Indonesia state power company in energy storage, green hydrogen MoU with ACWA Power

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ACWA Power and a state-owned power company in Indonesia will jointly investigate potential energy storage and green hydrogen projects in the Southeast Asian country.

Saudi Arabia-headquartered renewable energy and infrastructure developer and investor ACWA Power said last week that a Memorandum of Understanding (MoU) has been signed with PT Perusahaan Listrik Negara (PLN), Indonesia’s monopoly electric power distribution company and main electricity generator.

PLN is the country’s exclusive purchaser of energy generated by independent power producer (IPP) assets and operates or owns about two-thirds of Indonesia’s entire electric power generation fleet, with a total portfolio of 65.5GW.

The pair’s partnership will investigate various possible initiatives, including feasibility and other studies for a pumped hydro energy storage (PHES) facility at a 600MW to 800MW hydroelectric power plant, a potential 4GW battery energy storage system (BESS) project, and a hydroelectricity-powered green hydrogen or ammonia production facility.  

The MoU was signed in Bali at G20/B20 summit talks as Saudi Arabia’s Crown Prince and prime minister Mohammad Bin Salman Al Saud made a state visit. Signatories included ACWA Power and PLN’s CEOs, while also in attendance were Indonesia’s director general for electricity at the Ministry of Energy and Mineral Resources and other officials and dignitaries.

“PLN and ACWA are exploring the development of renewable energy projects and technological advancements in solar PV, wind, hydro, pump storage, battery peaker, battery storage, tidal, and geothermal. In fact, we will jointly develop green hydrogen and green ammonia facilities,” PLN CEO and president director Darmawan Prasodjo said.

ACWA Power entered the Indonesian market just a few weeks ago after PLN selected the developer to execute two large-scale floating solar PV (FPV) projects in the country, representing a total investment value of US$105 million.

As reported by our colleagues at PV Tech at the beginning of this month, ACWA will hold a 49% stake in the two FPV projects, while a PLN subsidiary will own the rest. At the time, ACWA chief investment officer Clive Turton described Indonesia as “an exciting market,” with government support for renewable energy, “an understanding of global challenges, considerable demand and an urgent need to supply the country’s numerous residents”.

Rising population’s rising power demand

In 2020, 69% of Indonesia’s primary energy consumption was met with coal (37%) and petroleum (32%), and 17% from natural gas, according to Ministry of Energy and Mineral Resources statistics. Just 4% came from geothermal and non-hydroelectric renewables, with the rest from other sources including hydroelectric (3%).

The country has pledged to achieve net zero emissions by 2060 or sooner and bring its share of electricity generated from renewables to 23% by 2025.

A recent report from the International Renewable Energy Agency (IRENA) found that while Indonesia’s demand for power is projected to grow fivefold as its population approaches 335 million by 2050, the country could make overall energy cost savings – and reduce the impact of externalities like air pollution – by investing in making renewable energy two-thirds of its power mix.

In March, PLN signed an MoU with Indonesia Battery Corporation (IBC), another state-owned company, for the construction of a pilot 5MW BESS project, as reported by Energy-Storage.news at the time.

Indonesia also looks like it could be a host site for large-scale renewable energy-plus-energy storage projects, which will serve the nearby city-state of Singapore. PLN signed an MoU with Singapore’s Sembcorp Industries for a solar-plus-storage project on Indonesia’s Batam-Bintan-Karimun island region in October last year, which would serve both local power needs and transmit power to Singapore via a subsea cable.

Another Singapore company, renewable energy developer Sunseap plans 7GW of solar PV paired with 12GWh of storage in another island region to transmit power back overseas – or in this case undersea.

In August, ACWA Power reported an operating income of SAR1,153 million (US$307.46 million) during the first half of 2022, with its year-on-year profit for the period increasing by 21%.

As of the end of June the company had a portfolio of 42.7GW, of which 15.7GW is renewable energy. Sister site PV Tech today reported that ACWA Power has just signed another MoU on green hydrogen, with the government of Thailand.

Energy-Storage.news’ publisher Solar Media will host the 1st Energy Storage Summit Asia, 11-12 July 2023 in Singapore. The event will help give clarity on this nascent, yet quickly growing market, bringing together a community of credible independent generators, policymakers, banks, funds, off-takers and technology providers. For more information, go to the website.

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