Indonesian Coal Miner To Build 10.5 MW Solar Plant

• SESM will build a 10.5 MW solar power plant in Indonesia's South Sumatarai region
• Project will enter construction on 12-hectare space with completion due for March 2022
• The off-grid solar PV project will supply power generated to PT Golden Blossom Sumatra for its captive consumption for a period of 20 years

Corporate solar power contracts have reached Indonesia. Local coal mining company Sumber Energi Sukses Makmur (SESM) signed a memorandum of understanding (MoU) for a 10.5 MW PV plant in the Asian country on February 27, 2020 to sell power from to a local palm oil plantation company PT Golden Blossom Sumatra. SESM will build the project on a stand-alone basis in South Sumatarai region for captive consumption of the palm oil company; the system won't be connected it the grid.

Work on the solar power plant is set to begin in July 2020 on some 12-hectare land that's being cleared for the purpose. The project is likely to start operations in March 2022 when the 20-year power purchase agreement (PPA) will come into effect, reported local media during the MoU signing event.

Around 30% of the total $18 million to $20 million project cost will be borne by SES, the remaining 70% will be sourced as bank loans.

Aiming to diversify its business and be relevant in a changing energy market, SESM plans to build more off-grid solar power plants. The Jakarta Post reported its next PV project with 5 MW capacity in Batam region to supply electricity to a shipyard.

Indonesia has been targeting to achieve a 23% renewable energy share in its electricity mix by 2025, increasing from around 10% currently, according to The Jakarta Post.

In January 2020, the government promised to replace 5.7 GW of existing power capacity in the form of 23 coal-fired plants, 1.78 GW in the form of 2,246 old diesel power plants, and 5.9 GW of 46 combined cycle power plants, with renewable energy, as per a February 2020 report titled Racing Towards 23% Renewable Energy of the Institute for Energy Economics and Financial Analysis (IEEFA).

Indonesia's Ministry of Energy and Mineral Resources (MEMR)  is expected to bring in a new Presidential Regulation to accelerate the renewable energy development here by 2025.

Nonetheless, the market remains full of potential for renewable energy. Abu Dhabi's Masdar is building a 145 MW floating solar power plant in the country under a PPA with state electricity company PLN (see 145 MW Floating Solar Plant In Indonesia Taking Shape).