Promoting Massive Use of Solar Energy in Jambi

Jambi, 28 November 2023 – In the General National Energy Plan (RUEN) document, Indonesia targets 23% renewable energy mix by 2025. Until 2023, Indonesia has only achieved 12.5% renewable energy in its energy mix. In the Jambi Government Forum organized by the Institute for Essential Services Reform (IESR) in collaboration with the Jambi Province Energy and Mineral Resources Office (ESDM) (28/11), Yunus Saefulhak, Head of the Energy Policy and Hearing Facilitation Bureau stated that the National Energy Council (DEN) predicts that in 2025 Indonesia will only reach 17-19 percent of renewable energy in the national energy mix.

“The province’s role in pursuing predetermined renewable energy targets is important, in accordance with the potential in each region,” said Yunus.

Yunus added that Jambi does have quite a lot of fossil resources, but it can still seize various opportunities to develop renewable energy, such as the use of rooftop PV on government buildings.

Anjas Bandarso, Energy Policy Analyst from the Directorate General of Regional Development, Ministry of Home Affairs, in the same forum highlighted the limited authority of regional governments for energy matters.

“Whatever the sub-national government does, as long as there is no authority given to the regional government, it will just be a story. So the central government is looking for ways in which regions can develop new, renewable energy. “This can be realized with Presidential Decree 11/2023 concerning additional concurrent authority for regional governments,” said Anjas.

Nanang Kristanto, Sub-Coordinator for RUEN Implementation Monitoring, National Energy Council, added that whatever target is the government’s priority, whether for Net Zero Emission (NZE) or achieving renewable energy mix figures, local governments have an important role.

“Regional governments have an important role in pushing the energy transition agenda by maximizing energy transition derivative activities in their regions, funding support, preparing human resources to maintain decentralized generating installations, as well as socializing new renewable energy in districts and even sub-districts,” said Nanang.

Apart from having natural products such as oil palm plantations and coal producers, Jambi also has large renewable energy potential. Jambi Province is targeting a renewable energy mix of 24% by 2025, and this target is optimistic that it will be achieved because currently the Merangin-Kerinci hydroelectric power plant with a capacity of 350 MW is being built.

Jambi also has quite large solar energy potential, reaching 281.5 GW based on land suitability. Marlistya Citraningrum, Sustainable Energy Access Program Manager, IESR stated that solar energy could be an option that allows various parties to contribute to the availability of clean electricity.

“Installing rooftop PVs has a number of benefits, such as being a means of mutual cooperation in achieving energy mix targets and reducing emissions, providing clean electricity sources in various regions, opening up business/employment opportunities for local residents, as well as increasing the competitiveness of the solar industry/business in Indonesia,” he said.

Marlistya added that the public wants incentives for rooftop PVs users, which could be in the form of ease of licensing, or facilitation of financing by the government.

SE-Bali 2023 Event Invites Balinese People to Success Bali NZE 2045

Bali, November 25, 2023 – The Provincial Government of Bali has launched Bali towards Net Zero Emission 2045 or Bali NZE 2045 in August 2023. Strategy implementation and collaboration with various parties continue to be carried out to achieve the initiative’s target of net zero emissions. Supporting this initiative, the Institute for Essential Services Reform (IESR) in collaboration with some communities held Sustainable Energy Bali (SE-Bali) 2023 on Saturday and Sunday, November 25-26, 2023. In addition to promoting the use of renewable energy, the event also aims to encourage togetherness for the achievement of the Bali NZE 2045 target.

Fabby Tumiwa, the Executive Director of IESR, views that the achievement of the Bali NZE 2045 target will affect sustainable economic improvement, particularly in the tourism sector which is the backbone of Bali. He believes that Bali will be able to achieve the NZE target, which is 15 years ahead of the national target.

“There are three reasons that make Bali strategic to achieve this target. First, the Balinese culture is very close to maintaining harmony with nature. Second, the government has the spirit to make Bali sustainable with sustainable energy. Third, renewable energy will make Bali more attractive for tourists to visit along with increasing world awareness to overcome the climate crisis,” said Fabby.

Head of the Bali Manpower and Energy and Mineral Resources (ESDM) Office, Ida Bagus Setiawan, revealed that achieving Bali NZE 2045 is a joint work. 

“Bali NZE 2045 is not only about the Bali Provincial Government program but also about how we can be involved in protecting Bali’s nature. For this reason, in addition to accelerating the use of renewable energy, the Bali Provincial Government also encourages the improvement of human resources (HR) related to individual understanding of the importance of reducing emissions to increasing the ability of vocational students to be absorbed in green jobs,” said Ida Bagus Setiawan.

Prof. Ida Ayu Dwi Giriantari, Chairperson of the Center of Excellence Community of Based Renewable Energy (CORE) Udayana University, mentioned that Nusa Penida became an early area to achieve net zero in the Bali NZE 2045 program, with a target of 100% renewable energy by 2030. One of the concrete steps to support this vision is the operation of a hybrid solar PV in Nusa Penida with a capacity of 3.5 Megawatt peak (MWp). Located on 4.5 hectares of land, the solar PV is a clean and sustainable  energy, and it has the potential to become an attractive ecotourism destination in Bali.

“Achieving the 100% renewable energy target in Nusa Penida is a real step in supporting sustainability and ecosystem balance. We strongly believe that the potential of renewable energy, such as solar, wind, and hydro, can be maximized to achieve environmental sustainability,” explained Prof Ida Ayu.

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.

Koran Jakarta | Indonesia Must Continue to Intensify the Development of Solar PV

The operation of  Cirata floating photovoltaic (PV) power plant, West Java, is a milestone in the acceleration of solar PV development to decarbonize electricity in Indonesia. Going forward, Indonesia must optimize the potential of solar PV to support the achievement of the electricity sector’s peak emission target in 2030, at the lowest cost.

Read more on Koran Jakarta.

Awaiting Regulatory Certainty for Solar Energy Adoption

Fabby Tumiwa dalam konferensi pers Smart Transportation and Energy di Indonesia pada Kamis (9/11/2023)

Jakarta, November 9, 2023 – Solar power has the potential to accelerate renewable energy in Indonesia’s primary energy mix. However, developing the country’s solar power plants has proved challenging. The Executive Director of the Institute for Essential Services Reform (IESR), Fabby Tumiwa, explained that Indonesia has the highest potential in solar energy. An IESR study shows that solar power in Indonesia could reach a technical potential and land suitability of 3,000-20,000 GWp. Despite this potential, there are regulatory challenges to developing solar energy in the country, particularly regarding solar PV. In 2022, the realized installed capacity of solar PV was only 271.6 MW, which was far below the planned capacity of 893.3 MW, based on data from the Directorate General of EBTKE of the Ministry of Energy and Mineral Resources.

“Solar PV utilization is currently limited to around 10-15% of its capacity, which makes the economics of solar PV low and unattractive. In 2021-2022, the growth of rooftop solar PV has stagnated. However, since the beginning of this year, there have been efforts to revise the regulations to prevent uncertainty. The revision process is long and has even been discussed at the Ministry of Law and Human Rights (Kemenkumham). Unfortunately, the process has not been completed yet and still requires further coordination between Ministries and Institutions,” said Fabby Tumiwa at Thursday’s Smart Transportation and Energy in Indonesia press conference (9/11/2023).

 

Fabby Tumiwa mentioned the uncertainty must be resolved immediately with strong leadership from President Joko Widodo (Jokowi). Additionally, on Thursday (9/11/2023), Indonesia unveiled the Cirata Floating Solar Power Plant, which has a capacity of 192 MWp, making it the biggest floating solar power plant in Southeast Asia.

“The inauguration of the Cirata Floating Solar Power Plant signifies the Indonesian Government’s commitment to developing solar energy. This project could not have been completed without the use of advanced technology and innovation from China, the world’s largest producer of solar energy technology. Considering Indonesia’s plan to increase the usage of renewable energy, we anticipate a significant demand for solar power plants in the coming years,” explained Fabby Tumiwa.

Cirata Floating Solar PV Plant Ready to Operate: Important Milestone for Accelerating Solar Energy Development to Decarbonize Electricity in Indonesia

Jakarta, November 9, 2023 – Cirata floating photovoltaic (PV) power plant located in Cirata Reservoir, West Java, with a capacity of 145 MW(ac) or 195 MW(p), has been inaugurated today. This event marks an important milestone for Indonesia as it is now home to the largest floating solar power plant in Southeast Asia, surpassing the Tengeh floating solar power plant in Singapore.

The Institute for Essential Services Reform (IESR) considers the operation of the Cirata floating PV power plant as a significant achievement in accelerating the development of large-scale solar power plants in Indonesia. The country’s solar power development has been almost non-existent since 2020. However, the decreasing investment cost of solar PV has made it the cheapest renewable energy source. Therefore, Indonesia must optimize the technical potential of PLTS, which reaches 3.7 TWp to 20 TWp, to support its goal of achieving the electricity sector’s peak emission target by 2030 at the lowest possible cost.

IESR also encourages the government and PLN to take advantage of the technical potential of floating PV power plants, which reach 28.4 GW from 783 water body locations in Indonesia, to accelerate the utilization of solar power plants. Based on the data from the Ministry of Energy and Mineral Resources shows that there is potential for large-scale floating solar power plants that can be developed in at least 27 locations of water bodies that have hydropower plants (PLTA), with a total potential of 4.8 GW and an investment equivalent to USD 3.84 billion (IDR 55.15 trillion). Utilizing the potential of this floating solar power plant will accelerate the achievement of the renewable energy mix target and achieve the net zero emission (NZE) target sooner than 2060.

The government and State Electricity Company (PLN) must optimize the potential of floating solar power plants by creating a regulatory framework that attracts businesses to invest in these plants. One way to achieve this is by offering an attractive rate of return on investment that matches the risk profile but is attractive and reduces additional burdens.

One area of concern for the government is PLN’s assignment scheme to its subsidiaries, which has been a priority option for developing floating solar power plants. Through this scheme, the subsidiary seeks equity investors for minority ownership but must be willing to bear a larger portion of equity through shareholder loans.  

“This scheme benefits PLN but cuts the return on investment for investors and risks the bankability of the project and the interest of lenders. This scheme can also create unfair business competition among business players, as only those with large equity can partner with PLN, and most investors are foreign. This could impact overall investment interest,” said Executive Director of IESR, Fabby Tumiwa.  

The solution, according to Fabby, requires government support by strengthening the capital of PLN and its subsidiaries through special state capital participation (PMN) for renewable energy development and providing concession loans to PLN through PT SMI, which can then be converted into share ownership in floating PV power plants project. 

Indonesia can reap the potential for investment and low-emission electricity from floating solar power plants with the support of definitive and binding regulations from the government. In July 2023, the government issued Minister of Public Works and Public Housing Regulation Number 7 of 2023 on the Second Amendment to the Regulation of the Minister of Public Works and Public Housing Number 27/PRT/M/2015 on Dams, which no longer limits the area of water bodies in reservoirs that can be utilized for floating solar power plants at 5%. The regulation opens up opportunities for the development of floating solar power plants on a larger scale, provided that when using more than 20% of the water body area, it is necessary to obtain a recommendation from the Dam Safety Commission.

Marlistya Citraningrum, Program Manager for Sustainable Energy Access, IESR, sees this as an opportunity to overcome land issues in developing solar PV.

“Land availability is often an obstacle in the development of solar PV, especially in areas already dense with high land prices, as well as land cover that may not be suitable for solar PV, for example, too steep or productive agricultural land. Indonesia also has several dams, whether hydropower or not, that could be used as potential sites. The Hijaunesia 2023 project, for example, has offered the development of floating solar power plants in Gajah Mungkur, Kedung Ombo, and Jatigede with a capacity of 100 MW each,” Marlistya mentioned.

However, according to Marlistya, the overall planning, tendering, and construction of floating solar power plants in Indonesia still needs to be improved. Despite being a flagship project and a form of intergovernmental cooperation (G2G), the timeline for completion of the Cirata floating solar power plant is quite long – starting with a memorandum of understanding between Indonesia and the United Arab Emirates in 2017 and the formation of a joint venture between PJB Investasi and Masdar in the same year, the signing of the new PPA took place in 2020 and financial closing in 2021. This lengthy process reduces the attractiveness of floating solar power plant investment in Indonesia.

The development of supply chains for solar PV and floating PV components in Indonesia is also wide open, including for solar cells and modules. Not only for the domestic market, which has yet to reach 1 GW, solar cells and modules with tier 1 criteria produced in Indonesia are also intended for foreign markets. Chinese tier 1 solar cell and module manufacturer Trina Solar has collaborated with Sinarmas to build an integrated solar cell and module factory in Kendal Industrial Estate, Central Java, with a production capacity of 1 GW/year.