JAKARTA (TheInsiderStories) – Indonesia, with the world’s fourth-largest population, has an aggressive goal to increase the share of renewable energy in the country’s energy mix to 23 percent by 2025.
With its overall potential to generate 788,000 megawatts (MW) through new and renewable energy, Indonesia is expected to serve as a model for clean energy deployment, especially for island nations, while providing a growing market for advanced renewable energy technologies worldwide.
With a population anticipated to number 285 million by 2025, the greatest challenges of Indonesia to achieve universal electrification is in remote regions and islands that are currently heavily dependent on costly diesel fuel, transported over long distances. Some is also imported.
Indonesia has a goal to incorporate 23 per cent of new and renewable in their primary energy mix by 2025, and 31 per cent by 2050. With abundant untapped geothermal resources, Indonesia aims to reach an installed capacity of 7,241.5 MW from geothermal in 2025 and 17,546 MW in 2050.
General Electric (GE), a major US-based corporation, is committed to provide new technologies for renewable energy-based power plants to support Indonesia’s 35,000 MW program.
In an interview with TheInsiderStories, GE Indonesia CEO Handry Satriago said the Company is committed to providing solutions that focus on efficient power plants and the development of renewable energy resources in Indonesia. GE is convinced Indonesia possesses a huge potential in the sector and is on the right track in developing it.
Satriago explained how sustainability is becoming an important key in developing energy potentials in the country.
Q: How do you see renewable energy development in Indonesia?
A: I am fully optimistic about Indonesia’s renewable energy potential; the progress that we have made has exerted an effect on the price of renewable energy power plants. In Denmark, a wind-based power plant is cheaper than an offshore power plant; this shows how renewable energy development has resulted in efficiency and an amazing impact on business sustainability.
We (GE) are also involved in several projects to build power plants with advanced technologies, such as wind, solar or hydro – all expected to eventually replace conventional power plants.
Combining onshore and offshore wind, hydro and innovative technologies such as concentrated solar power, GE Renewable Energy has installed more than 370 gigawatts capacity globally to make the world work better and cleaner. Renewable energy is the new option.
Q: What are the innovations and potentials that you see in Indonesia that need to be explored further?
A: I think we need more execution than planning, done by all stakeholders, from regulators to the state electric company.
We believe the business case for renewable energy remains strong today for several reasons:
First, the demand for new energy around the world keeps growing at a significant pace. During the first half of 2016, clean energy investments reached US$116.4 billion, and approximately US$2 trillion is invested in the global energy sector per year.
Second, in many countries renewable can meet or even beat the cost of generation from conventional options. For example, in the United States the price of onshore wind power is competitive with that of a new natural gas-fired generation unit.
Q: Is there any regulation that could be an obstacle for Indonesia?
A: Recently, people have been talking more about the tariffs. We should consider the reality, many investors are concerned about the high costs involved in renewable energy power plant investment. There should be a breakthrough from the government to assure investors and society that investing in renewable energy is positive and will help the country to be more competitive in a global scope.
Q: How long do you think Indonesia will get conclusive benefits from renewable energy?
A: I actually don’t know, but by 2019 we will see many renewable energy power plant projects activated. Then we can appraise the benefits and investors can actually calculate the real costs involved in the project.
Q: Speaking of costs, many businesspeople were disappointed over the government’s recent decision to gradually increase local content for solar photo-voltaic modules, from 40 per cent local industrial content this year to 50 per cent in 2018. How do you see this affecting the development program?
A: Actually that is a good idea and I am quite happy to localize as much as possible. But the challenge is the scale of the Indonesian market and its ability to produce sufficient units. The government should fill all the financing gaps to make projects economically viable. It should also be able to reduce costs by providing various subsidies. This would still be better than having the government develop all the facilities by itself.
Q: Any breakthrough from GE Indonesia in 2018?
A: I think we will focus strongly on renewable energy, because we think that is the key to the future. We are new in this sector; even though the numbers are still relatively small we are making progress. Even a 1-percent increase in efficiency signifies millions of dollars in savings. We are pursuing solar, smart grids, wind turbines and micro hydro-power. We are ready to bring our technologies here.
Q: Is there any ongoing project that has specifically made significant progress?
A: GE’s recent energy projects include the Gorontalo steam power plant, a 100 MW mobile-plant that was built in six months. The multinational corporation is also working with independent power plant developers such as Cikarang Listrindo, with which it signed a memorandum of understanding in June.
Q: Do you have any target for investment in power plant development next year?
A: GE provides power plant equipment such as turbines, boilers and solar panels. With an increased product range including steam and solar panels after acquiring Alstom Power in December last year, GE Indonesia is keen on getting involved in more power plant projects.
GE’s gas engines have helped generate 500 MW of electricity in Indonesia. Thirty percent of these engines generate clean, renewable energy derived from waste such as wood chips, oil palm mill effluent, agri-waste biogas, low-rank coal syn-gas, coal bed methane and oil & gas sector products.
Written by: Elisa Valenta, email: firstname.lastname@example.org