Analysis of the feasibility of Indonesia's move away from reliance on thermal power generation

With at least 207GW of PV potential, Indonesia has been one of the major PV markets in South East Asia. However, the market has not experienced much growth over the last decade due to a lack of consistency, transparency and attractive policies in government regulation.

Berkeley Energy Indonesia's Business Development Manager, Yogi Adi Satria, began his presentation by talking about the opportunities and challenges that exist for solar in the Indonesian market from the perspective of the latest regulations and the local environment. In his presentation, Satria, who has worked in the EPC, power and renewable energy sectors for 10 years, elaborated on Indonesia's renewable energy portfolio targets and the country's goal of becoming carbon neutral by 2060 under Government Regulation No. 79 of 2014.

Yogi Adi Satria, Business Development Manager, Berkeley Energy Indonesia, giving a presentation

Satria highlighted Indonesia's solar potential, as the country has a large amount of solar radiation and increasingly affordable solar technology, and with the demographic dividend peaking in 2030, international investment and a global consensus to reduce carbon emissions, there is likely to be significant installed growth in the future. At the same time, Satria summarised some of the challenges facing solar installations, including oversupply, over-reliance on conventional energy sources, land constraints and uncertainty over regulatory implementation.

André Susanto, Chief Technical Officer of Quantum Power Asia Ltd, gave an overview of solar development in Indonesia from a technical and project implementation perspective. He argued that regional grids and cross-border power trade could lead to gigawatts of installed solar power in Indonesia.

According to Susanto, solar energy is the future of Indonesia and will be one of the main technologies for power generation when traditional resources are exhausted. Judging by the global consortium investment, Indonesia is likely to become the hub of the solar PV industry in the region and the world, with 7-20 GW of solar power likely to be installed in the next 5-10 years. At the same time, he concluded by sharing his views on the practical implementation and execution of the project, stating that the government needs to allow solar PV to be exported to neighbouring countries, which is absolutely beneficial.

Presentation by Andres Susanto, Chief Technology Officer, Quantum Dynamics Asia Ltd.

For her part, TüV Rheinland Indonesia Account Manager Tiara Ramadny focused on the process by which local companies obtain certification to the SNI Indonesia National Standard, which is mandatory in Indonesia and only PV products with this certification are allowed to be distributed in the market.

According to Ramadny, in 2021, the Indonesian Ministry of Energy and Mineral Regulation issued quality standards for crystalline silicon PV modules, which are mandatory for both local and imported products, and TüV Rheinland Indonesia is the certification body that issues the SNI certificates. According to Ramadny, the certification process consists of five stages, namely application, selection, identification, review and decision, as well as the process of issuing the SNI certificate.

Presentation by TüV Rheinland Indonesia Account Manager Tiala Ramadny

At the same time, she highlighted several highlights of the assessment phase and explained in detail the determination process and the required application documents. In addition, she describes the range of things to do once the SNI certificate has been obtained. The whole process usually takes around five months.

During the discussion session, the guests focused on some of the more notable local practical issues. For example, the highly decentralised structure of the Indonesian grid and the operation of off-grid areas. In response to this situation, Susanto said that the national grid is not a major concern for O&M companies, as it is more complex and requires dealing with the Indonesian National Grid. Quantum Power Asia Ltd. therefore focuses on independent grids owned by private companies. Currently, there are about 50 companies licensed to supply business zones, the same level as the Indonesian National Electricity Corporation.

In terms of project funding, there are many investors already lined up to invest in renewable energy. In order to finance effectively, the government needs to prioritise the type of renewable energy that will be developed. In response, Susanto said that the Indonesian government will not fund large projects. "They will only fund projects in remote areas. The government will not choose commercial PV projects on its own, and government funding will only be used for villages and areas that cannot be reached by the Indonesian national electricity company."

To a certain extent, Pertamina could essentially determine whether the country achieves its zero carbon goal. The company has pledged to stop building new coal power plants after 2023 and plans to achieve net zero emissions by 2060, and Susanto stressed that in addition to setting these targets, the government must create a viable business model around them. Many coal projects and investors have signed power purchase agreements with Pertamina and are not afraid of being called off. There is also no incentive for investors in coal power plant projects to phase out coal early. He therefore believes that the government should focus on creating viable and implementable business models to facilitate the development of PV projects.