JAKARTA: Indonesia and Singapore will start joint development of a floating solar farm on Batam in 2024, which will generate about two gigawatts of electricity and be transported to the republic via undersea cables.
If the schedule goes according to plan, Batam will be the first location in Indonesia to have a large-scale commercial photovoltaic (PV) plant installed.
Currently, there are only a few photovoltaic power plants in Indonesia, each with a capacity of less than 50 MW.
A photovoltaic power plant with a capacity of about 150 MW in West Java province is not expected to come online until October 2023.
“Today, Singapore is more ready to accept large-scale photovoltaic power,” Deputy Minister of the Coordinating Ministry of Maritime Affairs and Investment Rahmat Kaimuddin, who oversees the project, told the Straits Times.
Analysts see the project as a win-win: Singapore is looking to switch from natural gas to renewables, while Indonesia will benefit from foreign investment that will allow it to tap into its vast natural resources and geographic advantage.
Mr. Fabi Tumiva, Executive Director of the Basic Services Reform Institute in Jakarta, told ST: “Gas prices are high and volatile.
“The Batam PV project will not only provide competitive prices, but also make electricity rates in Singapore stable and predictable. For Indonesia, this means more investment.
Currently, Indonesia mainly uses fossil fuels for electricity generation.
Mr Fabi said Indonesians are still benefiting from very affordable coal-fired electricity as the government lowers the price of coal sold to power plants, making PV less competitive at the moment.
This makes Singapore an ideal buyer for its products.
“The Batam solar plant is expected to be 40% locally sourced, with parts and equipment locally sourced,” said Rahmat, an MIT graduate who recently joined government from the private sector.
The Indonesian consortium, which includes Jakarta-based Adaro Energy, TBS Energy Utama and Medco Energy, will work on the project with a Singaporean consortium, specifically Keppel Corporation, he said.
Adaro operates businesses ranging from power plants to gold mines and has a joint venture with TBS that sells electric motorcycles. Medco is an oil and gas company.
A Keppel representative in Singapore told ST on Friday that he supports the Green Corridor project.
A growing number of foreign investors in Indonesia are funding the production of photovoltaic materials and devices that convert sunlight into electrical energy.
They are drawn to the country's rich natural resources and supported by government policies such as income tax cuts and exemptions from import duties for the first six years of operation.
The latest entrant was California-based solar module manufacturer SEG Solar, which announced in June it would spend $500 million ($676 million) to build a solar panel plant in Batangas, in Central Java province.
“Indonesia offers a favorable environment with favorable policies, tax incentives and abundant silicon resources,” SEG Chief Executive Jim Wood said in a June 23 statement.
Indonesia has everything it needs to support solar generation.
According to government data, it has 211.8 billion tons of quartz sand resources, 700 million tons of zinc ore resources, and 9.4 billion tons of nickel ore resources.
The Indonesian government has said it is aiming to establish a national solar photovoltaic value chain to support the national deployment of renewable energy as it moves away from traditional fossil fuel-based electricity.
Kamaidi Notnegora, executive director of the Jakarta Reform Institute think-tank, dismissed criticism that exporting solar power is against Indonesia's national interests.
He said: "The Batam PV project will allow Indonesia to make a decent profit from sales in Singapore, which in turn can be cost-optimized for the construction of other power plants in the country." - The Straits Times/ANN
