Indonesia's isolated grids open for PV development

Indonesia's isolated grids open for PV development

A recent Asia Development Bank report found that Indonesia has 600 separate
grids.

Indonesia's multiple isolated grids represent opportunities for intrepid
solar developers, according to Andre Susanto, Clean Energy Consultant at
Bluejay Energy.

Speaking at the Solar & Off-Grid Renewables Southeast Asia event in Bangkok,
Susanto said the country's current installed power capacity of 50GW means
there is already potential for at least 2.5GW of renewables for the grids to
accommodate, but this is made complex by the many islands.

A recent Asia Development Bank report found that Indonesia has 600 separate
grids, not including the smallest sized systems and mini-grids. Of the 600,
Susanto said there are around 150 different isolated grids of 50MW size or
larger where renewables could be injected.

He added: "The grid integration challenge is one challenge that you will
have to be creative with both the technology and the financial engineering
of it. You've got to really talk to PLN, which is the state-owned utility
company, and figure out how can I be a partner? How can I help you run the
grid better and cheaper with my system?"

While developers coming in to build 100MW capacity projects are likely to
face problems from PLN due to the limted isolated grid capacities, solar
plants offering tariffs in extreme lows of US$0.04/kWh will have no trouble
signing PPAs with PLN, said Susanto.

The price threshold for PLN to get on board is particularly low in
Java-Bali, which currently has around 40GW of installed power generation so
PV developers' opportunities are in other areas, he added.

Elsewhere, Sumatra has installed power capacity of 8GW across four separate
isolated grids, leaving around 5-6GW in the rest of Indonesia.

The challenge of having to achieve low solar costs then becomes an
opportunity, because developers can look at the generation costs on each
individual isolated island grid. Some of these island system costs can be as
high as US$0.30/kWh. These are in remote areas, but they are not too remote
to access via shipping to install solar systems.

Susanto said: "Your EPC costs may be increased by 60%, but you can get more
than twice on the tariff. If you are willing to do that and take that risk,
that's an opportunity for you."

In terms of off-grid there is also potential for 1GW solar installations
given that there are 12,500 un-electrified villages, not including those
villages where only a fraction of the population has access to electricity.

Susanto added: "Indonesia is complex and if you are going to back away from
it you will be along with the rest of them, so you have to be the one who is
willing to say I see the challenges and I'm willing to find a solution for
[them]."

In contrast to Susanto, a recent BNEF report said that Indonesia's first
ever feed-in tariff (FiT) for solar PV projects should generate attractive
project returns in Java-Bali and Sumatra.

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Link to Original Article:
http://www.pv-tech.org/news/indonesias-isolated-grids-open-for-pv-developmen
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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com