Indonesia is going solar as the country's state coal miner PT Bukit Asam Tbk (PTBA) is developing a solar-based power plant project (PLTS), as Kontan reported Thursday (January 16).

PTBA Corporate Secretary Hadi Surya Palapa explained the project is still under review, without elaborating the estimated cost of the investment as well as the revenue from the project. He added that solar power plants are suitable for Indonesia's weather conditions with two seasons; rainy and hot seasons.

Previously, Indonesia's state electricity firm PT PLN has agreed on a Power Purchase Agreement (PPA) with the PT PJBI-Masdar for a floating solar-based power plant in Cirata, West Java, with the capacity of 145 MW.

What is solar energy?

Solar power is the limitless energy resource on our planet Earth. Solar energy is energy from the sun that can be converted into electrical or thermal energy.

There are two primary methods to utilize solar energy; photovoltaics (PV) and concentrated solar power (CSP). The former catches the sunlight to produce electric power. While the CSP provides solar power by using a mirror configuration to collect the sunlight energy into a receiver then convert it.

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A roadmap for Indonesia's Power Sector: How Renewable Energy Can Power Java-Bali and Sumatera, an IESR-commissioned study in 2019, stated that alternative energy could only account for 19 per cent of Indonesia's power generation by 2027.

How possible is Indonesia using solar energy?

Indonesia is rich in solar energy potential. However, the utilization of solar energy in Indonesia is still 0.05 per cent, said Director of Conservation and Renewable Energy Infrastructure Development Planning at the Ministry of Energy and Mineral Resources, M. Arifin as IDNTimes quoted in October 2019.

According to data from the Institute for Essential Service Reform (IESR), the installed capacity of solar power plants in Indonesia only reached 100 MW, far from the real potential of 500 GW.

The development of solar-based power plants is facing several challenges, from a price cap 85 percent of local electricity supply to high requirement of local component, said The Indonesian Solar Energy Association (AESI) as The Jakarta Post reported.

What's the solution?

Energy expert Pamela Simamora explained that Indonesia could learn from other countries such as India, the United Arab Emirates (UAE), and Brazil on how they are developing solar power plants.

In India, there is no local component requirement for projects run by private companies. In the UAE, the government provides land for power plants for free with a competitive interest rate (2.6 per cent to 3.6 per cent).

Brazil is among the countries with rapid solar power plant development, thanks to the government's incentives such as discounts for electricity transmission and distribution, soft loan and low-interest rate of 0.9 percent, making the electricity price from solar power plant only reaches 1.95 cent per kWh.