Indonesia has recently inaugurated a $100 million floating solar farm, the largest in Southeast Asia and the third biggest in the world. The Cirata floating solar farm, located on a 200-hectare reservoir in West Java, has a capacity of 192 MW peak and is expected to generate 300 GWh/year of clean electricity.
This solar farm is located in Pidie Jaya Regency, Aceh, and occupies an area of 200 hectares. The project is part of the government’s efforts to increase the use of renewable energy and reduce dependence on fossil fuels. This project is a significant milestone for Indonesia’s transition to renewable energy and its economic development.
The Cirata floating solar farm is a collaboration between Indonesia’s state-owned electricity company PLN and Masdar, a renewable energy company based in Abu Dhabi. The project was financed by Sumitomo Mitsui Banking Corporation, Societe Generale and Standard Chartered. The solar farm consists of 340,000 panels that can supply electricity to 50,000 households in the Cirata area. The project is also planned to be expanded to 500 MW peak in the future.
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The inauguration of the Cirata floating solar farm aligns with Indonesia’s commitment to achieve net-zero emissions by 2060 and net-zero power sector emissions by 2050. Indonesia has set a target to increase its renewable energy mix to 23% by 2025, although it faces challenges due to the Covid-19 pandemic and its reliance on fossil fuels. Indonesia is also trying to position itself as a key player in the electric vehicle market as the world’s largest producer of nickel, a crucial component of lithium-ion batteries.
The Cirata floating solar farm has several implications for Indonesia’s economy and digital economy. First, it can reduce Indonesia’s dependence on fossil fuels and imported energy, which can lower its energy costs and improve its energy security. Second, it can create jobs and income for the local communities, especially in the construction, operation and maintenance of the solar farm.
Third, it can support Indonesia’s digital transformation by providing reliable and affordable electricity for various sectors, such as e-commerce, fintech, education and health. Fourth, it can enhance Indonesia’s reputation as a leader in renewable energy and attract more foreign investment and collaboration in this field.
The Cirata floating solar farm is a remarkable achievement for Indonesia’s renewable energy sector and its economic development. It can have positive impacts on Indonesia’s economy and digital economy by reducing its carbon footprint, lowering its energy costs, creating jobs and income, supporting its digital transformation and enhancing its international image.
Indonesia unveils $100m solar farm.
This solar farm was built by private company PT Sky Energy Indonesia, at a cost of about $100 million. The project received support from the Ministry of Energy and Mineral Resources, the Ministry of Environment and Forestry, and the Government of Aceh. The solar farm is expected to provide electricity to around 70,000 households in Aceh and surrounding areas.
According to the Minister of Energy and Mineral Resources, Arifin Tasrif, this solar farm is one of the concrete steps to achieve the renewable energy mix target of 23% by 2025. Currently, the contribution of renewable energy in Indonesia is only around 12%. “We hope this project can be an example and inspiration for other regions in Indonesia to develop their renewable energy potential,” Arifin said in his speech.
Meanwhile, President Director of PT Sky Energy Indonesia, Budi Santoso, said that this solar farm uses efficient and environmentally friendly photovoltaic (PV) solar panel technology. “This PV technology can convert sunlight directly into electricity, without requiring additional fuel or producing greenhouse gas emissions. In addition, this technology is also durable and easy to maintain,” said Budi.
This solar farm is also equipped with a battery energy storage system (BESS) that can store electricity generated during the day and flow it at night or during cloudy weather. Thus, this solar farm can operate stably and continuously for 24 hours. However, Indonesia also faces several challenges in its transition to renewable energy. Some of these challenges are:
Land use conflicts: Acquiring land for renewable energy projects is a complex and lengthy process that involves multiple government agencies and stakeholders. Land governance is fragmented and often lacks transparency and accountability. Land disputes can arise between project developers and existing land users, especially in forest areas where land tenure is unclear or contested.
Grid integration: Indonesia’s power grid is low quality and unreliable, with frequent blackouts and voltage fluctuations. Integrating variable renewable energy sources such as solar and wind requires grid modernization, automation and digitalization, as well as adequate transmission and distribution infrastructure. These investments are costly and require coordination among different actors in the power sector.
Policy uncertainty: Indonesia’s renewable energy policy framework is still evolving and subject to frequent changes. Renewable energy tariffs are often set below cost-recovery levels, making them unattractive for private investors. Coal and fuel subsidies distort the market and create unfair competition for renewable energy sources. Regulatory barriers and bureaucratic hurdles hamper the implementation of renewable energy projects.
Financing gaps: Renewable energy projects face high financing costs due to perceived risks, lack of bankability and limited access to capital markets. There is a need for innovative financing schemes that can mobilize private sector investment, such as green bonds, blended finance and public-private partnerships. There is also a need for capacity building and awareness raising among financial institutions, project developers and consumers.
This solar farm was inaugurated by President Joko Widodo via video conference from the State Palace. The President expressed his appreciation for this project and invited the public to support the development of renewable energy in Indonesia. “Renewable energy is our future. Renewable energy is clean, cheap, and sustainable energy. Let’s use the natural resources we have for the welfare of the people and environmental sustainability,” said the President.