An Indonesian renewable energy firm is set to commence the construction of solar power plants valued at $9 billion (equivalent to S$12.3 billion) on an island near Batam starting in 2024. Their goal is to supply Singapore with low-carbon electricity by 2027.
In an agreement signed on October 23, Marubeni Global Indonesia (MGI) committed to delivering 600 megawatts (MW) of electricity to Tuas Power, Singapore’s top power generation company. Tuas Power intends to submit a proposal to Singapore’s Energy Market Authority (EMA) by the end of November to import this electricity, which will be sufficient to power approximately 730,000 households.
The first phase of construction is scheduled to commence in March 2024 on Galang Island, located south of Batam and part of the Riau Islands province. MGI’s managing director, Tjaw Hioeng, stated that their Singapore partner requires the electricity to be connected to the grid by the end of 2027, with the power being transported through undersea cables.
The initial solar farm will have a capacity of 2.55 gigawatt-peak (GWp) and will include a 7GWp battery-energy storage system. The second phase of the project is expected to begin after the first solar farm becomes operational in 2027 and will be situated on nine less-populated or uninhabited islands near Batam.
Tuas Power’s chief operating officer, Michael Wong, mentioned that the company will initially import up to 400MW during the first phase, with the capacity increasing as the project advances toward the 600MW target upon the second phase’s completion. This electricity import represents a long-term supply arrangement spanning 25 to 30 years.
Wong noted that the 600MW import would account for approximately 15% of Singapore’s target to import 4GW of renewable energy by 2035. Singapore aims to source this power from its Southeast Asian neighbors, including Indonesia, Laos, Malaysia, and Vietnam.
The Riau Islands provincial government is already involved in building solar power plants on six small islands in 2023 to meet domestic electricity demand. Akhmad Ma’ruf Maulana, chairman of the Riau Islands chapter of the Indonesian Chamber of Commerce and Industry, anticipates that the MGI project will attract investments in the manufacturing of components used in solar plants. This aligns with the Indonesian government’s requirement that any company seeking to export electricity must source at least 60% of the solar farm components domestically.
Several companies have already invested in Batam to establish facilities for producing solar cells and modules. This solar export initiative is expected to bring added value, create jobs, and support the development of Indonesia’s solar industry.
In April 2023, the Indonesian government designated the MGI solar project as a “national strategic project,” recognizing its role in stimulating economic growth and improving welfare in the region.