Like islands all around the world Indonesia, with its thousands of islands, is faced with the high costs for diesel generation, especially at its remote island grids. Add to this the low electrification rates – averaging 73% (in 2012) across the whole country, but as low as 53% on some of the larger islands – and there appears to be considerable potential for largely undeveloped renewable resources.
Sustainable Energy for Remote Indonesian Grids (SERIG)
Such is the goal of the Sustainable Energy for Remote Indonesian Grids (SERIG) project, which is developing the business case for high penetration of energy efficiency and renewable energy technologies on selected islands and remote grids.
SERIG is a joint US-Indonesian initiative. On the US side, the partner is the Department of Energy, with the National Renewable Energy Laboratory (NREL) providing the project management team, and on the Indonesian side the government, with the national state utility PLN the lead organization.
Other objectives of the initiative include mobilizing private investment in energy efficiency and renewable energy projects, and developing a replication plan for accelerated deployment of these technologies across other remote grids in Indonesia.
Lamandau and Sabu
After a detailed evaluation, two sites were selected for the initiative. These are the Lamandau district in Central Kalimantan (on the island of Borneo) and the small southern Sabu Island.
An energy efficiency assessment found that respective savings of over 22% and almost 25% were possible at the two sites. In both cases the main contributor is improved operation and maintenance, with more energy efficient lighting and appliances also an important contributor. Together these could save almost 1.3 million litres of diesel annually.
In the Lamandau district, the main renewable energy opportunities were found to be solar PV and methane capture from palm oil mill effluent (POME). A hybrid biogas (1.5MW)/PV (1MW) plant could reduce diesel fuel usage by 37% and the levelised cost of energy by 50%.
For Sabu Island renewable energy opportunities were found in solar PV, wind and storage. A combination of 250kW of PV, 550W of wind and 553kWh of storage offers potential diesel fuel reductions of up to almost one-third and an LCOE reduction of 13%.
While there would be some challenges in integrating these renewables because of the weaker island grids, nevertheless the economics are likely to be favourable, given the high costs of energy at these locations.
In the next steps of SERIG, a deployment plan is being drawn up and a start will be made to identify financing partners and technology providers for these initiatives.
SERIG will also provide input to a pilot wind project of approximately 500kW capacity underway on Sumba island, due for implementation in 2015. The objective of the East Sumba Hambapraing wind project is to scale up to 4MW.
Renewables in Indonesia
PLN’s 10-year energy plan calls for the deployment of 2,786MW of renewable energies by 2022, primarily in small hydro and solar PV (together making up about three-quarters of this capacity).
Biomass offers good potential, using palm oil shells, bagasse, rice husks, municipal waste and wood chips. On the other hand wind offers only limited potential, with a low average wind velocity, and in the Wind Power Development Program up to 2020, 200MW are in procurement and study.
Renewables are also expected to play a role in driving the remote microgrid market in Indonesia, which is expected to be one of the most important in the Asia Pacific region. [Engerati-Investment in Microgrids In Asia-Pacific To Near US$31 Billion By 2023]
Under the 10-year plan the renewable share in the generation mix will rise to 19% in 2022. Nevertheless, coal-fired generation will continue to dominate, with the addition of a planned 38GW of coal-fired power out of the total 60GW in the period to 2022.