Indonesia Sets Off to Become a Major Solar Power Exporter in South East Asia

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The recently announced solar power projects in Indonesia clearly set out the advent of an export-focused strategy in the solar power markets. Experts highly believe that more local and international companies will look to sell new and renewable energy (NRE) from Indonesia to its neighbors.

The Executive Director of the Institute for Essential Services Reform (IESR) Fabby Tumiwa said, “There are tremendous opportunities for exporting renewable energy to neighboring countries, especially Singapore”. 

Tumiwa, who is also the chairman of the Indonesian Solar Energy Association (AESI), calls for the government to ensure NRE power plant developers prioritized domestic NRE supply and help the country achieve the target of 23% NRE portion in the national energy mix by 2025.

Singapore’s aim to diversify its electricity supply with a focus on NRE sources would largely drive solar power exports from Indonesia. Gan Kim Yong, the Singaporean Minister of Trade and Industry, stated that the city-state was targeting 4 GW worth of low-carbon electricity imports by 2035. 

The Director-General NREEC Ministry of Energy and Mineral Resources, Dadan Kusdiana said, “Several parties have shown interest in exporting low-carbon electricity, especially from solar power plants.” 

Kusdiana also mentioned that increase in solar power export would not affect domestic NRE supply, as the Indonesian government continued to push for NRE usage in accordance with its National Electricity Supply Business Plan (RUPTL) 2021-2030 where 51.6% of total power generation projects to be developed are NRI projects.

Some energy analysts anticipate either Indonesia or Singapore would get to claim the carbon reduction in joint venture projects.

Elrika Hamdi from Institute for Energy Economics and Financial Analysis (IEEFA) commented, “If the [carbon reduction] has been claimed by Indonesia, it cannot be claimed by Singapore, and vice versa,” she said.

The Energy Market Authority (EMA) has granted in-principle approval on a joint-venture project to import solar power from Indonesia to Singapore.

Electricity retailer PacificLight Power Pte Ltd. (PLP), PT Medco Power Indonesia, together with Gallant Venture are in the advanced stages of developing the solar PV project, which is expected to provide 100 MW equivalent of non-intermittent electricity that will be supplied to Singapore in 2024.

Indonesian Minister of Energy and Mineral Resources, Arifin Tasrif said, “The inaugural 100 MW solar power export from Bulan Island is a milestone for Indonesia to provide clean and renewable energy.” 

Singapore-based Sunseap Group signed a Memorandum of Understanding (MoU) with various local and international partners, including Jakarta-based property giant Agung Sedayu Group to explore and develop solar power systems with a combined capacity of 7 GW around the Riau Islands. 

Sunseap CEO Frank Phuan said, “This will be one of the most consequential clean energy projects for Singapore and Indonesia.” He expects the project to make optimal use of subsea cables by reducing transmission costs.

The project is considered one of the largest cross-border clean energy projects in Southeast Asia. Coupled with multiple energy storage facilities totaling over 12 GWh, the project is expected to provide 1 GW of non-intermittent solar power energy to both countries.

Energy developer Sembcorp Industries announced an exclusive joint development agreement with renewable energy developer PT Trisurya Mitra Bersama and PT Pelayanan Listrik Nasional Batam, a subsidiary of national utility company PLN, for a large-scale integrated solar and energy storage project of 1 GWp solar power generation capacity in Riau Islands.

Sembcorp Industries Group President & CEO, Wong Kim Yin stated, “This project will mark another milestone in Sembcorp’s transition from brown to green while contributing to the region’s energy transition”.

The increasing demand for low-carbon electricity put forward new opportunities for the NRE energy power plant developers to export energy from Indonesia to Singapore and other countries of SouthEast Asia. Experts envisage increasing intra-ASEAN energy trade thanks to the rise in regional demand for clean energy due to population and economic growth.

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