IESR: Cirata Floating PLTS Becomes A Milestone For Acceleration Of Solar Power Plant Development

Photo: Doc. Antara

JAKARTA - The Institute for Essential Services Reform (IESR) assesses that the operation of the floating PLTS Cirata, West Java is a milestone in accelerating the development of solar power plants for electrical decarbonization in Indonesia. "Along with the decline in PLTS investment costs, it makes it the cheapest renewable energy generation today. Indonesia must optimize the technical potential of PLTS which reaches 3.7 TWp to 20 TWp to support the achievement of the peak electricity sector emission target in 2030, with the cheapest cost," said IESR Executive Director Fabby Tumiwa in his statement in Jakarta, quoted from Antara, Thursday 9 November. The government on Thursday inaugurated the Cirata floating Solar Power Plant (PLTS) located in Cirata Reservoir, West Java with a capacity of 145 MW (ac) or 192 MW(p). With the inauguration of floating PLTS in Cirata, Indonesia is now the largest floating PLTS location in Southeast Asia, previously held by floating PLTS Tengeh in Singapore. IESR also encourages the government and PLN to take advantage of the technical potential of floating PLTS which reached 28.4 GW out of 783 water bodies in Indonesia to accelerate the use of PLTS. Data from the Ministry of Energy and Mineral Resources shows the potential for large-scale floating PLTS to be developed at at least 27 locations of water bodies that have hydroelectric power plants (PLTA), with a total potential of 4.8 GW and equivalent to an investment of 3.84 billion US dollars (Rp 55.15 trillion). "Utilizing the potential of floating PLTS will accelerate the achievement of the target of the renewable energy mix and achieve the net zero emission (NZE) target faster than 2060," said Fabby. The government and PLN, he continued, must optimize the potential of floating PLTS by creating a regulatory framework that attracts business actors to invest in the generator. One of them, by providing a level of return on investment according to the risk profile but is attractive and reduces additional burdens in managing investment. In addition, he said the government needs to pay attention to the PLN assignment scheme to its subsidiaries, which has been a priority option for the development of floating PLTS. Through this scheme, subsidiaries are looking for parties who are willing to invest or equity investors for minority ownership but must be willing to bear a larger portion of equity through shareholder loans. "This scheme benefits PLN but cuts investment returns for investors and risks project banking and interest in lenders. This scheme can also create unhealthy business competition among business actors, because only those with large equity can partner with PLN, and the majority of foreign investors. This can have an impact on overall investment interest," said Fabby.

The solution, according to Fabby, requires government support by means of the government strengthening the capital of PLN and its subsidiaries through state capital participation (PMN) specifically for the development of renewable energy and/or providing concession loans to PLN through PT SMI which can then be converted into share ownership in floating PLTS projects. Thus, Indonesia can reap potential investment and low-emission electricity from floating PLTS with definite and binding regulatory support from the government. In July 2023, the government has issued Minister of Public Works and Public Housing Number 7 of 2023 concerning the Second Amendment to the Regulation of the Minister of Public Works and Public Housing Number 27/PRT/M/2015 concerning Dams that no longer limit the area of water bodies in reservoirs that can be used for PLTS floating at 5 percent. "This regulation opens up opportunities for the development of floating PLTS on a larger scale, provided that if using a water body area of more than 20 percent, it is necessary to obtain recommendations from the Dam Security Commission," said Fabby.