fossil fuels (petroleum oil, natural gas, coal) in its primary energy mix, Indonesia will encounter greater pollution from emissions (CO2, SO2, NOx, particulates) and economic challenges (limited energy supplies, higher prices, larger subsidies) brought about by the importation of primary energy. Moreover, after Indonesia became a net oil importing country, it has begun experiencing the difficulties of imported energy dependency. 12. However, the rapid growth in electricity demand is a challenge that the Government of Indonesia (GoI) could not meet alone. Therefore, the partnership of the private sector and the

assistance of the international community are important ingredients in the proper development of the countrys energy sector. This project will endeavor to direct private sector and GoI efforts, investments and policies in the right direction of sustainable development that recognizes the need to reduce GHG emission from major CO2 sources in the power generation industry in order to minimize its carbon footprint and thus mitigate global warming and climate change risks which the entire planet is facing today. 13. Indonesias task, therefore, is to contribute to the global effort of avoiding irreversible climate change within our lifetime by substituting or replacing consumption of fossil energy (oil, gas and coal) with carbon-neutral renewable energy technologies and adopting low carbon technologies such as efficiency improvements in the power generation, industry, transport, buildings, public services, agricultural and residential sectors of our economy. And wind energy is one such abundant resource available in Indonesia that has so far remained untapped. Currently, only 0.01% of its potential of 9,190 MW has been developed and utilized. Indonesia Electricity Outlook 14. Indonesias total primary energy demand stood at 191 million tonnes of oil equivalent (Mtoe) in 2007, the highest in the ASEAN region and the 13th highest in the world. It has an installed power generating capacity of 21.4 GW of which 87.0% is thermal (oil, gas and coal), 10.5% hydro and 2.5% geothermal. By 2008, installed capacity has risen to 29.5 GW. 15. Fuel consumption for power generation (PLN, IPP and Captive) totals 222.49 BOE in 2006, consisting mostly of expensive diesel oil at 35.28% and coal at 36.34%. Natural gas is also significant at 16.58%, followed by modest contribution from renewable energy sources such as 6.93% hydro, 4.72% geothermal and 0.16% mini-hydro. There is a need to reduce petroleum fuel and electricity subsidies that add to budget deficits and expand potential for more valueadding energy exports of crude oil and petroleum products, natural gas, LNG and coal for sustainable development. Table 5: Fuel Consumption for Power Generation in 2006 (BOE) Energy Source PLN + IPP Captive Diesel Oil 45.50 33.00 Coal 70.00 10.84 Gas 35.00 1.89 Hydro 14.00 1.41 Mini-hydro 0.35 Geothermal 10.50 Total 175.35 47.14 BOE = Barrel Oil Equivalent = 600 kW per barrel of oil Total 78.50 80.84 36.89 15.41 0.35 10.50 222.49 Percentage 35.28 36.34 16.58 6.93 0.16 4.72 100.00

Source: Outlook Energi Indonesia 2009, Pusat Teknologi Pengembangan Sumberdaya Energi - BPPT

16. As of 2008, the main power generation technology for providing 29,206 MW of installed capacity (PLN, IPP only) is the Steam Rankine cycle thermal power plants (using coal, natural gas and diesel and fuel oils). This is followed by Combined Cycle gas turbine power plants (using natural gas and diesel) and by Diesel power plants (diesel gensets using diesel and marine/industrial fuel oils) and Open Cycle gas turbine power plants (open cycle gas turbines using natural gas and diesel). Renewable energy-based power generation is small at 12.29% (hydro) and 3.13% (geothermal). Cumulative wind power in hybrid with solar and diesels aggregate 1,121 kW, while solar PV capacity is 576 kW peak. Private IPPs provide around

576 MW or 1.97% of Indonesia capacity. Table 6 and Fig. 1 show the breakdown of installed power generation capacity of PLN and IPPs (by power generation technology) in 2008. Table 6: Installed Power Generation Capacity (2008)
Power Generation Technology
Diesel Power Plants (Diesel Gensets) Thermal Power Plants (Steam Rankine) Coal Gas & Oil Oil Gas Turbine Power Plants (Combined Cycle) Gas & Oil Oil Gas Turbine Power Plants (Open Cycle) Gas & Oil Oil Hydro Power Plants Micro-hydro Power Plants Geothermal Power Plants Wind Power Generation Units Solar Power Generation Units IPP (Various Technologies)

Installed Capacity, MW
2,678 11,470 8,570 1,000 800 7,027 4,007 2,136 2,895 252 1,984 3,588 56 915 1.12 0.09 576

Percentage
9.17% 39.27% 29.34% 3.42% 2.74% 24.06% 13.72% 7.31% 9.91% 0.86% 6.79% 12.29% 0.19% 3.13% 0.0038% 0.0003% 1.97%

Total

29,206.21

100%

17. In 2008, electricity generation from PLN alone stood at 147,622 GWh. Bulk of this is generated using coal (44.77%). Oil accounted for 24.81%, while 17.47% of the total generation is from natural gas. Data from IPPs and captive power generation are not readily available. Table 7 and Fig. 2 show the power generation from PLN (by energy source) in 2008. Table 7: Power Generation from PLN Power Plants (2008)
Energy Source
Oil High Speed Diesel Marine Fuel Oil Natural Gas Coal Hydro (Large & Micro) Geothermal Total

Power Generation, GWh

36,618 23,701 12,917 25,790 66,088 11,020 8,106 147,622

Percentage
24.8% 16.1% 8.8% 17.5% 44.8% 7.5% 5.5% 100%

18. In that same year (2008), the total GHG emission from the power generation (PLN only) was 118,646 ktons CO2. The average GHG emission factor was 0.804 kg CO2/kWh. Table 8: GHG Emissions from PLN Power Generation (2008)
Energy Source
Oil High Speed Diesel Marine Fuel Oil Natural Gas Coal Total

GHG Emissions, ktons CO2

29,682 18,377 11,306 13,623 75,340 118,645

Percentage
25.0% 15.5% 9.5% 11.5% 63.5% 100%

Fig. 1: Installed Power Generation Capacity in Indonesia, 2008

Installed Capacity, MW 8570

4007 2678 1000 800 2136 252 1984

3588 915 56 1.121 0.09 576

19. Annex 1 shows a complete database on Indonesias power sector showing historical and forecast population, GDP, demand growth to GDP growth elasticity ratio, electrification ratio, energy sales demand by account type, number of customers by account type, gross generation (production) from the state PLN, private IPPs and captive sources (Table B.9), net generation (energy requirement), station use, transmission & distribution line losses, pump storage & other losses, peak load, reserve requirement and installed capacity. Indonesias economic prospect of growing its GDP over 6.0% p.a. is put at risk due to its population growing over 1.2% p.a. coupled with the need to increase electrification from 62% to 84% to meet socioeconomic aspirations of its people. With electricity sales growing at a faster pace of over 9.8% p.a. than GDP, implying an elasticity ratio greater than 1.6 is indicative of deteriorating electricity utilization efficiency that must be immediately remedied, lest it leads to unsustainable electricity growth that would have to be supported by power generation from a predominantly fossil fuel mix. In 2008, it registered a less than unity elasticity ratio of 0.99, which should have been improved upon, indicating the urgent need to undertake energy efficiency improvement measures aside from fossil fuel substitution.

Primary Energy Demand 20. Since 1980, total primary energy demand has grown rapidly (except during the Asian Financial Crisis of 1998/1999) at an average of 4.6% per year, while GDP has grown at 4.8% per year. Total primary energy demand was 0.84 toe per capita in 2007, less than one-fifth of the OECD average. 21. In the Reference Scenario of the RUPTL, which is the baseline for this WHyPGen project, Indonesias primary energy demand is projected to grow at an average annual rate of 2.4%, from 191 Mtoe in 2007 to 330 Mtoe in 2030. The share of fossil fuels in the primary energy mix will expand from 69% in 2007 to 72% in 2030. Oil demand will increase moderately from 60 Mtoe in 2007 to 79 Mtoe in 2030, as robust demand growth from transport is offset by substitution away from oil in power generation. Oils share of the energy mix will contract from 32% in 2007 to 24% in 2030. Coal demand, mainly driven by power generation and industry, is expected to rise at 4.2% per year, the fastest among fossil fuels. By 2030, coals share of primary demand will reach 29% to become the leading fuel in the energy mix. Gas demand will likewise double from 34 Mtoe in 2007 to 63 Mtoe in 2030. 22. Almost half of the increase in gas demand is due to power generation. The share of biomass in primary demand will decline from 27% in 2007 to 22% in 2030, as living standards improve and residents use more LPG and electricity. Other renewable energy resources - a group that includes wind, geothermal and solar PV - will grow briskly at 5.2% per year and their share in the energy mix will double to 6% by 2030, from 3% today. 23. In recent years, many obstacles caused delayed power projects, especially gas-fired power plants that were delayed due to uncertainties in gas supply. As a result, oil-fired power plants that have been converted to gas-firing were forced to operate again using petroleum fuels whose price is more expensive. To reduce the cost of electricity production due to high world oil prices, the government power plants implemented diversified programs towards nonpetroleum fuels. 24. According to the Minister of Energy and Mineral Resources, Indonesia still needs 35,000 MW of electricity until 2015. In anticipation of a future electricity crisis, the PLN has encouraged the investment and promotion of renewable energy (RE) generation by private electricity

companies (IPPs) so that they may immediately construct and operate these new RE power projects to supplement the current limited fossil power generation that is experiencing outages. Fig. 4: Historical and Forecast Primary Energy Demand by Fuel (1980 2030)

25. The seriousness of the electricity crisis was made worse by soaring world oil prices and rapid power growth that overloaded power plants. Blackouts began to appear as early as 2004. The government felt the need to issue policy power usage settings, including the need of industry to regulate operating hours, restrictions on hours of broadcast television (to reduce residential load during peak hours), as well as appeals of electricity savings in government offices beginning early July 2008. The limitations in power supply were also addressed by the peak load demand management (shifting day operations to night operations to lower peak load). Wind Energy 26. The countrys Ministry of Energy & Mineral Resources estimates a total potential of 448 MW of wind power generation in areas with best wind conditions such as in the south coastal areas of South Sulawesi and Nusa Tenggara. Previous studies by the US National Renewable Energy Laboratory (NREL) shows excellent potential for wind power generation in the country at areas near 9o to 10o S latitude. Wind speeds in these areas range from 6.3 10.1 m/s and a stand-alone wind power density of 300 1,000 W/m2 at 30 m altitude. Prevailing wind direction is from the east at 90o. The ASEAN Center for Energy estimates this at 480 MW for 3 5 m/s wind speeds. 27. In 2008, the total installed power generation capacity in the grid systems of PLN that are located in the wind rich areas of East Nusa Tenggara, South and West Sulawesi, Maluku and Papua, was 285.7 MW. During the same year, the net effective power generation capacity (net dependable capacity) was 246.0 MW; total power generation was 936.1 GWh; average peak demand was 182.2 MW; and average load factor was 54.6% of installed capacity. Barrier Analysis 28. With the entry of China in the mass production of wind turbines and solar panels, the cost of renewable energy from wind and solar energy is now becoming cheaper, readily available and more environmentally benign compared to using fossil energy. But exploiting the potential of

renewable energy such as hydro, geothermal, mini-hydro, biomass, solar, wind, tidal and ocean energy is still not fully developed and accepted in Indonesia. Fig. 5: Average Wind Speeds in Indonesia (Source: www.3tier.com)

29. The wind energy resource potential of Indonesia of 9.3 GW is indeed significant. However, to date, wind energy still has insignificant contribution towards the national energy mix. There are no substantial experience in the design, installation and operation of wind power generation units (> 1 MW). These are due to a number of factors that up until now has hindered the rapid promotion of wind energy development and utilization in the country, in general, and wind hybrid power generation systems, in particular. In general, the main issue which the WHyPGen project has to address is the lack of investments in wind power generation arising from a number of barriers such as detailed wind data for Indonesias various regions which have great potential for wind power generation. Technical Application and Assessment Barriers 30. The application of WHyPGen systems in Indonesia is facing the reality that high average wind speed is available more often in remote areas, but limited in areas where there is great demand for electricity. This reality is further aggravated by the following barriers: Lack of wind data and limited wind data assessments as such limited number of quality feasibility studies. Wind energy availability is irregular/not stable Since favorable wind energy resources are mostly available in remote areas, not every location is suitable for wind power unless there is sufficient transmission capability Lack of demonstrable applications of WHyPGen, with current demonstrations limited only to low wattage power generation (both stand-alone and hybrid), and applications mainly for mechanical power (e.g. ground water pumping) Many examples of pilot/demos of wind power generation have failed in the past, because wind turbine selection has not been conducted with accurate wind potency survey and proper design Lack of local technical service providers for the installation, operation and maintenance of WHyPGen systems

Lack of technical knowhow in the design and engineering of WHyPGen systems

Financial Barriers 31. The current business environment is not supportive of commercialization of wind power generation projects, such that implementing a road map for wind power generation lacks adequate financing. Further, WHyPGen business still stumbles on barriers such as the following: Fiscal and financial incentives are limited for technology applications like WHyPGen and not yet available for commercial applications The payback period of WHyPGen financing might be too long under current Indonesian economic context Lack of advanced project finance tools and business models for wind that investors, banks and financing institutions are more familiar with are not yet readily available in Indonesia Economic and financial feasibility for WHyPGen application in Indonesia is unknown yet

Policy and Institutional Barriers 32. The central body that can advocate policy & financial decision makers for new power projects like WHyPGen is ineffective. Further, there is generally insufficient understanding of WHyPGen at the policy making level and in the public sector, such as the lack of capacity within government (either local or central) in facilitating WHyPGen development. Generally, the policy-related and institutional barriers are the following: Non-existent policies, regulatory initiatives government policies on promoting and supporting WHyPGen, which is due to the fact that the wind energy business is not yet commercialized. Existing policy regime that is not yet supportive to WHyPGen application, or not yet aligned to the interests of the development of WHyPGen system Undefined pricing policy for power generation from renewable energy resources, especially wind energy (current feed-in tariff is based on mini-hydro and is deemed insufficient for wind energy)

33. Due to above policy- and institutional-related barriers, the project proponent especially the private sector find it hard to prepare first-rate investment grade proposals for WHyPGen projects. Promotion (Information Awareness) Barriers 34. WHyPGen developments find it difficult to gain public acceptance because of several reasons, such as lack of information about good/bad experiences on this technology implementation. The public, in general, and policy maker in particular, do not understand WHyPGen system and its true benefits and environmental significance or advantage. The obstacles under this category of barriers that have to be overcome if WHyPGen is to be promoted and commercialized in Indonesia are the following: Lack of information for Engineers, Developers & Consumers on WHyPGen Application Low awareness on merits & benefits of WHyPGen In all education levels, renewable energy systems (including wind power generation) are not yet consciously taught

Lack or absence of campaigns and capacity building programs on renewable energy technology such as WHyPGen that targets the general public Lack of information on WHyPGen local suppliers

Market Development and Industrial Support Barrier 35. To date, WHyPGen is regarded as an unproven and high-cost technology in Indonesia such that potential WHyPGen market and its industrial support are not developed and realized. The following are barriers to the development of the WHyPGen market in Indonesia: The country in general is heavily dependent on imported technology Low level of confidence on the use locally-made spare parts, as well as limited numbers of local technology providers to undertake quality installation Lack of wind energy markets - even in accessible areas with promising wind energy potentials, the idea of grid-connected WHyPGen has not yet been adopted by power utilities The general opinion that WHyPGen is not directly beneficial except for special cases The advantages to be gained from WHyPGen is not attractive for private parties Fossil fuel energy cost is lower Difficult access to finance for private sector, plus high investment cost due to the relative expensive price of WHyPGen technology. Demand for WHyPGen application is still limited, so that the local manufacturers are not eager to produce its parts. Training and testing facilities for WHyPGen systems and components are not yet established Local components of WHyPGen are not standardized Lack of qualified human resources for engineering and maintenance of wind power plant

Stakeholders Analysis and Baseline Analysis Stakeholders in Promoting Low GHG-Emitting Energy Technologies 36. BPPT, through its B2TE (Balai Besar Teknologi Energi) / Energy Technology Centre - is committed to promote and work on initiating the marketing development of WHyPGen application in Indonesia. The B2TE is a BPPT subsidiary working in the field of energy technologies, especially in energy conversion (renewable energy as well as fossil fuel energy) and energy conservation. One of B2TEs main tasks is to assist the GoI in the national economic development through research, assessment and application of energy technology. 37. Within the BPPT organization, B2TE will work together with LAGG (Laboratorium Aerodinamika Gas dan Getaran) / Aero-Gas Dynamic and Vibration Laboratory - to assess deeper the WHyPGen technology, especially the establishment of testing standards and testing facilities for WHyPGen components in order to improve the quality of WHyPGen system and its components. LAGGs mission is to provide industries, research and educational establishments as well as governmental agencies with a sound solution through various services, i.e., Wind tunnel design and testing; Fine mechanical design and manufacturing; Software and system engineering development; Vibration and aero-elastic testing; Computational fluid dynamics; and Training and education. 38. B2TE will also work closely with LAPAN (Lembaga Penerbangan dan Antariksa Nasional) / National Institute of Aeronautics and Space - as a working partner for WHyPGen assessment

and to develop potential map of WHyPGen application. LAPAN already has several demo wind power generation plants which can be utilized as baseline project references. 39. Recently, it has established the MEAI (Masyarakat Energi Angin Indonesia) / Indonesia Society for Wind Energy. This is a society of stake holders who work and have interest in the wind energy business and renewable energy in general. The society facilitates stakeholders for communication, consultation and cooperation in order to enhance the target of wind power application as one of national energy contributor. 40. The societys vision is the sustainable fulfillment for people energy demand. The society missions are: to escort GoI in providing rural electrification, to improve people living standard through electrification and water pumping, to promote wind power generation by developing demo plants, and to provide the national energy alternative. 41. In addition, BPPT cooperates with the Ministry of Energy & Mineral Resources (MEMR) and the Ministry of Trade & Industry (MTI) to in promotional activities and capacity building that would involve all stakeholders interested in the development of the WHyPGen market in Indonesia. 42. The design and development of financing mechanisms will involve a number of commercial banks, especially those which already have a portfolio for financing similar renewable energy project such as mini/micro-hydro. The development and implementation of the demonstration schemes, market development and support to energy service companies (ESCOs) and WHyPGen users will also involve private sector companies. Baseline Analysis 43. The baseline scenario is based on the current energy plan of Indonesia (RUPTL 2009-2018). In 2007, the primary energy mix of Indonesia for power generation was predominantly coal (40%), oil (34%), natural gas (14%), hydro (9%) and geothermal (3%). In this scenario, Indonesia hopes to reduce its oil dependency to 2% by 2018 by increasing natural gas to 17%, coal to 63% and geothermal to 12%. Such decrease in oil coupled with increase in geothermal would reduce the calculated GHG emission factor from 0.722 to 0.669 kg CO2/kWh1. 44. There is no forecast of non-traditional renewable energy (wind, solar PV, biomass, tidal, ocean energy) in this RUPTL plan. Rather, it only mentions of the traditional renewable energy from hydro (large, pumped hydro) and geothermal. RE-based electricity generation data is very scant consisting mainly of small wind-solar-diesel hybrids and stand alone wind turbines. 45. The baseline scenario represents business as usual which in the current Indonesia national electricity plan means minimal utilization of renewable energy (RE) for power generation. The current combined developed or installed capacities of hydro, geothermal, biomass, wind and solar capacities are very small compared to their collective potential. Presently there is 700 kW of wind power generation representing a tiny 0.006% of the Indonesias wind potential.

The RUPTL reports a value of 0.787 kg CO2/kWh as of 2008 which is forecast to go down to 0.741 kg CO2/kWh by 2018 [page 62 of RUPTL]. Based on the fuel blend used in diesel gensets (10% diesel, 90% fuel oil), the GHG emission factor of 0.886 kg CO2/kWh which is based on fuel to electricity conversion efficiency, gross heating value of fuel and carbon content. In calculating the amount of displaced fossil fuel, it is necessary to calculate the Oil Factor which represents the equivalent oil quantity to generate a kWh of electricity. It is determined by the fuel to electricity conversion efficiency and the gross heating value of the fuel and is calculated to be 0.276 kg Oil/kWh.

46. However in the future, tidal power (energy from the rise and fall of sea levels due to lunar tides), ocean waves and currents passing thru narrow straits, and ocean thermal energy conversion (maximum temperature difference from the ocean surface and sea water 1 km below surface of around 20OC is possible in equatorial Indonesia) may also contribute to the future renewable generation mix. But in the absence of a clear renewable energy plan indicating forecast generation from these non-traditional renewable energy sources, the baseline scenario is therefore the RUPTL plan with the existing and planned RE-based power generation facilities (mainly geothermal and hydro) plus the existing 700 kW wind energy installation. Table 9: Potential Renewable Energy-based Power Generation in Indonesia (RUPTL) RE Resource PLTA (Hydro) PLTP (Geothermal) PLT Surya (Solar) PLT Angin (Wind) Biomassa (Biomass) Biogas (Biogas) Gambut (Peat Moss, Lignite) Tidal (Tidal) Unit MW MW GW MW MW MW BoE MW Potential 75,000 27,140 1,200 9,290 49,810 680 16,800 240,000 Developed 4,125 827 0.012 0.700 445 % Utilization 5.50% 3.05% 0.001% 0.006% 0.89% 0.00%

47. While the RUPTL reports only a 700 kW (0.700 MW) of wind power generation in the entire country, recent reports obtained by the WHyPGen team reveals a total of 987.5 kW of wind turbine capacity that are hybrid with solar PV units of 89.8 kWp capacity and 125 kW of diesel gensets. The largest is a 735 kW wind turbine installed in 2009 at Nusa Penida, Bali. Another unit of 200 kW is installed at P. Selayar, South Sulewesi and is grid connected. For stand-alone wind turbine systems, a very small 133.5 kW has been installed over the period 1991-2004 in various locations. Table 10.A: Installed Wind Hybrid Power Generation Systems Location Nembrala Rote Ndao - NTT, Wini - North Timor Tengah Girisari, Bali Nusa Penida, Bali P. Selayar, South Sulawesi TOTAL Year 2007 2008 2009 Wind Energy (kW) 50 2.5 735 200 987.5 Solar Energy (kWp) 85 4.8 GRID 125 Diesel Energy (kW) 125

89.8

Table 10.B: Installed Stand-Alone Wind Power Generation Systems Location Jepara, Nyamuk Island, Karya Island, Oitui Samas - Yogyakarta, Kuwaru Village, Sundak & Giliyang Madura TOTAL Year 1991-2004 Wind Capacity (kW) 69.5 64 133.5

48. Based on the above, the forecast baseline scenario is shown in the Figure below (Fig. 6)

Forecast Electricity Generation in Indonesia (Baseline S cenario)

700,000 Electricity Generation, GW yr h/ 600,000 500,000 400,000 300,000 200,000 100,000 0 200820092010 201120122013 2014 2015 2016 2017 2018 2019 2020 20212022 2023 20242025

Total GWh/yr

RE GWh/yr

2. STRATEGY Project Rationale and Policy Conformity 49. WHyPGen technology is simple power generation technology because its prime mover is driven directly by rotational shaft of wind turbine which does not involve prior energy conversion. Unlike other power generation systems such as gas/steam turbines or gas/diesel engines, they require combustion process to convert the primary energy into mechanical energy to turn turbine/engine shaft. Simply, when the wind energy blown across the turbine blades is high enough to turn the wind turbine shaft, then the WHyPGen unit will produce electric power. As a result, WHyPGen technology employs less fast-moving parts such that this technology will only need low (minimum) maintenance to guarantee its continuous operation. 50. Until some amount of capacity is developed considerably, this simple technology of wind power generation will remain privately garage-made. But to produce wind power generation parts of higher capacity, this will require some industrial production tools and more advanced techniques such as aerodynamic modelling, controlling techniques and accurate production machines. Since wind power generation can be developed in ranges of capacity, then techniques should be flexible when applied widely in wind power generation systems either as off-grid rural electrification project or as grid-connected WHyPGen application. 51. With the possibility of applying various sizes of wind turbines for power generation, this will create many opportunities in wind power related businesses, namely: feasibilities studies, design & engineering, parts production, installation, construction as well as operation & maintenance provider. Thus, the economic benefits will come not only from more economical electrical production, but also from doing the above-mentioned business. Creation of entrepreneurs, jobs and employments will follow automatically once the WHyPGen project becomes widely accepted as a beneficial power generation system. 52. The project strategy then is to forcefully facilitate the commercialization of WHyPGen systems by disseminating WHyPGen advantages, providing favorable financing initiatives and

supporting the establishment of positive policies by showing all aspects on demo plant projects. The great yields of this project are expected to trigger more WHyPGen applications and expand its market in Indonesia. Country Ownership: Country Eligibility 53. The GOI has ratified the UNFCCC on August 23, 1994. Since the proposed WHyPGen Project will contribute to the reduction of GHG emissions and also lead to sustainable global benefits, the proposal lends itself to Indonesias compliance to said convention. The project will address the underlying causes of global environmental concerns such as economic policy, legal and social issues, institutional weaknesses and information barriers to the development and utilization of wind energy. 54. As a GEF member, Indonesia is eligible to avail of GEF funds for this initiative. The proposed project is in line with the GoIs aim to restructure the energy sector in the light of the countrys decreasing oil reserves and for maintaining environmental balance. The GoI has introduced two policies to restructure energy sector development. These are the: (1) National Energy Policy; and, (2) Policy on Renewable Energy Development and Energy Conservation. Among the actions that are promoted at the government level to support both policies are: (1) Renewable Energy; and, (2) Technical, technological and professional development in the energy sector. Under its electricity generation policy, the following are among those that are being promoted: (a) Development of a small grid connected electricity power plant; and, (b) Increased deployment of renewable energy technology such as hybrid technology of wind power, photovoltaic and diesel generator. In this regard, the proposed project is in line with all of these actions being promoted by the GoI. Country Drivenness 55. For a nation like Indonesia, whose economic growth has brought about increased energy consumption and greenhouse gas emissions, the concept of sustainable environmentally sustainable development has been an essential goal. Currently, it is facing a growing population while at the same time pushing hard to develop its economy that will further push demand for energy particularly electricity. With the current energy usage manifesting a high fossil primary energy mix, Indonesia will face further pollution from emissions and economic challenges through the import of primary energy when Indonesia becomes a net oil importing country. It is anticipated that by that time the country will start experiencing the consequences of dependency on energy imports. Indonesia is facing tremendous growing demand in electricity, and in its current situation and the GoI alone will not be able to tackle this challenge. The private sector is a willing partner in the development of the countrys energy sector and it would of the countrys great interest to facilitate such partnership. 56. Considering its finite reserve, oil, which at present dominates the countrys energy consumption mix, the GoI encourages the substitution/replacement of fossil fuels with other indigenous sources of energy. Since the countrys oil reserve is decreasing, it has been imperative to identify and implement other measures to reduce dependency in oil. Wind energy is a renewable energy resource that is available in Indonesia. Several studies have been conducted in the past to assess the countrys wind energy potential and overall the general conclusions from those studies are as follows: (1) Several locations in Indonesia show good to excellent potentials for wind power generation; (2) Despite the very good potentials there are very few wind power generation installations in the country; (3) Further research is necessary to map Indonesias wind potential as a base for commercial utilization of wind power; and, (4) To be able to continuously operate at higher load factors and high reliability, wind power

systems should be in hybrid with other power generation systems (e.g., PV systems, diesel power generator systems). 57. With the above energy supply concerns and prospects for wind energy utilization, the GOI has proposed this project in order to take advantage of the wind energy potentials of the country. This is also in line with the achievement of the countrys committed target of GHG emission reduction by 2020. Alternative Scenario 58. Through this proposed WhyPGen project, the required enabling environment that will make it conducive for prospective power project developers and investors to venture in wind energy power generation (particularly wind hybrid system) projects in Indonesia. The proposed project is expected to show both the economic/financial and environmental benefits from WHyPGen applications to meet the increasing power load demand as well as the requirement for increasing the electrification ratio in the country. This objective can be achieved faster by removing the technical, information, policy, market and financial barriers which are not hindering the development and application of WhyPGen in Indonesia. 59. The objective of WHyPGen commercialization will be achieved by measures that will increase the demand for new WHyPGen installations in the country. This will result in an alternate scenario (relative to the baseline) wherein, apart from the projected additional hydro and geothermal power generation projects in the country, there will also be deployments of WHyPGen facilities, which will also contribute to the supplanting of existing and planned future fossil fuel-based power generation. 60. The envisioned activities of the WHyPGen project are expected to result to Renewable Energy generation (particularly wind energy) will be economically competitive and affordable. Deployment of this technology will be supported by abundance potential wind energy resource in several areas within Indonesia archipelago. The WHyPGen application will progress from the projected reduction cost due to more local component supports; expected growing WHyPGen market demand and increasing economies of scale of component manufacturing and engineering services. 61. The successful implementation of WHyPGen application project will increase awareness of the application benefit for all stakeholders, and thus will likely assist in reducing the project cost and removing the identified barriers. It is likely that developers and service providers will be further encouraged to enhance their business in WHyPGen applications. 62. Investigations done during the project preparation phase have identified 3 wind energy-based power generation projects that can implemented during the proposed WHyPGen project as demonstrations for showcasing the business angle of wind power generation (including WHyPGen) technology applications. The combined power generation capacity of the 3 demo projects is 9.4 MW. Further expansions are also feasible for commercial replication units with combined capacities of up to 100 MW after the WHyPGen project. From the identified 17 wind energy sites in the country, a total potential 4,026 MW installed capacity can be expected. Obviously, these can only be realized with the establishment of the required enabling environment that would feature favourable policies and RE electricity tariffs, financing schemes for wind energy projects, investments in new wind energy power generation (including WHyPGen) facilities, and the availability of locally manufactured wind energy system components.

63. From the anticipated potential wind energy-based power generation, the alternative scenario is characterized with a higher % share of RE-generated electricity in the total electricity production in Indonesia in the next 15 years. This is shown in Fig. 7. The forecast total electricity generation is the same as in the baseline scenario. However, the annual RE electricity generation is higher than in the baseline because of the additional wind energy power generation systems. 64. Fig. 8 shows the comparison of the % RE Electricity, which is the percentage of the total electricity generation in the country that is generated using renewable energy, in the baseline and alternative scenarios. Note that the total electricity generation is the same for both scenarios. In the alternative scenario, there will be more electricity generated from RE resources. The increase in RE electricity is the sum of the forecast annual RE electricity + forecast wind energy power generation. Pumped storage in the RUPTL forecast dropped from 862 (2014) to 841 (2015), thus the drop in %RE electricity in 2015. Figure 7
Forecast E lectricity Generation in Indonesia (Alternative S cenario)
700,000 Ele ricit G e a io , G hy ct y n r t n W/ r 600,000 500,000 400,000 300,000 200,000 100,000 0 2008 2009 2010 2011 20122013 2014 2015 2016 2017 2018 20192020 2021 2022 2023 2024 2025

Total GWh

RE GWh/ yr

Figure 8
RE E lectricity as % of F orecast Total E lectricity Generated (Baseline vs. Alternative)
30.00% % o To a Ele ricit G n r t n f tl ct y e e a io 25.00%

20.00% 15.00% 10.00% x

5.00%

NOTE : Increase in R E electricity is sum of forecast annual R E electricity + forecast wind energy power generation

0.00% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

% RE Base

% RE Alt.

65. The GHG emissions associated with the total electricity generation are mainly from the fossil fuel fired power generation units. Fig. 9 shows the annual GHG emissions in the baseline and alternative scenarios. The lower annual GHG emission in the Alternative Scenario is mainly due to the operation of wind energy (stand-alone and WHyPGen) systems. Figure 9

GHG E missions from the Power S ector in Indonesia (Baseline vs. Alternative)
G G Em H issio s, m n illio t n CO n os 2 450,000 400,000 350,000 300,000 250,000 200,000 150,000

100,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

NOTE : GHG emission reduction in Alternative S cenario is mainly due to operation of wind energy (including WHyPGen) systems

GHG E mis sions (Baseline)

GHG E mis sions (Alternative)

Design Principles and Strategic Considerations 66. Given the limited work done in the area of wind energy development in Indonesia, the design of the proposed WHyPGen project will focus on demonstrating best practices that are applicable to the Indonesian context and take into account lessons learned and experiences from previous initiatives, in developing and implementing a project that addresses in an integrated and holistic manner the barriers to commercial wind energy applications in the Indonesian power sector. The demonstrations will essentially provide a proof of concept for interested power project developers in addressing the business angle of wind energy development, in general, and wind hybrid power generation systems, in particular. The project will remove awareness barriers from which relevant information and experiences can be used to remove regulatory, technical and financial barriers. 67. To ensure success, demonstrations for the wind energy-based power generation systems will be holistically planned, and integrate international best-practices with current electricity supply planning, power generation programs (including upgrades and expansions). The applied approach will involve: Holistic planning approaches towards a successful wind energy systems demonstration The demonstrations will be in line with the local development planning in the provinces where the demo project sites are located, including that of the PLN (i.e., the RUPTL); Streamlining institutions; strengthening strategic plans and the regulatory policy framework at the provincial level The will facilitate development of energy policies that are supportive of wind power generation and build capacity within responsible provincial agencies (where there are feasible wind energy resources) to adopt wind power generation in provincial development planning;

Enhancing awareness and knowledge in general, of issues related to RE-based power generation, and wind energy-based power generation (including WHyPGen), in particular. This will include targeted publicity campaigns and supporting curriculum development in technical and academic institutions; Adaptive management to ensure examples of best practices for integrated electricity planning, wind power generation (specifically for wind hybrid systems), and promoting commercial wind energy systems can be effectively demonstrated, replicated and sustained even after the completion of this UNDP-GEF project.

Project Goal, Objective, Outcomes and Outputs/Activities 68. The goal of the proposed WHyPGen project is the reduction of the rate of growth of GHG emissions in the power sector of Indonesia. The project objective is the facilitation of the commercial development of on-grid Wind Hybrid Power Generation (WHyPGen) systems for an environmentally sustainable electricity supply in Indonesia through government and private sector cooperation. 69. This project addresses the barriers to the commercial development of WHyPGen systems in Indonesia through interventions that will improve significantly the overall capacity (technical, policy, planning, institutional, fiscal, financial) both in the public and private sectors to develop, design, engineer, finance, install and commercialize the utilization of WHyPGen technology for grid-connected supply. For clarity, this project aims to promote, develop and apply cost-effective and commercially viable on-grid wind hybrid power generation systems. Although the scheme calls for operating wind turbines in combination with diesel power generation units, the project is not for promoting diesel power generation. 70. With the completed demonstrations in place and with significant private sector participation in place, the rate of growth of GHG emission in the power sector is reduced, aside from reducing the cost of power generation, especially in the use of large and efficient wind turbines. Project Outcome, Outputs and Activities 71. In order to realize the project objective, the project is designed to comprise of six components, each of which addressing a specific category of barriers to WHyPGen technology development and application in Indonesia. The project components are: Component 1: WHyPGen Technology Application and Assessment Component 2: WHyPGen Technology Demonstration Component 3: Financing WHyPGen Initiatives Component 4: Policy and Institutional Support for WHyPGen Initiatives Component 5: WHyPGen Promotion Component 6: WHyPGen Market Development and Industry Support

Component 1: WHyPGen Technology Application Assessments 72. This component is aimed at enhancing the awareness and knowledge of the pertinent stakeholders in Indonesia (e.g., MEMR, BPPT, local governments, local equipment manufacturers, engineering firms, etc) about all aspects of WHyPGen technology. The expected outcomes from the outputs that will be delivered under this project component include: (1) Enhanced knowledge of potential WHyPGen application, (2) Improved knowledge of WhyPGen system benefits, and costs; (3) Enhanced interest in investing in WhyPGen system projects. The expected outputs of the activities that will be carried out under this

component are : (1) Updated wind maps of area with significant wind energy potentials (2) Techno-economic feasibility studies (FS) of potential WhyPGen application projects; and (3) Completed feasibility assessments of the local manufacturing/production of WhyPGen system components. 73. Activity 1.1: Assessment of Existing Wind Maps - This activity involves the review of existing wind maps, both in regions that already installed wind power generation systems and in other areas that have the potential for wind power generation. This is in order to analyze the gaps and needs for WHyPGen technology development and commercialization in Indonesia. Part of the assessment is the identification of the required updates to the wind maps, and gaps/needs that have to be addressed in establishing comprehensive data/information regarding the wind energy resource in Indonesia2. The wind maps will also be updated, and where necessary new wind maps will be prepared, based on new wind energy data that will be gathered. The planning for new developments on WHyPGen applications (including that for the demonstrations and replications) shall be based on the results of the assessments and updated wind maps. The relevant stakeholders in the MEMR, BPPT, LAPAN and local governments will also be trained in conducting the review and updating of wind maps. The assessment and updating of wind energy data especially in regions where feasible WHyPGen projects can be implemented shall become regular activities of the pertinent GOI institution that will be mandated to carry out such tasks. 74. Considering the potential impacts of climate change on wind energy projects in Indonesia, the capacity building on wind resource assessment that will be provided to MEMR, BPPT, LAPAN, etc., will include enhanced meteorological services in the current regions with wind resources in order to better assess the present and future potential of the wind resource. The project will work together with its partners in the power sector in the conduct of more detailed climate change projection modeling3 and economic assessment studies in order to understand to which extent climate change may affect a wind energy project and what its long term financial viability will be. The wind resource assessments will also look into changes in the solar intensity in the identified regions. GEF support is required for the technical assistance in the review/assessment and development of wind maps, as well as in the capacity building in these subjects. 75. Activity 1.2: Identification and Screening of Wind Power Generation Sites The new and updated wind maps data from Activity 1.1 previous activities, and the data from the RUPTL of PLN will be used as bases for identifying potential new wind energy projects, and for identifying existing wind energy plants that can be upgraded to a higher generation capacity. The screening will include the evaluation of the areas economic development, demography, electrical network required, project site topography and access, the infrastructures required at site, contacts in relevant institutions, as well as the regulations and permitting requirements
The available wind maps in the country are those that are developed from satellite imaging and can be obtained from satellite imagery providers such as NASA Data Center, 3Tier, and Bureau of Meteorology Australia. The wind maps will be purchased and will be reviewed, updated and detailed for specific targeted areas. Detailed measurements of the same parameters measured through satellite imagery will be conducted through qualitative surveys of the wind power potential in the identified areas and then followed up by the installation in each identified area of a wind measurement tower equipped with an anemometer. The wind measurements are carried out for at least 1 year with the anemometers set altitude at 50 m. The number of anemometers installed in each wind measurement tower will depend on the coverage area. 3 With a more complete and longer period of meteorological data measurement, which includes wind speed/direction and solar insolation parameters, it is possible to use such data for developing a climate change prediction model that can be used to assess long term impacts of climate change on wind energy project. The wind monitoring units (particularly in wind power sites that can be potentially be in hybrid with solar power systems) will also be equipped with instruments that will monitor solar power intensity. For wind-solar hybrid systems, the information on solar intensity profile will be used in sizing and specifying the solar power generation equipment to be installed.
2

that need to be complied with. Moreover, an analysis of the financial viability of each potential project will also be carried out. Profiles of each potential projects describing the technical specifications, investment requirements, and the results of the technical and financial feasibility evaluations will also be prepared for dissemination to interested wind energy project developers/investors in the country and from abroad4. GEF support is required for the technical assistance in the screening of the identified wind power generation sites. 76. Activity 1.3: Capacity Development and Awareness Enhancement on Wind Energy-based Power Generation This will involve the organization and conduct of a series of seminarworkshops targeting power project developers (private companies and central/local governments), equipment manufacturers, and investors, to introduce the principles and benefits of WHyPGen technology. The seminar-workshops will focus on the technical aspects, cost (investment and operational) and benefits of WHyPGen systems. The wind energy power generation project profiles that will be developed in Activity 1.2 will also be presented. In addition to increasing the awareness of the relevant stakeholders about the WHyPGen technology, this activity is expected to generate interest in WHyPGen systems among the local and foreign investors, business developers, energy system equipment manufacturers, and energy engineering service providers, and to enhance the awareness of the relevant GOI agency in realizing the national sustainable follow-up plan for the regular updating of wind maps, wind resource assessments, and wind energy technology (including WHyPGen) development. 77. This activity will also involve the development and institutionalization of a national plan for the regular conduct of wind resource assessments, and updating of wind maps as a regular activity of the relevant GOI agency or institution (most likely the MEMR) that have mandates on energy technology development and particularly on wind energy in Indonesia. Work on the approval and funding (e.g., presentations, advocacy and lobbying) of the plan will a major task to be carried out under this activity5. GEF support is required for the technical assistance in the organization and facilitation of the WHyPGen seminar- and workshops, and the awareness raising campaigns. GEF support is not required in the development of, and advocacy work on the follow-up plan. 78. Activity 1.4: Comparative Analysis (System Performance and Cost) of Different WHyPGen Systems in the World Market - From various sources of information, including direct contact with technology providers, information about price, specification and performance of various WHyPGen systems available in the world market will be gathered. The enabling environment for each of these systems will also be taken into account. The acquired information will be processed and categorized. The technical (design and system performance information) and cost (investment and operational costs), as well as the enabling conditions will be compared for various WHyPGen systems. The aim is to establish the reference unit cost and performance of WHyPGen systems. A report on the comparative analysis of the commercially available wind power generation systems and system equipment (considering system performance, and
Activity 1.2 is not for the feasibility study of the wind power generation demo units. It is for the feasibility analysis of the all potential wind energy power projects in areas that were identified in the wind resource assessments that have favorable wind regimes. The output of the feasibility analysis/study under this activity will be offered to the power project developers for them to consider investing in the identified potential wind power generation projects. 5 This will supplement the usual advocacy and lobbying efforts/techniques that are done in the country. With supplementary assistance from advocacy/lobby experts it is anticipated that the chances of getting the approval and follow-up plan will be enhanced. Note that the continuance/sustenance of enabling policies supportive of wind energy power generation (or for any initiative) is necessary and the approval and funding of the follow-up plan would help ensure this.
4

the various factors that played a role in the system operation) will be prepared, published and disseminated. Moreover, the comparative analysis will be updated towards the end of the project using new data/information that will generated from Activity 6.2 thereby bringing up to date the reference unit cost and performance of wind power generation systems/facilities. GEF support is required for the technical assistance in the conduct of the comparative analysis. 79. Activity 1.5: Evaluation of the Energy Utilization and Operating Performance of Existing Wind Power Generation Systems in Indonesia This activity entails the collection of pertinent data/information on the existing wind power generation facilities in Indonesia (on-grid and off-grid). The data/information to be gathered will include, among others, the energy input and consumption and other factors related to the operation and maintenance. The various operational parameters (e.g., capacity factor and efficiency of the wind turbine generators) as well as operational procedures and problems will be evaluated. Based on the evaluation results, recommendations for improved operational performance, improved system efficiency, retrofit options for enhanced generation capacity, retrofit options for improving generation cost and reliability, as well as maintenance and safety will be developed. Best practices will also be identified and documented, along with the recommendations for enhanced generation capacity, and improved operating performance. All of the information generated will be inputted in a database (See Activity 5.3) that will be developed for data banking and knowledge management purposes. GEF support is required for the technical assistance in the conduct of the wind energy power generation facility performance analysis. Component 2: WHyPGen Technology Demonstration 80. This component of the WHyPGen project will comprise mainly of the implementation of demonstrations for showcasing the business angle of wind power generation (including WHyPGen) technology applications. The project will work together with the private sector in the demonstration of the design, engineering, planning, financing, installation and operation of wind hybrid power generation projects. The identified demonstrations are expected to perform satisfactorily and to ensure that these will be good showcases of WHyPGen technology application benefits. The expected outcomes from the outputs that will be delivered under this component: (1) GHG emission reductions from WHyPGen demo projects; (2) Increased number of WHyPGen projects planned and implemented; and, (3) Increased share of wind energy in the national power generation mix. The expected outputs are: (1) Successfully implemented WHyPGen demonstrations; and, (2) WHyPGen project replications planned and implemented. The following are the activities that will be carried out to deliver the component outputs and realize the expected outcomes: 81. Activity 2.1: Detailed Feasibility Analysis and Establishment of Baseline Data and Performance Targets of Identified Potential WHyPGen Demonstrations Based on the wind energy project profiles that will be produced in Activity 1.2, more comprehensive technical and financial feasibility analyses will be carried out to come up with the final line up of demonstrations6. This is for the purpose of coming up with the final line up of demonstrations,
6 Activity 2.1 will involve more comprehensive assessments for the selected particularly on those aspects that will be required as part of the demonstration (e.g., changes in design from stand-alone wind power generation to hybrid operation, improved inter-connect and synchronization system that will be required by PLN, etc.). The additional assessments are mainly to incorporate aspects that need to be showcased for demonstration purposes. Moreover, not all the project developers that positively committed to develop wind power generation have even determined the location for the installation of their wind-hybrid system, which they have agreed to be among the demonstration units of this proposed

including the establishment of baseline data of using diesel power generation and performance target for each demonstration project. The selected projects, together with their respective proponents/owners (who will be the demonstration hosts) will be designed (e.g., basic engineering and process scheme, system and equipment sizing and specifications) to incorporate aspects that need to be showcased. Annex 4 summarizes the description of the demonstration projects. 82. By utilizing the outputs from Activity 1.5, the baseline data for each demo project will be set up7. Using a suitable techno-economic model or performance simulation tool (like the one used during the PPG exercise for this project), the realistic and achievable targets in terms of, among others, annual electricity generation; annual energy savings (as compared to not using wind energy) and annual CO2 emission reduction (due to displacement of fossil fuel-based power generation) will be established. The financial viability (e.g., in terms of IRR) will serve as the minimum economic performance target. GEF support is required for the technical assistance in the comprehensive technical & financial feasibility analyses, WHyPGen demo project design and in the establishment of the demo project energy performance baseline and targets. 83. Activity 2.2: Evaluation of Logistical, Safety, Administrative, and Legal Requirements for WHyPGen Projects This activity will involve the thorough evaluation of all the requirements for the construction of WHyPGen demonstration units, e.g., legal requirement, administration, safety, and all logistic needs, including the negotiation of power purchase agreements (PPA) with PLN8. Based on the evaluation, a guidebook on procedures for the design, planning and implementation of wind energy projects will be developed for dissemination to prospective wind energy project developers/investors in the future. Moreover, from the evaluation findings, policy recommendations will be developed in order to come up with support policies that would expedite or easily facilitate securing all the necessary safety, administrative and legal requirements for WHyPGen project implementations. GEF support is required for the technical assistance in the development of the guidebook on the facilitation of WHyPGen project implementation requirements. 84. Activity 2.3: Facilitation of the Successful Implementation of WHyPGen Technology Application Demonstrations This activity involves the provision of assistance to the demonstration hosts in the promotion of their WHyPGen demo unit to the public and to the relevant local government agencies at the demo project site. This will involve the identification and implementation of action courses for securing the various logistical, safety,
project. This refers to, in particular with the 5.4 MW wind-solar-diesel hybrid power generation project (4.9 MW wind-solar) of KPDT. Technical assistance in the comprehensive technical & financial feasibility analyses for this particular demo is required. 7 This activity focuses on determining the specific case/condition (i.e., optimal) that will be used as basis of the wind power generation demo design, while the feasibility analyses will involve various case analyses (for sensitivity and optimization purposes) and showing what would be the resulting feasibility for each case, focusing on an optimum case/condition that will be recommended from the former. The demo project design will be based on such optimum condition, and simulations will be carried out to establish the baseline data and target performance for specific power plant performance parameters under such condition. 8 Regulations for developing and building a power plant are issued by the local government (that has jurisdiction on the project site) and/or by the PLN operation district. Due to some specific additions (for the purpose of showcasing) that will be included in some of the demonstrations, it is anticipated that there can be requirements (i.e., additional to general requirements for power plant projects, particularly by PLN) that will have to be complied with. In the case of one of the demo projects (KPDT), the project site has not yet even been finalized and the system is not yet designed. In that case the logistical, safety, administrative, and legal requirements have yet to be evaluated and complied with. In Indonesia, permit issuance for RE demo plants development follows the same procedures as that for commercial power plants. This usually takes between 3-6 months to complete, and securing PPA takes more than a year.

administrative and legal requirements for, as well as for the removal of any barriers to, the successful implementation of WHyPGen application demonstration projects. This is for the socialization of the project to secure public acceptance and approval of the communities and relevant agencies. The demo hosts will be assisted in securing agreement and permission for the installation and operation of each WHyPGen demo project at the community, district, and provincial levels. Where necessary, the demo hosts will be assisted in facilitating the smooth planning, implementation (i.e., installation) and operation of their demo project. Although it is expected that the demo hosts will work out their respective PPA with PLN, if required, technical/advisory assistance will also be provided in the PPA negotiations. GEF support is required for the technical assistance in the facilitation of the socialization, regulatory, and business (e.g., PPA) aspects of the WHyPGen demo project implementation and operation. 85. Activity 2.4: Development of the Engineering Design and Implementation Plan (including financial plan) of the Demonstrations Three demonstration projects have been preliminarily identified during the project preparation stage. The combined installed capacity of the 3 demonstrations is 9.4 MW (9.0 MW wind + 0.4 MW PV). This activity will be carried out practically by the demonstration hosts, who agreed to subsume their respective projects to become part and parcel of this proposed UNDP-GEF project as demo projects. The allocated GEF funds for Component 2 will mainly be for investments on wind turbines and electricity transmission/distribution system for one of the Ministry of Disadvantage Regions (KPDT) rural electrification projects, which is in Alor Island in Nusa Tenggara Timur (NTT) province9. The rest is for technical assistance in the design, engineering, implementation and financial planning of demonstration projects. Technical assistance will be provided to all 3 demonstrations. GEF support is required for the technical and/or advisory assistance in the design, engineering, implementation and financial planning of demonstration projects, and for the incremenal costs required for the purchase of systems/components/instruments/hardware required for the KPDT demonstration in Alor Island, NTT. 86. Activity 2.5: Implementation and Commissioning of the WHyPGen Demonstration Projects This is also an activity that will be carried out by the demo host. If needed, the demo host will be provided assistance in specific aspects of the project equipment installation and commissioning. Assistance can be provided, for example in the provision of technical advice in the power plant performance tests during the commissioning of the WHyPGen demo unit.

Under its rural electrification program, the KPDT has allocated budget for the installation of a solar PV-diesel hybrid power plant in a village in the northern part of Alor Island, NTT in 2012. The power plant capacity is 120 kW and is comprised of 72 kW solar PV units (+ inverters) and a 48 kW diesel generator set. The installed capacity will be enough to serve the electricity requirements of the village for households and for some rural commerce and industry activities. The province of NTT is rich in wind energy resources and in the northern part of Alor Island where the power plant will be sited the wind regime is very favorable for wind power generation. For the demonstration, instead of going ahead with a solar PVdiesel hybrid power plant, a wind-solar PV-diesel hybrid power plant will be showcased. The baseline costs for the purchase and installation of the solar PV (+inverters) and diesel genset, including the necessary systems for the mini-grid serving the village will be borne by KPDT. Moreover, for this KPDT project, the commercialization of community-based WHyPGen systems will be demonstrated. This will involve the expansion of the capacity of the planned wind-solar PV-diesel power plant to 240 kW in order to supply electricity to another village, which also has almost the same electricity demand as the original village. In this case the power plant will comprise of 20 x 6 kW wind turbines operating in hybrid with the 72 kW solar PV (+ inverters) and 48 kW diesel engine. In summary, for this KPDT demonstration: Baseline: 120 kW (72 kW solar PV + 48 kW diesel engine) supplying 1 village mini-grid system. Alternative: 240 kW (20 X 6 kW = 120 kW wind turbines + 72 kW solar PV + 48 kW diesel engine) supplying 2 village minigrid systems Incremental: 20 X 6 kW = 120 kW wind turbines + transmission line to other village

GEF support is required for technical assistance (if needed) in the installation and/or commissioning of the WHyPGen demo units. 87. Activity 2.6: Operation and Performance Evaluation of each WHyPGen Demonstration Project This activity will involve the regular monitoring of the operational performance of each demo project, as well as the economic performance. A monitoring and evaluation plan will be developed for this purpose taking into account the baseline data and targets. Monitoring and evaluation reports will be prepared, and data obtained will be inputted in a central database that will be developed in Activity 5.3. GEF support is required for technical assistance in the monitoring of the power plant operations and in the evaluation of plant performance. 88. Activity 2.7: Demonstration Program Results Presentation and Follow-up Planning - Towards the end of the UNDP-GEF project, a consolidated report on the WHyPGen demonstration program results and impacts will be prepared10. The report will contain the operational and economic performance results, best practices, lessons learnt, as well as operational problems encountered and how these were addressed in each demo project. This demonstration program results will be presented in a seminar-workshop that will be organized and conducted to also get enough feedback and recommendations for monitoring and evaluation of the demo projects, as well as recommendations for improving power plant performance. Moreover, strategic planning will be carried out for the follow-up of the demonstration program, aiming for replication of the demos by interested power project developers and investors. Work will also be done on securing the approval and funding of a national sustainable follow-up plan for further promotion of the demo program and the development of new WHyPGen system projects. Such plan will also be included in the WHyPGen demonstration report, which will be published and disseminated to the public to enhance awareness about WHyPGen application benefits. The report will also be disseminated in other countries, hopefully to showcase WHyPGen technology applications success in Indonesia as well as enhance awareness of WHyPGen application benefits in Indonesia. GEF support is required for the technical assistance in demonstration program evaluation, presentation in seminar-workshop and documentation. Component 3: Financing WHyPGen Initiatives 89. This component of the project is intended to create awareness for banking and financial institutions, build trust in renewable energy based activities, and remove the financing barriers to spread renewable energy project development and implementation, especially wind energy. It addresses the need to provide technical and financial assistance packages to companies and project proponents interested in applying WHyPGen to meet entirely or partially industrial energy needs. It also includes technical assistance in facilitating the design, establishment and implementation of appropriate mechanisms for financing the projects. 90. Presently, the commercial lending/financing institutions have very limited support for technology development and application initiatives especially for what they perceive as unproven and new technologies such as those on wind energy. It is expected that the activities
10

The monitoring of the performance of the demo units will be conducted continuously (via data logging instruments, and power plant control system), while the technical and economical evaluation will be conducted periodically during 3 (three) years project implementation. That should provide at least preliminary results of the performance of the demo projects, including experiences and lessons learned in the installation and operation of the power generation facilities. The monitoring and performance evaluation will continue even after the project completion, and this will be facilitated through the sustainable follow-up plan that will be developed and is expected to be approved for implementation.

that will be carried out under this project component will facilitate immediate and future financing for wind energy installations as manifested by the following outcomes: (1) Increased investments on wind power generation (including) WHyPGen projects; and, (2) Local Banks/financing institutions providing loans for wind power generation (including WHyPGen) projects. 91. This is important in ensuring the replication and sustainability of WHyPGen technology applications in Indonesia, and ultimately leads to the reduction of the WHyPGen technology cost. The main deliverables from the activities that will be carried out are: (1) Completed training and promotions for banking/financing institutions in financing WHyPGen projects; and, (2) Design financing schemes for WHyPGen projects. The following are the activities that will be carried out to produce these outputs and realize the expected outcomes. 92. Activity 3.1: Capacity Building Program on WHyPGen Project Financial Feasibility Evaluation for the Banking/Financial Sector A survey will be conducted to determine and evaluate the current level of capacity of the local banking/ financing community to evaluate and finance wind power generation projects like WHyPGen. The results of the assessment will be used in designing a training program for improving the knowledge and skills of the local banks/financing institutions in the financing of Wind power generation projects, as well as in the provision of technical assistance. A training course for local banks/financing institutions will be designed, prepared, organized and implemented. It will be on the assessment and financing of wind power generation projects (including WHyPGen projects). The training materials will be prepared by experts that will be engaged, and will be based on the results of the earlier capacity assessment. After the training course, its effectiveness will be assessed to come up with relevant recommendations for future continuing training program on EE/RE project financing after this UNDP-GEF project. The trainees will evaluate the quality of the training provided. Also, the training experts will evaluate trainee preparation for the training, and knowledge/skills uptake. The evaluations are expected to provide useful feedback in the design of similar training programs in the future. As part of the impact analysis of this activity, post training surveys will be carried out to determine how the recipients of the training are utilizing the knowledge and skills that they learned in their respective work in the local banking/financing industry in Indonesia. GEF support is required for the necessary technical assistance in the design, implementation and evaluation of the training program. 93. Activity 3.2: Capacity Building Program on WHyPGen Projects for Power Project Developers and Local Technical Services Providers - As in other capacity development activities, a survey will be conducted to determine and evaluate the current level of capacity of the power project developers and local technical services providers in the development of business plans and utilization of financial models. The results of the assessment will be used in designing a training program for improving the knowledge and skills of these stakeholders on the financial modeling and planning of their planned power generation projects, as well as in the development of bankable wind power generation projects like WHyPGen projects. A training course for power project developers and local technical services providers on the development business plans and utilization of financial models to prepare bankable project proposals will be designed, prepared, organized and implemented. The training materials will be prepared by experts that will be engaged, and will be based on the results of the earlier capacity assessment. After the training course, its effectiveness will be assessed to come up with relevant recommendations for future continuing training program on energy/power project design and planning and in the preparation of bankable project proposals after this UNDP-GEF project. The trainees will evaluate the quality of the training provided. Also, the training

experts will evaluate trainee preparation for the training, and knowledge/skills uptake. The evaluations are expected to provide useful feedback in the design of similar training programs in the future. As part of the impact analysis of this activity, post training surveys will be carried out to determine how the recipients of the training are utilizing the knowledge and skills that they learned in their respective work in the power sector in Indonesia. GEF support is required for the necessary technical assistance in the design, implementation and evaluation of the training program. 94. Activity 3.3: Design and Implementation of Financing Schemes This major activity, which consists of several sub-activities is meant for assisting potential: (a) wind energy project developers; and (b) local equipment manufacturers, in securing financing for their wind energy projects. At the start, a working group comprising of local banks/financing institutions and local ESCOs to carry out the review of the performance of the existing credit schemes in Indonesia to determine the most appropriate scheme (or a combination of schemes) for the envisioned wind power generation project financing, as well as the latest international literature and experience on similar financial mechanisms for investments on wind power generation projects including WHyPGen technology applications. The group will also assess how much financing is currently being extended to wind power generation projects by local banks/financing institutions. An evaluation of the viability of financing wind power generation projects, as well as the assessment of potential financing schemes will be carried out. A report detailing the terms and conditions of each viable schemes will be prepared. Technical assistance will be provided in the design of appropriate financing schemes for such projects, based on whatever available government grants, and loans from financial intermediaries there are. The identification and assessment of sources of finance, tariff structures and fiscal aspects will also be covered11. The design of the financing schemes will also involve the development of selection criteria for the financing schemes and the selection of eligible borrowers 95. The agreed financing schemes with partner banks and financial intermediaries will be implemented. Socialization and promotion of the schemes will be carried in order to encourage the potential borrowers to avail of the financing. The funds that will be lent to eligible borrowers (e.g., power project developers, ESCOs and technical service providers) will be from the participating banks and financial institutions. Assistance will be provided to both lenders and borrowers in the preparation of mutually acceptable and bankable Wind power generation projects like WHyPGen projects. One such financial institution is PT. SMI12, which committed to support RE-based power generation projects in Indonesia. GEF support is required for the technical assistance in the assessment of financing schemes, in the design of the recommended financing scheme for wind power generation projects 96. Activity 3.4: Review of the Performance of Implemented Financing Schemes, and their Impacts on WHyPGen Market Development - This activity will involve the review and evaluation of the implementation of the implemented financing schemes. Favorable financing
11

The financing schemes that will be developed shall be based on the approved fiscal policies (that promote specific fiscal incentives) and regulatory frameworks in support of wind energy (including WHyPGen) technology applications and market development as developed in Activity 4.3 and officially established in Activity 4.4. 12 PT Sarana Multi Infrastruktur (PT. SMI) is a financing company in Indonesia established in February 2009 for accelerating infrastructure development in the country. It was formed based on Government Regulation No. 66/2007 and Government Regulation No. 75/2008 on State Equity Participation in the Establishment of Perusahaan Perseroan (Persero) in the Sector of Infrastructure Financing. PT. SMI provides alternative source of fund to financing project by working with all stakeholders to obtain an appropriate financing solution. It is intended to promote Public Private Partnerships in financing various infrastructure projects in Indonesia. The company provides financing to infrastructure projects through various financing schemes including loan, mezzanine and equity.

schemes will be manifested mainly by the number of applicants and approved project financing applications. Based on the finding and recommendations from the performance evaluation, the financing scheme(s) will be revised. GEF support is required for the technical assistance in the review of the performance of the implemented financing schemes. 97. Activity 3.5: Promoting Public Private Partnership for the Commercialization of Wind Power Generation Projects - This activity specifically promote private investments on the installation and commercial operation of small scale (< 1 MW) wind power generation facilities in provinces in Indonesia where there are favorable wind regimes. This will also facilitate public private partnerships in the delivery of government services, particularly energy supply and energy access to communities. Based on stakeholder consultantions that were carried out during the PPG exercise, provincial banks, especially those that have current or planned lending programs for rural development initiatives, will be willing to provide loans to RE-based power generation projects if the risks to them are minimized, if not eliminated. In particular, they require guarantees for any loan that they will provide to proponents/developers of such kind of projects. This activity will involve the setting-up of a loan guarantee scheme (LGS) with a provincial bank for facilitating the financing of small scale commercial wind power project development, implementation and operation. Strategic discussions with potential partner provincial banks (i.e., local government-owned banks), will be carried out and a suitable partner bank will be selected. The LGS with the partner bank will be designed including the mechanics (e.g., eligibility criteria) and procedures of the scheme and the implementing rules that will be applied, based on the recommendations for loan guarantee schemes in Activity 3.3. The relevant government policies including those that will be formulated under this project (See Activity 4.3) will be taken into account in the design of the LGS. The escrow agreement on the LGS will be signed between government institutins and the selected partner bank. The seed fund allocation for the scheme that will come from the WHyPGen project (GEF contribution) is estimated at US$ 200,000. 98. The LGS scheme will assist a wind energy project developer to get loan from a commercial bank up to 70-80% of the expected total investment required. Under this scheme, the project developer (i.e. borrower) will agree to pay back the LGS amount during the first year of the repayment period to the lending bank. This makes possible the reuse of the LGS fund to support another project developer. Under this scheme, it is expected that the initial US$ 200,000 can be leveraged to up to US$ 3,200,000 during the 3 years project cycle and could finance in total of 3.3MW wind hybrid projects. Based on the current development plan of PLN (the national power utility), Ministry of Energy & Mineral Resources, and available information from private power developers it is estimated that wind energy projects totaling about 33 MW can perhaps be assisted by the LGS three (3) years after the completion of the WHyPGen Project. This translates to about 56,350 tons of CO2 emission reductions per year (direct post-project) that can be attributable to the WHyPGen Project. The operation of the LGS will be adopted from the existing rules and regulations in the country governing LGSs, and the terms and conditions required by the potential partner banks and the requirements of the prospective beneficiaries of the scheme. In case of no defaults on the loans, the project will continue the scheme and conduct study on how to make use of the unused funds to further support wind energy development in the wind resources-rich areas of the country. The actual exit strategy will be determined after 1 (one) year of the established LGS operation.

GEF support is required for the seed capital for the loan guarantee scheme, and for the technical assistance in the design and setting up of the scheme.

Component 4: Policy Institutional Support for WHyPGen Initiatives 99. This component will involve activities that will facilitate the promulgation of and compliance to policies and regulations that encourage adoption of WHyPGen technology in Indonesia. The main expected outcome from this project component is the approved and enforced policies supportive of wind power generation (including WHyPGen) projects. The expected outputs are: (1) completed policy study on wind hybrid energy system; (2) proposed policy frameworks supportive of WHyPGen projects. To realize these outputs, the following proposed activities will be carried out under this component: 100. Activity 4.1: Conduct of Promotional Workshops for WHyPGen - This activity involves the conduct of a series of forum discussions among the relevant stakeholders, reviewing existing RE policies in the country with the objective of determining possible improvements that can be applied to the existing policies and regulations, and awareness campaign and capacity building to the relevant GOI agency in developing a sustainable follow up program for ensuring the enforcement of approved policy. This is for the facilitation of inter-agency discussion on policies supportive of the market development and application of RE technologies like WHyPGen, including capacity building to enforce the approved policy. The relevant stakeholders include the power project developers/investors, financial institutions, national and local government agencies involved in energy development and sustainable rural development (MEMR, PLN, Ministry of Research and Technology, State Secretariat, the Energy Commission in the Indonesian Parliament), etc. The first forum that will mainly promote the WHyPGen technology (i.e., feasible applications and benefits), the succeeding for a will mainly to discuss results and findings of policy studies that will be carried out under this project component, and to discuss recommended supportive policies and regulations for WHyPGen technology applications in Indonesia. 101. Towards the end of the project, planning and strategizing for a follow-up program for continuous monitoring and evaluation of the policy implementation will be carried out. This is for the purpose of ensuring continuous support for subsequent wind power generation projects (including WHyPGen) that will be replicated by interested power project developers and investors. GEF support is required for the technical assistance in conduct and analyses of the results and findings in the discussions during the fora. 102. Activity 4.2: Policy Studies on WHyPGen Application and Market Development - This activity involves the conduct of policy studies and RE electricity pricing as primary inputs for the development of supportive policies and regulations supportive of WHyPGen applications and market development. A special study will be carried out to determine appropriate fiscal/financial incentives that can be provided to WHyPGen project developers/investors13. Such study shall recommend a suitable incentive program for WHyPGen projects. It will determine the set of time-bound incentives that will bring about the combined advantage to allow WHyPGen technology to be competitive, thereby ensuring its market development in Indonesia, and for the country to benefit from the long term economic and environmental
The fiscal policy study that is planned by the MEMR in cooperation with the Ministry of Finance (MoF) is, among others, meant for RE sources such as solar, biomass, geothermal and micro-hydro. Wind energy is not included, most likely because the wind energy potentials are not very clear to the MoF. This activity will cover wind energy i.e., applicable incentives covering the various aspects of the technology, i.e. project development, capital equipment, pricing for wind-based electricity, and grid interconnection. Potential incentives for the local manufacturing and use of locally produced wind energy-based power generation equipment and components will also be included in the proposed fiscal policy study. Hence, the value-added is in regards to the fiscal incentives that would encourage and promote the widespread application of wind energy-based power generation systems in the country.
13

benefits of the technology applications. This can be jointly done with the fiscal policy study and recommendations for the incentive program (energy efficiency and renewable energy) that is being planned by the Ministry of Energy and Mineral Resources in cooperation with the Ministry of Finance. These incentives14 should cover the various aspects of the technology, i.e. project development, capital equipment, fuel supply, pricing for power produced (e.g., feed-in tariffs), grid interconnection, etc. 103. Such incentives could also be for encouraging the local manufacturing of components of WHyPGen systems. Incentives to bring about cost reduction by increasing the local content on the WHyPGen demonstration and replication projects should be determined and adopted so that the up-front cost of wind power generation could be lessened and more favorable to the local industries. For incentives to both wind power generation project developers and wind power generation equipment manufacturers, specific policy studies will be carried out based on the suggestions of the relevant stakeholders as well as the recommendations from the policy reviews and discussions in Activity 4.1. The results of the policy studies and the recommendations from the discussions will be documented and published for public dissemination. GEF support is required for the technical assistance in the policy and incentives studies. 104. Activity 4.3: Formulation of Supportive Policies and Implementing Rules and Regulations on WHyPGen Technology Applications and Market Development Based on the results of the policy studies and recommendations from the discussion for a, proposed policies and regulatory frameworks in support of wind energy (including WHyPGen) technology applications and market development will be drafted15. The formulated policies including the implementing rules and regulations (IRRs) will be presented to the stakeholders and the Project Advisory Board of this UNDP-GEF project16. This activity also involves the formulation of possible policy support activities and strategies that can be considered for
14 Several potential incentives will be evaluated. However, the initial economic feasibility analyses that were done for the potential wind energy projects and for the demo projects were based on specific financial/economic assumptions, and a number of fiscal/financial incentives that have either been already considered or still up for consideration (but most likely will be considered) by the GOI. These include: (a) Duty-free importation of RE equipment and accessories (3% if no incentive); (b) VAT-free importation of RE equipment (12% if no incentive); (c) 20 km allowance for transmission line that could be recovered in the FiT (incentive); (d) Documentary stamps for RE contracts (1% of EPC contract cost if no incentive); (e) Economic life for FiT recovery of investments (15 years depreciation incentive vs. usual 20-30 years economic life of power plants); (f) Salvage value of 10% at the end of 15 years - accelerated depreciation incentive; (g) 30% minimum equity requirement, 70% maximum debt ceiling (incentive to borrow at 10% p.a. or lower from financial institutions offering lower debt interest); (h) Allowance of 3.0% plant own use and 0.74% transmission line losses to raise FiT to the advantage of RE investor - incentive for higher FiT; (i) Lower rates of special privilege tax (1%) and special realty tax (1.5%); (j) Impost tax for purposes of assistance to host rural communities for compensating local residents for the disturbance caused by wind turbines or any other power generation facility; and, (k) Lower income tax rate of 10% (versus 30% maximum) on taxable income after 7 years of income tax holiday incentive. 15 The project team will be working in close coordination with the BPPT (which is expected to provide guidance regarding government activities and plans in the area of technology development and applications); BAPPENAS (which is expected to provide guidance regarding development planning and implementation issues at the national level); the Ministry of Finance (which is expected to provide guidance regarding the government-financed development projects, and fiscal incentives); and MEMR (which is expected to provide advice on the energy policy formulation). These 4 GOI entities have strong influence in the approval and implementation of energy-related policies. Where necessary, other GOI agencies/institutions as well as private sector entities (e.g., IPP Association) will be invited to participate in the policy development work and solicit their full support. All of these GOI and private sector entities are expected to play advocacy support roles in the implementation of Activity 4.4. 16 The formulated policies and their associated implementing rules and regulations (IRRs) will be presented to the PAB and project stakeholders for purposes of soliciting comments, recommendations and advice. Such participatory approach is necessary to ensure adequate coverage of all issues in the policy formulation and evaluation, as well concurrence by the key players and beneficiaries of proposed policies and how the policies will be implemented (i.e., implementation arrangements) and enforced. In Activity 4.4, the proper coordination of the advocacy support roles of all of these key players and beneficiaries (from the GOI, private sector, NGOs, etc.) will be carried out in order to ensure the approval of the proposed policies.

prospective power project developers/investors who would like to venture in wind energy (including WHyPGen) projects. The formulated policies will be useful inputs to the design of financing schemes for assisting potential wind power (including WHyPGen) project developers and local manufacturers in locally producing wind power system equipment and components (Refer to Activities 3.3 & 3.5). GEF support is required for the technical assistance in preparing the policy and implementing rules and regulations and for taking them through the decision making structures of the GOI. 105. Activity 4.4: Approval and Enforcement of the Proposed Policies and Implementing Rules and Regulations for Wind Energy (including WHyPGen) Applications - Once favorably endorsed, the document will be submitted to the relevant GOI agency for approval. Advocacy and lobbying work will be carried out (if necessary) in order to secure the approval of the proposed policies and IRRs. Assistance will be provided to the MEMR in facilitating the enforcement of the approved policies and IRRs17. A training program for the MEMR personnel who are responsible for the enforcement of the policies and IRRs will be designed and implemented. This will include training on the evaluation of proposed WHyPgen projects that are applied for building permits and approvals. An evaluation will be carried out to ascertain the level of technical and institutional capacity built within the MEMR a year after the training program completion. GEF support is required for the technical assistance in taking the policy recommendations and IRRs through the decision making structures of the GOI. 106. Activity 4.5: Review of Implemented Policies and Regulatory Frameworks for Wind Technology Applications - This activity will involve the gathering of all relevant information regarding stakeholder views/impressions and recommendations on the implementation of the policies and regulations governing wind energy (including WHyPGen) projects in Indonesia. A survey will be conducted among the WHyPGen project developers and investors for this purpose. Using the information gathered, a policy impact study will be carried out. GEF support is required for the technical assistance in the survey and evaluation. 107. Activity 4.6: Revision of Policies Based on the Findings and Recommendations of the Policy Impact Analyses and Work on the Securing of their Approval18 Based on the outcomes of the policy impact analysis, and policy implementation, the necessary adjustments in the policies will be made, which will ensure full support for wind energy projects. GEF support is required for the technical assistance in any necessary policy revision. Component 5: WHyPGen Promotion

The MEMR will be consulted in the wind energy policy development work since it is the main GOI body that is responsible for the formulation and implementation of energy-related policies. It will play significant advisory and advocacy roles in Activities 4.3 and 4.4. Specifically, the MEMR will be providing guidance regarding relevant existing policies and regulations that need to be considered in the policy formulation work. It will also provide advice and comments in the analysis (feasibility and impacts) of the proposed policy recommendations, and is expected to endorse whatever suitable and feasible policies that will be developed. It will also provide guidance and contribute in the development of the IRRs for the endorsed policies. More importantly, the MEMR is expected to provide advocacy support to the project team in the lobbying for the approval of their endorsed policies and associated IRRs. 18 Any of the recommended policies that will be enforced during the WHyPGen project implementation period will be evaluated continuously. Revisions (if needed) may be done during the 3-year project implementation, and this exercise will be conducted even after the end of the project

17

108. This component is intended to support the creation of the local WHyPGen market in Indonesia. It will involve the design and implementation of an active promotional program for WHyPGen that will bring about enhanced awareness of the public and other stakeholders on the benefit of WHyPGen applications. This will also address the barrier of insufficient information and actual dissemination of policies, regulations and guidelines in the implementation of the nationwide WHyPGen program. The following outcomes are expected from this project component: (1) Enhance awareness of the benefits of WHyPGen; and, (2) Planned and implemented WHyPGen projects. To realize these outcomes, the following proposed activities will be carried out: 109. Activity 5.1: Participation in Exhibitions to Showcase WHyPGen Technology and Applications - This activity will involve the promotion of the WHyPGen technology through participations in various technology exhibitions in the country19. For more synergy, this activity will, as much as possible, be carried out as joint effort of the relevant stakeholder agencies (i.e., BPPT, MEMR, etc). The output of this activity is expected to enhance the acceptance of the WHyPGen technology by prospective power project developers/investors, thereby facilitating the WHyPGen market development. GEF support is required for technical assistance in the design of exhibition materials and format. 110. Activity 5.2: Design, Production and Dissemination of WHyPGen Technology Promotion Materials This activity entails the production of promotional materials and implementation of promotional activities targeted to PLN, independent power producers, and prospective power project developers/investors. These promotion materials will be disseminated to these target stakeholders. The promotional materials that will be developed and produced will also be disseminated through the project website (See Activity 5.4). Key government agency project sponsorship and inclusion in the Project Advisory Board will further enhance media placement ability. This will ensure longer term and higher level impact on consumers. Articles on WHyPGen (design, system component manufacturing, installation, operation and maintenance, etc.) will be prepared and published for dissemination. These articles will be produced through various means, whichever are deemed most practical and cost-effective. It could be through: (a) Call for technical papers for a conference on Wind Energy Technology; (b) School writing contest to come up with human interest aspects of wind energy applications; (c) Commissioning wind energy experts (foreign and local) to write technical papers for example on the climate change impacts of wind power generation systems; or, (d) Solicitation of prepared and unpublished articles related to the wind energy industry or WHyPGen technology applications. 111. As part of the production of the WHyPGen technology promotion materials, a forwardlooking planning dialogue between all stakeholders involve the development of the wind energy (including WHyPGen) market in Indonesia will be organized and conducted. The stakeholders include technology providers/suppliers, equipment manufacturers, power project
Technology exhibitions are periodically conducted by GoI agencies, for example during the National Technology Day which is held annually on the 10th of August. There are also various exhibitions scheduled periodically in Jakarta, such as the Electrical Exhibition which is held alternatively with the Manufacturer Exhibition every 2 years. There is also a scheduled technology exhibition in Surabaya this year. The WHyPGen project can participate in these scheduled exhibitions inasmuch as these exhibitions cater to both proven and developing technologies. Throughout the project lifetime, different technological solutions that would be achieved in the country (especially those facilitated through the project) on wind power generation can be exhibited. Through partnerships with foreign wind energy technology developers and/or suppliers, joint participation in such exhibitions can be done. Since all of these exhibitions are open to the public and extensively covered by various mass media, participation of the WHyPGen project in these events will definitely contribute significantly in the promotion and market development of wind-based power generation systems in the country.
19

developers/investors, and engineering service providers, including MEMR, BPPT, etc. The dialogue will ensure that the essential enabling conditions that will support the market are taken into account and adequately addressed. This is in line with the intention to develop a sustainable follow-up program for wind energy technology and market development through public private partnerships. This is required to ensure that the essential enabling conditions that will support the market are taken into account and adequately addressed. The success of this sub-activity will be indicated by the number of coordination activities that will take place; the number and share of manufacturers participating in coordination activities; and the number of wind energy (including WHyPGen) projects that are lined up for implementation in Indonesia. This sub-activity is intended to track the progress in the partnership/cooperation between the wind energy market players in the country. The WHyPGen Project Team will coordinate the holding of, and participate in, the planning meeting. GEF support is required for the preparation of promotional articles on WHyPgen technology, and for the technical assistance in the design and implementation of public relations activities promoting WHyPGen, as well as funds for holding the sustainable follow-up plan dialogue 112. Activity 5.3: Development, Operation and Maintenance of a Central Database on Wind Energy - With the information that were gathered regarding wind energy project assessments during the PPG exercise; and the wind energy project profiles that will be developed in Activity 1.5, and the monitoring & evaluation results for the demonstrations, a central database will be designed, developed, put in operation and maintained. This activity will involve the design of the central database system, which will be for facilitating the data gathering, data processing, data banking and dissemination. The central database will be operated and maintained by an appropriate entity that will be identified during the project implementation. Part of the database development is the selection of the suitable entity that will operate and maintain the database after the UNDP-GEF assistance is completed; and training of the personnel of the selected entity in the operation and maintenance of the database. GEF support is required for the technical assistance in the design of the central database. 113. Activity 5.4: Development and Establishment of a Project Website and an Information Exchange Network on Wind Energy Technologies Development and Applications - This activity will involve the design and development of a dedicated and user-friendly website for keeping up to date the progress of the WHyPGen project activities. The website content will be prepared and maintained by the project management office. The content will comprise of technological information, WHyPGen project structure and system, profile of WHyPGen projects all over the world, as well as interactive discussion forum (FGD) via internet. Access to the central database that will be developed in Activity 5.2 will also be through this website. The output of this activity is expected to spread out widely pertinent information about WHyPGen technology and application projects in Indonesia as well as to host the virtual discussion among WHyPGen stakeholders. GEF support is required for the technical assistance in the design of the website. 114. Activity 5.5: Development and Implementation of Specialized Wind Energy Technology Design and Application Courses in Engineering Schools - This activity will entail the design and development of a special engineering education course on wind energy technology (including WHyPGen). Discussions with engineering schools will be carried out in order to mutually agree on thecourse content. The course materials will be designed and developed, and the course will be integrated with the engineering curricula of selected engineering schools, where the course will be implemented on a trial and demonstration basis. The course

implementation will be carried out as per the agreed implementation arrangements in cooperation with the partner GOI agencies. The actual training event will be conducted as planned. Any uncontrolled deviation in the plan must not greatly affect the prescribed objectives and schedule of the trainings. A monitoring and evaluation plan will be developed and used for assessing from both perspectives of the engineering students and the teachers. A report incorporating the results of the evaluation for each activity shall be prepared. Moreover, a national sustainable follow-up plan for the continuing education in the wind power generation industry in Indonesia will be developed. The plan shall also involve the continuation of the engineering program. This sub-activity will involve planning and strategizing for a follow-up program for the continuing program for training and skills upgrading in the design, engineering, installation, operations and maintenance of wind power generation systems (including WHyPGen). GEF support is required for the technical assistance in the design and development course materials, as well as in the course evaluation. Component 6: WHyPGen Market Development and Industry Support 115. For achieving widespread application of Wind Energy Power Generation (including WHyPGen), this technology has to be supported by local resources and local industries. In that regard, necessary activities that will enhance local capacity for wind energy system design, engineering, installation, operation and maintenance, as well as system component manufacturing shall be carried out under this UNDP-GEF project. Improvement of human and technical capacity to manufacture wind energy system components can guarantee the availability of locally made high quality components. 116. This component of the project will address the barriers that hinder the development of the wind energy market in Indonesia, as well as the need to improve the quality of services and products that are required to support not only such market but the operation and maintenance of installed wind-based power generation (including WHyPGen) facilities. The expected outcomes from the outputs that will be delivered under this component are: (1) Improved local wind energy system (including WHyPGen) design & engineering capacity; (2) Ensured availability of local service providers for wind power generation facilities; (3) Availability of quality components of wind energy systems that are locally made; and, (4) Better understanding of the availability and potentials for wind energy for ensuring environmentally sustainable power supply in Indonesia. 117. The expected outputs of the activities that will be conducted are: (1) Completed capacity building and technical support program for the local manufacturing of wind energy (including WHyPGen) system components; design and engineering of wind energy projects; installation, operation and maintenance of wind power generation (including WHyPGen) facilities; and, (2) Completed survey and evaluation of electricity demand areas served by wind power generation (including WHyPGen) facilities. The following are the activities that will be carried out to produce the component output and realize the expected outcomes: 118. Activity 6.1: Development and Establishment of a Wind Energy Market Service Center or Clearing House - This activity will involve mobilizing local and international financial institutions and power industry resources to promote the commercialization of wind power generation (including WHyPGen) technology application. A clearinghouse unit or a wind energy market services unit shall be organized with the main function of identifying business opportunities for wind power generation through the provision of technical support to wind

power project design, engineering and financing20. This will be for the provision of assistance on wind power generation (including WHyPGen) project development and application. Depending on the agreed implementation arrangements, this unit can be set up in the MEMR21. As a means of capacity building in this respect, such clearinghouse of market services unit will advise on the business and financial planning of the WHyPGen demonstrations under the project in order to ensure that these demonstrations will be implemented as planned according to the purposes of the demonstration activity. Working through the pertinent stakeholders/actors in the public and private sectors, the clearinghouse or market service unit will work directly with power project developers, IPPs and financial institutions, responding to their individual needs to structure investments, develop products, build their capacity to deliver wind energy projects and wind power generation technology (including WHyPGen) application project financing, and market their projects and financing products. The performance of the clearinghouse or market service unit will be evaluated for its capacity to engage key actors (e.g., wind energy system suppliers), businesses and local governments to implement wind-based power generation (e.g., WHyPGen) technology application projects. GEF support is needed for the technical assistance in setting-up and capacitating the clearinghouse unit or market service unit, and to cover its initial operational costs22. 119. Activity 6.2: Gathering, Processing, Analysis and Data Banking of Information on Ongoing and Planned Wind Power Generation (including WHyPGen) Projects in other Countries This will involve desk research and possibly direct enquiries to wind energy system equipment suppliers, wind energy technology developers/suppliers, and owners/operators of wind power generation (including WHyPGen) facilities in other countries. The data/information to be gathered will include, among others, the energy input and consumption and other factors related to the operation and maintenance of the power generation facilities, the various operational parameters (e.g., capacity factor and efficiency of the wind turbine generators) as well as operational procedures and problems (and how these were addressed). Information about the commercially available wind power generation equipment (e.g., wind turbines) will also be gathered (e.g., capacity, efficiency, unit price, installed price), as well as contact details of wind energy technology developers/suppliers, as well as that of the wind energy system equipment suppliers/distributors. The processed data will be encoded into a special module of the central database (See Activity 5.3) and will be regularly maintained and updated, and will also be used in updating the established reference unit cost and performance of wind power generation systems/facilities (including WHyPGen). The results of the comparative analysis of the commercially available wind power generation systems and system equipment (considering system performance, and the various factors that played a role in the system operation) will be published and disseminated.

The major functions of the clearing house are: (1) Provision of assistance to prospective power project developers/proponents on the coordination and facilitation of permitting process for the approval of wind energy-based power generation projects; (2) Provision of wind energy technology advisory and information services and the promotion of the financing schemes that will be developed and supported by the WHyPGen project; and, (3) Provision of assistance to the wind power project developers/proponents in coordinating the compliance of necessary documentary and permitting requirements related to the processing and approval of wind power project applications. 21 The clearing house or market service unit is envisioned to be the focal point in the country for wind power market development and will serve to link private sector players to the government institutions particularly the BPPT and MEMR for the purpose of harmonizing expectations and mutual support. It will not be a government agency fully dependent on public funds. The clearing house will be established as a quasi-private organization representing private sector and GoI interests. It will be made an integral component of the Directorate General for Energy Utilization of the MEMR. This set-up will enable the clearing house access to logistical and administrative support from the BPPT. 22 To start up the establishment and operation of this market service unit, GEF support will be used to supplement the funds from the MEMR that will be used in setting-up the unit, providing capacity development to the units personnel, and to cover the units initial operational costs. The co-financing is mainly for the contribution of the MEMR towards office space, equipment and local staff personnel.

20

GEF support is required for as the technical assistance in the data gathering and in the conduct of the comparative analysis. 120. Activity 6.3: Survey and Evaluation of Electricity Demand Areas Served by Wind Power Generation Facilities This activity will involve the conduct of a survey of the electricity demand in the areas where potential wind power generation facilities will be installed23. The survey results will be evaluated and forecasts of electricity demand will be done. The information from the surveys and evaluation results will provide the necessary information that can assist prospective wind power generation (including WHyPGen) project developers the feasibility analyses, planning and engineering of their prospective projects. The information from the survey and evaluation results will be inputted in the central database. GEF support is required for the technical assistance in the conduct of the survey and evaluation of the survey results. 121. Activity 6.4: Assessment of the Capacity of Local Equipment Manufacturers to Produce Wind Energy System (including WHyPGen) Equipment/Components This activity involves the conduct of a survey of local equipment manufacturers that can potentially venture into the wind power generation business and market. These manufacturers will be individually assessed in terms of the quality and capacity of their production facilities, technical and production staff complement, technical capacities of both engineering and production personnel; financial capacity; equipment manufacturing market performance; technical knowledge of engineering staff; power generation equipment manufactured; partnership with internationally known power generation equipment manufacturing firms, etc. Moreover, the survey will also to determine and evaluate the current level of capacity of the local equipment manufacturers in the design and manufacture of wind power generation system equipment/components. Based on the evaluation of the survey responses, a shortlist of prospective local equipment manufacturers will be prepared, including the system equipment/components that can be feasibly manufactured by each manufacturer. The survey report (including the shortlist of manufacturers) will be prepared and submitted to the relevant GOI agency. GEF support is required for the technical assistance in the conduct and evaluation of the survey. 122. Activity 6.5: Evaluation of Financial, Technical, Logistical, Legal Requirements for the Local Manufacturing of Wind Energy System (including WHyPGen) Equipment/Components - This activity will involve the evaluation of the feasibility of, and requirements for developing an industry/business for the local manufacture of wind energy power generation system equipment and components. The evaluation will make use of the assessment of the current capabilities of the local equipment manufacturers that is done in Activity 6.3. An assessment report highlighting findings and recommendations for the local equipment manufacturing industry for the production of specific equipment/components for wind energy systems for domestic use (and possibly for the export market) will be prepared and submitted to the relevant GOI agency.

PLN does not cover all areas in Indonesia. Some of the areas where the favorable wind resources can be found are not covered by PLN. Hence, the proposed surveys and evaluations proposed under this activity are still needed. The project proponents agree that the surveys and evaluations should be part of the feasibility studies of actual wind power projects. The planned surveys & evaluations are meant to show to prospective wind power project developers that there are indeed demands for the electricity that can be generated from such power plants. The results of the surveys & evaluations are among the critical information that the private sector (particularly the power project developers) in Indonesia need to encourage them and make them interested in investing and venturing into wind power generation.

23

GEF support is required for the technical assistance in the evaluation. 123. Activity 6.6: Evaluation of the Potential Improvements/Modifications of Existing Manufacturing Processes, Practices & Facilities for WHyPGen Component Production This activity entails the conduct of visits to selected (based on a set of selection criteria) equipment manufacturers (based on the shortlist prepared in Activity 6.3) to evaluate in detail the condition and performance of the existing manufacturing facilities (e.g., equipment, process controls, safety systems, quality control systems, etc.) and to carry out an energy audit of the manufacturing process. The site inspections and energy audits will be scheduled and coordinated with each manufacturing facility. The site inspections and energy audits will come up with the findings and recommendations on how the production facilities can be improved or retrofitted to allow a cost-effective and energy efficient manufacturing of the system equipment/components that they can feasibly produce. GEF support is required for the technical assistance in the site inspections and energy audits. 124. Activity 6.7: Development of Capacity & Capability of Local Manufacturers for Wind Power Generation (including WHyPGen) System Equipment/Components Production - The results of the assessment done in Activity 6.4 will be used in designing a training program for improving the knowledge and skills of the equipment manufacturers in the wind energy system business. A wind energy system equipment manufacturing training course will be designed, prepared, organized, and implemented. The training materials will be prepared by experts that will be engaged, and will be based on the results of the capacity needs assessment that will be carried out. After the training course, an assessment of its effectiveness will be conducted to come up with relevant recommendations for future continuing training program on wind energy system equipment/component design and manufacturing after this UNDP-GEF project. The trainees will evaluate the quality of the training provided. Also, the training experts will evaluate trainee preparation for the training, and knowledge/skills uptake. The evaluations are expected to provide useful feedback in the design of similar training programs in the future. As part of the impact analysis of this activity, post training surveys will be carried out to determine how the recipients of the training are utilizing the knowledge and skills that they learned in their respective work in the wind power generation industry or wind energy service market. GEF support is required for the necessary technical assistance in the design, implementation and evaluation of the training program. 125. Activity 6.8: Establishment of an Independent Association of Wind Power Generation (including WHyPGen) System Component Manufacturers This activity will involve the formation of an association of equipment manufacturers that are, or are interested in doing business in, locally producing wind power generation system components/equipment. The core members will be those that were shortlisted in Activity 6.3. However, other prospective manufacturers will also be contacted. Assistance will be provided to in the required organizational work on formation (including formulation of mandates, by-laws, election of officers, etc.) and incorporation of the association. In general, there is concurrence in the manufacturing industry that such an association (e.g., wind energy system manufacturers association - WESMA) would help develop the wind energy market in Indonesia24.
24 There is already an existing and very active power producer association in Indonesia. The proposed activity is in line with the interest expressed by local power system equipment manufacturers and suppliers/distributors to organize and cooperate and collaborate (also with IPPs and power project developers) in power projects in Indonesia and potentially in the ASEAN region. The promotion of setting up an equipment and manufacture association is considered very important in the early stage of the project. This is based on experience from the organization and operationalization of similar industry associations in the country. Through the planned association, the local equipment manufacturers expect a standardization of equipment

GEF support is required for the technical assistance in the formation of the association. 126. Activity 6.9: Conduct of Collaborative R&D on Wind Power Generation Equipment/Components Manufacturing This activity will be carried out as part of the initial major endeavor of the WESMA. It will focus on R&D of critical components of wind power generation (including WHyPGen) systems that can potentially be manufactured in Indonesia, and on the engineering of wind energy systems. Based on the findings and recommendations of the site inspections and energy audits in Activity 6.3, and the training received in Activity 6.7, joint research will be carried out in areas like: (1) Design of wind energy system components using locally made/available materials; (2) Application of cost-effective and energy efficient methods/techniques of manufacturing; (3) Design of mass produced wind energy system component production lines; (4) Conversion of existing production lines to allow cost-effective and energy efficient production of wind energy system components; and, (5) Operation and maintenance of wind energy system component production lines25. An Expert Team will be deployed to provide hands-on TA to manufacturer design and engineering staff, consisting of technical Q&A sessions, provision of suggested improvements on wind energy system design and production, and other hands-on support which manufacturers otherwise are unable to obtain, particularly from high-level international experts26. GEF support is required for the technical assistance in the R&D work and expert advice. 127. Activity 6.10: Design and Implementation of Technical Capacity Development Program on WHyPGen System Design, Engineering, Installation, Operation and Maintenance This activity will involve the conduct of a survey will be conducted to determine and evaluate the current level of capacity of the local technical service providers (e.g., engineering firms/consultants, power system repair & maintenance companies) to design, engineer, install, operate and maintain wind power generation systems. The results of the assessment will be used for classifying the existing service providers, and also for designing a training program for improving their knowledge and skills on wind energy/power generation systems, as well as in the provision of technical assistance. A wind energy technology training course will be designed, prepared, organized, and implemented. The training materials will be prepared by experts that will be engaged, and will be based on the results of the capacity needs assessment that will be carried out. After the training course, an assessment of its effectiveness will be conducted to come up with relevant recommendations for future continuing training program on wind energy system design, engineering and maintenance after this UNDP-GEF project. The trainees will evaluate the quality of the training provided. Also, the training experts will evaluate trainee preparation for the training, and knowledge/skills uptake. The evaluations are expected to provide useful feedback in the design of similar training programs in the future. As part of the impact analysis of this activity, post training surveys will be carried out to determine how the recipients of the training are utilizing the knowledge and skills that they
design, price and solutions for wind power technology in Indonesia. The project proponents expect the association will have more participation among the stakeholders of the project particularly those involved in power system equipment/component manufacturing. They would expect to receive benefits from the association in getting more information about wind power generation in the country. 25 The cited sample R&D works are possible offshoots of the capacity building that the local manufacturers received from the project (Activity 6.7). These R&D are for further improvement of their manufacturing capabilities and also improvement of the quality of products they produce. These will be carried out by like-minded local manufacturers facilitated through the proposed WESMA. Inasmuch as proper R&D is considered as contributing to the facilitation of effective wind power generation systems in the country, this activity will facilitate also providing capacity in the strategy to carry out R&D by individual manufacturers (as is the current practice) and joint R&D by a group of manufacturers. 26 The GEF is not expected to provide support to the actual specific R&D work. Technical assistance from the GEF is requested for the capacity development in the design and implementation of R&D activities (e.g., how to design joint R&D programs, how to evaluate the feasibility of R&D activities, etc.).

learned in their respective work in the wind power generation industry or wind energy service market. GEF support is required for the necessary technical assistance in the design, implementation and evaluation of the training program. 128. Activity 6.11: Conduct of Skills Upgrading Program for Power Generation Engineers and Operators This capacity development activity is targeted to engineers and operators currently working in power plants operated by PLN and IPPs, specifically in areas where potential wind power generation facilities will be installed. The training course will be designed to cater to the incremental knowledge that these personnel will need in order to manage, operate and maintain equipment and control systems associated with wind power generation (including WHyPGen) systems. As in the other skills upgrading activities under this component of the project, training materials will be prepared by experts that will be engaged. After the training course, an assessment of its effectiveness will be conducted to come up with relevant recommendations for future continuing training program for wind power generation systems after this UNDP-GEF project. The trainees will evaluate the quality of the training provided. Also, the training experts will evaluate trainee preparation for the training, and knowledge/skills uptake. The evaluations are expected to provide useful feedback in the design of similar training programs in the future. As part of the impact analysis of this activity, post training surveys will be carried out to determine how the recipients of the training are utilizing the knowledge and skills that they learned in their respective work in the wind power generation industry or wind energy service market. GEF support is required for the necessary technical assistance in the design, implementation and evaluation of the training program. Key Indicators, Risks and Assumptions 129. The project success indicators are shown in the Project Planning Matrix (PPM) in Section III of this document. These form part of the parameters that will be monitored during the course of the WHyPGen implementation. The target values for these indicators, based on the PPM, are summarized in Section III. The key indicators are the following: 130. At the end of the 3-year WHyPGen project, the following are the expected outcomes: Total installed capacity of WHyPGen units = 9,4 MW Reduction of GHG emissions due to operation of 9,4 MW WHyPGen facilities = about 17,071 tonnes CO2/year (based on fuel blend emission factor of 0.886 kg CO2/kWh) Total energy savings from the 9,4 MW WHyPGen operation = about 19.72 GWh/year equivalent to around 5,568 kL fuel blend/year (based on oil factor of 0.276 kg oil blend/kWh) valued at around $3,304,932/year (based on average fuel blend cost of 0.5936$/liter).

131. During the project development stage, all possible major risks in project implementation were identified and suitable mitigation measures were proposed. As to the possible risk of project complexity, inasmuch as this is a comprehensive barrier removal project, close coordination of many different activities is a must in order to effectively implement the agreed activities/interventions and maximize project impact. Experiences from the UNDP-GEF Integrated Microhydro Development and Application Project (IMIDAP) were made used of in the project design in order to minimize potential project implementation risks. The project management system and tools developed and adopted during implementation of that ongoing

project in Indonesia will be used in tracking and managing timely delivery of key milestones and outputs of project activities. 132. While all possible efforts have been made to ensure the effective design and implementation of the project activities in the project design phase, there are inevitably some unavoidable residual risks that will have to be carefully monitored and managed during the project to ensure its success. The different risks that were identified during the project formulation and the recommended mitigation measures and comments on the need for mitigation measures are provided in detail in Annex 1. These are mainly those with risk levels rated medium. 133. There were also risks that were earlier identified by BPPT, and presented in the GEFapproved PIF as low level risks. During the project design, these low level risks were assessed as negligible. Hence, are not included anymore in Annex 1. 134. There is also one potential risk to the proposed project, and in particular to subsequent wind power generation projects in Indonesia. This is the potential negative (and maybe positive too) impact of projected climate change in Indonesia, particularly in areas where there are wind energy resources, on wind energy generation given that it depends strongly on climatic and environmental conditions at a particular site27. 135. In order to ensure the sustainability of future wind energy projects, the identification of potential wind sites shall include an assessment of the possibility of large changes in global atmospheric circulation in the area. It is in such locations that radical changes in wind patterns can occur, leading to changes in wind space, time dynamics and scale that may have consequences with regard to wind energy potential at locations that may currently be under consideration as suitable sites. The capacity building activities on wind resource assessment (Component 1) shall include enhanced meteorological services in the current regions with wind resources in order to better assess the present and future potential of the wind resource. The project will work together with its partners in the power sector in the conduct of more detailed climate change projection modeling and economic assessment studies in order to understand to which extent climate change may affect a wind energy project and what its long term financial viability will be. The wind resource assessments will also look into changes in the solar intensity in the identified regions28. Financial Modality 136. Since bulk of the activities that will be carried out under the proposed project are for the removal of barriers to the widespread development and application of WHyPGen technology in the Indonesian power sector, the requested GEF funds will be used as grant. In that regard, the requested GEF funds will be used for: (a) fully funding some of the incremental activities; (b) augment the funds for implementing some of the baseline activities; and (c) supplement the co-financing for proposed alternative activities. Specifically, the GEF funds will be used to: (a) Mobilize stakeholders for activities where there have been no prior funding commitments; and, (b) Add to resources committed from project partners to strengthen baseline activities.

27

Wind is caused by the uneven heating of the earths surface by the sun. Since the earths surface is made of very different types of land cover and water, it absorbs the suns heat at different rates; this generates temperature gradients and is the reason for wind flow. If temperature gradients changes, it is possible that wind patterns may also change. 28 If solar incidence decreases, average wind speeds may suffer a significant decrease of 10%15% (which entails 30%40% decrease in potential wind power generation).

137. As shown in Table 11, the total estimated cost of the WHyPGen Project (excluding US$140,000 for PPG) is US$ 39,640,800. Out of this, costs for all incremental activities funded by GEF amount to US$ 2,156,200. The Government of Indonesia (KPDT & BPPT) and the private sectoe (Alpen Steel and Viron Energy) will provide a combined total amount of US$ 37,484,600 co-financing for implementing the projects baseline activities. TABLE 11: PROJECT COSTS (US$) Project Component Title
WHyPGen Technology Application Assessments WHyPGen Technology Demonstration Financing WHyPGen Initiatives Policy & Institutional Support for WHyPGen Initiatives WHyPGen Promotion WHyPGen Market Development and Industry Support

#
1 2 3 4 5 6

CoFinancing
746,200 34,068,600 302,500 517,200 436,900 733,700 679,500 37,484,600

GEF
282,830 576,570 301,600 108,850 336,775 379,575 170,000 2,156,200

Total
1,029,030 34,645,170 604,100 626,050 773,675 1,113,275 849,500 39,640,800

Project Management Total

Cost Effectiveness: Global Benefits 138. The successful implementation of the WHyPGen project activities is expected to result in improved market demand for wind power generation (including WHyPGen) applications. The demonstration wind power generation facilities with a combined total installed capacity of 9.4 MW will displace about 19.272 GWh of electricity from oil-based generation. The resulting GHG emissions reduction from this amount of wind-based power generation is about 17,071 tonnes CO2/year by end of project. 139. By projects end, when the wind energy technology application demonstrations are in operation, an additional 100 MW replication wind power generation projects from commercial investors will come on stream. Three years after end of project, the replications would already be generating a combined annual amount of 192.72 GWh of electricity. Considering an influence period of 10 years, this amount of power generation translates to an annual GHG emission reduction of about 170,715 tons CO2. 140. For a 10 year influence period (2013-2022), this amount of GHG emission reduction plus that of the 9.4 MW demonstration wind power generation projects translates to a conservatively estimated unit abatement cost (UAC) of about US$ 1.15/ton CO2 (i.e., GEF$ per ton CO2). If the overall CO2 emission reduction is reckoned throughout the life of the wind power generation facilities (20 25 years), the UAC would be significantly much lower. While this is based on the assumption that the WHyPGen project would have created the enabling conditions that will facilitate the widespread application of wind energy systems in the countrys power sector by 2013, this measure of the projects cost effectiveness (i.e., UAC) will be tracked using a monitoring and evaluation system that will be developed for the proposed project. The CO2 emission reduction estimations are presented in Annex 2. Cost Effectiveness: National Benefits

141. The successful implementation of this project will assist Indonesia in its efforts to address global environment issues by promoting an environmentally friendly solution to providing electricity supply to all consumer sectors. It is also enhances socio-economic infrastructure and stabilize the countrys economy through a secure supply of energy, especially electric energy. Securing national energy supply will strengthen country competitiveness to attract local and international investors who want to establish businesses in Indonesia leading to greater job opportunities. Moreover, the GHG emission reductions (in terms of tonnes CO2) that will be facilitated and influenced by the anticipated success of this project will definitely contribute to the achievement of the GOIs committed target of 26% reduction in GHG emissions by 2020. Sustainability 142. Sustainability is an integral element of the proposed WHyPGen project activities and is ensured through the outputs of most of the project components. The sustainability of the institutional elements of this project will be ensured through the adoption of collaborative approaches and strategies that seek to foster and reinforce the long-term sustainability of existing institutional and coordination structures that have been established and are operational at both the national and provincial levels of government in Indonesia with regards to projects dealing with rural electrification and socio-economic development. 143. Furthermore, sustainability of the project is ensured through the outputs of the different project components, e.g., endorsed policies on the application of wind energy technologies (including WHyPGen); the projects website and central database that will be regularly updated and maintained even after the UNDP-GEF assistance; and the sustainable follow-up plans that will be developed and approved (and funded) to ensure the continuity of the important activities. Moreover, by widening the scope of the technology (i.e., covering all forms of wind energy-based power generation systems) aside from WHyPGen, the potential wind power generation project developers and investors have wider options/choices as to the type and configuration their wind energy application will be designed and installed. Replicability 144. The WHyPGen project is designed to have a balanced mix of capacity building and enabling environment activities taking into consideration the Indonesian context (in terms of specific conditions in the power sector, energy markets and regulatory environment). Such balanced mix of activities is expected to promote the envisioned widespread commercial application of wind energy systems (including WHyPGen) in Indonesia that will make use of the countrys wind energy resources. Replication is an integral component of the project design as the expected GHG emission reductions are based and dependent on the subsequent wind power generation (including WHyPGen) in Indonesia. That is to say that the replication of the demonstrations that will showcase commercial wind power generation system applications in Indonesia (and the corresponding GHG emissions reduction from the displaced fossil-fuel electricity production) rely on the replication of the relevant WHyPGen project activities. 145. Replicability of the proposed project components will be ensured through the documentation of the package of activities/inputs that went into each wind power generation projects that are in one way or another, directly or indirectly influenced by this UNDP-GEF project.

3. PROJECT RESULTS FRAMEWORK:

This project will contribute to achieving the following Country Programme Outcome as defined in CPAP or CPD: CPD 2006-2010: By 2010 improved environmental living conditions and sustainable use of energy in Indonesia, and establishment of sustainable living conditions in the poorest provinces. Country Programme Outcome Indicators: % of renewable energy used in the Java, NTT, NTB and Papua provinces. Primary applicable Key Environment and Sustainable Development Key Result Area: Expanding access to environmental and energy services for the poor. Applicable GEF Strategic Objective and Program: Promoting market approaches for renewable energy Applicable GEF Expected Outcomes: Growth in markets for renewable power in participating program countries Applicable GEF Outcome Indicators: Outcome Indicator: ton CO2eq avoided Policy Outcome Indicator: adoption of policy frameworks, allowing renewable generators equitable access to the grid Outcome Indicator: kWh generated from renewable sources Objectively Verifiable Indicators Indicator Tons of CO2 emission/year reduced from substitution of fossil fuel-based power generation by WHyPGen29 by endof-project (EOP), MT CO2 % of reduction in CO2 emissions from the power sector by EOP Installed capacity of WHyPGen facilities by EOP, MW Total electricity generation from installed WHyPGen facilities by EOP, GWh/year Total WHyPGen capacity planned for installation, MW

Strategy Project Goal: Rate of growth of GHG emission in the power sector is reduced Project Objective: Facilitation of commercial on-grid WHyPGen systems for environmentally sustainable electricity supply

Baseline 0 0.006 0.7 1.35 0

Target 17,071 0.027 9,4 19.27 100

Means of Verification Project monitoring reports PLN reports IPP reports Production reports from wind power systems PLN reports IPPs reports WHyPGen project reports GEF project monitoring reports

Assumptions Economic growth rate of Indonesia continues to improve

GOI overall policy on supporting Renewable Energy development and utilization is at least maintained

COMPONENT 1: WHYPGEN TECHNOLOGY APPLICATION ASSESSMENTS Output 1.1: Number of assessed locations with wind power generation Updated wind maps of potentials by EOP Area with significant Number of provinces covered by the new & updated wind wind energy potentials maps
29

0 0

25 9

Wind resource assessment reports Wind resource assessments by

Increasing demand of updated wind maps for wind power generation project development

This refers to wind energy systems that are: (a) grid connected and operating in hybrid with other power generation units within the grid; and, (b) operating in hybrid with other power generation units within a power generation facility. WHyPGen is also the short name of this UNDP-GEF Project.

Strategy

Objectively Verifiable Indicators Indicator Number of identified locations with wind resources that are feasible for wind-based power generation by EOP Number of evaluated existing wind energy systems by EOP Number of completed wind power generation (including WHyPGen) project feasibility studies by EOP Number of seminar-workshops on wind energy (including WHyPGen) applications and promotion of potential wind power projects by EOP Number of local equipment manufacturers that can potentially produce wind energy (including WHyPGen) system components by EOP Number of local equipment manufactures that are ready to produce wind energy (including WHyPGen) system components by EOP

Baseline 0 0 0 0

Target 15 11 10 6

Means of Verification LAPAN/MEAI Wind assessment reports of IPPs WHyPGen Project reports Documentation of completed feasibility studies Seminar-workshop proceedings Promo materials Assessment reports Manufacturing industry reports List of companies engaged in wind energy projects from Trade & Industry Ministry Project monitoring reports Demo project monitoring reports Host demo company monitoring reports Project performance reports of MEAI Documentation of wind energy projects RUPTL MEMR annual reports

Assumptions purpose; IPPs share wind assessment reports Access to existing wind energy system facilities and data is provided by owners

Output 1.2: Techno-economic feasibility studies(FS) of potential WHyPGen application projects

Output 1.3: Completed feasibility assessments of the local manufacturing/productio n of WHyPGen system components

14

COMPONENT 2: WHYPGEN TECHNOLOGY DEMONSTRATION Output 2.1: Successfully implemented WHyPGen pilots/demos Number of WHyPGen pilots/demos that are successfully implemented by EOP Cumulative electricity production from successfully implemented 2MW WHyPGen pilots/demos by EOP, GWh Cumulative CO2 emission reductions from successfully implemented 2MW WHyPGen pilots/demos by EOP, MT CO2 Output 2.2: WHyPGen project replications planned and implemented Number of planned WHyPGen replication projects by EOP Number of WHyPGen projects implemented by EOP (including pilot/demo projects) % contribution of WHyPGen in the electricity supply in Indonesia by EOP COMPONENT 3: FINANCING WHYPGEN INITIATIVES 0 0 3 3.85 Monitoring reports prepared by host demo companies Other relevant entities share reports of other wind energy projects

0 0 0 0

3,073 10 6 0.0062

WHyPGen demos are replicated by interested power project developers and investors

Strategy Output 3.1: Completed training and promotions for banking/financing institutions in financing WHyPGen projects

Output 3.2: Designed financing schemes for WHyPGen projects

Objectively Verifiable Indicators Indicator Number of completed capacity building programs for banks/FI by EOP Number of completed capacity building programs for project developers and service providers and equipment manufacturers by EOP No. of banks/financing institutions trained on WHyPGen project financial feasibility evaluation by Year 3 No. of local services providers and power project developers trained on the development of business plans and utilization of financial models for preparing bankable project proposals by Year 3 No. of power project developers trained on the development of business plans and utilization of financial models for preparing bankable project proposals by EOP Number of local banks/FIs that provide affordable financing schemes for WHyPGen projects by EOP Number of Local Governments that fund WHyPGen projects by EOP Number of venture capital funded WHyPGen projects planned and implemented by EOP Number of financing schemes designed and approved for wind energy projects as well as for WHyPGen component manufacturing by EOP Number of wind energy projects planned with approved financing scheme by EOP Number of wind energy projects implemented with financial support through the approved financing scheme by EOP Volume of financing provided to implemented wind energy projects through the approved financing scheme by EOP, US$ million

Baseline 0 0 0

Target 3 6 3

Means of Verification Project monitoring reports Internal Report from Agency for Investment Coordination (BKPM) Documentations of loans provided by local banks/FIs and venture capital funds

Assumptions

0 0 0 0

28 3 2 1 Project monitoring reports Internal Report from Agency for Investment Coordination (BKPM) Documentations of loans provided by local banks/FIs and venture capital funds Economic growth sustains continued growth of wind energy business in Indonesia

0 0 0 0

3 2 2 16

COMPONENT 4: POLICY & INSTITUTIONAL SUPPORT FOR WHYPGEN INITIATIVES Output 4.1: Number of existing WHyPGen-related policies evaluated by Completed policy study EOP

Project monitoring reports

Current GoI policy on RE development and use is at

Strategy on WHyPGen system

Output 4.2: Proposed policy frameworks supportive of wind energy (including WHyPGen) projects

Objectively Verifiable Indicators Indicator Number of policy recommendations proposed for facilitating, promoting and supporting wind power generation (including WHyPGen) investments by EOP Supporting policies for wind power generation including WHyPGen formulated by EOP

Baseline 0

Target 3 Policy on regulatory , fiscal, market Policy on regulatory , fiscal, market 14

Means of Verification Policy study reports

Assumptions least maintained

Supporting policies for wind power generation including WHyPGen endorsed by the government by EOP

Documents of the approved policies and implementing rules and regulations from MEMR List of companies engaged in wind energy projects from Trade & Industry Ministry

Economic growth sustains continued growth of WHyPGen business GoI endorses the implementation of WHyPGen projects

Number of local companies actively engaged in the wind power generation (including WHyPGen) business by EOP COMPONENT 5: WHYPGEN SUPPORT Output 5.1: Number of completed promotional materials on wind Designed and energy, in general, and WHyPGen, in particular by Year 2 implemented WHyPGen promotion and advocacy An operational and widely used central database system on program wind energy by Year 2 Average number of satisfied users of the WHyPGen website (for promotion and information exchange) each year starting Year 2 Number of local businesses and entrepreneurs that engage in the WHyPGen business by EOP Number of engineering schools that offer courses on wind energy technologies (including WHyPGen applications) in their engineering curricula by EOP Average number of coordination activities of WESMA (wind energy system manufacturers association) each year starting Year 2 Average number of WESMA members participating in coordination activities each year starting Year 2

0 0 0

15 Year 2 1000

Documented promotional materials Operational database maintained/update WHyPGen Project website Central database and project website will remain operational even after the WHyPGen Project

30

List of companies engaged in wind energy projects from Trade & Industry Ministry Curricula and enrolment of participating engineering schools Documentation of WESMA meetings

0 0

4 8

Curricula will continue and possibly improved even after the WHyPGen Project WESMA will remain operational even after the WHyPGen Project

Strategy

Objectively Verifiable Indicators Indicator Number of wind energy (including WHyPGen) projects that are lined up for implementation in Indonesia by EOP

Baseline 0

Target 6

Means of Verification BKPM Internal Report Profiles of proposed wind energy projects Project monitoring reports Clearinghouse reports

Assumptions

COMPONENT 6: WHYPGEN MARKET DEVELOPMENT AND INDUSTRY SUPPORT Output 6.1: A fully established and operational wind energy clearing Completed capacity house by Year 2 building and technical Number of project developers, investors, technical service, support program for the: and local equipment manufacturers that make use of the (a) Local manufacturing clearing house each year starting Year 2 of WHyPGen system Cumulative number of local equipment manufacturers components; (b) Design trained under the capacity development program by EOP and engineering of WHyPGen projects; and, Number of trained local equipment manufacturers that are (c) Installation, operation manufacturing quality wind energy system equipment & and maintenance of components by EOP WHyPGen facilities Number of local technical service providers trained under the capacity development program by EOP Number of trained local technical service providers that are actively engaged in the servicing (installation & maintenance) of wind energy systems (including WHyPGen) by EOP Number of of trained local technical service providers that are actively engaged in the servicing (design & engineering) of wind energy systems (including WHyPGen) by EOP Percentage of all trainees of the capacity development programs that are actively engaged in the Indonesia wind energy market by EOP, % Number of power generation engineers and operators certified to operate and maintain wind power generation (including WHyPGen) systems by EOP Number of wind energy projects (including WHyPGen projects) that are designed and engineered by local technical service providers by EOP Number of wind power generation (including WHyPGen)

0 0

Year 2 8

Economic growth sustains growth of the local wind energy business

15

0 0

60 15

50

50

60

Documentation of training program Capacity development (CapDev) training materials Capacity development program performance evaluation Report List of companies engaged in wind energy projects from Trade & Industry Ministry List of certified power plant engineers & operators for the operation and maintenance of wind energy systems

Individual and corporate entities interested in the wind energy business are willing to be trained and apply their learned skills in their work in the wind energy market in Indonesia.

18 Wind energy project design & engineering reports Wind energy project design, WESMA is sustained &

0 0

4 2

Strategy

Objectively Verifiable Indicators Indicator projects facilitated through the WESMA by EOP

Baseline

Target

Means of Verification engineering & installation reports from WESMA

Assumptions maintained by members even after the WHyPGen project WESMA members cooperate and support wind energy R&D Limited or none constraints in the conduct of electricity demand surveys Operation of central database is sustained even after the WHyPGen Project

Number of wind power generation R&D projects completed through WESMA by EOP Output 6.2: Completed survey and evaluation of electricity demand areas served by wind power generation (including WHyPGen) facilities. Number of areas with completed electricity demand analyses and forecasts by EOP

2 Electricity demand survey reports Load demand forecast reports Central energy database WHyPGen Project website

25

Number of power project developers and technical service providers that make use of the electricity demand analyses and forecasts by EOP

TOTAL BUDGET AND WORK PLAN

Award ID: Award Title: Business Unit: Project Title: PIMS no. 4223 Implementing Partner (Executing Agency) 00060776 Project ID(s): 00076672 PIMS 4223 CC FP: Indonesia Wind Hybrid Power Generation (WHyPGen) Marketing Development Initiatives IDN10 PIMS 4223 CC FP: Indonesia Wind Hybrid Power Generation (WHyPGen) Marketing Development Initiatives PIMS 4223 CC FP: Indonesia Wind Hybrid Power Generation (WHyPGen) Marketing Development Initiatives Agency for the Assessment & Application of Technology (BPPT)

GEF Outcome/Atlas Activity

Responsible Party or Implementin g Agent

Fund ID

Donor Name

Atlas Budgetary Account Code 71200 71300 71400 71600 72100

ATLAS Budget Description

Amount Year 1 (USD) 10,000 31170 2500 16600 14000 0 2400 1650 1500 1500 8800 3600 5000 98,720

Amount Year 2 (USD) 10000 31400 2500 17100 14500 0 2400 1400 1500 1500 9750 4100 5000 101,150

Amount Year 3 (USD) 10000 26710 2300 12400 11900 0 1400 1250 1500 1350 5750 3400 5000 82,960

Total (USD)

International Consultants Local Consultants Contractual services Individual Travel Contractual Services Companies Equipment & Furniture Communication & AV Equipment Supplies IT Equipment Rental & Maintenance of other equipment Professional Services AV & Printing Production Costs Miscellaneous Total Outcome 1

30,000 89280 7,300 46,100 40,400 0 6,200 4,300 4,500 4,350 24,300 11,100 15,000 282,830

OUTCOME 1 : WHyPGen Technology Application and Assessment

72200 BPPT 62000 GEF 72400 72500 72800 73400 74100 74200 74500

GEF Outcome/Atlas Activity

Responsible Party or Implementin g Agent

Fund ID

Donor Name

Atlas Budgetary Account Code 71200 71300 71400 71600 72100

ATLAS Budget Description

Amount Year 1 (USD) 12500 27810 5000 24250 11000 107108 1100 1600 1100 1100 3080 1400 10000 207,048 0 13500 0 4250 2000 0 0 1600 105255

Amount Year 2 (USD) 12500 24865 5000 24500 10500 107108 1100 1600 1100 1100 0 1400 10000 200,773 0 13500 0 6500 4200 0 0 3000 47525

Amount Year 3 (USD) 12500 24215 2000 19900 8050 85784 1100 1600 1100 1100 0 1400 10000 168,749 0 12500 0 5500 1000 0 0 3000 47220

Total (USD)

International Consultants Local Consultants Contractual services Individual Travel Contractual Services Companies Equipment (wind turbines; transmission & distribution system components) Communication & AV Equipment Supplies IT Equipment Rental & Maintenance of other equipment Professional Services AV & Printing Production Costs Miscellaneous Total Outcome 2

37500 76890 12000 68650 29550 300000 3300 4800 3300 3300 3080 4200 30000 576,570 0 39500 0 16250 7200 0 0 7600 200000

OUTCOME 2 : WHyPGen Technology Demonstration

72200 BPPT 62000 GEF 72400 72500 72800 73400 74100 74200 74500

71200 71300 71400

International Consultants Local Consultants Contractual Services Individual Travel Contractual Services Companies Equipment & Furniture Communication & AV Equipment Supplies Micro Capital Grants (Loan Guarantee Scheme seed fund)

OUTCOME 3 : Financing WHyPGen Initiatives

71600 BPPT 62000 GEF 72100 72200 72400 72500 72615

GEF Outcome/Atlas Activity

Responsible Party or Implementin g Agent

Fund ID

Donor Name

Atlas Budgetary Account Code 72800 73400 74100 74200 74500

ATLAS Budget Description

Amount Year 1 (USD) 1500 1000 2500 1000 3000 135,605 0 15150 0 6400 6000 0 0 1000 2100 1500 2150 2700 3100 40,100 0 24690 0

Amount Year 2 (USD) 500 1750 4000 3000 3000 86,975 0 15150 0 7600 4600 0 0 1500 0 1000 1700 2700 2000 36,250 0 25295 0

Amount Year 3 (USD) 500 1500 3000 3000 1800 79,020 0 15650 0 5450 4000 0 0 1000 0 600 1500 1800 2500 32,500 0 24690 0

Total (USD)

IT Equipment Rental & Maintenance of other equipment Professional Services AV & Printing Production Costs Miscellaneous Total Outcome 3

2500 4250 9500 7000 7800 301,600 0 45950 0 19450 14600 0 0 3500 2100 3100 5350 7200 7600 108,850 0 74675 0

71200 71300 71400 71600 72100

International Consultants Local Consultants Contractual Services Individual Travel Contractual Services Companies Equipment & Furniture Communication & AV Equipment Supplies IT Equipment Rental & Maintenance of other equipment Professional Services AV & Printing Production Costs Miscellaneous Total Outcome 4

OUTCOME 4 : Policy Institutional Support for WHyPGen Initiatives

72200 BPPT 62000 GEF 72400 72500 72800 73400 74100 74200 74500

OUTCOME 5 : WHyPGen Promotion

71200 BPPT 62000 GEF 71300 71400

International Consultants Local Consultants Contractual Services Individual

GEF Outcome/Atlas Activity

Responsible Party or Implementin g Agent

Fund ID

Donor Name

Atlas Budgetary Account Code 71600 72100 72400 72500 72800 73400 74100 74200 74500 Travel

ATLAS Budget Description

Amount Year 1 (USD) 15000 16950 5750 2200 10000 5500 18500 11700 5000 115,290 0 40100 14550 32500 5000 0 4000 2000 2500 7250

Amount Year 2 (USD) 13000 16950 5000 3000 8650 5750 17400 15800 5000 115,845 0 32585 14200 31550 6750 0 3000 2000 2000 4800

Amount Year 3 (USD) 9550 20000 4000 2000 6900 5500 17000 10000 6000 105,640 0 23740 14700 26300 4000 0 2850 1200 650 2900

Total (USD)

30

37550 53900 14750 7200 25550 16750 52900 37500 16000 336,775 0 96425 43450 90350 15750 0 9850 5200 5150 14950

Contractual Services Companies Communication & AV Equipment Supplies IT Equipment Rental & Maintenance of other equipment Professional Services AV & Printing Production Costs Miscellaneous Total Outcome 5

71200 71300 71400

International Consultants Local Consultants Contractual Services Individual Travel Contractual Services Companies Equipment & Furniture Communication & AV Equipment Supplies IT Equipment Rental & Maintenance of other equipment

OUTCOME 6 : WHyPGen Market Development and Industry Support

71600 BPPT 62000 GEF 72100 72200 72400 72500 72800 73400

30

Local consultants are Indonesian experts who will work during the project implementation and will be based at the project office, which in this case is Jakarta. These consultants are not based in the areas (provinces, islands) where the project will be working. They will be working at the office station most of the time, and will travel to areas where, for example the wind energy resources will be measured and mapped. The travel cost is relatively high since the wind resource-rich areas are mostly located in remote areas of Indonesia. Furthermore, the travel cost will also cover the travel budget for experts from abroad, Jakarta, and other regions of the country to attend and participate in capacity building activities that will be conducted under the project.

GEF Outcome/Atlas Activity

Responsible Party or Implementin g Agent

Fund ID

Donor Name

Atlas Budgetary Account Code 74100 74200 74500

ATLAS Budget Description

Amount Year 1 (USD) 22000 8450 6000 144,350 0 35100 21306 150 100 132 56,788

Amount Year 2 (USD) 21900 6300 6500 131,585 0 35100 21306 150 100 0 56,656 729,234

Amount Year 3 (USD) 18800 3500 5000 103,640 0 35100 21306 150 0 0 56,556 629,065

Total (USD)

Professional Services AV & Printing Production Costs Miscellaneous Total Outcome 6

62700 18250 17500 379,575 0 105300 63918 450 200 132 170,000 2,156,200

71200 71300 Project Management Unit 71400 BPPT 62000 GEF 72500 74200 74500

International Consultants Local Consultants Contractual Services Individual Supplies AV & Printing Production Costs Miscellaneous Total Management PROJECT TOTAL

797,901

SUMMARY OF PROJECT FUNDS

Sources of Funds
GEF Government Ministry of Disadvantaged Region (KPDT) BPPT Private Sectors Viron Energy Alpen Steel $5,000,000 $0 $5,000,000 $500,000 $5,000,000 $1,000,000 $15,000,000 $1,500,000 $3,000,000 $444,866 $6,000,000 $444,866 $10,500,000 $444,868 $19,500,000 $1,334,600

Amount (Year 1)
$797,901

Amount (Year 2)
$729,234

Amount (Year 3)
$629,065

Amount (Total)
$2,156,200

Donor Agencies UNDP TOTAL $50,000 $9,292,767 $50,000 $12,724,100 $50,000 $17,623,933 $150,000 $39,640,800

4. MANAGEMENT ARRANGEMENTS Implementation Arrangement 146. BPPT is the designated Implementing Partner for the project. It will execute the project on behalf of the Government of Indonesia (GoI) under the National Implementation Modality (NIM) of the UNDP. The UNDP, which provides support to the project on behalf of the GEF takes the role of the Senior Supplier, while BAPPENAS represents the GoI and act as the Senior Beneficiary of the Project. The three parties make up the core members of the Project Board (or Project Advisory Board) which main function is to strategically guide the course of the project towards achieving its objective. Project Board 147. The Project Board (or Project Advisory Board) is responsible for making decisions for the project when guidance is required by the Project Management Unit (PMU), including recommendations for approval of project plans and revisions. It is the equivalent of a project steering committee. In order to ensure UNDPs ultimate accountability, Project Board decisions should be made in accordance to standards that shall ensure management for development results, best value money, fairness, integrity, transparency and effective international competition. Other stakeholders can be included in the Board as appropriate and agreed by the existing Board members. The potential members of the Project Board are reviewed and recommended for approval during the Project Appraisal meeting. The Project Appraisal meeting takes place prior to project implementation. 148. For this project, the following comprise the Project Board: National Development Planning Agency (BAPPENAS), BPPT, i.e., B2TE (Energy Technology Centre); Ministry of Energy and Mineral Resources (MEMR); LAPAN (National Institute of Aeronautics and Space); Ministry of Energy & Mineral Resources (MEMR); Ministry of Trade & Industry (MTI); Ministry of Finance; National Electricity Company (PLN); and, UNDP. 149. Three roles within the Project Board are described as follows: Implementing Partner and UNDP representatives as Chairs of the Project Board The Senior Supplier representing the interests of the parties concerned which provide funding and/or technical expertise to the project - UNDP will provide support services to project implementation, inter-alia recruitment and contracting of project management and technical staff, procurement of services, support for budget and financial management, and overall monitoring of the implementation of activities and services for this project in order to ensure effective and efficient use of resources. The Senior Suppliers primary function within the Project Board is to provide guidance regarding the technical feasibility of the project31. Representative from BAPPENAS as the Senior Beneficiary, representing the interests of those who will ultimately benefit from the project - The Senior Beneficiarys primary function within the Board is to ensure the realization of project results from the perspective of project beneficiaries.
31

On the role of the UNDP as senior supplier in providing technical feasibility, this actually refers to the assurance role that UNDP plays during project development and project implementation. In the case of implementation, this role refers to ensuring that activities to be carried out are in line with those stated in the approved ProDoc, and where there will be adjustments to be made in any of the activities or outputs (not outcomes), such adjustments (e.g., changes, additions, modifications) are ensured to be technically feasible.

National Project Director 150. To execute the project, BPPT will appoint a national project director (NPD) who will mainly be responsible for effective coordination among the stakeholders and achievement of project objectives as per the approved Project Document. The NPD is trusted with the responsibility to judiciously authorize the use of project fund and resources to effectively deliver project outputs. His/her accountability to the project is formally presented by timely submission of quarterly progress report, and dully signed financial reports, as well as the projects combined delivery report at the end of each fiscal year. He/she also bares the duty to manage project risks and escalate critical issues to the Project Board. As required, BPPT may officially appoint Deputy NPDs to act on his/her behalf and take on a specific responsibility of the NPD. Project Management Unit (PMU) 151. At the management level, a Project Management Unit (PMU) will be created. This entity will be responsible for the overall operational and financial management and reporting in accordance with the rules and regulations of the Government of Indonesia and UNDP, as stated in the PMIG. 152. The PMU will manage day-to-day operations of the project, and will be based at taskforce office or associated offices. The PMU will be responsible for the overall day to day operational and financial activities, developing the AWPs, progress reports, M&E framework, in close coordination with the Responsible Parties and key-stakeholders. 153. The PMU will also be responsible for preparing a work plan covering all activities and inputs under the project. Quarterly progress reports will be prepared on activities and detailed expenditures. The AWP will be accompanied by a budget table and the clarification of specific procurement and recruitment activities to be undertaken by either the PMU or UNDP. The AWP and budget will be reviewed and agreed by the PB. The PMU is comprised of the following key posts: (a) National Project Manager (NPM) 154. A National Project Manager will be recruited to ensure smooth implementation of the project on a daily basis. The NPM will be accountable for implementation of all activities of the project. This position will require outstanding management skills and experience, and thorough knowledge of both the UN and GoI rules and regulations. 155. The NPM is the responsible to achieve the Project goals on time by providing administrative and technical inputs for Project activities. The NPM will also be responsible for preparing a work plan covering all activities and inputs under the project. Quarterly progress reports will be prepared on activities and detailed expenditures. In close collaboration with UNDP, the NPM will be responsible for preparing reports for the PB and for the GoI. 156. The main tasks of the NPM are: Follow up on progress made on the tasks outlined in the work plan, as well as on a future mobilization of resources for the Projects sustainability; Prepare, and monitor compliance with work plans (annual and quarterly); Prepare budgets (annual and quarterly);

 Prepare ToR for inputs and services that are of non-technical nature to be cleared and contracted through UNDP as requested by the taskforce Revise the Projects technical and administrative documents; Prepare technical, financial and progress reports (quarterly, annual and final). Inform the PB of the Projects progress, problems and possible solutions adopted and/or recommendations on how to achieve its objectives; Prepare and present a situation report at any meeting or meetings about the Project; Supervise and ensure compliance with the work of the personnel contracted by UNDP according to the contractual criteria contained in the SOP (b) Professional Staff members 157. The PMU will be supported by an operational team of professional staff including experts in wind power generation technology, renewable energy financing, finance associates, and other staff functions include communication, IT, administration, drivers and secretarial posts. The exact number and composition of the above posts will vary according to needs of the project. Project Assurance 158. The UNDP Environment Unit will carry out the Project Assurance role, which supports the Project Board by conducting project oversight and monitoring functions, as well as providing technical and advisory relevant to the project implementation. 159. The Project Assurance function will: Ensure that project plans are being developed according to standards and that quality management procedures are properly followed; Ensure that project outputs and activity definitions, including description and quality criteria, have been properly recorded in the Atlas Project Management module to facilitate monitoring and reporting; Ensure that the Project Board's recommendations are followed and revisions are managed in line with the required procedures. Project Organization Structure
PROJECT BOARD Senior Supplier (UNDP) Implementing Partner (BPPT) Senior Beneficiaries
BAPPENAS, MEMR, MoF, PLN, MoI, MoT

National Project Director Project Assurance (UNDP) Project Management Unit Project Partners
Coordination & Support Direction & Supervision

National Project Manager Experts/Consultants/Contractors PMU Admin & Finance Personnel

5. MONITORING AND EVALUATION PLAN AND BUDGET

160. The project will be monitored through the following M&E activities as detailed in the following paragraphs and M&E Work Plan and Budget Table. Project Start 161. A Project Inception Workshop will be held within the first 2 months of project start with those with assigned roles in the project organization structure, UNDP country office and where appropriate/feasible regional technical policy and programme advisors as well as other stakeholders. The Inception Workshop is crucial to building ownership for the project results and to plan the first year annual work plan. 162. The Inception Workshop should address a number of key issues including: Assisting all partners to fully understand and take ownership of the project. The workshop should detail the roles, support services and complementary responsibilities of UNDP CO and RCU staff vis--vis the project team. The roles, functions, and responsibilities within the project's decision-making structures will be discussed including reporting and communication lines, and conflict resolution mechanisms. Terms of Reference for project staff will be discussed again as needed; Finalizing the first annual work plan (AWP) based on the project results framework and the relevant GEF Tracking Tool if appropriate. The indicators, targets and their means of verification will be reviewed and agreed upon, as well as assumptions and risks being rechecked; Providing a detailed overview of reporting, monitoring and evaluation (M&E) requirements. There should be agreement on the M&E work plan, budget and schedule; Discussing financial reporting procedures and obligations, and annual audit arrangements; Planning and scheduling Project Board meetings. Roles and responsibilities of all project organization structures should be clarified and meetings planned. The first Project Board meeting should be held within the first 12 months following the inception workshop. 163. An Inception Workshop report is a key reference document and must be prepared and shared with participants to formalize various agreements and plans decided during the meeting. 164. The project will be monitored through the following M&E activities as detailed in the following paragraphs and M&E Work Plan and Budget Table. M&E Work Plan and Budget
Type of M&E Activity Inception Workshop and Report Measurement of Means of Verification of project results. Responsible Parties Project Manager UNDP CO, UNDP GEF UNDP GEF RTA/Project Manager will oversee the hiring of specific studies and institutions, and delegate responsibilities to relevant team members. Oversight by Project Manager Budget US$ Excluding project team staff time Indicative cost: 10,000 To be finalized in Inception Phase and Workshop. Timeframe Within first two months of project start up Start, mid and end of project (during evaluation cycle) and annually when required. Annually prior to

Measurement of

To be determined

Type of M&E Activity Means of Verification for Project Progress on output and implementation ARR/PIR

Responsible Parties Project Management Unit (PMU)

Budget US$ Excluding project team staff time as part of the Annual Work Plan's preparation.

Timeframe ARR/PIR and to the definition of annual work plans

Periodic status/ progress reports Mid-term Evaluation

Project manager and PMU teams UNDP CO UNDP RTA UNDP EEG Project manager and PMU teams Project manager and PMU teams UNDP CO UNDP RCU External Consultants (i.e. evaluation team) Project manager and team, UNDP CO UNDP RCU External Consultants (i.e. evaluation team) Project manager and PMU teams UNDP CO local consultant UNDP CO Project manager and team UNDP CO UNDP RCU (as appropriate) Government representatives

None

Annually

None Indicative cost: 30,000

Quarterly At the mid-point of project implementation.

Final Evaluation

Indicative cost: 30,000

At least three months before the end of project implementation At least three months before the end of the project Yearly Yearly

Project Terminal Report Audit Visits to field sites

Indicative cost per year: 3,000 Paid from IA fees and operational budget

Quarterly 165. Progress made shall be monitored in the UNDP Enhanced Results Based Management Platform. PMU has to report to UNDP a Quarterly Monitoring Report (QMR), and based on the initial risk analysis submitted, the risk log shall be regularly updated in ATLAS. Based on the information recorded in ATLAS, Project Progress Reports (PPR) can be generated in the Executive Snapshot. Other ATLAS logs can be used to monitor other issues such as lessons learned. The use of these functions is a key indicator in the UNDP Executive Balanced Scorecard. The initial risk log can be found in Annex 1. Annually 166. The Annual Project Review/Project Implementation Reports (APR/PIR) will be prepared to monitor progress made since project start and in particular for the previous reporting period (30 June to 1 July). The APR/PIR combines both UNDP and GEF reporting requirements. 167. The APR/PIR includes, but is not limited to, reporting on: Progress made toward project objective and project outcomes, each with indicators, baseline data and end-of-project targets (cumulative);

Project outputs delivered per project outcome (annual); Lessons learned and good practices; Annual Work Program and other expenditure reports; Risk and adaptive management; ATLAS QPR; Portfolio level indicators (most focal areas on an annual basis).

Periodic Monitoring through Site Visits 168. UNDP CO and the UNDP RCU will conduct visits to project sites based on the agreed schedule in the project's Inception Report/Annual Work Plan to assess first hand project progress. Other members of the Project Board may also join these visits. A Field Visit Report/BTOR will be prepared by the CO and UNDP RCU and will be circulated no less than one month after the visit to the project team and Project Board members. Mid-Term of Project Cycle
169. The project will undergo an independent Mid-Term Evaluation (MTE) at the mid-point of project implementation, November 2012. The MTE will determine progress being made toward the achievement of outcomes and will identify course correction if needed. It will focus on the effectiveness, efficiency and timeliness of project implementation; will highlight issues requiring decisions and actions; and will present initial lessons learned about project design, implementation and management. Findings of this review will be incorporated as recommendations for enhanced implementation during the final half of WHyPGens term. The organization, terms of reference and timing of the MTE will be decided after consultation between the parties to the project document. The Terms of Reference for the MTE will be prepared by the UNDP CO based on guidance from the Regional Coordinating Unit and UNDP-GEF. The management response and the evaluation will be uploaded to UNDP corporate systems, in particular the UNDP Evaluation Office Evaluation Resource Center (ERC).

170. The relevant GEF Focal Area Tracking Tools will also be completed during the mid-term evaluation cycle. End of Project 171. An independent Final Evaluation will take place three months prior to the final Project Board meeting and will be undertaken in accordance with UNDP and GEF guidance. The final evaluation will focus on the delivery of WHyPGens results as initially planned (and as corrected after the MTE, if any such correction took place). The final evaluation will look at impact and sustainability of results, including the contribution to capacity development and the achievement of global environmental benefits/goals. The Terms of Reference for this evaluation will be prepared by the UNDP CO based on guidance from the Regional Coordinating Unit and UNDP-GEF. 172. The Terminal Evaluation should also provide recommendations for follow-up activities and requires a management response which should be uploaded to PIMS and to the UNDP Evaluation Office Evaluation Resource Center (ERC). The relevant GEF Focal Area Tracking Tools will also be completed during the final evaluation. 173. During the last three months, the project team will prepare the Project Terminal Report. This comprehensive report will summarize the results achieved (objectives, outcomes, outputs), lessons learned, problems met and areas where results may not have been achieved. It will also

lay out recommendations for any further steps that may need to be taken to ensure sustainability and replicability of the projects results. Learning and Knowledge Sharing 174. Results from the project will be disseminated within and beyond the project intervention zone through existing information sharing networks and forums. The project will identify and participate, as relevant and appropriate, in scientific, policy-based and/or any other networks, which may be of benefit to project implementation though lessons learned. The project will identify, analyze, and share lessons learned that might be beneficial in the design and implementation of similar future projects. There will also be a two-way flow of information between this project and other projects of a similar focus. 6. LEGAL CONTEXT

175. This document together with the CPAP signed by the Government of Indonesia and UNDP which is incorporated by reference, constitute together a Project Document as referred to in the Standard Basic Assistance Agreement (SBAA) and all CPAP provisions apply to this document. 176. Consistent with the Article III of the SBAA, the responsibility for the safety and security of the implementing partner and its personnel and property, and of UNDPs property in the implementing partners custody, rests with the implementing partner. The implementing partner shall: Put in place an appropriate security plan and maintain the security plan, taking into account the security situation in the country where the project is being carried; Assume all risks and liabilities related to the implementing partners security, and the full implementation of the security plan. UNDP reserves the right to verify whether such a plan is in place, and to suggest modifications to the plan when necessary. Failure to maintain and implement an appropriate security plan as required hereunder shall be deemed a breach of this agreement. 177. The implementing partner agrees to undertake all reasonable efforts to ensure that none of the UNDP funds received pursuant to the Project Document are used to provide support to individuals or entities associated with terrorism and that the recipients of any amounts provided by UNDP hereunder do not appear on the list maintained by the Security Council Committee established pursuant to resolution 1267 (1999). The list can be accessed via: http://www.un.org/Docs/sc/committees/1267/1267ListEng.htm. This provision must be included in all sub-contracts or sub-agreements entered into under this Project Document.

7.

ANNEXES

Annex A: Historical and Forecast Electricity Demand in Indonesia

Annex 1: Risk Analysis OFFLINE RISK LOG

Project Title: Wind Hybrid Power Generation (WHyPGen) Marketing Development Initiatives # 1 Description Lack of ongoing, long-term central government support for wind-based power generation Date Identified October 2010 Type Political Risk Level The risk would prevent the project from delivering on its objectives for Outcome 4 (Policy & Institutional Support) Risk Level: Medium The risk would prevent the project from delivering on its objectives for Outcome 6 (Market Development). Risk Level: Medium The risk would prevent the project from delivering on its objectives for Outcome 6 (Market Development). Risk Level: Medium The risk may hinder the selection of right area for the project implementation. Project ID: 00073976 Date: October 22, 2010 Countermeasures/Management Response Formulation of revised policy and implementing guidelines for issuance and enforcement. Lobbying of the government approval of favourable policy recommendations, preparation and approval of policy IRRs, and the policy enforcement Dissemination of draft policies and IRRs to all stakeholders

Locations of wind-rich resources are remote and far from existing grids, therefore discouraging project proponents

October 2010

Financing

Detailed technical and economic evaluation of grid extension to the wind-rich areas will be carried out; linkage with financing institution will be facilitated by the proposed project.

Non-repayment or delayed repayment of loans for WHyPGen projects

October 2010

Financing

Financing schemes studies on new applicable approaches to help finance WHyPGen systems will be conducted to find the best arrangements that will deliver the loans at acceptable terms and conditions for better repayment performance and apply them to the demonstration plants for replication to others

Lack of comprehensive wind maps data.

October 2010

Technical

The proposed project will work closely with the key partners to conduct wind energy resources that will at least provide capacity building to develop, prepare and interpret wind maps.

Price for wind-based generated electricity is not competitive due to governments subsidy policy for fossil fuel.

October 2010

Policy

Risk level: Medium The risk may lower interest in wind-power generation investment. Risk level: medium

Measures to reflect true cost of fuel and electricity prices will be determined through conduct of energy cost and market studies.

Submitted by Project Manager ________________

Approved by UNDP Programme Analyst ______________

Annex 2: Agreements GEF OFP Letter of Endorsement

PT. Viron Energy Letter of Commitment for Co-Financing

Ministry of Disadvantaged Regions Letter of Cmmitment for Co-Financing

BPPT (B2TE) Letter of Commitment for Co-financing

Alpen Steel Letter of Commitment for Co-financing

GE Energy Letter of Commitment for Co-Financing

Annex 3: Detailed CO2 Calculations and Assumptions Summary The goal of the WHyPGen project is the reduction of GHG emission from fossil-based power generation in Indonesia. This proposed project will contribute to the realization of that goal by removing barriers preventing the sustainable and widespread use of wind turbine and diesel hybrids in both grid and off-grid (remote) applications in the Indonesian market. The removal of barriers is expected to result in actions that would influence reduction of the cost of wind-diesel hybrid (WHyPGen) systems by optimizing the selection of wind turbine manufacturer/model to the specific wind site, providing adequate and reliable backup support for the intermittent wind power thru peaking and base load fossil (oil, natural gas, LNG, coal) and conventional power (hydro, geothermal) generation, adoption of supportive regulatory framework for wind-diesel hybrid and renewable energy generation. Assumptions Some assumptions used in estimating the CO2 emission reductions attributable to this UNDP-GEF project are as follows: The 0.886 kg CO2/kWh emission factor for oil generation is based on an assumed mix of 10% HSD (30% thermal efficiency, 18600 BTU/lb gross heating value, 87.87% Carbon, 0.815 kg CO2/kWh) and 90% MFO (31% thermal efficiency, 19200 BTU/lb gross heating value, 85.50% Carbon, 0.894 kg CO2/kWh). The 0.399 kg CO2/kWh emission factor for natural gas generation is based on an assumed mix of 30% simple cycle gas turbine (36.31% thermal efficiency, 20754 BTU/lb gross heating value, 69.73% Carbon, 0.525 kg CO2/kWh) and 70% combined cycle gas turbine (55.33% thermal efficiency, 20754 BTU/lb gross heating value, 69.73% Carbon, 0.345 kg CO2/kWh). The 0.425 kg CO2/kWh emission factor for liquefied natural gas (LNG) generation is based on assumed mix of 30% simple cycle gas turbine (34.31% thermal efficiency, 20754 BTU/lb gross heating value, 69.73% Carbon, 0.567 kg CO2/kWh, 0.260 kg oil/kWh) and 70% combined cycle gas turbine (53.33% thermal efficiency, 20754 BTU/lb gross heating value, 69.73% Carbon, 0.365 kg CO2/kWh, 0.277 kg oil/kWh). The average oil factor is thus 0.276 kg oil/kWh. The 0.970 kg CO2/kWh emission factor for coal generation is based on assumed mix of 50% pulverized coal (35.21% thermal efficiency, 10200 BTU/lb gross heating value, 65.80% Carbon, 1.040 kg CO2/kWh) and 50% circulating fluidized bed (40.67% thermal efficiency, 10200 BTU/lb gross heating value, 65.80% Carbon, 0.900 kg CO2/kWh).

The other power generation technologies such as hydro, pumped storage, geothermal, nuclear and other renewable energy technologies are assumed in the estimations to have nil or insignificant CO2 emission during its operating period (although the manufacture of the power plant may have some one time CO2 emission, which when spread out over its economic lifetime would be small compared to fossil power generation). Direct CO2 Emission Reductions and Energy Savings The WHyPGen project will commence at year 1 (2011) and shall end 3 years later in 2013. The project includes the demonstration of the design, engineering, planning, financing, installation,

commissioning, and operation of wind power generation systems (including WHyPGen facilities). The total installed capacity of the demonstrations is 9.4 MW (9 MW wind + 0.4 MW Solar PV), and this installed capacity will be operational by end of project. At 22% annual capacity factor32, this will generate 18.115 GWh per year. Using a CO2 emission factor of 0.886 for diesel oil-based generation, the GHG emission reduction for displacing 18.115 GWh of oil-based generation is 16,050 tonnes CO2/year by end of project. Assuming a 20 year useful life for a wind power generation facility, the overall direct CO2 emission reduction is 321,000 tonnes CO2. Using the average specific oil consumption of 0.276 kg oil/kWh, the direct energy savings arising from displacement of fossil oil generation is placed at 5,311 tons oil/year or 5,568 kL/year valued at around US$3.305 million. The net savings after deducting fixed and variable O&M is US$3.299 million. Using an all-in cost of US$ 3,200/kW for wind power generation, and US$ 3,000/kW for solar PV power generation including battery , the total investment for the 9.4 MW (9 MW wind + 0.4 MW solar PV) demonstration would be US$ 30 million, which could be recovered in around 6 years. Direct Post-Project CO2 Emission Reductions and Energy Savings From discussions with power project developers and IPPs during the project preparation stage, it is expected that that an additional 100 MW wind power generation facilities from commercial investors will come on stream by end of project. For example, GE has committed to subsume their planned 80 MW wind power generation project to this UNDP-GEF project. (See Letter expressing interest in co-financing). It is estimated that the first commercial units of 30 MW will be operational in by end 2012, and the the additional 70 MW units will be developed thereafter and be operational by end of the WHyPGen project. The combined 100 MW wind power generation facilities will provide 192.72 GWh/year (@ 22% capacity factor). Using the same CO2 emission factor for diesel oil-based power generation, the GHG emission reduction is 170,715 tonnes CO2/year. For a 10 year influence period, the cumulative GHG emission reduction from the additional 00 MW wind power generation installations will amount to 1,707,150 tonnes. The amount of displaced diesel-fuel oil blend using the same specific fuel consumption of 0.276 kg oil/kWh is 53,111 tons oil/year or 55,678 kL oil/year valued at around $33.049 million per year. The net savings (value of displace oil less fixed and variable O&M costs) is $32.989 million per year while the total investment for the 100 MW turbine is $143.972 million. Simple payback analysis shows that the investment could be recovered in 4.36 years. Indirect CO2 Reductions and Energy Savings Following the expected success of the 9.4 MW WHyPGen demo units and the 100 MW commercial replication units by reputable developers, it is expected that even without government intervention, the private sector is now ready to provide wind turbine generation to its maximum, limited only the capability of the grid to absorb its intermittent power generation. Thus, it is assumed that after end of project (2013), wind energy-based power generation will supply
32 This capacity factor for wind power systems is the calculated weighted average of 17-prospective wind power generation sites. This is considering an estimated aggregate installed capacity of 4,062 MW of wind turbines producing electric energy of about 7,800 GWh/year. The wind speed data of the 17-prospective sites were obtained from wind speed prospecting analyses provided by 3-Tier, while the hourly power output of the wind turbine models were provided from the power curves obtained from wind turbine manufactures. In the case of solar PV, the annual capacity factor ranges from 18 26%, and an average 22% was considered.

approximately 15% of the national generation of Indonesia, and this intermittent generation will be provided with adequate backup for voltage and frequency control from both fossil and conventional generation thru both peaking and base load generating units. With this as the underlying assumption, the consultant prepared this following generation forecast based on the RUPTL demand forecast showing wind turbine generation replacing fossil generation. The baseline scenario consists of existing fossil generation (oil, gas, LNG, coal) and wind-solardiesel hybrids and stand-alone wind turbines with an assumed growth rate of 2% p.a. without the WHyPGen intervention, and other renewable energy sources such as hydro, pumped storage and geothermal growing according to the RUPTL projections. In particular, the existing wind-solar-diesel hybrids aggregate to 987.5 kW with assumed capacity factor of 22% for wind, 15% for solar and 50% for diesel. On the other hand, stand-alone wind turbines have an assumed 22% annual capacity factor. Using this assumed capacity factor, kW capacity and 24 x 365 hours per year, the annual generation from new RE resources is estimated to be 2.882 GWh/year, which is then added to the conventional RE generation of 19,353 GWh/year in 2009. In 10 years time (i.e., influence period) after the WHyPGen project completion, the cumulative CO2 emission reduction is 576 million tonnes CO2 (see table below).
Baseline Scenario Year Total Annual Electricity Generation, GWh 147622.0 156880.8 173820.9 191833.9 211123.0 232601.1 255356.1 279550.2 306059.2 333429.3 364805.4 396677.2 430629.7 466437.2 504099.5 543616.8 Annual RE Electricity, GWh 19126.0 19355.8 20940.9 24321.9 31756.0 36761.1 43788.1 46480.2 51446.2 58257.3 66509.4 73770.4 81796.7 90302.0 99286.3 108749.6 % RE Electricity 13.0% 12.3% 12.0% 12.7% 15.0% 15.8% 17.1% 16.6% 16.8% 17.5% 18.2% 18.6% 19.0% 19.4% 19.7% 20.0% Alternative Scenario Annual Wind Total Annual GHG Potential Annual RE Electricity Power Emissions, Wind Energy Electricity, Generation, '000 mt CO2 Systems, GW Generation, GWh GWh GWh 106822.4 0.0 0.0 147622.0 19126.0 112327.7 0.0 0.0 156880.8 19355.8 126619.0 0.0 0.0 173820.9 20940.9 141578.7 5.5 10550.7 191833.9 34872.6 151155.9 6.0 11611.6 211123.0 43367.6 163866.4 6.6 12792.9 232601.1 49553.9 179241.6 7.3 14044.4 255356.1 57832.5 198502.8 8.0 15375.1 279550.2 61855.3 215515.8 8.7 16833.1 306059.2 68279.3 233520.2 9.5 18338.4 333429.3 76595.7 252891.0 10.4 20064.1 364805.4 86573.5 274084.4 11.3 21824.8 396677.2 95595.2 296056.6 12.3 23693.6 430629.7 105490.3 319138.2 13.3 25664.5 466437.2 115966.5 343329.3 14.4 27737.6 504099.5 127023.9 368629.6 15.5 29912.8 543616.8 138662.4 % RE Electricity 13.0% 12.3% 12.0% 18.2% 20.5% 21.3% 22.6% 22.1% 22.3% 23.0% 23.7% 24.1% 24.5% 24.9% 25.2% 25.5% GHG Emissions, '000 mt CO2 106822.4 112327.7 126619.0 123628.2 128372.6 137816.0 147971.6 163858.5 173615.7 187076.3 201199.8 213857.7 229073.9 245265.9 262433.8 280577.5 GHG Emssion Reduction, '000 mt CO2 0.0 0.0 0.0 17950.5 22783.3 26050.4 31270.0 34644.2 41900.1 46443.9 51691.2 60226.6 66982.7 73872.4 80895.5 88052.2

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

= Forecast after WHyPGen Project

Considering the significant barrier removal work and perhaps reduced investment costs that will be done under the project, it is deemed that the GEF influence in achieving the above mentioned CO2 emission reductions during the influence period, may be considered quite high relative to the WHyPGen project period (2011-2013). In this regard, most of the indirect CO2 reduction may be attributed in a way to interventions that will be carried out under the WHyPGen project such as establishment and enforcement of renewable energy policies and financing mechanisms, market enhancements and the successful demonstration programs. In this case, the GEF Causality Factor (CF) can be taken as Level 3 (substantial but modest), i.e. 60%. The indirect CO2 emission in this case is: 576 million x 0.6 = 345.6 million tons CO2. Summary Estimated CO2 Emission Reductions Attributable to WHyPGen Project (ktons CO2) Category Direct Direct Post Project Indirect (Bottom-up) Quantity 341.4 1,707.2 345,600 Remarks From the 10 MW demonstration units (20 years life) From 100 MW replications (10 years influence period) Based on RUPTL projections; GEF Causality Factor = 0.6

Annex 4: List of Demonstrations

Project Name Capacity (MW) Project Site Wind Energy Scheme Grid-connected, Wind Power Plant; in-hybrid with other power generation units within the grid; for supplanting diesel power plants connected to grid33. Grid-connected Wind Power Plant; in-hybrid with other power generation units within the grid; for supplanting diesel power plants connected to grid. Wind Turbines in hybrid with diesel generator sets or RE power generating units (RE and/or non-RE) within a single power generation facility/plant to improve availability. Power generation facility serves a mini-grid34. Refer to specific Demo in Alor Island35. Description No. of wind turbines = 2 Capacity factor = 22% No. of wind turbines = 3 Capacity factor = 22% No. of wind turbines = 21 of (@ 200 kW) + 50 of (@ 6 kW) Capacity factors: Wind (22%); Solar (18 -26%, say 22% average) Annual Production (MWh) 3,469 Annual CO2 Emission Reduction, tons 3,073.5

Ciemas-1

1.8

Sukabumi

Ciemas-2

2.7 4.5 (Wind), 0.4 (PV); 3.7 (kWh Battery), 0.5 (Diesel) 9.436

Sukabumi Several locations, to be decided later

5,203

4,610.3

KPDT
(Rural Electrification Program)

9,443

8,366.5

Total Demo

18,11537

16,050.3

The demonstration host will be provided assistance in securing part of the investment for the Ciemas 1 & 2 wind power generation projects from PT. Sarana Multi Infrastruktur (PT. SMI). Please refer to Activities 2.4 & 3.4. When and where required; technical assistance in the design, engineering, implementation and financial planning will be provided to both demonstrations. 34 Technical assistance in the design, engineering, implementation and financial planning will be provided to most of the KPDT demonstration projects. The allocated GEF funds for the demonstration will mainly be for investments on wind turbines for one of the KPDTs rural electrification projects, which is in Alor Island in Nusa Tenggara Timur (NTT) province. 35 Under its rural electrification program, the KPDT has allocated budget for the installation of a solar PV-diesel hybrid power plant in a village in the northern part of Alor Island, NTT in 2012. The power plant capacity is 120 kW and is comprised of 72 kW solar PV units (+ inverters) and a 48 kW diesel generator set. The installed capacity will be enough to serve the electricity requirements of the village for households and for some rural commerce and industry activities. The province of NTT is rich in wind energy resources and in the northern part of Alor Island where the power plant will be sited the wind regime is very favorable for wind power generation. For the demonstration, instead of going ahead with a solar PV-diesel hybrid power plant, a wind-solar PV-diesel hybrid power plant will be showcased. The baseline costs for the purchase and installation of the solar PV (+inverters) and diesel genset, including the necessary systems for the mini-grid serving the village will be borne by KPDT. Moreover, for this KPDT project, the commercialization of community-based WHyPGen systems will be demonstrated. This will involve the expansion of the capacity of the planned wind-solar PV-diesel power plant to 240 kW in order to supply electricity to another village, which also has almost the same electricity demand as the original village. In this case the power plant will comprise of 20 x 6 kW wind turbines operating in hybrid with the 72 kW solar PV (+ inverters) and 48 kW diesel engine. In summary, for this KPDT demonstration: Baseline: 120 kW (72 kW solar PV + 48 kW diesel engine) supplying 1 village mini-grid system. Alternative: 240 kW (20 X 6 kW = 120 kW wind turbines + 72 kW solar PV + 48 kW diesel engine) supplying 2 village mini-grid systems Incremental: 20 X 6 kW = 120 kW wind turbines + transmission line to other village. 36 This is exclusive of the diesel power generation (9.4 MW considering wind + PV only) 37 This is from the RE portion only (wind + PV)

33

Project Name GE Indonesia Total Demo + Replication

Capacity (MW)

Project Site

Wind Energy Scheme

Description No. of wind turbines = TBD Capacity factor = 22%

Annual Production (MWh) 19,292

Annual CO2 Emission Reduction, tons 17,075

10

Potential Grid-connected Wind Power Plants; in-hybrid with Replication other power generation units within the grid; for supplanting diesel power plants connected to grid. (TBD)

19.4

37,407

33,125

= Prospective replication project KPDT (Ministry of Disadvantaged Regions) Alor Island Wind Hybrid Power Generation Demonstration

Village Electrification Project (Alor Island, NTT) Description

Village Electrification Project (Alor Island, NTT) Features

Village Electrification Project (Alor Island, NTT) - Cost Sharing

Baseline Provision of electricity services to 1 rural village for household, social services and livelihood support activities. Electricity to be supplied using solar energy and diesel genset. 120 kW installed capacity (72 kW Solar PV + Inverters; 48 kW Diesel Genset); mini-grid power distribution system for 1 village 100% KPDT Funds

Alternative Commercial electricity generation and supply to 2 rural villages for household, social services and income generating activities (cottage industries, rural industrial and commercial establishments). Electricity to be supplied using wind energy, solar energy and diesel genset. 240 kW installed capacity (20 x 6 kW Wind Turbines; 72 kW Solar PC + Inverters; 48 kW Diesel Genset); mini-grid power distribution system for 2 villages; 1 power transmission system to one village
KPDT: 10 x 6 kW Wind Turbines; 72 kW Solar PC + Inverters; 48 kW Diesel Genset); mini-grid power distribution system for 1 village; and, initial operating costs of 240 kW power plant GEF: 10 x 6 kW Wind Turbines; mini-grid power distribution system for 1 village; 1 power transmission system to one village

Incremental Commercial electricity generation and supply to 2 villages for income generating activities (cottage industries, rural industrial & commercial establishments). Application of wind energy power generation. 120 kW Wind Turbines; 1 mini-grid power distribution system; 1 power transmission system to one village
GEF: 10 x 6 kW Wind Turbines; mini-grid power distribution system for 1 village; 1 power transmission system to one village

Annex 5: Schedule of Activities (Gantt Chart

Annex 6: Linkages of Activities Activity Inputs From Component 1: WHyPGen Technology Application Assessments Activity 1.1: Assessment of Existing Wind Maps Available data inputs (existing & PPG exercise generated) Activity 1.2: Identification and Screening of Wind Power Generation Sites Activity 1.1 Activity 1.3: Capacity Development and Awareness Enhancement on Wind Energy-based Power Generation Activity 1.4: Comparative Analysis (System Performance and Cost) of Different WHyPGen Systems in the World Market Activity 1.5: Evaluation of the Energy Utilization and Operating Performance of Existing Wind Power Generation Systems in Indonesia PPG generated data; Activities 1.1 & 1.2 Available data inputs (existing & PPG generated); Activity 6.2 Available data inputs (existing & PPG exercise generated); Activity 6.2 Outputs To Activities 1.2, 1.3, 2.1, 5.1, 5.2, 5.3, 5.5, 6.1 Activities 1.3, 2.1, 5.1, 5.2, 5.3, 5.5, 6.1 Activities 5.3, 6.1

Activities 2.1, 5.3, 6.1

Activities 2.1, 5.1, 5.2, 5.3, 5.5, 6.1

Component 2: WHyPGen Technology Demonstration Activity 2.1: Detailed Feasibility Analysis and Establishment of Baseline Data and Performance Targets of Identified Potential WHyPGen Demonstrations Activity 2.2: Evaluation of Logistical, Safety, Administrative, and Legal Requirements for WHyPGen Projects Activity 2.3: Facilitation of the Successful Implementation of WHyPGen Technology Application Activity 2.4: Development of the Engineering Design and Implementation Plan (including financial plan) of the Activity 2.5: Implementation and Commissioning of the WHyPGen Demonstration Activity 2.6: Operation and Performance Evaluation of each WHyPGen Demonstration Project Activity 2.7: Demonstration Program Results Presentation and Follow-up Planning Component 3: Financing WHyPGen Initiatives Activity 3.1: Capacity Building Program on WHyPGen Project Financial Feasibility Evaluation for the Banking/Financial Sector Activity 3.2: Capacity Building Program on WHyPGen Projects for Power Project Developers and Local Technical Services Providers Activity 3.3: Design and Implementation of Financing

Activities 2.2, 2.3, Activities 1.1, 1.2, 2.4, 5.1, 5.2, 5.3, 1.4, 1.5 5.5, 6.1 Activity 2.1 Activities 2.1 & 2.2 Activities 2.1 to 2.4 and 3.3 Activity 2.4 Activity 2.5 Activity 2.6 Available data inputs (existing & PPG exercise generated) Available data inputs (existing & PPG exercise generated) Available data Activities 2.3, 2.4, 5.3, 6.1 Activities 2.4, 5.3, 6.1 Activities 2.5, 5.3, 6.1 Activities 2.6, 5.1, 5.2, 5.3, 5.5, 6.1 Activities 2.7, 5.3, 6.1 Replication of Demos

Activities 3.3, 3.6, 5.3, 6.1

Activities 3.3, 3.6, 5.3, 6.1 Activities 3.4, 3.6,

Activity Schemes

Inputs From inputs (existing & PPG generated); Activities 3.1 & 3.2 Activity 3.4

Outputs To 5.3, 6.1

Activity 3.4: Review of the Performance of Implemented Financing Schemes, and their Impacts on WHyPGen Market Development Activity 3.5 Promoting Public Private Partnership for the Commercialization of Wind Power Generation

Activities 3.6, 5.3, 6.1 Further WHyPGen financing iniatives

Activities 3.1 to 3.5

Component 4: Policy Institutional Support for WHyPGen Initiatives Activity 4.1: Conduct of Promotional Workshops for Available data WHyPGen inputs (existing & PPG exercise generated) Activity 4.2: Policy Studies on WHyPGen Application Activity 4.1 and Market Development Activity 4.3: Formulation of Supportive Policies and Implementing Rules and Regulations on WHyPGen Activity 4.2 Technology Applications and Market Development Activity 4.4: Approval and Enforcement of the Proposed Activities 4.2 & Policies and Implementing Rules and Regulations for 4.3 Wind Energy (including WHyPGen) Applications Activity 4.5: Review of Implemented Policies and Activities 4.3 & Regulatory Frameworks for Wind Technology 4.4 Applications Activity 4.6: Revision of Policies Based on the Findings and Recommendations of the Policy Impact Analyses and Activity 4.5 Work on the Securing of their Approval Component 5: WHyPGen Promotion Activity 5.1: Participation in Exhibitions to Showcase Official WHyPGen Technology and Applications invitations, Activities 1.1, 1.2, 1.5, 2.1, 2.5 Activity 5.2: Design, Production and Dissemination of PPG exercise WHyPGen Technology Promotion Materials generated data; Activities 1.1, 1.2, 1.5, 2.1, 2.5 Activity 5.3: Development, Operation and Maintenance PPG exercise of a Central Database on Wind Energy generated, Activities 1.1 to 1.5, 2.1 to 2.6, 3.1 to 3.5, 4.2, 4.5, 5.1, 6.2, 6.4 Activity 5.4: Development and Establishment of a Project Activities 5.2 & Website and an Information Exchange Network on Wind 5.3 Energy Technologies Development and Applications Activity 5.5: Development and Implementation of Activities 1.1, 1.2, Specialized Wind Energy Technology Design and 1.5, 2.1, 2.5 Application Courses in Engineering Schools

Activities 4.2, Activities 4.3, 4.4, 5.3, 6.1 Activities 4.4, 4.5,

Activities 4.5, Activities 4.6, 5.3, 6.1 Policy Reviews and Approvals

Activities 5.3, 6.1

Activities 5.4,

Further activities requiring WE data inputs. Activities 5.4, Website & Network Operations Continuing Education on WE Technology

Activity Inputs From Component 6: WHyPGen Market Development and Industry Support Activity 6.1: Development and Establishment of a Wind PPG exercise Energy Market Service Center or Clearing House generated, Activities 1.1 to 1.5, 2.1 to 2.6, 3.1 to 3.5, 4.2, 4.5, 5.1, 6.2, 6.4 Activity 6.2: Gathering, Processing, Analysis and Data Available data Banking of Information on Ongoing and Planned Wind inputs (existing & Power Generation (including WHyPGen) Projects in PPG exercise other Countries generated) Activity 6.3: Survey and Evaluation of Electricity Demand Areas Served by Wind Power Generation Activity 6.2 Facilities Activity 6.4: Assessment of the Capacity of Local Available data Equipment Manufacturers to Produce Wind Energy inputs (existing & System (including WHyPGen) Equipment/Components PPG exercise generated) Activity 6.5: Evaluation of Financial, Technical, Logistical, Legal Requirements for the Local Activity 6.4 Manufacturing of Wind Energy System (including WHyPGen) Equipment/Components Activity 6.6: Evaluation of the Potential Improvements/Modifications of Existing Manufacturing Activities 6.4 & Processes, Practices & Facilities for WHyPGen 6.5 Component Production Activity 6.7: Development of Capacity & Capability of Local Manufacturers for Wind Power Generation Activities 6.4 to (including WHyPGen) System Equipment/Components 6.6 Production Activity 6.8: Establishment of an Independent Association of Wind Power Generation (including Activity 6.4 WHyPGen) System Component Manufacturers Activity 6.9: Conduct of Collaborative R&D on Wind Activities 6.4 to Power Generation Equipment/Components 6.7 Manufacturing Activity 6.10: Design and Implementation of Technical Capacity Development Program on WHyPGen System Activities 6.4 to Design, Engineering, Installation, Operation and 6.7 Maintenance Activity 6.11: Conduct of Skills Upgrading Program for Activities 6.4 to Power Generation Engineers and Operators 6.7

Outputs To

MEMR-DGEU Clearing House Operations

Activities 1.4, 1.5, 5.3, 6.1, 6.3,

Activities 5.3, 6.1, 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11 Activities 6.6, 6.7, 6.9, 6.10, 6.11

Activities 6.7, 6.9, 6.10, 6.11

Activities 6.9, 6.10, 6.11 WESMA Activities Continuous R&D Activities Activity 5.5; Postproject WE Training Courses Activity 5.5

Annex 7: Sample of Wind Measurement Report

Annex 8: Budget Analysis

GEF Outcome/ Atlas Activity Atlas Budgetary Account Code 71200

ATLAS Budget Description

Total (USD)

Explanation

International Consultants

30,000

71300

Local Consultants

89,280

Twelve weeks of an international consultant to assist the assessment of WHyPGen technology application Total of 80 weeks for local consultants (consist of Power Generation Tech. Consultant, Power Automation System Consultant and Wind Power Tech. and structure Consultant); and 35 weeks of local consultant (Finance Consultant, Energy Policy consultants and Marketing and Promotion Consultant) to support the activity of updating wind maps of area with significant wind energy potential, conduct the techno-economic feasibility studies of potential WHyPGen application projects, including the feasibility assessments of the local manufacturing/production of WHyPGen system components. 27 weeks of Project Technical Officers to assist in the drafting of TOR and activity description related to WHyPGen Technology Application and Assessment. 5 weeks of Mid Term Review Consultant in assisting the International MTR consultant in gathering of data on the overall project achievement and performance of the project. Allocation for sources and experts to conduct seminar-workshop on wind-energy based power generation Travel and DSA for International Consultant. Travel and DSA for Local consultants to conduct survey and data collection in the areas with significant wind energy potential to update the existing wind maps, identify and conduct screening of identified wind power generation sites, and evaluate the existing wind power generation facilities in Indonesia Allocations for surveys, meeting/seminar/workshop organization & conduct, and other service Communication expenses for all consultants assigned in the field Stationery (for printing reports/memos/communications) and office supplies (e.g., printer toner, etc) Computer hardware and software tools for assessment of wind-energy based power generation Rental of seminar-workshop space at project sites, and rental of survey instruments Charges for wind-map data service providers Documentation/reporting activities, printing of seminar/workshop materials, reproduction of project reports

OUTCOME 1 : WHyPGen Technology Application and Assessment

71400

Contractual Services - Individual

7,300

71600

Travel

46,100

72100 72400 72500 72800 73400 74100 74200

Contractual Services - Companies Communication & AV Equipment Supplies IT Equipment Rental & Maintenance of other equipment Professional Services AV & Printing Production Costs

40,400 6,200 4,300 4,500 4,350 24,300 11,100

GEF Outcome/ Atlas Activity

Atlas Budgetary Account Code 74500

ATLAS Budget Description

Total (USD) 15,000 282,830 37,500 Meeting expenses and petty cash

Explanation

Miscellaneous Total Outcome 1

71200

International Consultants

Fifteen weeks of International Consultant to assist in the WHyPGen Demonstration activities 55 weeks in total of Local Consultants (Power Generation Tech. Consultant, Power Automation System Consultant and Wind Power Tech. and structure Consultant) and 48 weeks of Local Consultants (Finance Consultant, Energy Policy consultants and Marketing and Promotion Consultant) which will be working together to conduct (1) the study and assessment on the potential WHyPGen demonstration project, including the evaluation of logistical, safety, administrative and legal requirements; (2) the development of engineering design, implementation plan (including financial plan) of the demonstration project, and monitoring and evaluation of the demonstration project operation and performance. 20 weeks of Project Technical Officer to support the drafting activity on the TOR and activity description related to WHyPGen technology demonstration, as well as assisting the development and implementation of demonstration project monitoring and evaluation. 4 weeks of Final Evaluation Consultant in assisting the International FE consultant in the gathering of data/information on the overall project achievements and performance Allocation for individuals who will support engineering and construction of demo plants Travel and DSAs for International Consultant Travel and DSAs for Local Consultants to conduct survey, data collection, as well as, implementation, and monitoring and evaluation of the demonstration projects. Sub-contract for engineering and construction companies Hardware/instruments/equipment/system components purchase for the demonstration projects Communication expenses during on-site inspections and monitoring visits Stationery (e.g., paper, binder, etc) Computer hardware and software tools for engineering demo plants Rental of necessary tools and instrument for construction works Expenses for engineering and construction support work

71300

Local Consultants

76,890

OUTCOME 2 : WHyPGen Technology Demonstration

71400 71600 72100 72200 72400 72500 72800 73400 74100

Contractual Services - Individual Travel Contractual Services - Companies Equipment & Furniture Communication & AV Equipment Supplies IT Equipment Rental & Maintenance of other equipment Professional Services

12,000 68,650 29,550 300,000 3,300 4,800 3,300 3,300 3,080

GEF Outcome/ Atlas Activity

Atlas Budgetary Account Code 74200 74500

ATLAS Budget Description

Total (USD) 4,200 30,000 576,570

Explanation

AV & Printing Production Costs Miscellaneous Total Outcome 2

Printing for documentation, reporting and publication on the demonstration program results Meeting expenses and other miscellaneous expenses in demonstration project activities

71300

Local Consultants

39,500

58 Weeks of Local Consultant (Finance Consultant, and Marketing and Promotion Consultant) in conducting training and promotion for banks/financial institutions in financing WHyPGen project, and in designing financing schemes for WHyPGen projects. 9 weeks of Project Technical Officer to assist the drafting activity on the TOR of activities related to WHyPGen Financing initiatives, as well as in assisting the development and implementation of project communication strategies Travel and DSAs for local consultants to conduct survey in determining and evaluation the current level of capacity of the local banks/financial community in financing the wind power generation project, as well as, to determine and evaluate the current level of capacity of power project developers and local technical service providers in the development of business plans and utilization of financial models. Travel, DSAs and local transports will be provided for the participants (banks, financial institution, ESCOs) for their attendance in the training (improving the knowledge and skills of the local banks/financial institutions in the financing of wind power generation, and for the other stakeholders in improving their knowledge and skills in the financial modeling and developing a bankable wind power generation projects) Sub contract for training and education services Stationery and office supplies The fund will be managed by the financial institution to disburse on Co-financing approach as a seed to commercialize wind power hybrid power generation Computer hardware and software tools for use in financial model applications Venue rental for conducting training and courses Expenses for services in developing financial models Printing and reproduction if training materials, activity reports printing/documentation

71600

Travel

16,250

OUTCOME 3 : Financing WHyPGen Initiatives

72100 72500 72615 72800 73400 74100 74200

Contractual Services - Companies Supplies Micro Capital Grants - Other IT Equipment Rental & Maintenance of other equipment Professional Services AV & Printing Production Costs

7,200 7,600 200,000 2,500 4,250 9,500 7,000

GEF Outcome/ Atlas Activity

Atlas Budgetary Account Code 74500

ATLAS Budget Description

Total (USD) 7,800 301,600

Explanation

Miscellaneous Total Outcome 3

Meeting expenses and other charges (petty cash) 7 weeks of local technical consultants (Power Generation Tech. Consultant, Power Automation System Consultant and Wind Power Tech. and structure Consultant) to give technical assistance and advice in the policy related study. 66 weeks of local consultant (Energy Policy Consultants) in studying the policies of wind hybrid energy systems, as well as in proposing policy frameworks supportive of WHyPGen projects. 3 weeks of Project Technical Officer in representing the project at forums and meetings, as well as drafting TOR for activities related to Policy Institutional Support for WHyPGen Initiatives Travel and DSAs for Local Consultants Meeting/Forum Discussion arrangement. Resources persons / experts in regulation/policy will be invited to the forum discussion/training to give inputs on the existing policy and regulation related to energy policy especially renewable energy Stationery (e.g., paper, binder, etc) Additional computer hardware and (business) software tools for consultants Venue rental for conducting series of forum discussion among relevant stakeholders in reviewing existing RE policies in the country, capacity building/awareness campaign activities, as well as, in conducting training program for the MEMR personnel Charges for survey services for policy of market development and wind-based energy development Printing of reports/documentation Meeting expenses, and other miscellaneous charges and sundries for WHyPGen Policy Institutional Support 121 weeks of local Marketing and Promotion consultant in designing and implementing active promotional program for WHyPGen to support the creation of the local WHyPGen market in Indonesia. 3 weeks of Project Technical Officer in assisting the development and implementation of project communication strategies, and assist the drafting of TOR related to WHyPGen promotion activities Travel and DSAs for Local Consultants Exhibition arrangement Svc Co Information Technology Services, Course & training arrangement

71300

Local Consultants

45,950

71600

Travel Contractual Services - Companies Supplies IT Equipment Rental & Maintenance of other equipment Professional Services AV & Printing Production Costs Miscellaneous Total Outcome 4

19,450 14,600 3,500 2,100 3,100 5,350 7,200 7,600 108,850

OUTCOME 4 : Policy Institutional Support for WHyPGen Initiatives

72100 72500 72800 73400 74100 74200 74500

71300

Local Consultants

74,675

OUTPUT 5 : WHyPGen Promotion

71600 72100 Travel Contractual Services - Companies 37,550 53,900

GEF Outcome/ Atlas Activity

Atlas Budgetary Account Code 72400 72500 72800 73400

ATLAS Budget Description

Total (USD) 14,750 7,200 25,550 16,750

Explanation

Communication & AV Equipment Supplies IT Equipment Rental & Maintenance of other equipment

Camera, Projector, Audio and Video player for exhibitions Stationery and other office supplies Computer hardware, software and networking devices to formulate database centre of windenergy based Rental equipments for transporting exhibitions tools/equipments Charges for web development, web hosting service, participation fee on various exhibitions and promotion fee on various media (radio, TV, newspaper, online) Promotion printings, AV promotion development, including courses material printing for promotion in engineering schools Meeting expenses, and other miscellaneous expenses and sundries for WHyPGen promotion

74100 74200 74500

Professional Services AV & Printing Production Costs Miscellaneous Total Outcome 5

52,900 37,500 16,000 336,775

71300

Local Consultants

96,425

OUTPUT 6 : WHyPGen Market Development and Industry Support

73 weeks in total of Local Consultants (Power Generation Tech. Consultant, Power Automation System Consultant and Wind Power Tech. and structure Consultant) and 75 weeks of Local Consultants (Finance Consultant, Energy Policy consultants and Marketing and Promotion Consultant) which will be working together to conduct (1) the capacity building and technical support program for the local manufacturing of wind energy system components; (2) survey and evaluation of electricity demand areas served by wind power generation facilities. 5 weeks of Project Technical Officer in representing the project at forums and meetings, reviewing and providing comments on all project outputs. 2 weeks of Final Evaluation Consultant in assisting the International FE consultant in the gathering of data/information on the overall project achievements and performance. Allocation for sources and experts to develop and maintain clearing house, WHyPGen data banking, assisting local R&D, and conduct capacity development seminar-workshop courses. Travel and DSAs for Local Consultants Allocations for supply demand survey, local manufacturer capacity survey, meeting/seminar/workshop arrangement Communication charges during local capacity survey and assisting local R&D

71400 71600 72100 72400

Contractual Services - Individual Travel Contractual Services - Companies Communication & AV Equipment

43,450 90,350 15,750 9,850

GEF Outcome/ Atlas Activity

Atlas Budgetary Account Code 72500 72800 73400 74100 74200 74500

ATLAS Budget Description

Total (USD) 5,200 5,150 14,950 62,700 18,250 17,500 379,575 105,300 63,918 450 200 132 170,000 156 weeks for National Project Manager Stationery and office supplies

Explanation

Supplies IT Equipment Rental & Maintenance of other equipment Professional Services AV & Printing Production Costs Miscellaneous Total Outcome 6

Additional computer hardware and software tools for clearing house database Rental of necessary tools and instrument for supporting local R&D Participation fee on trainings, seminars and courses for capacity building for local manufacturers and local engineers/operators

Reproduction of survey reports, assessment reports, activity reports, and other documentation
Meeting expenses, miscellaneous costs and sundries for supporting WHyPGen market development and industry support.

71300 71400 Project Management Unit 72500 74200 74500

Local Consultants Contractual Services - Individual Supplies AV & Printing Production Costs Miscellaneous Total Management PROJECT TOTAL

156 weeks of Finance Assistant and 90 weeks of Administrative Assistant Stationery and office supplies Printing and documentation of project reports and monitoring & evaluation reports Meeting expenses, miscellaneous costs and sundries for monitoring and evaluation

2,156,200

Annex 9: Co-Financing Analysis

Budget Budget Code Description

71200 71300 71400 71600 72100 72400 72500 73400

Co-Financed Source of CoAmount, US$ Financing

Viron, KPDT, BPPT, Alpen Steel Viron, KPDT, BPPT, Alpen Steel Viron, KPDT, BPPT, Alpen Steel Viron, KPDT, BPPT, Alpen Steel Viron, KPDT, BPPT, Alpen Steel Viron, KPDT, BPPT, Alpen Steel Viron, KPDT, BPPT, Alpen Steel Viron, KPDT, BPPT, Alpen Steel

Co-Financer Related Activities

Component 1: WHyPGen Technology Application and Assessment International 120,000 Consultant (IC) Local Consultant (LC) 108,000 Contractual Service Individual Travel 144,000 37,800 ICs engaged by host demonstration companies to provide expert advice in their wind mapping activities that are part of the WHyPGen project. LCs engaged by the host demonstration companies for advising in their wind mapping activities that are part of the WHyPGen project. Full time experts engaged by host demonstration companies as person in charge of the implementation of the wind resource assessment activities that are subsumed to Travel/DSA cost of ICs and LCs working on the wind mapping activities in 7 identified locations. These are activities that are subsumed to the WHyPGen project as baseline Research and engineering firms sub-contracted by the host demonstration companies to carry out the abovementioned wind mapping activities, including those that will do Communication cost of ICs and LCs engaged by the various host demonstration companies for communication between main offices and field offices overseeing wind Cost of supplies (e.g., stationeries) allocated by the host demonstration companies in the temporary field offices they have set up in the wind monitoring sites. These are for Maintenance of installed wind measurement equipment at 7 WHyPGen potential sites that were subsumed to WHyPGen, and paid for by the host demonstration companies. Cost of materials for the construction of wind towers and sheds housing the wind Viron, KPDT, BPPT, Local professionals hired by the host demonstration companies in the construction of Alpen Steel temporary field offices in the wind resource assessment sites. Viron, KPDT, BPPT, Printing and publication of wind resource assessment data, including updated wind Alpen Steel maps Viron, KPDT, BPPT, Miscellaneous and sundries paid for by the host demonstration companies in their Alpen Steel wind resource assessment activities that are subsumed to WHyPGen.

Contractual Services 150,000 Companies Communication & AV 7,400 equipments Supplies 2,000 Rental & Maintenance 20,000 of other equipment Professional services Printing & reproduction costs Miscellaneous 140,000 10,000 7,000 746,200

74100 74200 74500

SUB TOTAL Component 1

Budget Budget Code Description

71200 71300 71400 71600 72100 72200 72400 72500 73400

Co-Financed Source of CoAmount, US$ Financing

Viron, KPDT, BPPT, Alpen Steel Viron, KPDT, BPPT, Alpen Steel Viron, KPDT, BPPT, Alpen Steel Viron, KPDT, BPPT, Alpen Steel Viron, KPDT, BPPT, Alpen Steel Viron, KPDT, BPPT, Alpen Steel Viron, KPDT, BPPT, Alpen Steel Viron, KPDT, BPPT, Alpen Steel Viron, KPDT, BPPT, Alpen Steel Viron, KPDT, BPPT, Alpen Steel Viron, KPDT, BPPT, Alpen Steel

Co-Financer Related Activities

Component 2: WHyPGen Technology Demonstration International 60,000 Consultant (IC) Local Consultant (LC) 60,000 Contractual Service Individual Travel Contractual Services Companies Equipment 144,000 53,700 3,647,900 30,000,000 ICs engaged by the host demonstration advising on their respective wind power generation projects that have been agreed as demonstrations/pilots of the WHyPGen LCs engaged by the host demonstration companies assisting the ICs and also providing expert advice on their respective wind power generation projects that have Full time experts engaged by host demonstration companies as person in charge of the planning and implementation of the wind power demonstration projects that are Travel/DSA cost of ICs and LCs working on the design, implementation and operation of the wind power generation demonstrations/pilots. These are activities that are Engineering firms sub-contracted by the host demonstration companies to carry out the installation and commissioning of the pilot wind power generation demonstrations. Wind power generation system hardware purchased and funded by the host demonstration companies Communication cost of ICs and LCs engaged by the various host demonstration companies for communication between main offices and field offices overseeing the Cost of supplies (e.g., stationeries) allocated by the host demonstration companies in the field offices they have set up in the demonstration project sites. These are for use Maintenance of the wind power plant infrastructure and physical equipment that make up the demonstration units; and paid for by the host demonstration companies. Kick-off workshop in each demonstration site, participated in by inviting 50 participants per workshop. Miscellaneous and sundries paid for by the host demonstration companies in their wind power generation projects that are subsumed to the WHyPGen project as

Communication & AV 7,500 equipments Supplies 2,500 Rental & Maintenance 33,000 of other equipment Professional services Miscellaneous 50,000 10,000 34,068,600

74100 74500

SUB TOTAL Component 2

Budget Code
71300

Budget Description
Local Consultants

Co-Financed Amount, US$

144,000

Source of CoFinancing

Co-Financer Related Activities

Component 3: Financing WHyPGen Initiatives KPDT, BPPT, Viron, Financial consultants engaged by host demonstration companies to evaluate the Alpen Steel financial viability of their respective wind power generation projects; 1 financial expert engaged by KPDT to assess the financial viability of potential renewable energy power generation projects (including wind power generation) that can be implemented under KPDT, BPPT Travel/DSA cost of LCs working on the financial feasibility evaluations of the demonstration projects; as well as those on the financial evaluation of potential REbased power generation projects in the Disadvantaged Regions of Indonesia, and KPDT, BPPT, UNDP Contractors engaged to work on the design of financing schemes for RE-based power generation, in general, and wind power generation projects, in particular. These financing scheme development activities are among the baseline activities that are being supplemented to come up with more favorable financing schemes that are KPDT, BPPT Communication costs involved in the work done by the hired local consultants and contractors. KPDT, BPPT Cost of supplies (e.g., stationeries) allocated by KPDT and BPPT for use by the company admin staff and by the hired LCs and contractors working on financial KPDT, BPPT, UNDP Event organizer engaged to organize workshop on the promotion of RE-based power generation (including wind power generation) to targeted banks and financing KPDT, BPPT, UNDP Preparation, publication and dissemination of RE-based power generation financing workshop proceedings KPDT, BPPT Miscellaneous and sundries paid for the development and organization of the promotional campaign on RE-based power generation financing.

71600

Travel

26,400

72100

Contractual Services Companies

75,000

72400 72500 74100 74200 74500

Communication & AV 5,000 equipments Supplies 2,500 Professional services Printing production costs Miscellaneous 37,100 10,000 2,500 302,500

SUB TOTAL Component 3 71200 71300 71600 72100

Component 4: Policy Institutional Support for WHyPGen Initiatives International 34,500 Consultant (IC) Local Consultant (LC) 144,000 Travel Contractual Services Companies 18,900 100,000 KPDT, BPPT, UNDP ICs engaged by KPDT to conduct policy studies in RE development and utilization in Disadvantaged Regions, including policy recommendations on RE-based power KPDT, BPPT Energy policy experts engaged by KPDT to conduct a policy study and policy advocacy work that full subsumed to WHyPGen project. KPDT, BPPT Travel/DSA cost of are time consultants working on abovementioned activities in Viron, KPDT, BPPT, region that are subsumed to hired to carry out policy surveys on RE-based power Market research companies the WHyPGen project. Alpen Steel generation (inclusive of wind energy) one under the auspices of KPDT in the Disadvantaged Regions; and one by BPPT under its technology development program. Both activities are subsumed to WHyPGen as baseline activities for policy/regulatory barrier removal. Cost also include work carried out by the host demonstration

Budge t Code
72400 72500 74100 74200 74500

Budge t De scription

Co-Finance d Amount, US$

Source of CoFinancing
KPDT, BPPT

Co-Finance r Re late d Activitie s

Communication & AV 5,000 equipments Supplies 4,800 Professional services Printing production costs Miscellaneous 180,000 10,000 20,000 517,200

Communication costs involved in the work done by the hired local consultants and contractors. KPDT, BPPT Cost of supplies (e.g., stationeries) allocated by KPDT and BPPT for use by the company admin staff and by the hired LCs and contractors working on financial Viron, KPDT, BPPT, Event organizer engaged for organizing 2 consultation workshops and Focus Group Alpen Steel, UNDP Discussions each at the national and local levels (50-100 participants). KPDT, BPPT, UNDP Preparation, publication and dissemination of RE-based power generation policy and regulatory frameworks workshop proceedings KPDT, BPPT Miscellaneous and sundries paid for the development and organization of the promotional campaign for public acceptance of policy recommendations on RE-based

SUB TOTAL Component 4 71300

Component 5: WHyPGen Promotion Local Consultant (LC) 108,000 Viron, KPDT, BPPT, LCs for project website development by each host demonstration companies; LCs Alpen Steel engaged by KPDT for RE database system development; and those engaged by BPPT to update its database on wind energy systems and technology applications. All of Viron, KPDT, BPPT, Contractors engaged by the host demonstration companies to design the promotional Alpen Steel program for their respective projects; also for contractors that will be engaged by KPDT for website and database system maintenance; and those that will be hired by Viron, KPDT, BPPT, Travel/DSA cost of full time consultants working on abovementioned activities that are Alpen Steel subsumed to the WHyPGen project. Viron, KPDT, BPPT, Contractors engaged by the host demonstration companies to implement the Alpen Steel,UNDP promotional campaign for their respective wind power generation projects that are included in the WHyPGen project as demonstrations; also contractors hired by KPDT to implement their RE-based power generation program; and those engaged by BPPT Viron, KPDT, BPPT, Communication costs involved in the work done by the hired local consultants and Alpen Steel contractors. Viron, KPDT, BPPT, Cost of supplies (e.g., stationeries) allocated by the host demonstration companies, as Alpen Steel well as KPDT and BPPT for use by the company admin staff and by the hired LCs and Viron, KPDT, BPPT, Event organizer organized consultation workshops and Focus Group Discussions each Alpen Steel, UNDP at the national and local levels (50-100 participants). Viron, KPDT, BPPT, Preparation, publication and dissemination of wind power generation campaign and Alpen Steel, UNDP promotion materials by KPDT and BPPT; including advertisements paid for by the host Viron, KPDT, BPPT, Miscellaneous and sundries paid for the development and organization of the Alpen Steel promotional campaign for public acceptance of policy recommendations on RE-based

71400

Contractual Service Individual Travel Contractual Services Companies

144,000

71600 72100

30,000 70,000

72400 72500 74100 74200 74500

Communication & AV 7,100 equipments Supplies 4,800 Professional services Printing production costs Miscellaneous 60,000 10,000 3,000 436,900

SUB TOTAL Component 5

Budget Code
71300

Budget Description

Co-Finance d Amount, US$

Source of CoFinancing

Co-Financer Re lated Activities

Component 6: WHyPGen Market Development and Industry Support Local Consultant (LC) 90,000 Viron, KPDT, BPPT, LCs engaged by host demonstration companies to advice on the installation of locally Alpen Steel, UNDP produced wind energy system equipment and for the fabrication of wind power system accessories (e.g., towers). LCs tasked by KPDT to provide training to local manufacturers of RE-based power generation system components; as well as LCs Viron, KPDT, BPPT, ICs hired by the host demonstration companies to provide advice to their maintenance Alpen Steel and production personnel on the repair and maintenance of wind power systems (including fabrication of some components); ICs appointed by KPDT in training local manufacturers and local engineering service providers in the operation and Viron, KPDT, BPPT, Travel/DSA cost of LCs and wind energy system experts working on the Alpen Steel abovementioned activities that are subsumed to the WHyPGen project. Viron, KPDT, BPPT, Market research companies engaged by the host demonstration companies to conduct Alpen Steel survey and evaluation of electricity demand in areas where they plan to set-up wind power generation projects. Also surveys commissioned the KPDT in establishing the electricity demand in populated areas within the Disadvantaged Regions. Also include Viron, KPDT, BPPT, Communication costs involved in the work done by the hired local consultants and Alpen Steel contractors. Viron, KPDT, BPPT, Cost of supplies (e.g., stationeries) allocated by the host demonstration companies, as Alpen Steel well as KPDT and BPPT for use by the company admin staff and by the hired LCs and Viron, KPDT, BPPT, Local workshops organized by event organizers hired by the host demonstration Alpen Steel, UNDP companies and KPDT to promote wind power generation system equipment Viron, KPDT, BPPT, Preparation, publication and dissemination of wind power generation system Alpen Steel, UNDP equipment manufacturing workshop proceedings, including technical materials on wind Viron, KPDT, BPPT, Miscellaneous and sundries paid for the promotional campaign and training on wind Alpen Steel power generation system component manufacturing.

71400

Contractual Service Individual

216,000

71600 72100

Travel Contractual Services Companies

40,500 150,000

72400 72500 74100 74200 74500

Communication & AV 5,400 equipments Supplies 4,800 Professional services Printing production costs Miscellaneous 210,000 10,000 7,000 733,700

SUB TOTAL Component 6 SUB TOTAL - All Components Project Management Office (PMO) 71200 71400 71600 International Consultant (IC) Contractual Service Individual Travel

36,805,100
45,000 216,000 40,000 KPDT, BPPT, UNDP ICs engaged by host demonstration companies in the performance evaluation of demo projects; UNDP oversight on the conduct of the WHyPGen project mid-term and final Viron, KPDT, BPPT, Project managers and support personnel of the host demonstration companies in their Alpen Steel field offices in the vicinity of the demo projects. Include BPPT personnel seconded to Viron, KPDT, BPPT, Travel/DSA cost for host demonstration companies project management teams in Alpen Steel carrying out demo project monitoring visits.

Budge t Code
72200 72400 72800 73400

Budge t Description

Co-Finance d Amount, US$

Source of CoFinancing
Viron, KPDT, BPPT, Alpen Steel Viron, KPDT, BPPT, Alpen Steel Viron, KPDT, BPPT, Alpen Steel BPPT

Co-Financer Re lated Activities

Purchase of office equipment by host demonstration companies for their field offices in the vicinity of the demo projects. Communication expenses of host demonstration companies field offices, apart from monitoring & evaluation activities. Office IT equipment in the field offices of host demonstration companies, and those installed under the funding of KPDT. Project management office rental

Equipment & Furniture 200,000 Communication & AV 13,500 equipments IT Equipment 30,000 Rental & Maintenance 90,000 of other equipment Printing production costs Miscellaneous 20,000 25,000 679,500 37,484,600

74200 74500

Viron, KPDT, BPPT, Alpen Steel Viron, KPDT, Alpen Steel

Reproduction of demo project documents, engineering drawings, and performance reports paid for by the host demonstration companies. Miscellaneous and sundries paid for by the host demonstration companies in the operation of their field offices.

Sub Total PMO Grand Total

Annex 10: Annual Targets (Based on Project Planning Matrix, in line with PIR Reporting Periods)
Strategy
Project Goal: Rate of growth of GHG emission in the power sector is reduced Project Objective: Facilitation of commercial ongrid WHyPGen systems for environmentally sustainable electricity supply Outcome 1: Enhanced knowledge of potential wind power generation (including WHyPGen) applications Improved knowledge of wind power generation system benefits and costs Enhanced interest in investing in wind power generation (including WHyPGen) projects

Objectively Verifiable Indicators

Tons of CO2 emission/year reduced from substitution of fossil fuelbased power generation by WHyPGen38 by end-of-project (EOP), MT CO2 % of reduction in CO2 emissions from the power sector by EOP Installed capacity of WHyPGen facilities by EOP, MW Total electricity generation from installed WHyPGen facilities by EOP, GWh/year Total WHyPGen capacity planned for installation, MW Output 1.1 Number of assessed locations with wind power generation potentials by EOP Number of province covered by the new & updated wind maps Number of identified locations with wind resources that are feasible for wind-based power generation by EOP Output 1.2 Number of evaluated existing wind energy systems by EOP Number of completed wind power generation (including WHyPGen) project feasibility studies by EOP Number of seminar-workshops on wind energy (including WHyPGen) applications and promotion of potential wind power projects by EOP Output 1.3 Number of local equipment manufacturers that can potentially produce wind energy (including WHyPGen) system components by EOP Number of local equipment manufactures that are ready to produce wind energy (including WHyPGen) system components by EOP

Target
17,071 0.027 9,4 19.27 100

Year 1
-

Annual Targets Year 2 Year 3

3,414 0.006 2 3.85 30 17,071 0.027 9,4 15.42 100

25 9 15 11 10 6

10 3 3 3 2 1

10 3 6 3 4 3

5 3 6 5 4 2

14 7

2 1

6 3

6 3

This refers to wind energy systems that are: (a) grid connected and operating in hybrid with other power generation units within the grid; and, (b) operating in hybrid with other power generation units within a power generation facility. WHyPGen is also the short name of this UNDP-GEF Project.

38

Strategy
Outcome 2: GHG emission reductions from WHyPGen demo projects Increased number of WHyPGen projects planned and implemented Increased share of wind energy in the national power generation mix.

Objectively Verifiable Indicators

Output 2.1 Number of WHyPGen pilots/demos that are successfully implemented by EOP Cumulative electricity production from successfully implemented 2MW WHyPGen pilots/demos by EOP, GWh Cumulative CO2 emission reductions from successfully implemented 2MW WHyPGen pilots/demos by EOP, MT CO2 Output 2.2 Number of planned WHyPGen replication projects by EOP Number of WHyPGen projects implemented by EOP (including pilot/demo projects) (cumulative) % contribution of WHyPGen in the electricity supply in Indonesia by EOP

Target

Annual Targets Year 1 Year 2 Year 3

0 0 0 0 0 0 1 1,28 1,024 4 2 0,029 3 3,85 3,073 10 6 0,09

3 3,85 3,073 10 6 0,09

Outcome 3: Increased investments on wind power generation (including) WHyPGen projects Local banks and financing institutions providing loans for wind power generation projects.

Output 3.1 Number of completed capacity building programs for banks/FI by EOP Number of completed capacity building programs for project developers and service providers and equipment manufacturers by EOP No. of banks/financing institutions trained on WHyPGen project financial feasibility evaluation by Year 3 No. of local services providers and power project developers trained on the development of business plans and utilization of financial models for preparing bankable project proposals by Year 3 No. of power project developers trained on the development of business plans and utilization of financial models for preparing bankable project proposals by EOP Number of local banks/FIs that provide affordable financing schemes for WHyPGen projects by EOP Number of Local Governments that fund WHyPGen projects by EOP Number of venture capital funded WHyPGen projects planned and implemented by EOP 3 6 3 6 1 1 1 1 1 2 1 2 1 3 1 3

28 3 2 1

5 0 0 0

10 1 0 0

13 2 2 1

Strategy

Objectively Verifiable Indicators

Output 3.2 Number of financing schemes designed and approved for wind energy projects as well as for WHyPGen component manufacturing by EOP Number of wind energy projects planned with approved financing scheme by EOP Number of wind energy projects implemented with financial support through the approved financing scheme by EOP Volume of financing provided to implemented wind energy projects through the approved financing scheme by EOP, US$ million Output 4.1 Number of existing WHyPGen-related policies evaluated by EOP Number of policy recommendations proposed for facilitating, promoting and supporting wind power generation (including WHyPGen) investments by EOP Output 4.2 Supporting policies for wind power generation including WHyPGen formulated

Target

Annual Targets Year 1 Year 2 Year 3

1 0 0 0 1 0 0 0 1 2 2 16

3 2 2 16

Outcome 4: Approved and enforced policies supportive of wind power generation (including WHyPGen) projects

6 3

0 0

2 1

4 2

Supporting policies for wind power generation including WHyPGen endorsed by the government Number of local companies actively engaged in the wind power generation (including WHyPGen) business by EOP (cumulative) Output 5.1 Number of completed promotional materials on wind energy, in general, and WHyPGen, in particular by Year 2 An operational and widely used central database system on wind energy by Year 2 Average number of satisfied users of the WHyPGen website (for promotion and information exchange) each year starting Year 2

Policy on regulatory, fiscal, market Policy on regulatory, fiscal, market 14

Policy on regulatory

Policy on fiscal

Policy on market Policy on regulatory, fiscal, market 14

Outcome 5: Enhanced awareness of the benefits of wind power generation projects Planned and implemented wind power generation (including WHyPGen) projects

15 Year 2 1000

5 0 0

15 Completed 1000

Completed Completed 1000

Strategy

Objectively Verifiable Indicators

Number of local businesses and entrepreneurs that engage in the WHyPGen business by EOP Number of engineering schools that offer courses on wind energy technologies (including WHyPGen applications) in their engineering curricula by EOP Average number of coordination activities of WESMA (wind energy system manufacturers association) each year starting Year 2 Average number of WESMA members participating in coordination activities each year starting Year 2 Number of wind energy (including WHyPGen) projects that are lined up for implementation in Indonesia by EOP (including project which receiving finance facility from the component 3 from the WHyPGen project) (cumulative) Output 6.1 A fully established and operational wind energy clearing house by Year 2 Number of project developers, investors, technical service, and local equipment manufacturers that make use of the clearing house each year starting Year 2 Cumulative number of local equipment manufacturers trained under the capacity development program by EOP Number of trained local equipment manufacturers that are manufacturing quality wind energy system equipment & components by EOP (cumulative) Number of local technical service providers trained under the capacity development program by EOP (cumulative) Number of trained local technical service providers that are actively engaged in the servicing (installation & maintenance) of wind energy systems (including WHyPGen) by EOP (cumulative) Number of trained local technical service providers that are actively engaged in the servicing (design & engineering) of wind energy systems (including WHyPGen) by EOP (cumulative)

Target
30 3 4 8

Annual Targets Year 1 Year 2 Year 3

0 0 0 0 10 0 1 2 30 3 3 6

Outcome 6: Improved local wind energy (including WHyPGen) system design & engineering capacity Ensured availability of local service provider for wind energy facilities Availability of quality components wind energy (including WHyPGen) systems that are locally made Better understanding of the availability and potentials for wind energy for ensuring environmentally sustainable power supply in Indonesia

Year 2 8 15 60 15 50

0 0 0 0 0 0

Completed 3 5 20 5 20

Completed 5 15 60 15 50

50

20

50

Strategy

Objectively Verifiable Indicators

Percentage of all trainees of the capacity development programs that are actively engaged in the Indonesia wind energy market by EOP, % Number of power generation engineers and operators certified to operate and maintain wind power generation (including WHyPGen) systems by EOP (cumulative) Number of wind energy projects (including WHyPGen projects) that are designed and engineered by local technical service providers by EOP Number of wind power generation (including WHyPGen) projects facilitated through the WESMA by EOP Number of wind power generation R&D projects completed through WESMA by EOP Output 6.2 Number of areas with completed electricity demand analyses and forecasts by EOP Number of power project developers and technical service providers that make use of the electricity demand analyses and forecasts by EOP

Target
60 18

Annual Targets Year 1 Year 2 Year 3

0 0 40 8 60 18

4 2 2

0 0 0

1 0 0

4 2 2

25 8

5 2

10 4

10 8

NOTES: 1. Year 1 is from Start of project (in 2011) to 30 June 2012 2. Year 2 is from 1 July 20012 to 30 June 2013 3. Year 3 is from 1 July 2013 to End of Project or 30 June 2014