Page - (000142) - in Evaluating Climate Change Action for Sustainable Development

CaseStudy:PTSemen IndonesiaTuban PTSemenIndonesia(Persero),Tbk. is thelargestcementproducingcompany 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, PTSemen Indonesia proposed another “PowerGeneration byWasteHeat Recovery inCement Industry” project, developedwith their Japanesepartner JFEEngineering. Theproject introducesawasteheat recoveryataSemenIndonesiacement production plant inTuban,East Java, Indonesia. Thewaste recovery system isdesigned toutilizewaste heat emitted from the cement factory togenerate electricity for own consumption, therefore reducing electricity import from thenational electricitygridofapproximately165,000MWh/year,whichwill leadtothereductionoffossil fuelcombustionatgrid-connectedpowerplants. Apower generation facilitywith 30.6MWcapacitywas proposed. Afterfeasibility infiscalyear2013,officialProject IdeaNoteproposalwas 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 MRVmethodology (ID_AM001) tookonly 1month. PT Semen Indonesia sees three benefits from engaging in the JCM: environment,economic,andcompanyimage.Environmentalbenefits include CO2 emission reduction (approximately 122,000 tCO2/year, the largest selected project in Indonesia so far) and low stack gas temperature. Energy andwater consumption reduction resulting fromWHRprocess lead to both environmental and economic benefit. By utilizing about 30MWelectricity generatedbythe installedfacility,more than150millionkWHelectricityper year can be saved, leading tomore 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 50million USD, and the JCM subsidy from theMinistry of Environment Japan, which accounts to around18%of this cost, decreases theproject investment index (IDR/kW). Fromtheirexperience in theCDM,PTSemenIndonesiasees that theJCM offers a simpler, more reliable, and fastermechanism for the private sector and itsMRV system preferable for its simplicity. The JCMencouragement 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 IndonesiaTPE, ensure affordability of their services, and includingMRV cost in the project budget (continued) 124 A.Amellina