Indonesia announces new renewable energy hotbed

Indonesia, the most populous country in Southeast Asia, recently unveiled the region's largest floating solar power plant.

In November 2023, President Joko Widodo launched a 192-megawatt peak (MWp) facility at the Cirata reservoir, covering parts of three regencies in West Java province. Constructed by the state-owned electricity company, Perusahaan Listrik Negara (PLN), between 1984 and 1988, the Cirata reservoir not only serves as a hydroelectric power station but also as a vital water distributor for the surrounding regencies. Covering 43,000 hectares, it boasts 6,200 hectares of water and 37,000 hectares of land, making it Indonesia's tallest dam at 125 meters deep.

Dimas Kaharudin, the operational director at Pembangkitan Jawa Bali Masdar Solar Energi (PMSE), noted the challenge of land acquisition for solar panels in densely populated Java, which would necessitate clearing 200 hectares. The construction of the Cirata Floating Solar Power Plant, a two-year project involving 1,400 local workers, now provides employment for 60 to 100 individuals in maintenance and operational roles.

This initiative is hailed as a step towards enhancing renewable energy sources and diminishing the country's dependency on coal.

Spanning 200 hectares and divided into 13 blocks housing over 340,000 solar panels, the facility is projected to generate 245 million kilowatt-hours (kWh) of clean energy annually. This output is estimated to power over 50,000 households and slash carbon emissions by over 200,000 tons per year.

Potential for capacity expansion

Kaharudin from PMSE told FairPlanet that the plant's capacity could potentially expand to 1,000 MWp. He added that the environmentally conscious power facility, which was established in 2011 and completed in 2023, currently utilises 4 per cent of the Cirata Reservoir’s surface, with the possibility of expanding to use up to 20 per cent of the area. 

PMSE, a subsidiary of the state-owned electricity company Perusahaan Listrik Negara (PLN) and Pembangkitan Jawa Bali, manages the Cirata floating solar power plant, valued at USD 108.70 million.

Kaharudin noted, however, that discussions about expanding the plant's capacity are still in the early study phase and will take time. 

Nevertheless, Kaharudin is optimistic about Indonesia's prospects in floating solar power. He emphasised that Indonesia is home to more than 192 dams and reservoirs, spanning a catchment area of 86,274 hectares. Cirata ranks as the world's third-largest floating solar plant, trailing closely behind China's 150MW Three Gorges New Energy project and the 320MW Dezhou Dingzhuang project. It is the largest solar farm facility in Southeast Asia. 

Kaharudin underscored the country's potential, assessing that by leveraging these water bodies for floating solar power plants, Indonesia could generate more than 17,200 MWp.

"Cirata can be a trendsetter [in the future]. It is our goal," he said, adding that several provinces, including West Java, Central Java and East Java, harbor similar potential for development.

He argued that floating solar power plants tend to generate more electricity than their land-based counterparts of the same capacity and conditions, a fact he attributes to more efficient cooling mechanisms provided by their placement above water surfaces.

The efficiency of floating solar power plants, Kaharudin said, means Indonesia could harness them to supply electricity across the nation. He pointed out that both freshwater and seawater bodies offer potential sites for these plants. His team's analysis suggests that utilising 20 per cent of the surface area of water bodies throughout Indonesia for floating solar power plants could generate around 17 Gigawatts of electricity or more.

challenges to anticipate

Kaharudin's sheer optimism, however, isn't shared by everyone. Ai Saadiyah Dwidaningsih, the head of the Department of Energy and Mineral Resources of West Java Province, identified several challenges in the province's energy transition that still require a solution.

Dwidaningsih noted the limited authority of regional levels in energy-related matters in comparison to the central government, emphasising the need for collaboration between local and central governments to identify and reach consensus on solutions to these challenges.

Dwidaningsih further highlighted that renewable energy projects require significant investment for production and advanced technology, as well as major operational expenses due to the need for specialised skilled labour. She noted that the financing for the Cirata Floating Solar Power Plant was sourced from a consortium of international commercial banks, comprising Standard Chartered Bank via its UAE branch, Sumitomo Mitsui Banking Corporation's Singapore Branch and Societe Generale's Singapore Branch.

As of 2023, the acceleration of renewable energy has not reached its optimal pace, casting doubts on the feasibility of achieving the 23 per cent target by 2025 with less than two years left. A significant factor hindering the rapid development of renewable energy is the inadequate allocation of state budget funds for its progression, Dwidaningsih noted.

Furthermore, she noticed that Java, Madura and Bali are experiencing an electricity oversupply from PLN. According to PLN’s 2023 Long-Term Electricity Procurement Plan (RUPTL), the target was 3,886 MW, but in fact there was an addition of 4,182.12 MW in power generation.

"Due to the oversupply of electricity, it is difficult to build new renewable energy infrastructure," Dwidaningsih noted. She said that renewable energy and energy conservation concepts are not yet widely known among the public. As a result, the current surplus of electricity isn't fully utilised by the market or the public.

 Therefore, the West Java provincial government aims to stimulate demand to absorb the excess electricity by channelling it to Kertajati Airport or Patimban Seaport which are also located in West Java province, she added.

Dwidaningsih further stated that West Java province possesses 192 gigawatts of renewable energy sources, of which only around 3.41 gigawatts, or 2 per cent, are currently utilised. She added that West Java province has various renewable energy sources, including solar, hydro, geothermal, biomass and wind power.

What could be scaring off investors?

Concerns also extend to the likelihood of achieving the country's renewable energy mix target by 2025.

The National Energy Council (DEN) is currently drafting a revision of Government Regulation (PP) Number 79 of 2014 concerning the National Energy Policy (KEN). In this revision of the KEN PP, the target for renewable energy mix has been reduced from 23 per cent to between 17 and 19 per cent by 2025, according to the Indonesian news wire Antara.

Yunus Saefulhak, the Head of the Energy Policy Facilitation and Conference Bureau at DEN, stated that modifying the target range is intended to guarantee the achievement of the goal, but potentially only at the lower spectrum of the projected figures.

The DEN 2022 annual report revealed that in 2021, the renewable energy mix achieved was merely 12.32 per cent, not reaching the anticipated target of 14.52 per cent. Concurrently, the Indonesian Ministry of Energy and Mineral Resources recorded the country's renewable energy mix at 13.1 per cent.

Deon Arinaldo, an energy transformation programme manager at the Institute for Essential Services Reform (IESR), voiced apprehensions that although the draft has not been officially passed, its existence might establish an unfavorable precedent.

"Investors who were initially interested in investing may now feel uncertain," Arinaldo told FairPlanet. Investment in the energy sector should be approached with a long-term perspective, extending over periods of 10 or 20 years, he added, and must be backed by strong, detailed regulations.

To expedite the renewable energy mix, he suggested fostering gotong royong ('communal work') among stakeholders.

"Don't rely solely on PLN. Everyone should be able to install rooftop solar panels. It doesn't require state funds," Arinaldo said.

Arinaldo mentioned that for organisations beyond PLN, like village-owned enterprises in West Java province, it is necessary to obtain a permit to transmit self-generated electricity within their own territories.

Andri Prasetiyo, a researcher at Senik Centre Asia, supported Arinaldo's viewpoint, highlighting the financial hurdles in West Java province. He proposed that local governments should encourage the establishment of community-level financing mechanisms for renewable energy development.

"Promote communal-scale renewable energy, for example, through village-owned enterprises," Prasetiyo told FairPlanet. He suggested that this approach would be more sustainable than pursuing larger-scale renewable energy projects that could displace local residents from their land.

"Small and medium-scale renewable energy is clean, and its processes are trouble-free," Prasetiyo said.

Additionally, Prasetiyo emphasised the need for the West Java provincial government to take a more proactive role in advocating for renewable energy utilisation. He suggested that the local government could urge Jakarta to decommission old coal-fired power plants in the province, thereby creating more space for renewable energy.

Image by Leo Galuh.