Development of Renewable Energy in

the Insular context of Indonesia

Refi Kunaefi | kunaefi@akuoenergy.com

For Petro Gas Days , 2017

 About Akuo Energy
IPP Renewables | Operating in 14 countries,
960 MW in Operation/under construction | Biggest PV hybrid
project in Indonesia under construction | 2.5 B$ investment

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 Challenges in Providing Electricity in Islands

1. Reducing the dependency to
fossil fuels
 The request for alternative
solutions to dirty yet expensive
electricity on island’s is an-
avoidable.
 The sites access difficulty & the
huge price of imported oil make
the electrical generation
unaffordable, which leads to
government subsidy.
2. Improving Weak & Small
Electrical Networks
 On a small territory/Island, the
grid is considered as non-
interconnected and there is
actually no supply-demand
proliferation which greatly
reduces the balance between
production and consumption
3. Producing stable and
warranted electricity
 Moreover, the low production
sites density implies a power
support loss has directly a huge
impact on the entire grid
balance / stability.

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 Challenges in Providing Electricity in Islands

4. Finding Rare and

Competed Lands

5. Preserving Farm
Lands

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 Island Solutions: Hybrid Power Plant
Energy Management
System Distribution Line
To community / end user

Biomass / Genset
To balance the supply
(when needed)
Inverter / Battery
To store the Electricity

PV Module
Generate Electricity

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 Island Solutions: PV with Agrinergie

Production of
Clean Electricity

Organic Farming Activity

underneath: Double use
of Land / Space.

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 Island Solutions: PV with Aquanergie

Aquanergy:
Shared-space for
fish farming
Production of activity + Clean
Clean Electricity energy production

Benefits:
Increase fish Fishery Activity
production by 25% underneath
thanks to: (i)
cooler water
temperature and
(ii) avoided birds
attacks

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 Island Solutions: Hybrid Solar PV

Total installed capacity (Nov 2016)

54,000 MW; 12.7% is Renewables

Additional capacity in 5 yrs (2019):

35,000 MW (35 GW Program);

Per capita consumption:

800 kWh/year

• More than 30 million people have no access to electricity

• Solar PV installed capacity: less than 1% of national installed capacity, despite a massive
resources availability.
• MoE Regulation 19/2016 : scale up in solar energy deployment to 5 GW by 2019. Yet, its
become uncertain with the issuance of MoE Regulation No. 12/2017.
• The most possible and feasible technology to electrify all off-grid locations all around
Indonesia ~ 12k remote villages with no electricity access at the moment.

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 How the Private could Participate?

• Clear & consistent regulations and legal framework for the

Development of Renewables / Hybrid; to accommodante the need
of Island (as the Government, by Permen 12/2017 pushes the RE
dev. to be outside Java)

• Bankable Power Purchase Agreement (PPA) with PLN / Ad-hoc

agency to be created by ESDM, to in particular manage the
renewable electricity supply / business. Discussion on tariff +
Indexation, force majeure, Take Or Pay, Termination, …

• Should the project to be executed under a Tender process, there

should be Transparent & consistent tender process held by PLN /
ESDM  Avoid excessif development spending by IPP in the same
regions/locations.
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 Island Case: La Reunion

 Reunion Island: Indian ocean, ½ size of Lombok, Electricity consumption ~3 MWh/person.pa ( 3x average’s
Indonesian consumption)
 By 2013, Total installed capacity is 877 MW, with 40% Renewable ratio, with peak load of 450 MW. Target
renewable to be 100% by 2030.
 Solar PV total installed capacity is 160 MWp:
i. 18% from the total Island’s installed capacity
ii. 35% from the Island’s Peak load
iii. Contribute to 8% in the annual energy mix of the Island.
Source: Processed from EDF-SEI, 2014

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 Island Case: Nias
Power Supply in Nias

1. Electrification Ratio:
~41%
2. 100 % Diesel Power
Plants

Potential Solar PV Deployment in Nias

 Potential investment capacity: > 40 MW (PV+Storage+Biomass, Island’s connected)

 Investment needed: ~120 M$ (1.5 Triliun IDR), to be made by Private Sector / IPP (under PPA with
PLN).
 Energy generation: 56,000 MWh/year
 Annual government’s/PLN saving on diesel: 1.5 M$ (20 Milyar IDR) per year, with the current oil price.

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 Project under Implementation: Berau

HYBRID PROJECT (Berau,

East Kalimantan):

 PV-Storage/Battery-
Genset-Micro hydro (~1.5
MW)
 24 x 7 electricity supply
 Tariff on par with PLN tariff
 Viability Gap Funding by
Donor
 Managed by SPV owned by
BUMDes (village-owned
company)
 +1,700 Beneficiaries
 Avoided +1,200 Ton CO2
per year

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 Hybrid Power Plant: Where To Deploy

 With more than 17,000 Islands, abundantly solar energy available in one hand and high dependency on imported
diesel fuel for Island’s power generation on the other hand, Indonesia is definitely need to deploy large scale Hybrid
solar PV projects for Islands.
 For the current 35,000 MW program, considering the Nusa Tenggara & Maluku region only, there is an opportunity
to build ~200 MWp of PV plants (equivalent to ~500 M$ investment) to be integrated with the ~930 MW power
plants to be built in the region.
 Such investment could actually be done by Private sector should the Government provide the investment’s
environment as mentioned earlier.

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 Conclusion

• Indonesia, with its islands / Remote areas has a specific

conditions/challenges for satisfying its energy needs: un-
availability of fossil fuel, logistical constraints, low density
population;
• Therefore, the most suitable solution for Islands are: off-grid / mini
grid which use the locally available renewable resources;
• Among such resources, Solar/Sun is available everywhere which
make it the most feasible technology to be implemented;
• Private sector could invest in Islands/Remote area provided that
the Government support it by providing: Consistent Legal
framework, and Bankable Power Purchase Agreement, either with
PLN or Ad-hoc agency to be created by ESDM;

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