Indonesia Solar PV

& Net Zero Emission 2050

December 4th, 2021

Fabby Tumiwa
Executive Director, IESR
Chairman Indonesia Solar Energy Association
Glasgow Climate Pact pave a way to boost climate action in the next decades to reach
1,5℃, coal phase down and fossil fuels subsidy reform are key policies outcome

Untuk compatible dengan target Paris Agreement maka 45% emisi global dari tingkat 2010 harus turun di
tahun 2030.

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IEA Net Zero Emission 2050 Pathway suggested a structural transformation on energy system,
phasing out fossil fuels and rapidly increase clean energy technologies

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Future global primary energy mix will be determined by the speed and scale of renewables and
other clean energy technologies deployment.

85% of RE by 2050 52% of FF with CCT by 2050 65% of nuclear by 2050

Source: BNEF 2021 4

In 2027, solar PV + battery could become competitive to CCGT & Coal plants in Indonesia

Source: IESR & BNEF 2021 5

 As of Q3 2021, renewables accounted for 14.5% of total installed capacity (73.7 GW);
solar accounted for only 0.27% (~200 MWp)

Installed power capacity, Q3 2021 Renewables installed capacity, Q3 2021 Generation gap to 2025 RE target
Capacity, GW Capacity, GW Generation, TWh
Solar: 0.27% Solar: ~200 MWp

● Indonesia’s electricity generation is still dominated by coal (~65%), while renewables accounted for ~14% (mainly from hydro and geothermal)

● To address the 23% RE target generation gap, about 18~33 GW of solar are required and can be deployed relatively quickly (in 3-4 years)

Source: Ministry of Energy and Mineral Resources, PLN. BloombergNEF, IESR, and Bloomberg Philanthropies. (2021). “Scaling Up Solar in Indonesia”. 6
 Opportunities in solar amounts to ~20 GWp by 2025 across various use cases & markets

Grid-connected Mini-grid / off-grid

Centralized Distributed Centralized Distributed

Utility-scale (IPP) Rooftop solar, although not limited to Off-grid systems, usually coupled with battery energy storage.
Depending on sizes can be centralized or distributed.

Ground-mounted Floating C&I Residential Mainly contracted by MEMR or PLN as EPC project.

Typical size rng. 5 MW ~ 500 MW 20 kW ~ 10 MW Up to 20 kW 100 kW ~ 1 MW 1 kW ~ 100 kW

Behind the meter Behind the meter

Characteristics Requires a PPA with a power utility
for self-consumption (net metering)
Powers rural areas Powers rural areas

PLN: Residential,
Segmentation: IPP projects with PPA to PLN PLN: C&I, Gov bldgs
small biz
Rural electrification Rural electrification

Other business concession, Non-PLN:

“Wilayah Usaha” (non-PLN) Captive power

Key market for the next five years Moderate, but has 600 MWp up to 4 GWp of diesel conversion
Market outlook: (at least 3.9GW + ~10GW* outside PLN) Govt target: 3.6 GW by 2025 potential in the next five years
*For export to Singapore

Source: IESR analysis. Notes: Based on current market signal (PLN’s power development plan, or “RUPTL”) and other market developments. 7
 Solar gets a significant boost (5x) in RUPTL 2021–2030

Planned capacity addition under RUPTL 2019 vs. 2021

Capacity, GW

Note: EBT refers to renewable energy. EBT baseload refers to solar-and-battery,

wind-and-battery, geothermal or hydro projects.

● ~64% of planned solar capacity (2.9 GW) will be developed by the private sector (IPP).
● About 80% (3.9 GW) is planned for commissioning by 2025

Source: PLN. IESR analysis. 8

 Rooftop solar adoption has also been growing since 2018, particularly led by C&I solar

CAGR (2018–2021): +190%

● C&I solar accounted for ~50% of total rooftop solar installed capacity in Q3 2021, followed by residential at 25%.
● It is estimated that annual capacity addition from C&I solar (outside PLN’s concession, still unrecorded by MEMR) may reach 20~30 MWp/year

Source: Ministry of Energy and Mineral Resources, PLN. IESR analysis. 9

 C&I sectors together accounted for ~50% of power demand in 2019
*(industrial sector alone accounted for one-third of total power demand)

Indonesia power demand by sector, 2012–2019 Industrial estates outside PLN concession areas
Electricity consumption, TWh

RE100 companies ● Increasing clean power demand from companies with sustainability goals (incl. data centers)

Green manufacturers ● Manufacturers concerned with carbon footprint for exports (e.g., battery manufacturing, etc.)

Listed companies with

● Listed companies with strong ESG commitment required to release sustainability report
strong ESG commitment

Companies seeking
● Simply C&I consumers seeking efficiency on electricity bills (e.g., 10~15% below retail tariff)
efficiency

Source: BloombergNEF, IESR, and Bloomberg Philanthropies. (2021). “Scaling Up Solar in

Indonesia”.
 Current policies and regulation encouraging for solar development

Overarching policies: GR 79/2014 23% renewable energy in primary energy mix by 2025

Law 16/2016 NDC: 29% emissions reduction against BAU by 2030, 41% with international support

?? Net-zero target (by 2060 or sooner), coal moratorium from 2023, coal retirement, etc.

● ≤ 5 MW: Feed-in tariff

Category Regulations ● >5 MW: Ceiling price with a location factor

Utility-scale solar MEMR 50/2017 MEMR 53/2018 MEMR 4/2020 Presidential reg. Regulates tariff for solar electricity
● If local BPP > national BPP, ceiling price capped
at 85% local BPP
● If local BPP ≤ national BPP, B2B

MoI 54/2012 MoI 5/2017 Regulates local content on power plants

MoI 4/2017 Regulates local content on solar power plant

C&I rooftop solar MEMR 49/2018 MEMR 13/2019 MEMR 16/2029 MEMR 21/2021* Regulates net metering scheme on rooftop
solar for PLN consumer (and later for non-PLN
consumer (private power utilities)

Power wheeling MEMR 1/2015 MEMR 11/2021 Regulates mechanism on power wheeling

Source: IESR analysis. Notes: GR = Government Regulation, MEMR = Minister of Energy and Mineral Resources Regulation, MoI = Ministry of Industry Regulation. BPP = Average electricity generation cost. 11
Further reading

*IETO 2022 will be published in 21st December 2021

Visit: https://iesr.or.id/en/study-report for more information
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 Thank You
Accelerating Low Carbon
Energy Transition

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