Exchanging Insights on Local Solar Manufacturer in Indonesia and Viet Nam

Ha Noi, 14 December 2023 – The Ministry of Science and Technology of Viet Nam hosted its annual event: Technology and Energy Forum 2023, in collaboration with the Ministry of Industry and Trade and Project Clean, Affordable and Secure Energy for Southeast Asia in Viet Nam.In recent years, Viet Nam has witnessed remarkable development in the trends of energy transition, particularly in wind and solar power. By the end of 2022, the total capacity from wind and solar power had reached 20,165 MW, constituting 25.4% of the overall power capacity within the system.

However, despite this progress, 90% of equipment for renewable energy projects in Viet Nam is imported from countries like China, Germany, India, and the US. This reliance is due to the country’s limited ability to perform specific tasks during project assessment and development phases and its high dependence on imported technologies. Factors contributing to this situation include inadequate local technology capacity, production levels falling short of requirements, and a lack of support from industrial policies and mechanisms to encourage renewable electricity.

Consequently, Vietnamese enterprises and local supply chains have seen limited participation. Similarly, Indonesia faces comparable challenges in its procurement of renewable energy, particularly in solar power. Despite both countries boasting immense potential in solar power, their domestic markets are not yet equipped for solar manufacturing. This deficiency stems from uncertainties in local demands and the lack of competitiveness in the local supply chain.

Fabby started with an explanation about local content regulation that could minimize dependence on imported products. 

“Indonesia is currently facing domestic market issues; these local products encounter difficulties entering the market. The lack of a credible development pipeline limits financial viability for new solar modules manufacturing facilities. When it comes to Rooftop PV, PLN limits the installation capacity to 15%. This regulation further restricts the market for domestic solar modules,” state Fabby.

Fabby went on to highlight several lessons learned from implementing Local Content Regulations (LCR) in Indonesia, which could potentially accelerate the development of Viet Nam’s solar energy local content. First, despite the projected growth in solar power, there’s insufficient market signal to stimulate the growth of the solar module industry without a reliable pipeline. Second, inconsistencies in policies across government bodies might discourage investment in the solar power market due to increased uncertainty. Third, support for the domestic solar modules industry should encompass downstream raw material industries to reduce import dependency and enhance the competitiveness of end products. Lastly, governments should offer incentives, both fiscal and non-fiscal, to encourage the development of solar module manufacturing facilities. Fabby emphasized that LCR, without a conducive investment climate for the industry, might impede rather than foster the development of solar power.

Exploring Early Termination of Coal Power Plant Operations

press release

Jakarta, November 15, 2023 – The government is taking steps on Presidential Regulation (Perpres) No. 112/2022 concerning the Acceleration of Renewable Energy Development for Electricity Supply by drafting a road map for the operational termination of coal-fired power plants. The Institute for Essential Services Reform (IESR) views preparing a road map for the early termination of coal power plant operations as a first step to encourage renewable energy development. Furthermore, after the road map is determined,  the government should prepare a regulatory framework that can support the implementation of a financing structure or scheme for the operational termination of coal-fired power plants in Indonesia.

Deon Arinaldo, Program Manager of Energy Transformation at IESR, mentioned that there have been several proposed structures for terminating coal-fired power plants (CFPP) operations, such as write-offs or deletion of CFPP assets from company records because they are considered no longer economical or for example, spin-offs, namely the sale of assets to a new company to manage these assets with a shorter operating period. In addition, according to him, the government needs to make several pilot projects for the termination of the ongoing CFPP operations, such as the Cirebon CFPP, as a proof of concept and provide certainty to PLN and Independent Power Producers (IPP) as CFPP asset owners.

“Apart from a clear scheme or structure in the early termination of coal-fired power plant operations, a mechanism is also needed to allocate the funding obtained from the early termination of the power plant to renewable energy plants. The current regulations in Indonesia do not allow this. Therefore, it is necessary to conduct a thorough study and propose changes to allow the use of renewable energy funding, which is cost-effective, for retiring CFPP assets,” Deon said at the Enlit Asia panel discussion entitled “Leapfrogging to NZE: Accessing ASEAN readiness to retrofit or early retire coal fleets” (15/11).

Deon sees that a significant amount of work still needs to be done concerning the early retirement of CFPP. Some of the tasks include ensuring a legal framework that explicitly states that the early termination of CFPP operations is part of the country’s energy transition policy aimed at reducing emissions. Additionally, there needs to be regulations that permit modification of the power purchase agreement (PJBL) and other related tasks.

“It is even better if the strategy at the CFPP is part of an energy transition effort that wants to integrate renewable energy on a large scale to reduce GHG emissions. If the goal is like that, CFPP assets will be optimized to ensure renewable energy can enter the electricity mix quickly and cheaply. For example, instead of waiting to be retired, CFPP can be operated flexibly to help maintain system stability and reliability as the mix of intermittent solar and wind power increases,” Deon added.

Belajar dari Wind Farm di Feldheim, Jerman: Catatan Researcher IESR dalam program Fellowship Agora Energiewende

Kontributor: Deon Arinaldo, Energy Information Specialist; Researcher

Sebagai bagian dari program Fellowship yang dikelola Agora Energiewende dan Renewables Academy Jerman. Energy Information Specialist kami beserta 11 delegasi lainnya berkunjung ke Wind Farm di Feldheim.

Pembangkit Tenaga Angin dengan Kapasitas 123MW ini menyuplai sebagian besar produksi listrik ke jaringan setelah memenuhi kebutuhan listrik desa. Untuk kebutuhan panas (heater), koperasi petani Feldheim memiliki PLTBG yang menggunakan material dari hasil pertanian dan peternakan mereka sendiri.

Tenaga angin untuk listrik sepenuhnya terpenuhi, dan menggunakan Biogas plant dan wood chip biomass sebagai cadangan (backup) untuk panas (ada heating gridnya). Produksi tahunan PLTB sekitar 250 GWh, sedangkan kebutuhan desa adalah sekitar 1 GWh, sehingga 99% lebih di ekspor ke grid. Di lokasi yang sama, developer lainya juga membangun 10 mw baterry storage yang membantu menjaga stabilitas grid.

Kapasitas PLTB di desa ini sangat besar, sehingga meskipun angin tidak banyak, listriknya masih cukup dari PLTB untuk desa. Selain itu mereka punya PLTBG untuk CHP sebagai sumber listrik lainnya.  

Jika memang tidak ada sama sekali listrik dari keduanya, mereka menggunakan mobile diesel generator tapi selama ini belum pernah ada kejadian menggunakan mobile diesel generator tersebut.

PLTBG (biogas plant) nya memiliki kapasitas 500 kW.

Wind farm ini di kelola oleh developer (Energiequelle). Mereka hanya menyewa pada pemilik lahan (landowner). Maintenance contract langsung dgn EPCnya yaitu enercon. Sedangkan untuk koperasi petani, mereka bangun grid sendiri sehingga mereka beli listrik lebih murah dibandingkan listrik normal (agreement dengan developer). Unutk biogas plant dan heating grid, yang punya koperasi petaninya juga. Pemerintah setempat memberikan subsisdi untuk modal awalnya.

Mirip dengan Studi Kasus di Amerika Serikat untuk rural electrification, koperasi milik petani, punya peran penting dalam elektrifikasi dengan pinjaman lunak dari pemerintah.