The fifth aspect concerns about financing. price factors could be a determinant of an MHP project implementation. current MHP project implementation is dominated by the government financing. The implementation process of government projects is always through the tender process. Tender process emphasizes the principle of "least cost". This means that whoever is the least expensive will get the contract. Although the specification has been determined in the tender document, but they are very general and can not cover quality issue except for poewr output. There are risks in this process and the risk was mainly caused by quality problems. If the government has a limited amount of budget, then simpler MHP schemes will be the only options since they can be cheaply implemented. the more MHP schemes constructed the better for electrification ratio.
The sixth aspect is government's political goal especially in the energy sector particularly rural electrification. Goal or target to be achieved by the government, is in general the increase of electrification ratio. For Indonesia the increase electrification ratio is very relevant since electrification ratio is still low. MHP is not the only one solution to increase the electrification ratio, but MHP is one of the solutions that can significantly increase electrification ratio. This means that with the same amount of funds, the number of households that will be electrified can more than other solutions such as solar home systems. With limited funds the government must race against time to increase the electrification ratio. The more MHP scheme are built the more funding is needed. If quality is sacrificed a bit, then there will be more MHP can be built and thus significantly increasing electrification ratio.
Of some aspects of the above, it seems that the goal to increase electrification ratio is of the dominant prime mover. The government has a time limit to reach a certain electrification ratio (if they have??). With limited funds, there is a tendency to optimize the available fund and therefore "least cost" option is chosen. The consequence of this might be the sacrifice of MHP hardware quality.
to my opinion, the way the government develop the sector will boost the growth of MHP hardware industry. New manufacturers can emerge in many places in Indonesia. although sustainability of the scheme might seem to be sacrificed by using less quality hardware, but sustainability still can be achieved by strong social cohesiveness. hardware is a precondition and social plus environmental aspects are important requirements for sustainable MHP scheme.
the government at the end has to decide that the industry has to move on to next level (e.g. quality wise). this means the product quality must be better, the product must perform better, the production method must be better, the skill of technician must be better, and the product must be reliable. good products will open up more opportunities to the people that get the MHP scheme to have better economic condition.
currently there are advance MHP hardware producer in indonesia, they have to keep the commitment to quality. for new manufacturers they have to develop them selves to improve their product quality. the role of government is very strong. government has to set minimun quality standard of MHP hardware. government has to support new manufacturers by using their products as long as they are meeting the minimum standard. government must also support industry to improve their production method, technician's skill, new hardware technology etc. cooperation with higher education institution cal also support the effort as long as the institution has strong background on MHP technology. the current introduction of public domain cross flow turbine design is a good start.
Finally, since government's role is very big, a clearly defined program and goals must be made available. The program should be based on current conditions and look ahead to what the sector wants. currently there are some projects (nation wide) that are closely related to MHP sector. government can put one or more of its goal into each project and the project will try to achieve it based on their available resources. what we need now is clearly defined program and clear understanding of strength, weaknesses, opportunities and thread.
may the sector develops in a better way.
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