Bright Prospects for Solar Power Plants in Indonesia
“This post is written by Mahrus Ali, Market Research & Business Development at PT Indonesia Research Institute Japan Jakarta, a global management consulting firm on business strategy.”
The Indonesian government has a Renewable Energy Mix target of 23% by 2025. This policy combined with Indonesia’s commitment to reduce emissions by 29% by 2030 is a clear effort towards a more sustainable energy system. However, until 2020, only half of it has been achieved, namely 11.5%. Various acceleration programs for Renewable Energy Mix development continue to be promoted in order to pursue the energy mix target of 23% by 2025. Director General of New, Renewable Energy and Energy Conservation of the Ministry of Energy and Mineral Resources, Dadan Kusdiana said that one of the efforts to accelerate the achievement of the energy mix is through the installation of Solar Power Plants. Then, how big is the ability of Solar Power Plants in Indonesia? Is it true that it can help significantly increase the achievement of The Renewable Energy Mix target?
Solar Power Plants in the future will spearhead the Renewable Energy Mix compared to other energy in Indonesia. This is due to its modular nature, large capacity, easier access, and does not require a long installation time. In addition, solar is one of the renewable energies that has the greatest potential, but its utilization is still relatively small. This should be a concern for the Government of Indonesia to maximize the utilization of this solar potential. Based on data from the Directorate General of New Energy and Renewable Energy, Ministry of Energy and Mineral Resources, solar has a potential of 207.8 GW but has only been utilized or has only been installed at 0.135 GW or around 0.02%. This figure is a very small number considering that Surya’s potential is very large. Apart from having great potential, the potential for solar energy is almost evenly distributed throughout Indonesia. In this case, West Kalimantan province has the highest technical potential of 20,113 MW, while DKI Jakarta province has the lowest technical potential of 225 MW. So, if the solar potential is fully utilized, almost all regions in Indonesia can contribute to 23% of Indonesia’s 2025 Renewable Mix Target.
The Indonesian government through the Minister of Energy and Mineral Resources Regulation 49/2018 jo.13/2019 continues to boost the development of Solar Power Plants, with the policy of Rooftop Solar Power Plants. The system includes solar modules, inverters, customer electrical connections, safety systems, and Import-Export kWh meters. According to data from PT Perusahaan Listrik Negara (Persero), Director of Various New and Renewable Energy of the Ministry of Energy and Mineral Resources, Harris Yahya, revealed that as of June 2020 there were 2,346 Rooftop Solar Power Plants units installed throughout Indonesia with a total capacity of 11.5 MW. There are also more than 1,300 new installed customers for Rooftop Solar Power Plants since Minister of Energy and Mineral Resources Regulation 49/2018 is published. The majority of Rooftop Solar Power Plants customers come from Jakarta, as many as 703 customers with a total capacity of 2,986.51 kWp. Then followed by West Java as many as 656 customers with a total capacity of 2,462.12 kWp. In addition to the construction of Rooftop Solar Power Plants, Indonesia also continues to increase the construction of IPP Solar Power Plants, where up to now several power plants have been built, as follows (Source: Directorate General of New Energy and Renewable Energy, Ministry of Energy and Mineral Resources, 2020 ):
The Indonesian government has also issued a new policy to maximize solar potential in Indonesia. Apart from the Rooftop Power Plants policy, recently the Indonesian Government is intensifying the construction of a Floating Solar Power Plant. A total of 1,900 megawatts of potential for the development of a Floating Solar Power Plant in Java are planned to be included in the PLN 2021-2030 Electricity Supply Business Plan (RUPTL). The Director General of New, Renewable Energy and Energy Conservation at the Ministry of Energy and Mineral Resources, Dadan Kusdiana, said that the potential for a Floating Solar Power Plant to be installed on aquatic land, such as lakes, reservoirs and dams, is being drafted in the draft RUPTL 2021-2030.
The Floating Solar Power Plant is one of the government’s programs to accelerate the development of a Floating Solar Power Plant, because in terms of the electricity price generated is quite good, licensing is simpler, does not require land acquisition, and a large enough capacity can be developed. In the future, the development of a Floating Solar Power Plant will be encouraged to be combined with hydropower plants that are already in operation. Dadan said the combination of a Floating Solar Power Plant and a Hydro Power Plant will be more effective because the electricity supply from The Floating Solar Power Plant will be able to increase the operating time of a Hydro Power Plant which is usually only used as a peaker generator or only used during peak loads. One of the Floating Solar Power Plant projects currently running is the Cirata Floating Solar Power Plant in West Java with a total capacity of 145 megawatts peak.
Seeing the potential of solar power plants in Indonesia, this is a very big business opportunity. Investments in this field will greatly help and are needed by the Government of Indonesia to achieve the 23% Renewable Mix Energy Target for 2025. This Solar Power Plants business opportunity is something that cannot be wasted. We, Indonesia Research Institute will help investors to conduct further research on this business opportunity. Indonesia Research Institute Japan offers all services from desk research, in-depth interviews, to market surveys for a better understanding of the topic that wants to be understood on how Solar Power Plants’ business works.
For More Information and Services, please contact us :
Consulting Services info :
Hotline : +6285718923842
Email : contact@indonesiasoken.com
Thank you very much.
Download English & Japanese Version Here
Share this post!
Trend of Indonesian Companies IPO in early 2021
Bright Prospects for Solar Power Plants in Indonesia Co., LTD
We’ve got more coming…
Want to hear updates and seminars from our company?
Sign up for our newsletter and we’ll email you every time we have new updates.
Authored by : Fitri Aulia | 22 December 2020
Recent Property Development
The Covid-19 pandemic has dealt a quite severe blow to the property business sector in 2020. During the PSBB period, business activities were very sluggish and it can be said that some business actors suffered severe losses.
However, entering the new normal period, the economic activity in several sectors including property has begun to revive from the previous period. The role of the government triggers the revival of Indonesia’s property business activities.
Government Stimulus
The assistance provided by the government is in the form of subsidies or incentives for interest subsidies to debtors of public housing credit (KPR), which is contained in the Minister of Finance Regulation (PMK) Number 138 / PMK.05 / 2020 and amendments to PMK 85 / PMK.05 / 2020 regarding the guidelines for providing interest subsidies in the effort to implement the National Economic Recovery program.
In early March 2020, the Government decided to increase the allocation of housing financing assistance by IDR 1.5 trillion for Low-Income Communities (MBR). This was stated by the Director General of Infrastructure Financing of the Ministry of Public Works and Public Housing (PUPR) Eko Djoeli Heripoerwanto in a webinar, Wednesday (29/7/2020).
In addition, the Government also has Bank BTN as their partner-collaboration to implement their OMH Program aimed at Low-Income Communities (MBR) with low interest rates and low installments for the purchase of a prosperous tread house and a welfare apartment.
Bank BTN noted, in 2015 they have provided housing financing assistance totaling 474,099 units. Then in 2016 as many as 595,540 units, in 2017 to 666,806 units, in 2018 to 755,093 units, and in 2019 to 735,749 units.
As of September 2020, BTN has provided home ownership credit support (KPR) of 93,448 units which cost as much as Rp. 15.6 trillion. These support provided by BTN is significant for the survival of the business property sector.
BTN commitment on supporting business property has not slackened. In fact, during the pandemic, BTN continuously provides support for the government program.The distribution of subsidized KPR is still a mainstay of BTN for the One Million Houses program.
Source : Bank BTN (visit : https://www.btn.co.id/id/Conventional/Product-Links/Produk-BTN/Kredit-Konsumer/Pinjaman-Bangunan/KPR-BTN-Subsidi)
Positive Trend in Q3 2020
There is a positive trend during Q3 2020 after it drastically dropped earlier in the year, indicates there is potential for the revival of Commercial Property Demand in Q4 2020 and the next Q1 2021.
Source : Bank Indonesia
Hotels and convention halls are two sectors whose demand has risen quite drastically in the Q3 after falling badly in the previous quarter. This demonstrates positive potential for its development in the future. Meanwhile, the demand of apartment remains low and still struggles to revive until now.
Growth of Commercial Property Demand in Jabodetabek
Overall in Jabodetabek, the commercial property sector also experienced a positive increase during Q3 2020.
In Jakarta, all commercial property demands show positivism with hotels being the most prominent in their development at Q3 2020. After previously shows a negative number, the total index in Q3 has at least increased to be positive.
Source : Bank Indonesia
Meanwhile, the growth in the total commercial property index jumped drastically in Bogor, Depok and Bekasi. Same case with Jakarta, its hotel sector are also the most prominent in reviving, at least in the Q3 2020.
Source : Bank Indonesia
As we can see on charts above, the hotel segment shows a great improvement in demand. This was driven by various kinds of promotions offered by hotels to adapt in this situation such as providing huge discount, staycation packages, working from hotels offer, and wedding reception packages.
Why Hotels?
As Indonesia gradually eases lockdown restrictions, the hotel occupancy rates across the country including Jakarta, have slowly started to pick up. However this is not without several efforts and sacrifices driven by people in the hotels sector to improve and revive the hospitality business sector in Indonesia.
To get through this hard times, efficiency and innovation are the main keys. Therefore, there are several trends created specifically to adapt to this era. Hotels competing with each other to offer a flood of discounts. To further intensify its sales strategy, there are several e-commerce platforms that is becoming a great place to advertise rooms and staycation packages, such as Traveloka. The Buy Now Stay Later also sticks to this trend.
Hotels discounts on Traveloka (Source : Traveloka)
Another new trend is the Work From Hotel (WFH). As you might know, the abbreviation of WFH was initially stands for Work From Home. To connect the dots, Working From Hotel then exist and created because there are more and more office workers are getting bored with the atmosphere of their house and desperate to look for a new atmosphere. It’s a trend where hotels prepare rooms, complete with equipment and facilities to work (e.g : Wi-Fi , stationer, and free printing facilities,etc).
Source : Instagram @harrisfxsudirman and @arunasenggigi
During the transitional PSBB period, indoor wedding receptions are allowed to be held again after previously was banned temporarily due to the massive increase of the Covid-19 spread. This becomes the opportunity that triggers the revival for the hotel business.
However, this permission is also accompanied by the requirement to fulfill and comply with the health protocols made by the government. These includes the limitation of attendees to a maximum of 25 percent of normal capacity. Then, the seating distance for visitors is set at least 1.5 meters. Visitors are also prohibited from passing by or changing seats. The eating and drinking utensils must be sterilized, while the serving of food is prohibited from using a buffet. Last but not least, the wedding staffs are required to wear a mask, face shield and gloves.
One of the breakthrough in this trend was the make of “Virtual Wedding” ever since June 2020. As this was the case held by The Sunan Hotel Solo, which offer a virtual wedding service package for 44.5 million. The event is only attended by the couple and their family members, meanwhile guests are able to attend the wedding virtually through various platforms such as Zoom, YouTube, Facebook and Instagram, while enjoying food sent by the hotel to their residences.
Source: The Sunan Hotels Solo
Finally, we might conclude that the property business in Indonesia has the potential to develop more despite the massive impact it has taken from pandemic outburst. Combining the stakeholders effort and the government’s support to stimulate this sector are expected to help revive the business sector in the future.
References
Bank Indonesia. (2020). Perkembangan Properti Komersial (PPKOM).
Kementerian Pekerjaan Umum dan Perumahan Rakyat. (2020, November 3). Tingkatkan Kepemilikan Hunian Layak, Realisasi Program Sejuta Rumah Hingga Akhir Oktober 2020 Capai 601.637 Unit. Retrieved from https://www.pu.go.id/berita/view/18970/tingkatkan-kepemilikan-hunian-layak-realisasi-program-sejuta-rumah-hingga-akhir-oktober-2020-capai-601-637-unit
Kementerian Pekerjaan Umum dan Perumahan Rakyat . (2020, January 3). Capaian Pembangunan Rumah Tembus 1,25 Juta Unit. Retrieved from https://perumahan.pu.go.id/berita/view/227/capaian-pembangunan-rumah-tembus-1-25-juta-unit
Kompas. (2020, July 29). Alokasi Tambahan Rp 1,5 Triliun untuk Perumahan Terkait 3 Program. Retrieved from https://properti.kompas.com/read/2020/07/29/191334021/alokasi-tambahan-rp-15-triliun-untuk-perumahan-terkait-3-program?page=all
BUMN inc. (2020). Target Penyaluran KPR Bank BTN Naik Menjadi 300.000 Unit Per Tahun. Retrieved from http://bumninc.com/target-penyaluran-kpr-bank-btn-naik-menjadi-300-000-unit-per-tahun/?more=2