Electricity infrastructure: Huge costs for inter-island power grid
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia - Infrastruktur ketenagalistrikan: Ongkos jumbo urat nadi setrum antarpulau
21 November 2024
By M. Ryan Hidayatullah
As an archipelago, the electricity system in Indonesia is isolated to several zones, unlike in continental countries. The development of an inter-island electricity network will require significant investment costs.
Energy and Mineral Resources Deputy Minister Yuliot Tanjung revealed that the construction of a super grid or an inter-island interconnection requires an investment of around Rp400 trillion over the next ten years.
A super grid is a smart interconnected transmission network that connects new renewable energy (NRE) power plants to load centres.
He believes that a super grid can be a solution to address electricity issues in Indonesia.
This is because economic activities are still centred on Java, while NRE potentials are located on other islands.
Therefore, a super grid can encourage the equal distribution of NRE electricity. Additionally, a super grid can accelerate the energy transition towards net zero emissions by 2060.
“Meanwhile, the amount of investment required to establish such a transmission network reaches around Rp400 trillion,” he explained at the Electricity Connect 2024 event in Jakarta on Wednesday (20/11).
According to him, this is an investment potential from domestic companies, including state-owned enterprises (SOEs), that can be developed.
Besides that, Indonesia can also collaborate with other ASEAN countries and multinational companies to develop a super grid.
“Therefore, the transmission can be in line with set targets,” he stated.
He explained that, to utilise the super grid, Indonesia needs to develop its transmission over the next ten years with a network that reaches more than 50,000 circuit kilometres (CKm).
The circuit will include extra high-voltage transmission that reaches around 500 kilowatt hours (kWh), along 10,000 CKm of the network.
Data from the Energy and Mineral Resources Ministry (MoEMR) shows that the roadmap for developing a super grid in Indonesia includes both intra-island and inter-island developments.
Intra-island interconnection will be established by constructing a backbone transmission network with a capacity of 500 kilovolts (kV) in Sumatra, 275 kV in Kalimantan, and 150 kV in Sulawesi.
Meanwhile, inter-island interconnection will be established among Sumatra-Batam, Sumatra-Java, Kalimantan-Java, Kalimantan-Sulawesi, and Java-Sumba.
Electricity requirement
Meanwhile, PT PLN (Persero) President Director Darmawan Prasodjo revealed that his company, in collaboration with the MoEMR, has conducted modelling to fulfil the electricity requirement of 75 gigawatts (GW) from NRE power plants by 2040.
Initially, Darmawan said that PLN is currently finalising its Long-term Electricity Procurement Plan (RUPTL).
He mentioned that the electricity requirement from 2024 to 2040 reaches around 100 GW. Of this amount, 75 GW is planned to be sourced from NRE power plants.
Darmawan said that PLN is regularly coordinating with the Electricity Director General of the MoEMR, Jisman Hutajulu, to conduct modelling to ensure that the target can be achieved.
“Thank you to Mr. Jisman. The MoEMR has conducted joint system modelling with PLN where 75 GW is based on new renewable energy. Incredible,” he explained during the occasion.
According to him, this step aligns with the visions and missions of President Prabowo Subianto, who aims to transition from fossil energy to renewable energy.
He claims that renewable energy is becoming increasingly affordable. This is closely related to the battery energy storage system (BESS).
“The prices of new renewable energy are becoming increasingly affordable. From 25 cents, we are now tendering for only ten cents. From seven cents, we are now tendering for five cents,” he said.
Therefore, Darmawan reckons that the role of the BESS is crucial. Moreover, renewable energy is based on nature, which tends to fluctuate.
"[Solar power plants] will thrive in sunny weather. However, they will have lower performance in cloudy weather. [Wind turbines] will perform well on windy days. For hydro [power plants], they will have reduced performance during the dry season and better performance during the rainy season. Therefore, we need a battery energy storage system to address these fluctuations,” he explained.
Darmawan explained that the price for a BESS is becoming increasingly affordable. This can support the development of NRE.
“Previously, the price of a battery energy system costed more than 20 cents per kWh. Now, it has decreased to 13 cents, and even 9 cents. Today, alhamdulillah (Praise be to God), a battery energy storage system is far more affordable and competitively priced,” he stated.
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