Solar power projects up in the air

Eighty solar-power plant construction projects, some up for tender, are currently in limbo as the government has halted the process pending a Supreme Court ruling, following a lawsuit from a business group.

Energy and Mineral Resources Ministry renewable energy director general Rida Mulyana said the lawsuit was still at the Supreme Court.

“Of the 80 power-plant projects, 12 are already at tender and are awaiting the PPA [power purchase agreement] process. The tender process for the remaining projects must wait for the ruling,” Rida said.

The government had placed 12 power plant projects up for tender when the Solar Cell Association (APAMSI) filed a lawsuit, claiming there was an obligation to use local content and to prioritize local players to carry out the projects. 

Rida argued that the demands would likely conflict with the principles of the World Trade Organization (WTO), of which Indonesia is a member.

“We need to wait for the decision. If it rules in favor of the suit, we must revise the regulation,” he added. 

The Supreme Court’s website showed that it had ruled in favor of APAMSI’s suit, but a complete document highlighting the court’s ruling was not available.

As part of attempts to boost solar power-plant development in the country, in 2013 the ministry issued a ministerial decree regulating the purchasing of electricity produced by photovoltaic solar power plants by state-owned electricity company PLN.

Under the regulation, the highest tariff set is US$0.25 per kilowatt hour (kWh) and can be set as high as $0.3 per kWh if the photovoltaic solar power plants use at least 40 percent of local components in the material required.

Following the regulation, the government placed 80 solar power plant construction projects up for tender. If completed, the power plants will have a combined capacity of up to 140 megawatts (MW).

Most of the plants will be located in eastern Indonesia, such as in Papua, West Papua, Maluku, Sulawesi and the Nusa Tenggara region. The plants will have a range of 1 to 6 MW in capacity.

Investment for the 140-MW plants is estimated to be roughly Rp 2.8 trillion, as a solar cell requires around Rp 20 billion per MW.

The country is estimated to have 50,000 MW in solar energy potential. However, the utilization of resources is said to be low.

The development of solar power plants is expected to meet the minor electricity demands of remote areas. 

Providing remote areas with electricity represents one of the government’s efforts to boost the country’s electrification ratio, which was 84 per cent at the end of last year.

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