The Indonesian government has released a draft Comprehensive Investment and Policy Plan (CIPP), setting out Indonesia’s decarbonization initiatives to 2050, which include goals to achieve net-zero emissions by mid-century and expand installed photovoltaic capacity to 264.6GW. .
The CIPP draft is currently in the public comment stage with a deadline of November 14. This is Indonesia's contribution to the implementation of the Just Energy Transformation Partnership (JETP) plan.
Last year, the Indonesian government agreed to the JETP plan at the G20 Summit in Indonesia and received US$20 billion in funding to support its decarbonization goals.
JETP has proposed a series of plans for Indonesia's future energy structure, including achieving 44% of renewable energy power generation by 2030, and the CIPP draft is the Indonesian government's first attempt to achieve these goals.
Significant solar capacity
The most eye-catching feature of the CIPP draft is Indonesia’s commitment to solar power, which is expected to account for more of Indonesia’s installed capacity and power generation than any other energy source. The government targets solar installed capacity to reach 29.3GW by 2030 and 264.6GW by 2050, which will account for more than half of Indonesia's total installed power capacity (518.8GW).
This stems in large part from Indonesia’s huge solar power potential. The government estimates that Indonesia's installed solar power capacity is expected to reach 3.3TW based on the amount of sunshine in Indonesia. This is the highest of all renewable energy sources, with offshore wind potential in second place at 94.2GW.
Likewise, the report is optimistic about the potential of floating PV in Indonesia. Earlier this year, Masdar and PT Indonesia announced plans to triple the capacity of the 145MW Cirata floating photovoltaic power plant. The government estimates that the capacity potential in the floating PV sector alone will reach 28.4GW. Therefore, Indonesia has strong interest in developing new floating photovoltaic projects.
The chart above shows how the Indonesian government expects solar power generation to grow year by year until 2050. The government expects solar power generation to surpass natural gas in the mid-2030s, coal in the early 2040s, and all other forms of energy by 2045.
Solar energy is expected to grow at a more steady rate than other forms of renewable energy, such as wind. The government expects wind energy growth to level off in the 2030s, while geothermal energy is unlikely to grow after 2040. This continued growth also contrasts with expectations for rapid but late growth in hydrogen fuels and fluctuations in natural gas generation over the coming decades.
The authors of the CIPP draft wrote in the report, "The JETP plan attaches great importance to solar photovoltaic power generation as a pioneer in the development of renewable energy in Indonesia after 2030, realizing its huge potential compared with other renewable energy solutions."
Solar project costs fall
If government plans come to fruition, Indonesia will transition to an energy mix that relies heavily on renewables. The report points out that by 2040, "almost all new power generation capacity" will be generated by renewable energy sources, of which variable renewable energy sources such as solar energy will account for 45% of new capacity.
Achieving these expectations will require significant investment, starting with funding secured at last year's G20 summit. However, this alone is not enough. The government expects cumulative investment in geothermal and solar sectors to exceed $55 billion by 2040 to meet the huge potential of these energy sources. At the same time, investment in transmission and distribution networks will reach $50 billion.
In addition, CIPP also includes a four-phase plan to expand the national energy grid, which will start operation in stages from 2024 to 2030. At the same time, CIPP plans three expansions of existing parts of the grid that have not yet determined a provisional commissioning date.