Thursday, July 18, 2024

Indonesia’s C&I key to rooftop photo voltaic PV growth


It added that the newly issued quota continues to be not consistent with the National Strategic Program’s goal of reaching 3.6GW of rooftop photo voltaic capability by 2025, which is ready for 2021. According to analysis agency Rystad Energy, the put in rooftop photo voltaic capability in Indonesia is barely 0.192MWp in May 2024.

Is the aim achievable?

Indonesia beforehand set a renewable goal, hoping that it will cowl 23% of the nationwide vitality combine by 2025.

According to Mada Ayu Habsari, chairperson of basic affairs of the Indonesian Solar Energy Association, the scale of the rooftop photo voltaic PV quotas presents “optimistic sentiment” to the photo voltaic business in Indonesia as a result of it supplies certainty to home builders, who makes it straightforward to do. their enterprise plans.

Fabby Tumiwa, government director of The IESR, says the quotas can play a component within the goal of 23% of Indonesia’s nationwide vitality combine by 2025, though further energy era capability of as much as 10GW from renewable vitality energy vegetation is required.

The rooftop photo voltaic PV system growth quota presents an formidable goal, however there are some challenges in reaching this aim. In 2023, renewables accounted for under 13.1% of Indonesia’s vitality combine, beneath the goal of 17.9% in 2023, in keeping with the nation’s Ministry of Energy and Mineral Resources (MEMR).

Nevi Cahya Winofa, renewables and energy analyst at Rystad Energy, says that Indonesia has the potential to satisfy rooftop photo voltaic set up quotas, as a result of the principle driver is within the business and industrial (C&I) sector.

“This progress is supported by a optimistic inside price of return (IRR) for the C&I sectors from 3% to five%, as a result of excessive price of self-consumption and efforts to attain the targets of decarbonization,” he mentioned.

However, Winofa added that this IRR ought to improve to not less than 15% to make sure the sustainable progress of rooftop photo voltaic, which may very well be accelerated by introducing further monetary incentives.

Obstacles to growing photo voltaic capability in Indonesia

Indonesia has to face many obstacles to extend its rooftop photo voltaic capability. Winofa says low retail electrical energy costs, coupled with weak monetary incentives, have resulted in sluggish rooftop growth in Indonesia.
“Heavy subsidies for retail electrical energy have stabilized costs at US$0.068 per kWh for C&I and US$0.1 per kWh for residential. These tariffs are comparatively decrease than the highest performers of rooftop PV in Southeast Asia, equivalent to Vietnam, with US$0.1 per kWh for C&I and US$0.12 for residential,” mentioned Winofa.

Low retail electrical energy costs cut back the potential for important invoice financial savings, which is a key incentive for putting in rooftop PV techniques.

Recently, the Indonesian authorities eliminated the web metering scheme for rooftop photo voltaic below the MEMR Reg. 2/2024. Winofa says that this choice is anticipated to “hurt the financial viability of rooftop photo voltaic PV installations, particularly residential photo voltaic PV techniques”.

In addition, photo voltaic builders can solely construct photo voltaic PV vegetation in the event that they meet the 60% native content material requirement. This strict requirement and the dependence on imports hinder the implementation of photo voltaic PV techniques in Indonesia.

Winofa added: “The immaturity and restricted scalability of home manufacturing has led to increased prices in comparison with imports.”

Last 12 months, Indonesian state utility PLN and UAE state-run renewables developer Masdar inaugurated the 145MWac (192MWp) Cirata floating photo voltaic PV (FPV) plant in Indonesia’s West Java province. According to Winofa, the challenge can be going through delays within the energy buy settlement as a result of required waivers for relaxed native content material necessities.

Overbuilding of coal turbines and overestimation of demand has additionally delayed the connection of renewables to the grid. As a outcome, PLN should wait two to 3 years for elevated demand to soak up extra capability.

Indonesia’s potential to extend photo voltaic capability

Despite the challenges, Indonesia nonetheless boasts the potential to extend its put in photo voltaic capability. Based on Rystad Energy’s evaluation, the price of utility-scale photo voltaic tasks in Indonesia has decreased from US$2.6/MWp in 2013 to US$0.8/MWp in 2024, which is inside the world complete photo voltaic value between of US$0.5 and US$1.8 /MWp.

Finally, the Indonesian authorities printed a draft of the Comprehensive Investment and Policy Plan final 12 months, which estimated that Indonesia has the potential to put in 3.3TW of photo voltaic capability, based mostly on the quantity of daylight acquired. within the nation. This is probably the most of any renewable vitality supply by a substantial margin, with offshore wind accounting for the second highest potential of 94.2GW.

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