Case Study: PT Semen Indonesia Tuban
PT Semen Indonesia (Persero), Tbk. is the largest cement producing company
group in the country. The company has experience in developing a CDM
project in power generation by waste heat recovery in its Semen Padang
factory. In 2013, PT Semen Indonesia proposed another “Power Generation
by Waste Heat Recovery in Cement Industry” project, developed with their
Japanese partner JFE Engineering.
The project introduces a waste heat recovery at a Semen Indonesia cement
production plant in Tuban, East Java, Indonesia. The waste recovery system
is designed to utilize waste heat emitted from the cement factory to generate
electricity for own consumption, therefore reducing electricity import from
the national electricity grid of approximately 165,000 MWh/year, which will
lead to the reduction of fossil fuel combustion at grid-connected power plants.
A power generation facility with 30.6 MW capacity was proposed.
After feasibility in fiscal year 2013, official Project Idea Note proposal was
submitted in May 2014 and the project was selected for funding as JCM
Model Project (expected to be registered in 2017). Benefiting from project
participants’ preparation, technical expertise, understanding and experience,
as well as effective governmental consultation process, the approval of its
MRV methodology (ID_AM001) took only 1 month.
PT Semen Indonesia sees three benefits from engaging in the JCM:
environment, economic, and company image. Environmental benefits include
CO 2 emission reduction (approximately 122,000 tCO 2 /year, the largest
selected project in Indonesia so far) and low stack gas temperature. Energy
and water consumption reduction resulting from WHR process lead to both
environmental and economic benefit. By utilizing about 30 MW electricity
generated by the installed facility, more than 150 million kWH electricity per
year can be saved, leading to more than 85 % cost saving. The company is
also able to enhance company image, create jobs, and contribute to the
community. The project investment costs around 50 million USD, and the
JCM subsidy from the Ministry of Environment Japan, which accounts to
around 18 % of this cost, decreases the project investment index (IDR/kW).
From their experience in the CDM, PT Semen Indonesia sees that the JCM
offers a simpler, more reliable, and faster mechanism for the private sector
and its MRV system preferable for its simplicity. The JCM encouragement
for private sector active engagement is appreciated. PT Semen Indonesia
suggests to address the following to further enhance the JCM
implementation:
1. Improve appropriateness of MRV system by increasing the number of
Indonesia TPE, ensure affordability of their services, and including MRV
cost in the project budget
(continued)
124
A. Amellina
PT Semen Indonesia (Persero), Tbk. is the largest cement producing company
group in the country. The company has experience in developing a CDM
project in power generation by waste heat recovery in its Semen Padang
factory. In 2013, PT Semen Indonesia proposed another “Power Generation
by Waste Heat Recovery in Cement Industry” project, developed with their
Japanese partner JFE Engineering.
The project introduces a waste heat recovery at a Semen Indonesia cement
production plant in Tuban, East Java, Indonesia. The waste recovery system
is designed to utilize waste heat emitted from the cement factory to generate
electricity for own consumption, therefore reducing electricity import from
the national electricity grid of approximately 165,000 MWh/year, which will
lead to the reduction of fossil fuel combustion at grid-connected power plants.
A power generation facility with 30.6 MW capacity was proposed.
After feasibility in fiscal year 2013, official Project Idea Note proposal was
submitted in May 2014 and the project was selected for funding as JCM
Model Project (expected to be registered in 2017). Benefiting from project
participants’ preparation, technical expertise, understanding and experience,
as well as effective governmental consultation process, the approval of its
MRV methodology (ID_AM001) took only 1 month.
PT Semen Indonesia sees three benefits from engaging in the JCM:
environment, economic, and company image. Environmental benefits include
CO 2 emission reduction (approximately 122,000 tCO 2 /year, the largest
selected project in Indonesia so far) and low stack gas temperature. Energy
and water consumption reduction resulting from WHR process lead to both
environmental and economic benefit. By utilizing about 30 MW electricity
generated by the installed facility, more than 150 million kWH electricity per
year can be saved, leading to more than 85 % cost saving. The company is
also able to enhance company image, create jobs, and contribute to the
community. The project investment costs around 50 million USD, and the
JCM subsidy from the Ministry of Environment Japan, which accounts to
around 18 % of this cost, decreases the project investment index (IDR/kW).
From their experience in the CDM, PT Semen Indonesia sees that the JCM
offers a simpler, more reliable, and faster mechanism for the private sector
and its MRV system preferable for its simplicity. The JCM encouragement
for private sector active engagement is appreciated. PT Semen Indonesia
suggests to address the following to further enhance the JCM
implementation:
1. Improve appropriateness of MRV system by increasing the number of
Indonesia TPE, ensure affordability of their services, and including MRV
cost in the project budget
(continued)
124
A. Amellina