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Indonesia to Increase Solar Capacity Under Decarbonisation Plan by 2030

Under a new master plan, Indonesia aims to add up to 4.68 gigatons of solar power capacity by 2030 and to source 51.6% of its additional power capacity from renewable sources, according to its energy minister. Indonesia, a major coal producer, and exporter derive roughly 60% of its current electricity capacity from coal-fired power plants.

With international assistance, the government expects to transition away from fossil fuels and achieve net-zero carbon emissions by 2060, while reducing them by 41% by 2030. Solar power is being targeted because of its lower costs and shorter time to develop power plants, according to the energy minister in a virtual presentation.

To reach the master plan’s objectives, the government anticipates that independent power producers will play a larger role in the development of renewables projects in the coming years. The minister also stated that the government will encourage the development of interconnections between Indonesia’s main islands to improve electricity reliability and renewables penetration.

The Ministry of Energy and Mineral Resources (MEMR) of Indonesia has enacted the MEMR 26/2021 law, which helps improves net metering legislation for rooftop PV.

The state’s Electricity Company, Perusahaan Listrik Negara (PLN), has formed a joint venture with a renewable energy developer to build a 145MWac floating solar project at a reservoir in West Java. The partners recently completed the financial close for the solar plant, which is currently under construction and is scheduled to begin commercial operation by the end of 2022.

The additional 40.6 GW capacity will require an investment of around 800 trillion rupiahs ($56.10 billion), with renewables alone accounting for up to 500 trillion rupiahs, according to the PLN director. The community is seeking private sector investment in the majority of renewable energy projects. However, tax breaks and a compelling sales-purchase agreement with PLN would be required, according to the Executive Director of the Indonesia Renewable Energy Society.

According to Indonesia’s Minister of Energy and Mineral Resources, the roadmap outlines a strategy for Indonesia to significantly increase its solar capacity, which currently stands at less than 1% of its potential. This industry outlook also demonstrates how Indonesia, as Southeast Asia’s largest economy, provides tremendous economic and environmental opportunities for global investors as it pivots away from coal, gas, and fossil-fuel power and toward a future powered by renewable energy. According to the findings of the report, the power sector could achieve this level of renewable energy generation by installing 18 GW of photovoltaic (PV) systems alone by 2025, with this rapid increase in solar deployment enabled by short lead times and plummeting costs.

From another recently published report, Indonesia is poised to become a world leader in solar power, with all of the economic and public health benefits that investment in clean energy brings. Jakarta leaders have set a goal of reaching 23% renewable energy by 2025, an ambitious increase from the 13% renewable energy penetration in Indonesia’s primary energy mix in 2019.

The ACCESS Energy Patriot is part of a partnership between the United Nations Development Programme (UNDP) Indonesia and the Ministry of EMR, which is funded by grants from the Korea International Cooperation Agency (KOICA) through a project called the ACCESS (Accelerating Clean Energy to Reduce Inequality). The goal of the ACCESS project is to build 23 communal solar power systems with a total capacity of 1.2 megawatts (MW) in 23 villages across East Nusa Tenggara, Southeast Sulawesi, West Sulawesi, and Central Kalimantan.

The ACCESS project is one of the most ambitious strategies in clean energy development because assistance is provided in the form of not only power generation infrastructure but also training and certification for local operators, as well as the development of local units that manage electricity services.

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