New rural electrification project in Indonesia

The Indonesian Ministry of Energy and Mineral Resources (MEMR) has allocated a budget for electrification of 15,000 rural households with 50 W solar home systems (SHS). 

© Gerbang Multindo Nusantara, PT Tropical power: With over 18,000 islands and a likewise scattered rural population, off-grid SHS seems to offer the ideal solution for the electrification of remote areas in Indonesia.

The project will be administered by MEMR's Directorate General of Electricity and Energy Utilization (DGEEU), which coordinates the tendering process taking place at provincial level through different regional offices of the state-owned electric utility PT Perusahaan Listrik Negara (PLN). 

The first request for bids could already start by April, according to Ms. Indarti, head of DGEEU's rural energy division. She estimates that at total of around 20 different tenders will be issued for project areas located in almost all of the country's main provinces: Java, Kalimantan, Sumatra, Sulawesi, Maluku, and Nusa Tenggara. Although Indarti wouldn't reveal details about the total project costs, she underscores that all of the funding is entirely provided by the Indonesian government. The beneficiaries are private households in remote rural areas that would only have to contribute an as yet undisclosed share of funds to the maintenance and service costs.

By placing more value on after-installation services, it seems that the public decision makers have finally learned their lessons from past unsuccessful SHS projects. According to Klaus Baumann of the German utility RWE AG and former program manager of a small NGO-based solar electrification project in Nusa Tenggara Timor (see PI 2/2004, p.26), thousands of government-financed systems have failed over the years because the need for maintenance, particularly the expensive battery exchange, was completely ignored by the project designers. 

The Indonesian government's stronger commitment to renewable energies comes as the public fuel subsidy for stand-alone diesel generating sets is being stepwise removed. For a long time diesel generators were considered the most cost-efficient solution for electricity generation in the small and remote villages of the archipelago. Chayun Budiono, managing director of PT Gerbang Multindo Nusantara (GMN), a Jakarta-based renewable energy systems integrator, sees in addition to autonomous stand-alone SHS also a rising market for PV-diesel hybrid systems in the country. In the study Development of PV-Diesel Hybrid Market in Indonesia published in 2004, he points to a countrywide potential of 1,000 PLN-operated diesel generation sets for villages and small islands suitable for being retrofitted with an additional PV system. Although first projects have already been implemented – for example a 12.5 kW PV upgrade of a 25 kVA diesel system at Penaah island in western Indonesia – it is doubtful if the overall potential of 50 MW, as stipulated in the study, could really be tapped in the near future. Currently the PV market volume of Indonesia, which has 200 million inhabitants and an average electrification ratio of 55 percent, is estimated at only 500 kW per year.

Bernhard Brand 
© PHOTON International, March 2006