Indonesia, a nation of unparalleled natural beauty and abundant resources, is taking a resolute step towards a greener, more sustainable future. In a historic move, the country recently inaugurated a groundbreaking $100 million floating solar farm, the largest in Southeast Asia. This monumental achievement represents not only a triumph for Indonesia but also a significant milestone in the global transition to renewable energy.
The Cirata floating solar farm, boasting a capacity to generate electricity sufficient to power 50,000 households, sits majestically on a 200-hectare (500-acre) reservoir in West Java, a mere 130 kilometers (80 miles) from the bustling capital, Jakarta. As President Joko Widodo eloquently put it, “Today is a historical day because our big dream to build a renewable energy plant on a big scale is finally achieved.”
In his speech, President Widodo proudly announced that the Cirata floating solar farm now holds the title of the largest in Southeast Asia and ranks as the third-largest globally. This milestone underlines Indonesia’s commitment to reducing its carbon footprint and addressing pressing environmental concerns.
A testament to collaboration, the project brought together Indonesia’s national electricity company, Perusahaan Listrik Negara (PLN), and the Abu Dhabi-based renewable energy giant, Masdar. Over a span of three years, these two entities worked relentlessly to transform an idyllic reservoir surrounded by lush rice fields into a sustainable energy powerhouse. Funding for this ambitious endeavor came from Sumitomo Mitsui Banking Corporation, Societe Generale, and Standard Chartered.
With an impressive capacity of 192 megawatt peak (MWp), the Cirata floating solar farm currently supplies electricity to the Cirata area, marking a significant reduction in reliance on conventional energy sources. President Widodo has ambitious plans to expand this project to 500 MWp, while PLN envisions the farm eventually reaching a staggering 1,000 MWp. Such goals underscore Indonesia’s unwavering commitment to a cleaner and more sustainable energy future.
The Indonesian government’s dedication to environmental progress is not limited to the Cirata floating solar farm. The nation has set the ambitious target of achieving net-zero emissions by 2060, underlining its determination to tackle climate change. Moreover, Indonesia is committed to reaching net-zero emissions in the power sector by 2050.
Project Profile of Cirata Floating Solar PV
reference link: https://www.plnnusantarapower.co.id/portfolio/project-profile-of-cirata-floating-solar-pv/
Under the JETP plan, Jakarta has pledged to cap power sector carbon emissions at 250 million metric tons by 2030, a substantial reduction from the previous cap of 290 million. It is a robust response to the pressing need for climate action and a cleaner energy portfolio. As President Widodo stated, “We hope there will be more renewable energy built in our country such as solar, hydropower, geothermal, and wind.” This vision encapsulates Indonesia’s unwavering commitment to a green future.
However, despite these ambitious goals, the current state of renewable energy in Indonesia is a work in progress. Solar and wind power collectively account for less than one percent of the country’s energy mix. Southeast Asia’s largest economy still leans heavily on fossil fuels for electricity generation. Although Indonesia has set a target to expand renewable energy to 23 percent of its energy mix by 2025, the COVID-19 pandemic has caused delays, making this goal more challenging to reach.
Furthermore, the nation’s pledge to halt the construction of new coal-fired power plants has not prevented the completion of previously planned projects, eliciting protests from environmental activists. Indonesia’s aspirations to position itself as a major player in the electric vehicle market are marred by some industrial parks hosting energy-intensive nickel smelters powered by coal.
Despite the challenges, environmentalists have welcomed the Cirata floating solar farm as a positive step forward. However, they emphasize the importance of local involvement in the construction and management of such projects. Greenpeace Indonesia campaigner Didit Haryo Wicaksono aptly noted that “building floating solar farms by making use of vacant land or reservoirs should be the main generator of energy transition in Indonesia.” This viewpoint reflects the need to engage local communities, foster a sense of ownership, and ensure sustainable practices in renewable energy projects.
In a complementary development, the inauguration of the Cirata floating photovoltaic (PV) power plant in West Java is a testament to Indonesia’s progress in the renewable energy sector. With a capacity of 145 MW (ac) or 195 MW (p), it becomes the largest floating solar power plant in Southeast Asia, eclipsing Singapore’s Tengeh floating solar power plant.
The Institute for Essential Services Reform (IESR) views the operation of the Cirata floating PV power plant as a pivotal achievement in accelerating the development of large-scale solar power plants in Indonesia. Despite a hiatus in the country’s solar power development since 2020, the decreasing investment cost of solar PV has rendered it the most cost-effective renewable energy source.
Indonesia possesses a vast technical potential for solar power generation, estimated to range from 3.7 TWp to 20 TWp. Leveraging this potential is vital to meeting the country’s electricity sector’s peak emission target by 2030 at minimal cost.
The IESR also champions the use of floating PV power plants, with a potential capacity of 28.4 GW across 783 water body locations in Indonesia.
Data from the Ministry of Energy and Mineral Resources indicates the possibility of developing large-scale floating solar power plants at 27 locations with existing hydropower plants (PLTA), totaling 4.8 GW in capacity and an investment equivalent to USD 3.84 billion (IDR 55.15 trillion). Utilizing this potential will accelerate the achievement of renewable energy mix targets and help realize the net-zero emission (NZE) goal earlier than 2060.
However, realizing these objectives necessitates the optimization of floating solar power plants by creating an appealing regulatory framework that attracts private sector investment. Ensuring an attractive return on investment commensurate with the risk profile, while mitigating additional financial burdens, is essential.
An area of concern lies in PLN’s assignment scheme to its subsidiaries, which prioritizes them for developing floating solar power plants. This approach requires subsidiaries to seek equity investors for minority ownership and accept a larger equity share through shareholder loans. While this scheme benefits PLN, it can reduce the return on investment for private investors, potentially affecting project bankability and lender interest, while potentially favoring foreign investors with substantial equity.
Fabby Tumiwa, the Executive Director of IESR, suggests a solution involving government support, strengthening the capital of PLN and its subsidiaries through special state capital participation (PMN) for renewable energy development. Additionally, providing concession loans to PLN through PT SMI, which can then be converted into share ownership in floating PV power plant projects, would further bolster this initiative.
In a regulatory stride forward, the Indonesian government issued Minister of Public Works and Public Housing Regulation Number 7 of 2023 in July 2023. This regulation amended the limits on utilizing water bodies in reservoirs for floating solar power plants, removing the previous 5% restriction. While allowing for larger-scale projects, the regulation requires a recommendation from the Dam Safety Commission when using more than 20% of the water body area.
Marlistya Citraningrum, Program Manager for Sustainable Energy Access at IESR, views this regulatory change as an opportunity to address land scarcity challenges in solar PV development. Land availability often presents obstacles, particularly in densely populated areas with high land prices or unsuitable terrain. Indonesia’s numerous dams, whether for hydropower or other purposes, offer potential sites for floating solar power plants. For example, the Hijaunesia 2023 project envisions the development of floating solar power plants in Gajah Mungkur, Kedung Ombo, and Jatigede, each with a capacity of 100 MW.
Nonetheless, there is room for improvement in the overall planning, tendering, and construction of floating solar power plants in Indonesia. Despite being flagship projects and forms of intergovernmental cooperation (G2G), their lengthy timelines, like that of the Cirata floating solar power plant, can dampen the attractiveness of investment in such endeavors. The Cirata project’s timeline, which began with a memorandum of understanding in 2017 and concluded with financial closure in 2021, exemplifies the need for more efficient processes to incentivize investment in floating solar power plants.
The development of supply chains for solar PV and floating PV components in Indonesia presents a wide-open opportunity, including the production of solar cells and modules. This initiative encompasses not only the domestic market but also exports. Chinese tier 1 solar cell and module manufacturer Trina Solar has partnered with Sinarmas to establish an integrated solar cell and module factory in Kendal Industrial Estate, Central Java, with a substantial production capacity of 1 GW per year.
In conclusion, Indonesia’s landmark achievements in the renewable energy sector, such as the inauguration of the Cirata floating solar farm and the Cirata floating photovoltaic (PV) power plant, underscore the nation’s commitment to a more sustainable, environmentally friendly future. The government’s unwavering dedication to expanding solar power capacity, coupled with a conducive regulatory framework, is steering Indonesia towards its clean energy goals.
The removal of restrictions on utilizing water bodies for floating solar power plants represents a significant stride in overcoming land limitations and fostering solar energy development. With continuous enhancements in project planning and construction, as well as the development of robust supply chains, Indonesia is making great strides towards harnessing the power of the sun and transitioning towards a sustainable, low-emission energy future.