Securing Indonesia’s Energy Future with Microgrids
    Category: Energy Booster By : Ravi Krishnaswamy and Daniel Wicaksana Read : 2623 Date : Saturday, September 10, 2016 - 07:41:58

    Indonesia’s 17,508 islands present both a challenge and opportunity for energy planners. Indonesia’s power grid has eight interconnected power networks and 600 isolated grids. This network is besieged by power outages. One approach that can help is microgrids. 

    Microgrid are a self-sufficient localized grouping of electricity load and generation sources. They can help to provide stable power supply. For many islands, PLN is planning on using hybrid sources, combining diesel and solar panels. Microgrids can use locally available clean energy sources like solar, micro-hydro and biomass. They can also provide stable supply when combined with storage and advanced controls. Indonesia already has several microgrid installations such as in Nusa Penida, Morotai and Pulau Panjang. Critical success factors for microgrids are:
    (1) Decision making decentralization: The local PLN and local governments should be involved making power generation decisions for their region, with a focus on energy security and independence.
    (2) Localization: One key objective of regional power supply plans should be to develop local skills and use local resources.
    (3) Foreign investment: Projects under 10 MW should be open to foreign investments, in partnership with local government and the PLN to ensure a commitment towards successful project execution.    
    (4) Standardized packages: Firms in this sector should develop standardized microgrid packages rather than customize them for every project, thus reducing costs.
    (5) Modular approach: Microgrid projects can start small to address a particular community needs or specific loads, then scale up as funding becomes available or the project becomes self-sustaining. 
    (6) Industrial microgrids: Provide incentives for firms to develop captive renewable microgrid systems using their own funding, to ease the pressure on PLN’s grid. 
    (7) Tourism resorts: Tourist resorts and high-end developments are low hanging fruits for microgrid developments because of relative affordability and opportunities for green branding.     
    (8) New business models: The government, regulators and PLN should create conducive business climate for private investors to explore new business models like microgrids. In this model, developers will build microgrids and sell electricity directly to a single large or numerous small customers.

    Indonesia wants to achieve 99.7% electrification by 2025, requiring 80.5 GW of new power plants over the next 10 years. These plants are supposed to 80% powered by coal and gas, the rest by renewables such as solar and geothermal. Indonesia’s estimated potential for renewable energy includes more than 1,000 MW of micro/mini hydro, 32,654 MW of biomass apart from significant solar and wind power, spread across Indonesia—perfect for microgrid market development. The rapidly growing electricity demand cannot be satisfied only by PLN or few large IPPs. By using microgrids and other innovative approaches, Indonesia can secure its energy future.