The Indonesian government has released a draft Comprehensive Investment and Policy Plan (CIPP), which sets out Indonesia's decarbonization initiatives to 2050, including targets to achieve net-zero emissions by mid-century and to expand installed photovoltaic (PV) capacity to 264.6GW.
The draft CIPP, which is currently under public consultation until November 14, is Indonesia's contribution to the realization of the Just Energy Transition Partnership (JETP) program.
Last year, the Indonesian government agreed to the JETP program at the G20 summit in Indonesia and secured $20 billion in funding to support its decarbonization goals.
JETP proposes a range of options for Indonesia's future energy mix, including achieving a 44% share of renewable power generation by 2030, and the draft CIPP is the Indonesian government's first policy attempt to achieve these targets.
Significant solar capacity
One of the most striking aspects of the draft CIPP is Indonesia's commitment to solar power, which is expected to account for more of Indonesia's installed capacity and electricity generation than any other energy source. The government is targeting 29.3GW of installed solar capacity by 2030 and 264.6GW by 2050, which would represent more than half of Indonesia's total installed electricity capacity (518.8GW).
Much of this stems from Indonesia's huge solar power potential. The government estimates that, based on the amount of sunshine in Indonesia, the country's installed solar power capacity is expected to reach 3.3 TW. This is the highest of all renewable energy sources, with offshore wind potential at 94.2 GW coming in second.
Similarly, the report is optimistic about the potential of floating PV in Indonesia. Earlier this year, Masdar and Pertamina announced plans to triple the capacity of the 145MW Cirata floating PV plant. The government estimates that the capacity potential of the floating PV sector alone would be 28.4 GW. As a result, there is a strong interest in developing new floating PV projects in Indonesia.
The chart above shows how the Indonesian government expects solar power generation to grow year-on-year through 2050. The government expects solar power generation to surpass natural gas in the mid 2130s, coal in the early 2140s, 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 21st century 30s, while geothermal energy is unlikely to grow beyond 2040. This continued growth also contrasts with the rapid but later growth expected for hydrogen fuels and the volatility of natural gas generation in the coming decades.
The authors of the draft CIPP write in the report, "The JETP program places a strong emphasis on solar photovoltaic power as a forerunner for renewable energy development in Indonesia after 2030, realizing its great potential compared to other renewable energy solutions."
Costs of solar projects go down
If the government's plan is realized, Indonesia will transition to an energy mix that relies heavily on renewable energy. The report states that by 2040, "almost all new electricity generation" will be from renewable sources, with variable renewables such as solar accounting for 45% of the new capacity.
Realizing these expectations will require significant investment, starting with the funding secured at last year's G20 summit. But that alone will not be enough. The government expects cumulative investments in geothermal and solar energy to exceed $55 billion by 2040 in order to meet the huge potential of these energy sources. At the same time, investments in the transmission and distribution network will reach $50 billion.
In addition, the CIPP includes a plan to expand the national energy grid in four phases, which will start operating in stages from 2024-2030. At the same time, the CIPP plans three expansions of existing parts of the grid that have not yet been given a provisional commissioning date.