Media Announcement: Expression of Interest: 30 JUNE 2022
SBS INTL LTD, and its State-owned Partner, PT Indonesia Power, have jointly received a formal Expression of Interest (EoI) from United Kingdom Government Export Finance Agency (UKEF) detailing USD 41 Million project development financing for MWh-scale tidal turbine generator facilities in Indonesia’s Larantuka Strait.
AutoCAD visualisation of one of the two proposed Larantuka Strait tidal turbine arrays
UK marine, subsea development-engineering and tidal energy project developer SBS, local company, PT SBS Indonesia, and its joint-participating partner, State-owned, Indonesia Power, acting on behalf of its Parent Company, Indonesia State-owned electrical offtaker, PLN, have received a formal EoI from UKEF. The proposed Larantuka Strait plan of development for tidal energy arrays provides for clean, zero-emissions, sustainable, renewable, tidal energy power to the communities of East Flores and Adonara in direct support of an aggressive, ‘de-dieselisation plan’ by PLN, mandated by the Indonesian Government.
Under a fully-executed, joint-participating agreement between Indonesia Power and SBS, Indonesia Power provides Government/PLN liaison and permitting, while SBS is the nominated project director. During a recent feasibility study, Indonesia Power funded an IEC-compliant primary data tidal resource survey activity, while SBS delivered a 220-page feasibility study report, which included a copy of the ITB (Institute of Technology Bandung) survey activity report; as well as Feasibility Study and survey data analysis reports by our UK and Indonesian metocean specialists.
SBS Group Chairman & CEO, Michael J. Spencer, said: “Clearly, the EoI from UKEF is a vote of confidence for Indonesia and the joint-participating Parties. We warmly thank the British Government’s local Country Manager and UKEF London Team, as well as British Embassy International Trade & Investment Team in Jakarta, for their excellent support and encouragement. We have delivered a detailed Project Development Plan and Scope of Work for the next development stages for the Larantuka project and look forward to commencing the procurement process with Indonesia Power to select a suitably-qualified specialist tidal energy contractor to deliver the front-end engineering (FEED) activity.”
SBS has been providing marine and subsea development engineering expertise in Indonesia for 24 years; has researched and secured, ocean energy site-development rights directly through MoU, EoT and draft PPA with PLN, in selected tidal energy resource locations since 2012. The fully-developed and 3rd-Party reviewed SBS business model for Indonesia, demonstrates high local content, with progressive reductions in LCoE going forward; through techno-economic due diligence of OEMs; workable, MWh-scale tidal energy device technologies; while providing cost/time/resource reductions delivered from the local supply chain for local manufacture of tidal turbine generators and related components in Indonesia.
Media Announcement: SBS completes feasibility study for tidal energy project in Indonesia: 28 April 2022.
UK-based tidal energy project developer SBS has completed the main feasibility study for a planned Megawatt hour-scale tidal energy project in the Larantuka Strait in Indonesia.
AutoCAD Visualisation of Larantuka Strait site for the planned tidal energy projects
A final report analyzing the suitability of tidal energy resources in Larantuka Strait to drive MWh-scale tidal turbines was submitted for review to State-owned electrical plant and power-transmission company PT Indonesia Power, to its Parent Company, State electrical offtaker Perusahaan Listrik Negara (PLN) on 28 April 2022.
The tidal energy projects in the strait have the potential for providing clean, sustainable, renewable electricity to the communities of East Flores and Adonara.
Under a fully-executed, joint-participating agreement between the parties, formalized in November 2021, Indonesia Power provided an IEC-compliant primary data tidal resource survey activity, while SBS delivered a 220-page main feasibility study report, which included a copy of the survey activity report and raw data analysis report.
SBS Group Chairman and CEO, Michael J. Spencer, said: “This is our fifth feasibility study report on Indonesian tidal energy resources and is our most comprehensive tidal energy feasibility study report achievement to date for Indonesia. The next stage will be to discuss the draft power purchase agreement (PPA) document received from PLN; agree its terms and conditions; and together deliver a fully-executed PPA document, after which we expect to announce financial investment decision (FID) with interested British and European investors and commence procurement for the front end engineering design (FEED) activity.”
SBS has been providing marine and subsea development engineering expertise in Indonesia for 24 years and has secured ocean energy site development rights directly through agreements with PLN, in prime tidal energy resource locations since 2015. The development of the project in Larantuka Strait is expected to contribute to PLN’s decarbonization plan to replace as many diesel-fuelled power generators as possible with other forms of energy generation such as zero-emission tidal turbines.
UKEF letter confirming Indonesian Tidal Energy Investment for Larantuka Strait to PT Indonesia Power and SBS - signed 28th April 2022
Media Announcement: Feasibility study for Larantuka Strait tidal energy project gets go-ahead: 02 February 2022.
MoU signing event between PT SBS Indonesia President Director, Liza M. Spencer and PT Indonesia Power CEO, M. Ahsin Sidqi, November 2021.
Following the signing of a new memorandum of understanding (MoU) with state-owned electrical plant and power-transmission company Indonesia Power (IP), a proposal for a feasibility study was requested by Indonesia Power from SBS, which was submitted and has now been approved by PLN for immediate start. The feasibility study activity will include an offshore survey to gather primary tidal resource data in the Larantuka Strait, in accordance with IEC guidance, analysis of which will be included within the feasibility study report.
Larantuka Strait showing parts of the two communities either side
The completed feasibility study report is expected to be submitted to Indonesia Power within three months of commencement, according to SBS.
The recently-renewed Indonesia Power/SBS MoU is based upon an agreed 51%-49% special purpose vehicle company ownership for the joint IPP, and a cost-sharing basis for all tidal energy projects. A draft power purchase agreement has already been received from state-owned electrical offtaker Perusahaan Listrik Negara (PLN), terms of which will be finalised by the joint-participating parties for multiple tidal energy projects.
Michael J. Spencer, SBS Group chairman and CEO, said: “Confirmation from our esteemed partner, Indonesia Power, to commence the main Larantuka feasibility study activity is a significant step forward in the project development process. Completion of the main feasibility study activity will allow the joint-participating partners, in conjunction with PLN, to move to the next stage, which will involve original equipment manufacturers and financial partners, at which time the final engineering (FEED) activity and subsequent turbine manufacturing can commence.”
The development of the Larantuka Strait tidal energy project will contribute to the govt-mandated decarbonisation plan by PLN to replace as many diesel-fuelled power generators as possible with other forms of renewable energy generation such as zero-emission tidal turbine power generators.
Media Announcement: SBS inks deal for tidal energy projects in Indonesian straits: 01 Feb 2022
Signing of memorandum of understanding between SBS and Indonesia Power (Courtesy SBS)
The new MoU between SBS and Indonesia Power (IP), signed in November 2021, is based upon a 51%-49% cost sharing basis for the planned feasibility study activities on sites.
The cost-sharing basis extends beyond the feasibility study to the formation of a joint venture agreement for tidal energy projects between Indonesia Power and SBS, as part of a decarbonization plan for state-own electric utility Perusahaan Listrik Negara (PLN) to replace diesel power generation with renewable energy.
Michael J. Spencer, SBS Group’s chairman and CEO, said: “The agreement with our valued Indonesian Partner, IP is very significant, bringing together specialist capabilities of Indonesian and British companies as well as academia via our Indonesian CEARS (Centre of Excellence for Academic Research Studies) initiative in marine energy, which has formal support from 10 UK specialist marine study universities plus top Indonesian marine study universities, IPB and ITB.”
According to Spencer, some small-scale tidal original equipment manufacturers (OEM) have shown interest in Indonesia, however, with few exceptions, most fail to deliver a reliable device at utility-scale and are still at a low technology readiness level (TRL) rating with many more years of development still to complete to reach TRL which would pass independent due diligence evaluation.
“Our choice of tidal OEM Partner is SIMEC Atlantis Energy, with whom we have conducted extensive due diligence evaluation and have a fully-executed preferred supplier agreement with Atlantis which includes local manufacturing of components in Indonesia via an agreement SBS has executed in 2021, with State-owned oil platform and ship builder, PT. PAL (Persero), in Surabaya” Spencer added.
The completed feasibility study report is expected to be submitted to Indonesia Power within three months of commencement, according to SBS.
To remind, SBS and SIMEC Atlantis signed a PSA (preferred supplier agreement), for the supply of turbines, engineering services and equipment a planned tidal stream array off Lombok island back in 2017.
SBS has been providing its subsea and marine developer expertise in Indonesia for 23 years and previously secured exclusive ocean energy site-development rights directly through memorandum of understanding and draft power purchase agreements with PLN in some of Indonesia’s prime tidal resource locations.
Media Announcement: UK Project Developer SBS, Indonesia Power, enter talks over grid expansion for Nautilus: 17 Jan 2018
On 17 January 2018, project developer of the Nautilus Tidal Energy Project, SBS INTL LTD, for the Lombok Strait development, signed a Memorandum of Understanding (MoU) with Indonesian State-owned power construction and transmission company, PT Indonesia Power, aiming to power the grid on Lombok Island with sustainable ocean renewable electricity that will be fed-in to the grid by a proven and workable array of UK tidal turbine generators (TTG).
The MoU was signed by PT. Indonesia Power and SBS INTL LTD, with local independent power producer, PT. Energi Kelautan in attendance, and was the first step toward commencement of a feasibility study for the Lombok Island grid expansion to receive zero-emissions TTG power. The Nautilus tidal-stream project will need an experienced electrical transmission contractor for power transmission extension works on Lombok to receive the ocean energy power from the tidal-stream turbines when installed, and Indonesia Power is very well qualified to carry this out, SBS stated.
SBS Group Chairman & CEO, Michael J. Spencer said: “This is a very significant agreement bringing together the specialist capabilities of Indonesian and British companies. We anticipate that this MoU signing will subsequently lead to award of contract to Indonesia Power to provide its substantial onshore power transmission experience and construction capabilities to the Nautilus project, adding an essential element to our tidal-stream development activities for Indonesia.”
In October 2017, SBS Energi Kelautan reached consensus regarding final investment decision (FID) for the first phase of the Nautilus project. The first phase, expected to be completed by the first quarter of 2021, will involve the installation of eight 1.5MW tidal energy turbines, supplied by Edinburgh-based tidal energy developer, Atlantis Resources.
Power produced from the project will be sold to Indonesia’s State-owned electrical utility company, PT Perusahaan Listrik Negara (PLN), under a 30-year PPA (power purchase agreement).
The initial 12MW phase will be followed by site expansions to 70MW (phase II), and the project will ultimately have 150MW of capacity after the third and final phase. The project site in Indonesia is located in the straits between the islands of Bali and Lombok.