Accelerate Transition, Solar Energy Becomes Choice

JAKARTA, KOMPAS — As a source of renewable energy, solar energy is considered to have the potential to be used to accelerate the process of energy transition in the country. This acceleration is necessary considering that efforts to overcome the climate crisis are increasingly urgent. However, this requires support in the form of adequate technology and large market demand.

This was raised at the second day of the Indonesia Solar Summit 2023, in Jakarta, Wednesday (26/7/2023). Present as speakers, among others, Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif, Executive Director of the Institute for Essential Services Reform (IESR) Fabby Tumiwa, business people, and other stakeholders.

Arifin said the current climate crisis has forced a number of countries to set new targets for their renewable energy mix. Indonesia hopes to increase energy supply from renewable energy sources up to 300 gigawatts (GW) by 2030. As a proposal to accelerate the energy transition and achieve emission reduction targets, this discourse emerged at the meeting of the energy ministers of the G20 countries. in Goa, India, on July 22, 2023.

"The quickest way, as done by many countries and as we can also utilize, is through wind energy and solar energy. Indonesia has great potential in developing solar energy. Moreover, Indonesia is a tropical country that has a lot of land and is located in the equatorial belt with abundant land," said Arifin in his speech.

In the Electricity Supply Business Plan (RUPTL) 2021-2023, the government has targeted that the mix of new energy and renewable energy in Indonesia can reach 23 percent by 2025. However, the target has only been realized at around 12.3 percent in 2022, meaning that more than half of the target must be pursued within less than three years.

Meanwhile, out of a total of 20.9 GW of electricity coming from renewable energy in 2030, a total of 4.3 GW of electricity will come from solar energy. However, the total realization of solar panels that have been installed nationally has only reached 300 megawatts (MW) or only 6.9 percent of the target in 2030.

According to Arifin, there are two things needed to support the development of solar energy, which are the availability of technology and funding from investors. In developing technology, the government is currently trying to attract investors to build a solar panel industry domestically.

Several companies have started to build a solar panel industry, especially from China. Later, this will support local content, accelerate the energy mix, and reduce emissions. We must immediately improve because there will be a mechanism for carbon exchanges and carbon taxes which will certainly have an impact on industrial production results.

“The existence of a domestic market or demand will be an attraction for investors. If we can create a market with access to be able to build gigawatts of industry, surely the industry will enter. We have a lot of raw minerals (raw material) which so far have been exported. So, we want to evaluate the export ban, unless they are built domestically," continued Arifin.

The mineral raw materials in question are quartz sand, silica sand, iron, and other minerals. Previously, the Minister of Investment/Head of the Coordinating Investment Division (BKPM) Bahlil Lahadalia explained that his party was in the midst of intense communication and visiting the Xinyi Group, a glass and solar panel industry company from China (Kompas.id, 23/7/ 2023)

The company with a global market share of 20 percent will build a factory to process quartz sand or silica sand in the Rempang Eco-City area, Batam, Riau Islands Province. Arifin stated that China is the country with the largest solar panel production capacity in the world, accounting for a total of 90 percent of the world's capacity

"Some companies have started to build solar panel industries, especially from China. This will support local content, accelerate energy mix, and reduce emissions. We must immediately improve because there will be carbon exchange mechanisms and carbon taxes that will certainly have an impact on industrial production results," said Arifin.

In addition to building industries, the investment needed to develop solar panels is considered significant. This is related to supporting facilities such as energy storage capacity for the electricity generated. Because the electricity generated by solar panels can only be utilized for about five hours.

Also read: ASEAN Needs to Boost Renewable Energy Cooperation

Most rational
The development of solar power plants (PLTS) is the most rational choice for Indonesia in its decarbonization efforts. Fabby explained that this is due to the large potential that Indonesia possesses and the modular nature of PLTS technology.

Ministry of Energy and Mineral Resources noted, Indonesia has potential for solar energy reaching 3,300 GW. Through a study between the Ministry of Energy and Mineral Resources and the International Energy Agency (IEA) in 2022, PLTS is projected to be able to produce 65 GW of electricity in 2030 and 340 GW in 2060.

"With its existing potential and easy and fast installation nature, the development of solar power plants (PLTS) can achieve energy mix and decarbonization targets. Moreover, the price is becoming cheaper and more affordable, with a decrease of 80 to 90 percent. In the past 10 years, there has been no other technology like it," said Fabby.

On the other hand, PLTS has also become a global phenomenon as well as the main choice for many countries that are accelerating the energy transition. In the last five years, the IEA estimates that the contribution of PLTS has reached two-thirds of the total renewable energy produced in the world, namely 440 GW in 2023 and 550 GW in 2024.

According to Fabby, this indicates the potential for massive market development and technology. To achieve the target of net-zero emissions, at least a 4 GW increase in solar power capacity is needed each year, even 10-20 GW per year after 2030.

Based on the experience of various countries, the construction of solar power plants that can achieve a capacity of up to a gigawatt per year is not impossible. However, there are several things that need to be considered in order for this concept to materialize.

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“The government needs policy support, setting targets, as well as transparent and sustainable regulations. No regret policy is an important factor," he said.

On the other hand, the development of an integrated ecosystem will encourage the construction of a PV power plant with a capacity of up to a gigawatt. This ecosystem requires active public participation, strengthening of electricity infrastructure, and PT Perusahaan Listrik Negara (Persero) or PLN's willingness to participate as an equal partner.