A week ago, President Joko Widodo — aka Jokowi — inaugurated Indonesia’s largest solar power plant in Cirata, West Java. The 192 MW floating solar power plant (FSPP) is a collaboration between the State-Owned Enterprises Ministry, Energy and Mineral Resources Ministry, public electric utility PLN and Emirati energy company Masdar.
At the event, Jokowi said that the FSPP will help Indonesia meet its goal of increasing the share of renewables in the national energy mix from the current 13% to 23% in 2025.
To achieve this target, though, the president noted that the country needs to work hard to attract investment. That’s why Jokowi has spoken to the UAE Minister for Foreign Trade to increase the FSPP’s capacity to approximately 500 MW.
Show Me the (Green) Money
The FSPP adds to the existing electricity production capacity of the hydroelectric power plant in the same area, which has reached 1,000 MW. It also fits nicely with the president’s energy transition plan and showcases that he is not just focusing on building coal-fired power plants.
Jokowi highlighted the challenge of distributing new and renewable energy from source to the center of electricity demand. This will require further investment in the transmission line that connects each energy source to the economic centers.
The president hopes that this FSPP will lead to more investment in new renewable energy projects in Indonesia. As he gets ready to hand over the reins of the country to the winner of the February 2024 presidential election, we anticipate that Jokowi will continue pushing for his infrastructure ambition; this project signals his interest in further promoting new and renewable energy projects.
Building on Jokowi’s Renewables Legacy
Whoever the next president is, we expect more of these projects to get off the ground in the coming years. In fact, we can expect policy continuity as all presidential candidates support Jokowi’s energy transition program. They are following the global trends and responding to a demand from the Indonesian youth.
Still, foreign energy investors should pay close attention to the ongoing parliamentary debates on the renewable energy bill and the revision of the oil and gas bill. Both will accommodate Indonesia’s national commitment to reduce carbon dioxide emissions.
These legislative efforts are being spearheaded by the Ministry of Energy and Mineral Resources, while Pertamina and PLN will be the executors.
What Would Prabowo’s Presidency Mean for Foreign Direct Investors?
20 December 2023 | 10:00-10:30 AM WIB
Join us for an exclusive event with our Indonesia expert, Siwage Dharma Negara, to take an in-depth look at the 2024 Indonesia elections and their impact on foreign direct investors. Register below.
About Horizon Engage
Horizon Engage provides country-level analysis on political, social and environmental issues that impact the investment climate for foreign direct investors. We’re changing the game for our clients by merging tech and geopolitical expertise in a whole new way. Let us be your eyes and ears so you can make decisions with confidence. Learn what we do.