Market Opportunity for Renewables in Indonesia
Indonesia receives on average 4-6 peak sunlight hours per day with irradiation of 4.8-6.3 kWh/m2, with the highest irradiation found across the eastern regions of the country.
According to the Indonesian Ministry of Energy and Mineral Resources, the country has the potential to generate over 400 GW of renewable energy from sources like solar, wind, geothermal, hydro, and bioenergy. Indonesia has set a target to produce 23% of its total energy from renewable sources by 2025, which corresponds to a target of 29 GW of renewable energy capacity.
Solar power is expected to play a significant role in achieving this target, with the government setting a target of 6.5 GW of solar power capacity by 2025.
Currently, Indonesia relies heavily on coal to meet its electricity demand, accounting for around 56% of its electricity generation. With increasing geopolitical issues and the need to reduce greenhouse gas emissions, there is a growing interest in diversifying the energy mix and promoting the use of renewable energy sources. This presents an opportunity for solar energy to compete with conventional sources and help reduce the country's reliance on coal.
In addition, the decreasing cost of solar PV technology is making it an increasingly attractive option for electricity generation. Indonesia has implemented value-added tax (VAT) exemptions and import duty exemptions available for certain RE equipment, including solar panels and wind turbines. These exemptions can help to lower the upfront costs of RE projects and make them more financially viable.
Electricity prices from diesel or furnace oil-based plants in Indonesia cost around IDR 2,500-4,500/kWh (US$ 0.17-0.31/kWh). Grid tariffs for industries in Indonesia range from IDR 1,035-1,352/kWh (US$ 0.07-0.09/kWh), depending on the voltage level and location of the industry.
||Yes, with 100% offset
|PPA with C&I allowed
||Not for PLN consumers
|Operating lease model
|PPA with Discom
||No, only roof owner
Indonesia coal phase-out roadmap
Renewable energy capacity addition is the most favourable option for Indonesia’s power system. The retirement objectives for fossil power plants should result in a significant reduction in their output by 2040, and they are envisaged to be completely phased out by 2056 – to be replaced by renewables.
Fourth Partner Energy In Indonesia As EMITS (Empat Mitra Indika Tenaga Surya)
Fourth Partner Energy is proud to partner with Indonesia’s largest integrated energy company – Indika Energy (https://www.indikaenergy.co.id
) to help accelerate decarbonization across the country’s corporate sector. Through our JV company EMITS or Empat Mitra Indika Tenaga Surya (https://emits.id
) we will be extending customised low-cost, low-carbon solar energy solutions, battery storage and electric mobility solutions to Indonesia’s businesses.
EMITS’ (Empat Mitra Indika Tenaga Surya) Clean Energy Solutions
Ready to make the switch to renewable energy for your business?
Our team of experts will work with you to customise clean energy solutions for your business – our combined entity puts customer centricity at the core of operations. EMITS is synonymous with unparalleled regulatory acumen, execution expertise and recognition for asset management. Our solutions will help your company save between 30-60% on power costs, while shrinking your Carbon emissions. Not only is EMITS transforming Indonesia’s energy transition landscape but we are also scripting a powerful chapter for its economic development.
Chat with us today to learn more about how our sustainable solutions can propel your business.