Jakarta: In 2024, Indonesia and Singapore will begin joint development of a floating solar farm in Batam that will generate about 2 gigawatts of electricity and transmit it to the republic via submarine cables.
If the schedule goes as planned, Batam will be the first place in Indonesia to have large-scale commercial photovoltaic installations.
Indonesia today has many photovoltaic systems with an output of less than 50 megawatts.
The PV system in West Java with an output of around 150 megawatts is not expected to come online until October 2023.
“Singapore is now poised for large-scale adoption of solar energy,” Rehmat Qaimuddin, deputy minister for communications at the Ministry of Maritime Affairs and Investments, told The Straits Times.
Analysts say the project is mutually beneficial as Singapore aims to shift from natural gas to renewable energy sources, while Indonesia will benefit from foreign investment to take advantage of its vast natural resources and geographical advantage.
"Gas prices are high and volatile," he told ST.
The Batam PV project will not only offer competitive pricing, but also make Singapore's electricity tariff stable and predictable. For Indonesia, this means increasing investments.”
Indonesia currently relies mainly on cheap fossil fuels for power generation.
Fabi said Indonesians still use very cheap coal power because the government sets the price of coal sold to power plants, making photovoltaic power less competitive today.
This makes Singapore an ideal buyer for the product.
“The Batam solar farm is expected to be 40 percent local, parts and equipment local,” said Mr. Rachmat, an MIT graduate who recently transitioned from the private sector to the government.
He said an Indonesian consortium that includes Adaro Energy, TBS Energi Utama and Jakarta-based Medco Energi will work with a Singaporean consortium that includes Keppel Corporation, among others.
Adaro operates businesses ranging from power plants to gold mines, while TBS owns a joint venture that sells electric motorcycles. Medco is an oil and gas company.
A spokesperson for Keppel in Singapore told ST on Friday that it supports the Green Corridor project.
In Indonesia, more and more foreign investors are financing the production of photovoltaic materials and devices that convert sunlight into electricity.
They are attracted by the country's rich natural resources and facilitative government policies such as income tax cuts and import tax exemptions for the first six years of operation.
The latest addition was California-based SEG Solar, which announced in June that it would spend $500 million ($676 million) to develop a solar cell facility in Batang, Central Java.
“Indonesia offers a supportive environment with favorable policies, tax incentives and abundant silicon resources,” SEG CEO Jim Wood said in a June 23 statement.
Indonesia has everything it needs to support solar cell production.
According to the government, the country has 211.8 billion tons of quartz sand reserves, 700 million tons of zinc ore reserves and 9.4 billion tons of nickel ore reserves.
The Indonesian government has stated that it is committed to developing a national solar PV value chain to support the domestic deployment of renewable energy in moving away from traditional fossil fuel-based electricity.
Comedy Notonegoro, executive director of the Jakarta-based think tank ReforMiner Institute, rejected criticism that exporting photovoltaic power would run counter to Indonesia's national interests.
He said, "The Batam PV project will bring Indonesia good sales revenue from Singapore, which at the same time can be ideally used to build other power plants locally." - The Straits Times / ANN
