Reaching for The Sun on The Waves: Indonesia’s Untapped Potential for Floating Solar Panels
Indonesia, with its equatorial expanse blessed with year-round sunshine, possesses extraordinary solar energy potential. The average solar radiation intensity of 4.8 kWh/m2/day, promises electricity generation capacity up to 112,000 GWp. However, as of August 2024, its utilization remains far from optimal, reaching only 717.71 MW. Land limitations pose a major obstacle, given Indonesia's densely populated nature. With Indonesia wanting to reach net-zero emission in 2060, this is where floating solar panels emerge as an innovative solution, unlocking new opportunities for solar energy utilization across Indonesia’s vast water bodies.
Expanding Solar Horizons: The Potential of Floating Solar Power
Source: PLN Renewabels. Cirata Floating Solar Power Plant.
Currently, Indonesia has embarked on several floating solar panel projects on reservoirs, one of which is the Cirata Floating Solar Power Plant, the largest facility in Southeast Asia with a capacity of 145 MWac or 192 MWp. Moreover, a 2023 study by the National Renewable Energy Laboratory (NREL) reinforces this optimism, estimating Indonesia’s potential for floating solar power as follows:
15-34 GW on man-made reservoirs,
154-330 GW on natural water bodies such as lakes and rivers.
This potential does not yet include the oceans, which are estimated to be much larger.
Ideally, floating solar panels at sea operate in waters with waves below 6 meters and wind speeds less than 15 m/s. These conditions align with most of Indonesia's calm waters. Southeast Asia has 800,000 km2 of seascape that meets the criteria, capable of generating approximately 210,000 TWh/year. A significant portion of this potential exists in Indonesia, which accounts for about 62% of Southeast Asia’s total maritime area. This represents a major opportunity to contribute and strengthen Indonesia's renewable energy mix.
Pioneering projects like Solar2Wave, a collaboration between Institut Teknologi Sepuluh Nopember (ITS), and Innovate UK - a UK government agency, have demonstrated the feasibility of this technology at the ORELA shipyard in Gresik and Gili Ketapang, Probolinggo, setting the stage for larger-scale adoption.
Investment Opportunities and Government Incentives
This immense potential opens up vast investment opportunities for energy companies, manufacturing industries, and domestic and foreign investors. As the demand for clean energy continues to grow and awareness of the transition to renewable energy increases, new opportunities are emerging for the private sector to contribute to the development of technology and infrastructure.
Just as Masdar, a company from the United Arab Emirates, played a role in developing the Cirata Floating Solar Power Plant, the Indonesian Government is extending similar opportunities to other foreign companies to support further collaboration. The Indonesian government offers various attractive incentives, such as tax holidays, tax reductions, import duty exemptions, feed-in tariffs, and streamlined licensing.
Furthermore, the revision of the Minister of Industry Regulation No. 34 of 2024 now facilitates project financing from abroad, without strict TKDN (Domestic Component Level) requirements, making it more attractive for global investors to invest in Indonesia renewable energy projects. With USD 172 billion needed to achieve the 60 GW renewable energy target by 2040, investor participation is crucial.
A Sustainable Future: Indonesia’s Role in ASEAN’s Renewable Energy Market
Indonesia has the opportunity to lead the development of floating solar power in reservoirs, lakes, and oceans. By optimizing this potential will not only meet domestic energy needs but also position Indonesia as a solar energy exporter in the ASEAN region. However, challenges such as high initial investment costs, developing technology, and environmental impacts need to be addressed through collaboration between the government, private sector, and society. With the right steps, Indonesia can reach for the sun on the waves, paving the way for a future clean energy and sustainability.
