Experts interpret recently announced solar power projects as harbingers of an export-focused strategy in which local and international companies look to sell clean power from Indonesia to neighbouring countries.
Institute for Essential Services Reform (IESR) executive director Fabby Tumiwa said solar power exports would be largely driven by Singapore’s plan to diversify its electricity supply with a focus on new and renewable energy (NRE) sources.
“There are tremendous opportunities for exporting renewable energy to neighbouring countries, especially Singapore,” he told the Jakarta Post on October 27.
He was referring to an announcement made two days earlier by Singaporean Minister of Trade and Industry Gan Kim Yong that the city state was targeting 4GW worth of low-carbon electricity imports by 2035.
Rising demand for low-carbon electricity presents NRE power plant developers with new opportunities to export energy to Singapore or other countries of the region.
Anurag Chatterjee, who serves as Apac (Asia-Pacific) region business development manager at Norway-based classification and advisory services firm DNV, expects increasing intra-ASEAN energy trade thanks to rising regional demand due to population and economic growth.
Given the commercial interest in exports, Fabby, who also chairs the Indonesian Solar Energy Association (AESI), urged the government to ensure NRE power plant developers prioritised domestic NRE supply to help the country achieve the promised 23 per cent NRE portion in the national energy mix by 2025.
The Ministry of Energy and Mineral Resources’ renewables director-general, Dadan Kusdiana, said a solar power export trend would not affect domestic NRE supply, as the government continued to push for NRE usage in accordance with its 2021-2030 long-term electricity procurement plan (RUPTL).
“Several parties have shown interest in exporting low-carbon electricity, especially from solar power plants,” he told the Jakarta Post on October 28.
As to how a solar power export trend might affect Indonesia’s efforts to achieve the 23 per cent target, Elrika Hamdi, an energy analyst with the Institute for Energy Economics and Financial Analysis (IEEFA), said the interesting question was who would get to claim the carbon reduction in joint venture projects.
“If the [carbon reduction] has been claimed by Indonesia, it cannot be claimed by Singapore, and vice versa,” she said on October 27.
The carbon credits for solar power projects were usually claimed by the energy purchaser, said Chatterjee. Ownership for the credits associated with the clean energy generation of the solar arrays was assigned in the power purchase agreement (PPA), he added.
A joint venture between Indonesia and Singapore has agreed to develop a total of three solar power export projects.
PT Medco Power Indonesia, together with electricity retailer PacificLight Power Pte Ltd (PLP) and electricity company Gallant Venture, will develop the pilot project, which is expected to begin exporting 100MW-equivalent of nonintermittent electricity to Singapore in 2024.
Minister of Energy and Mineral Resources Arifin Tasrif said Indonesia would continue to develop NRE to meet domestic needs and demand from surrounding countries so as to prevent a worsening of the climate crisis.
“The inaugural 100MW solar power export from Bulan Island is a milestone for Indonesia to provide clean and renewable energy,” he said at the Singapore International Energy Week on October 25
Located on Bulan Island in Riau Islands and in close proximity to Singapore, the Bulan Island Solar PV Project is expected to have 670MW of installed capacity in the initial phase.
A Sunseap Group-led consortium also signed a memorandum of understanding on October 25 to develop solar power systems in the same province. The project is claimed to be one of the largest cross-border clean energy projects in Southeast Asia.
The Singapore-based solar energy developer will work on the project together with various partners, including property giant Agung Sedayu Group.
Once completed, the project is to have a combined installed capacity of seven gigawatt-peak (GWp), Sunseap said in a statement. It includes a previously announced 2.2GWp floating solar farm on Batam, Riau Islands. Coupled with multiple energy storage facilities totalling over 12GWh, the project is expected to provide 1GW of nonintermittent solar power energy for Singapore and Indonesia.
“This will be one of the most consequential clean energy projects for Singapore and Indonesia,” Sunseap CEO Frank Phuan said in a statement issued on October 26, adding that the project was expected to make optimal use of subsea cables by reducing transmission costs and helping Singapore and Indonesia meet their green energy goals.
Energy developer Sembcorp Industries announced, also on October 25, an exclusive joint development agreement for a large-scale integrated solar and energy storage project in Batam, Bintan and Karimun, all in Riau Islands.
Sembcorp Industries will develop the project with renewable energy developer PT Trisurya Mitra Bersama and PT Pelayanan Listrik Nasional Batam (PLN Batam), a subsidiary of national utility company PLN. Once operational, the project is expected to have approximately 1GWp worth of solar power generation capacity and an energy storage system to manage the intermittency for clean energy deployment and export.
“This project will mark another milestone in Sembcorp’s transition from brown to green while contributing to the region’s energy transition,” Sembcorp Industries president director Wong Kim Yin said in a statement issued on October 25.
THE JAKARTA POST/ASIA NEWS NETWORK