Bahtera Contributes to Indonesia’s Move toward Renewable Energy through Solar Energy Partnership
November 16
10min read
As the world moves towards decarbonization, renewable energy has gained significant traction over the years. In the last decade, renewable energy consumption has seen a 13.7% average annual growth, way ahead of other energy categories. The world indeed has been awaken to the many opportunities offered by renewable energy beyond environmental sustainability, from higher economic return to job creation. Amid this development, Bahtera made our first foray into renewable energy. This journey starts with solar energy, a renewable energy option with much untapped potential.
As of 2021, a total of 165 governments have made the pledge to shift toward renewable energy, including the Indonesian government. President Joko Widodo’s administration has set the target of 23% NRE in the national energy mix by 2025 and 31% by 2050.
Indonesia has an enormous renewable energy potential. The country holds 40% of the world’s geothermal energy reserve, a maritime area that potentially generates 75,760 MW of power, and a total potential of 788,000 MW from renewable energy sources. Meanwhile, renewable energy currently makes up only 11.5% of Indonesia’s national energy mix.
In line with our sustainability commitment, Bahtera seeks to contribute to government’s effort to closing the gap through our new renewable energy unit. Solar energy, which has been heralded as the quickest and easiest renewable energy option to set up, has been our focus at this stage. Bahtera has recently partnered up with a local renewable energy startup, working with industrial clients to help them make the move to solar energy.
Solar energy remains one of the biggest yet most untapped renewable energy potential for Indonesia. Indonesia’s impressive solar irradiation intensity is enough to cover its power output of up to 1,530 kWh/kWp annually. According to the MEMR, only 153.5 MW of solar power plant has been installed, while the total potential reaches 207.8 GW. As of 2019 however, solar energy only makes up 1.7% of the total electricity production.
Enthusiasm has been high among industrial clients, especially with the government’s continued push towards renewable energy. Recently, the President put a halt on the construction of any new coal-powered steam power plants. In 2018, the Indonesian government also issued MEMR Regulation 49/2018 governing PV system installation in the country. In 2021, this law was further amended through MEMR Regulation 26/2021, effectively easing licensing requirements and lowering monthly charge to the state-owned electricity company PLN.
This is a necessary move considering Indonesia’s pollution and resources crises. Indonesia ranks 9th as the world’s most polluted countries, facing deadly pollution problems. While known for its bountiful natural resources from vast tropical forest to an abundance of energy and mineral resources, Indonesia’s natural resources have been depleting at an alarming rate. In 10 years, Indonesia could run out of oil. Despite being one of the top 20 crude oil and gas exporting countries in the world, Indonesia is already a net oil importer and is predicted to become a net natural gas importer by 2030.
Meanwhile, the country’s energy consumption continues to increase. Between 2008 and 2015, Indonesia recorded an average electricity demand growth of around 6% annually, and peak demand is projected to triple by 2030.
However, progress has been slow. Massive investment from the government and the business segment is needed to meet these targets. Financial incentive in particular is necessary considering that one of the biggest barriers in switching to solar energy is the steep investment. The investment needed for every kilowatt energy adds up to a significant amount for factories, which average 5 MW in terms of energy need. This is where Bahtera sees an opportunity to contribute. We can work with renewable energy companies that offer financial incentives, which are key to pushing the industry sector to adopt solar energy.
Another area where Bahtera is focusing our effort is battery for energy storage. Currently, batteries are mostly used for solar microgrids in remote areas across the country. As we increase the national capacity for solar energy however, additional storage would be needed to cover the energy demand. Over time, batteries will be key to mass adoption of solar energy. Beyond supply balancing, batteries have many potential applications in the future.
As solutions to these issues are being discovered, the Indonesian government is moving ahead with its shift towards solar energy. The Ministry of Energy and Mineral Resources (MEMR) is planning to develop a massive solar park in eastern Indonesia. Bahtera will also focus our initial effort in this region, considering its high potential due to higher solar irradiation capacity and cheaper land with suitable slope and contour, which ultimately reduce cost.
Indonesia’s renewable energy potential—especially solar energy—is clear. The time to invest in solar energy, and ultimately in a brighter energy future for Indonesia, is now.
As the world moves towards decarbonization, renewable energy has gained significant traction over the years. In the last decade, renewable energy consumption has seen a 13.7% average annual growth, way ahead of other energy categories. The world indeed has been awaken to the many opportunities offered by renewable energy beyond environmental sustainability, from higher economic return to job creation. Amid this development, Bahtera made our first foray into renewable energy. This journey starts with solar energy, a renewable energy option with much untapped potential.
As of 2021, a total of 165 governments have made the pledge to shift toward renewable energy, including the Indonesian government. President Joko Widodo’s administration has set the target of 23% NRE in the national energy mix by 2025 and 31% by 2050.
Indonesia has an enormous renewable energy potential. The country holds 40% of the world’s geothermal energy reserve, a maritime area that potentially generates 75,760 MW of power, and a total potential of 788,000 MW from renewable energy sources. Meanwhile, renewable energy currently makes up only 11.5% of Indonesia’s national energy mix.
In line with our sustainability commitment, Bahtera seeks to contribute to government’s effort to closing the gap through our new renewable energy unit. Solar energy, which has been heralded as the quickest and easiest renewable energy option to set up, has been our focus at this stage. Bahtera has recently partnered up with a local renewable energy startup, working with industrial clients to help them make the move to solar energy.
Solar energy remains one of the biggest yet most untapped renewable energy potential for Indonesia. Indonesia’s impressive solar irradiation intensity is enough to cover its power output of up to 1,530 kWh/kWp annually. According to the MEMR, only 153.5 MW of solar power plant has been installed, while the total potential reaches 207.8 GW. As of 2019 however, solar energy only makes up 1.7% of the total electricity production.
Enthusiasm has been high among industrial clients, especially with the government’s continued push towards renewable energy. Recently, the President put a halt on the construction of any new coal-powered steam power plants. In 2018, the Indonesian government also issued MEMR Regulation 49/2018 governing PV system installation in the country. In 2021, this law was further amended through MEMR Regulation 26/2021, effectively easing licensing requirements and lowering monthly charge to the state-owned electricity company PLN.
This is a necessary move considering Indonesia’s pollution and resources crises. Indonesia ranks 9th as the world’s most polluted countries, facing deadly pollution problems. While known for its bountiful natural resources from vast tropical forest to an abundance of energy and mineral resources, Indonesia’s natural resources have been depleting at an alarming rate. In 10 years, Indonesia could run out of oil. Despite being one of the top 20 crude oil and gas exporting countries in the world, Indonesia is already a net oil importer and is predicted to become a net natural gas importer by 2030.
Meanwhile, the country’s energy consumption continues to increase. Between 2008 and 2015, Indonesia recorded an average electricity demand growth of around 6% annually, and peak demand is projected to triple by 2030.
However, progress has been slow. Massive investment from the government and the business segment is needed to meet these targets. Financial incentive in particular is necessary considering that one of the biggest barriers in switching to solar energy is the steep investment. The investment needed for every kilowatt energy adds up to a significant amount for factories, which average 5 MW in terms of energy need. This is where Bahtera sees an opportunity to contribute. We can work with renewable energy companies that offer financial incentives, which are key to pushing the industry sector to adopt solar energy.
Another area where Bahtera is focusing our effort is battery for energy storage. Currently, batteries are mostly used for solar microgrids in remote areas across the country. As we increase the national capacity for solar energy however, additional storage would be needed to cover the energy demand. Over time, batteries will be key to mass adoption of solar energy. Beyond supply balancing, batteries have many potential applications in the future.
As solutions to these issues are being discovered, the Indonesian government is moving ahead with its shift towards solar energy. The Ministry of Energy and Mineral Resources (MEMR) is planning to develop a massive solar park in eastern Indonesia. Bahtera will also focus our initial effort in this region, considering its high potential due to higher solar irradiation capacity and cheaper land with suitable slope and contour, which ultimately reduce cost.
Indonesia’s renewable energy potential—especially solar energy—is clear. The time to invest in solar energy, and ultimately in a brighter energy future for Indonesia, is now.