POWER-GEN Asia 2018

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Technical and Commercial Considerations for the Development of Solar PV Projects in Indonesia (Room Garuda 7A, 1st Floor)

Indonesia is the largest energy consumer in the Association of Southeast Asian Nations (ASEAN) community, accounting for roughly 40 percent of total energy consumption in the region. Given solar irradiation ranging from 4.5 to 5.1 kWh/m2/day, Indonesia’s Ministry of Energy and Mineral Resources (MEMR) is targeting a total solar installed capacity of 6.4 GW by 2025 and previously implemented a Feed-in Tariff (FiT) framework, which aimed to support 250 MW in 2016; however, while other ASEAN members such as Thailand and Malaysia have built strong frameworks, incentives and platforms for solar PV projects, the solar energy sector in Indonesia is relatively underdeveloped, with only 22 MW installed as of 2015. Only three utility-scale PV plants were known to be developed as of early 2017, with each anecdotally reported to have suffered grid-related challenges affecting ability to fully dispatch. Barriers faced include disrupting the country’s heavy reliance on fossil fuels, and limitations created by its grid characteristics, with limited electrical interconnections between dispersed islands. Technical challenges such as site accessibility, identifying optimal plant configuration to make best use of available land, grid-related constraints and lack of reliable data for solar resource estimation are evident. Mott MacDonald has accumulated experience as a technical advisor for solar PV projects in Indonesia, as well as other countries in the Asia Pacific region that share similar geographical characteristics including Malaysia, Japan and the Philippines. The main objective of this paper is to highlight lessons learned to minimize risk and maximize project value, relevant to archipelagic countries, focusing on Indonesia as a key case study.