Study on Fundamentals for Successful RE Deployment Strategy in Indonesia

Specific Focus: Photovoltaic and Bioenergy

 

In 2014, the government of Indonesia set the target of 23% of renewables in the energy mix by 2025 and 31% by 2050 as part of its plans to reduce greenhouse gas emissions in line with the objectives of the Paris climate agreement.

Indonesia NDC targets at reducing 314 Mt CO2e emissions by 2030. According to REmap – the global roadmap from the International Renewable Energy Agency (IRENA) – Indonesia could feasibly exceed its current targets and deploy even more renewables. Thus, the potential of solar energy and bioenergy can definitely meet the Government’s RE targets of 6.5 GW of photovoltaic power and 5.5 GW of bioenergy power by 2025. In fact, the country could reach its 2050 target two decades sooner – by 2030. The benefits of such accelerated uptake would greatly outweigh the costs as compared to current plans and policies, it would cut net energy system costs and avoid air pollution and carbon-dioxide emissions. The biomass target can reduce CO2 emissions by about 18 Mton CO2 per year and the solar PV target by about 7.4 Mton CO2 per year.

To support Indonesia with the targets and challenges mentioned above, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH started a joint project in 2012 together with the Directorate General for New Renewable Energy and Energy Conservation (EBTKE) entitled “Promotion of Least Cost Renewables in Indonesia” (LCORE-INDO). This project aims at helping to empower Indonesia’s policy makers in devising and implementing practical and achievable policies to expand the use of RE. The following Study on Fundamentals for a Successful RE Deployment in Indonesia is one outcome of  many different projects of this years-long cooperation. The study focuses specifically on photovoltaic and bioenergy deployment in Indonesia to achieve the 2025 targets.

Key results of the Study on Fundamentals for a Successful RE Deployment in Indonesia are:

The Study on Fundamentals for a Successful RE Deployment in Indonesia provides an outlook on measures needed to finally achieve the targets set. The PERMEN can be used and developed for future RE to meet economic requirements: the current calculation methodology of the BPP can be adjusted to up to the LCOE of new coal power plants, so RE cost can be met. Though it is not necessary to apply more than 90% of the LCOE of new coal power plants for every technology and province. The study explains that the BPP can - starting today - be developed on basis of the potential and cost. Currently, there is a discrepancy between inner and outer provinces due to higher BPP: the same PV or bioenergy installations are economically feasible in the outer islands but not on the main provinces. For the main provinces where the main RE potential is allocated, the economic feasibility can be created following the schemes explained.

The Study on Fundamentals for a Successful RE Deployment in Indonesia closes with a list of recommendations for various fields of activities and sectors. The following topics are addressed: Policy Making, Institutional Landscape, Financing Policies and Mechanism, Monitoring and Evaluation, as well as RE Grid and System Integration.

 

 

Renewable Energy Deployment Simulation (REDS) Tool 

As a part of the current LCORE Project E. Quadrat developed an Excel based calculation methodology, "Renewable Energy Deployment Simulation (REDS) Tool",  to simulate the potential future deployment of RE in a given province in Indonesia. The objective of the methodology is to provide advice to the Government on necessary promotions schemes stimulating and supporting the energy market in order to finally achieve RE targets.

The REDS Tool accounts for:

All in all, the calculation methodology serves as a tool which supports governments in estimating the impact of political instruments with regards to future market behaviour.

 

Full report (ENGLISH) is available Here

Full report (BAHASA) is available Here