Indonesia’s electricity network does not currently meet the needs of its population. The national electrification rate is around 84 per cent, and in some regions it is as low as 30 per cent. The network needs to grow massively to accommodate rising living standards, rising population and the connection of those not yet on the grid.
Most power in Indonesia is generated from fossil fuels, with a mix of coal, oil and gas; geothermal and hydroelectric power make up a little more than 10 per cent of the mix. Worldwide, solar photovoltaic and wind technology is being deployed on a large scale (more than 100 gigawatts of new capacity per year combined), and are likely to grow into enormous industries over the next decade. This growth is being driven by by extraordinarily rapid price reductions over the past five years and ever-increasing concern about greenhouse gas emissions.
This project aimed to explore the potential for renewable energy, principally solar PV, to supply most of Indonesia’s and Australia’s needs by 2050, through the development of large-scale, interconnected generation, storage and transmission systems. The primary storage technology chosen was pumped hydro energy storage, which constitutes about 99 per cent of all energy storage due to its low cost relative to alternatives such as batteries. The two nations are expected to be connected by a high-voltage direct current (HVDC) transmission line. This technology is being explored by the main electric utility in Indonesia, and there are three HVDC installations in Australia as well as many others around the world.
As a first step, the project investigated the possibility of supplying 50 per cent of Australian and Indonesian electricity needs from solar PV and wind by 2035. To reach their conclusions, researchers gathered information on the electricity use of a sample of typical Indonesian islands and reviewed recent literature for HVDC technology.
In 2014, renewable energy (primarily hydro, wind and solar) provided 59 per cent of net new electricity generation capacity worldwide, with fossil fuel (primarily gas and coal) power stations providing most of the balance. PV and wind presently constitute nearly all of the new generation capacity in Australia and several other countries. Within a few years, wind and solar are likely to pass hydro, gas and coal combined. About 0.1 per cent of Indonesia’s land surface would be required to meet all electricity requirements from PV and wind. However, wind and solar have low deployment rates in Indonesia despite excellent solar resources.
Indonesia is grappling with the triple problem of energy poverty, poor energy security and, to a lesser extent, high emissions intensity. Huge increases in electricity production and transmission are needed in the coming decades. Current power sources are fossil fuel intensive. Changes to this system of thought have been emerging, as Indonesia plans to provide new and renewable electricity penetration levels of 25 per cent by 2025, and to have achieved 10 per cent energy efficiency savings by 2019. Indonesia also faces the task of increasing electrification rates, a task that is more difficult than in other countries because the population is spread across numerous islands.
Dramatic falls in the price of solar PV mean that this mature technology has become affordable in many parts of the world. Indonesia is located in the tropics and has high levels of solar insolation. Importantly, Indonesian insolation and energy demand have low seasonality; unlike countries at higher latitudes, the temperature and solar availability varies little from season to season, which means expensive seasonal storage is not needed. There is no demand for energy intensive space heating, and low demand for energy intensive domestic water heating. Demand for air conditioning is usually well matched to solar availability. Energy demands for lighting and refrigeration vary little from month to month.
Australia has some of the best solar resources in the world, but much of this falls upon unpopulated and unconnected desert. This resource could, however, be harnessed and transported to Indonesia through HVDC transmission. Connecting Australian deserts to Indonesia via HVDC would result in a broad and diversified electricity market.
Reductions in the cost of solar PV and wind, coupled with developments in transmission and storage, allow PV and wind to strongly compete with all fossil, nuclear and renewable alternatives. Indeed, PV and wind are probably the cheapest options for new large-scale generation capacity in both Australia and Indonesia.
Blakers, A. (2017). Indonesian-Australian renewable energy supergrid. Project report, Australia-Indonesia Centre.