IESR: Wind Energy Acceleration Needs Supporting Ecosystems

Jakarta, July 25, 2022 – Indonesia has a large technical potential for wind energy. The Ministry of Energy and Mineral Resources noted that the total wind power potential reaches 155 GW consisting of 94.2 GW offshore wind and 60.6 GW onshore wind. Until now, the utilization of new wind energy is 131 MW or only about 0.1% of the existing potential. The government itself through the green RUPTL targets the development of wind energy to be installed up to 597 MW by 2030.

Cita Dewi, EVP Planning and Engineering for NRE at PLN, stated that one of the challenges in developing wind energy is that it has to be well prepared and its location is mostly in remote areas, so it requires massive infrastructure support for wind speed measurement surveys and development.

“Development of this wind power plant requires one accuracy, namely wind data. To see how much energy can be generated. This wind measurement is at least one year in one location to see the wind speed during certain seasons as well as at the change of seasons,” explained Cita Dewi at the Green Talk event on Berita Satu.

Agung Hermawan, General Chairperson of the Indonesian Wind Energy Association, explained that one condition that hinders the development of wind energy is the project auction mechanism which must be centralized through PLN.

“Before 2017, as long as we have comprehensive wind data, we just have to negotiate with PLN regarding the price and we can build it right away. Now, since 2017 procurement has been carried out through the PLN tender mechanism, so even though we already have measurement data, if the procurement mechanism has not started, we can’t do anything,” explained Agung.

Agung added that his party was aware of the difficult position of PLN as the offtaker who had to regulate the development of wind energy while maintaining the availability of electricity throughout Indonesia. However, he emphasized that openness is needed to collaborate with each other to encourage the acceleration of wind energy in Indonesia.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR), emphasized several things that will become a wind energy development ecosystem, first the need to invest in accurate wind measurement data in potential locations so that when PLN will open an auction there will already be data available.

Second, there is a need for improvement in terms of regulation. Fabby emphasized that the Presidential Decree regarding the price of new and renewable energy is highly anticipated. Because this rule will give a positive signal for investors and developers of renewable energy.

Third, there must be a strengthening or infrastructure development in places that will become PLTB locations such as access roads and ports. This requires coordination with relevant ministries and agencies outside the Ministry of Energy and Mineral Resources.

Fourth, it is necessary to design a low financing scheme to make it easier for PLTB developers to access funding. For example by involving local banks to provide this funding.

Fifth, the auction mechanism at PLN needs to be made transparent and scheduled so that developers and all parties know when the next auction will be held.

“The challenge for developing wind energy is on the logistic costs which is quite large, so it takes more than just policy reform and reform of the auction system,” concluded Fabby.