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Innovators in Indonesia are advancing renewable energy

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Innovators in Indonesia advancing renewable energy as per the Indonesian government strategy that is pushing to almost triple, shortly, the share of renewables in the country’s energy mix. Let us see how.

The above image is of Rio Pramudita contributed photo of an off-grid installation in Berau on Kalimantan, Indonesia.

Innovators in Indonesia are advancing renewable energy

By Ines Ayostina

Solar panels in Sulawesi, Indonesia.

The Indonesian government promises to almost triple the share of renewables in its energy mix in the next three years. That would reverse an investment climate in which fossil fuels saw 3 times more capital than renewable energy between 2016 and 2019. It would also require the nation’s monopoly power provider, Perusahaan Listrik Negara (PLN), to approve new projects at a rate that entrepreneurs don’t expect now. Moreover, all the distribution to customers is strictly handled by the state-owned company.

Accordingly, entrepreneurs work with global networks to improve the state’s literacy and risk appetite. One network is the Clean Energy Investment Accelerator. The CEIA works as a joint endeavor coordinated by Allotrope Partners, World Resources Institute (WRI), and the United States National Renewable Energy Laboratory (NREL) to accelerate renewable energy solutions for large electricity consumers in key emerging markets. CEIA brings together corporate buyers in Indonesia and magnifies their joint ideas to develop an enabling regulatory environment for accelerating renewable energy investment and use.

“How renewable energy fluctuates were claimed to be the greatest risk by potential investors to Indonesia,” says Rio Pramudita, a business development analyst for developer Akuo Energy. Because of the intermittent nature of renewable energy, the state-owned company must be ready to supply the client if renewable energy is unavailable. “Renewable energy faced some hurdles because they have to ‘pay’ for the uncertainty that PLN has to bear,” says Pramudita. In that context, a range of partners use a range of tools to promote the country’s renewable ecosystem.

Can renewable energy thrive in Indonesia’s current energy landscape?

Since its inception in 2018, CEIA has formed a taskforce in Indonesia that comprised of more than 25 corporate buyers. These corporate buyers are global firms with operations in Indonesia. They are among the companies who wish to source their energy from renewable sources but have discovered there is limited supply.There are reasons to discern a clean-energy economy growth curve in the country.

Independent Power Producers (IPP) that generate renewable energy remain limited in Indonesia. Currently, they supply 26 percent of national energy, and most lack transmission and distribution connections to sell energy directly to end users. Building distribution lines, of course, is expensive: The other option is to lease existing ones through PLN. “Transmission and distribution lines are a strategic asset of the state,” says Gina Lisdiani, director of Allotrope Partners Indonesia, part of the Clean Energy Investment Accelerator Indonesia.

“Because Indonesia is an archipelago, this transmission and distribution network becomes even more critical,” adds Lisdiani.

Although this means that IPPs generally cannot sell directly to end consumers, or be off the grid, some companies in Indonesia use their own solar panels to operate their factories and manufacturing facilities. For example, PT. Coca Cola Amatil Indonesia has this kind of solar panel arrangement with a capacity of 7.13 MW. However, an arrangement such as this is not completely off the grid. If something goes wrong and the supply falls below what the factory requires to run, PLN would supply electricity to the factory.

If industry has more supply than it needs (such as during the Eid Mubarak vacation period), they can sell it to PLN, a practice known as net metering. PLN smiles on this innovation, perhaps because it improves electrical supply without requiring new investment. “Net metering exists in Indonesia. In some cases, the PLN can reduce the price by roughly 35 percent. The process for obtaining a permit, or simply determining whether it is possible, is not uniform and depends on the location and permit by PLN regional office in the area,” adds Lisdiani.

Private-sector renewable energy purchasing

For generating and distributing renewable energy without running into the corruption that comes with permits, CEIA has worked with PLN to create and disseminate a Renewable Energy Certificate (REC). “It is hoped that it could serve as a catalyst for PLN to build and/or permit more renewable energy projects,” says Lisdiani.

Renewable energy certificates provide a simple way for businesses, institutions and individuals to offset their carbon footprint and support renewable energy. As more companies proclaim commitment to climate action and renewable energy, purchasing RECs allows businesses to source their energy from renewable sources. When demand rises, the possibility to create renewable energy power plants rises with it.

“They [corporate buyers] are also concerned about whether a renewable energy power plant has reached its break-even point. They would rather fund and incentivize generation that is not yet profitable [so they can realize higher returns in the future]. This is critical in order to assist project developers who wish to launch a renewable energy project in Indonesia,” Lisdiani says.

These enabling conditions and potential incentives are essential for project developers from the start of the project. “A new project developer without a portfolio will face enormous challenges. One of them is obtaining financing from a bank,” Lisdiani explains. “And REC has the opportunity to play a significant role in resolving some of the issues.”

The first solar off-grid system in Indonesia to serve communities

Despite hurdles, there are reasons to discern a clean-energy economy growth curve in the country. Akuo Energy, a renewable energy developer, has developed the first solar off-grid electrification systems that powers three villages in Berau, Kalimantan.

Because Akuo Energy is off-grid, it both generates and distributes energy directly to customers without running through the state pricing system. This project was mostly funded by the Millennium Account Challenge Indonesia and United States Agency for International Development (USAID). The solar off-grid is managed by a joint venture between Akuo Energy and the village-owned company (Badan Usaha milik Desa; Bumdes), with the latter owning the majority.One common misconception is that since Indonesia is a tropical country situated on the Equator, we would have been able to deploy solar energy everywhere.

The joint venture was able to obtain the required permit by presenting their project in front of the ministry, emphasizing the importance of electricity access in these three villages and how their distance from the transmission line is so far that the state-owned company cannot benefit from it. There is also a regulation that restricts the price they may charge customers; the ceiling is the price set by the state-owned company. If the joint venture wishes to raise the price above what the state-owned company has set, they must present the case to the Regional House Representative with rigorous justification.

“One common misconception is that since Indonesia is a tropical country situated on the Equator, we would have been able to deploy solar energy everywhere,” says Pramudita, who trained as a mechanical engineer. “There is a lot of heat in Indonesia, but what we need for solar panels are photons. As a result, different renewable energy technologies would be appropriate in different parts of Indonesia.”

Some parts of Indonesia are cloudy most of the year, while others are not. East Nusa Tenggara is one of the few places in the world where it is never cloudy. “Other locations such as some parts of Sumatera, the south coast of Papua, and West Java are not suitable for solar panels but are suitable for wind turbines,” explains Pramudita. Indeed, a study shows that Sukabumi and Garut, in West Java, are among the potential sites for wind turbines.

In a challenging environment, organizations and businesses such as these show a way forward. CEIA brings together renewable energy buyers and consolidates a unified voice to the government, whereas Akuo Energy is able to operate off-grid solar panels. This demonstrates a few of the opportunities for patient renewable energy investment in Indonesia.

This story first appeared on: Clean Energy Finance Forum

Emerging Economies Must Leapfrog to Renewables

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Emerging Economies Must Leapfrog to Renewables – and They Already Are per Roya Sabri in this TRIPLEPUNDIT’s article.


Emerging Economies Must Leapfrog to Renewables – and They Already Are

20 July 2021

Renewables like solar and wind are quickly becoming more affordable and accessible. The International Renewable Energy Agency (IRENA) reports that the cost of electricity coming from utility-scale solar power fell 82 percent between 2010 and 2019, and clean power technologies such as solar and wind are undercutting even the cheapest coal-fired power plants. Further, a 2020 analysis from BloombergNEF found that wind and solar have overtaken fossil fuels as the most cost-effective form of new sources of electricity in most of the world.

This trend has made “energy leapfrogging” – i.e., the ability to reap a nation’s power needs from renewables such as solar, wind and geothermal at a rapid pace, bypassing heavy investments in fossil fuels and the infrastructure needed for them – ever more possible in emerging markets.

Economies, including several examples in Africa and Latin America, have been transitioning straight from what for many of their communities had been traditional sources of energy like wood, charcoal, agricultural waste and animal dung; these countries are also able to shift rapidly toward renewables as they have not invested in massive infrastructure that supports a national power grid, as was the case with what more industrialized nations in Europe and North America had done during the 20th century.

The result is that more communities within these emerging markets are forgoing conventional energy sources like fossil fuels; the same goes for other forms of energy like nuclear, biofuels and even natural gas.

A recent report from the think tank Carbon Tracker and India’s Council on Energy, Environment and Water (CEEW) highlights progress emerging nations are making in embracing renewables. The report also comes with a warning: If more nations do not leapfrog to these cleaner sources of energy, a worldwide low-carbon economy will not occur.

As the demand for energy grows, leapfrogging to renewables becomes necessary

The International Energy Agency estimates a surge in power generation in emerging nations will boom over the next decade, accounting for the majority of electricity demand by 2030. Thus, a world aiming to reduce greenhouse gas emissions has an incentive to ensure countries like India and China continue their developing infrastructure that is more conducive for renewables.

The authors of this Carbon Tracker and CEEW study find that emerging markets are already stepping away from fossil fuels. “Given the continued rapid growth rate of solar and wind, it is highly likely that emerging markets ex-China have already plateaued or reached peak demand for fossil fuels for electricity. China is likely to peak before 2025,” they write. China may still be a major coal consumer, but its solar sector is growing fast. Countries like Morocco, Nicaragua and Kenya have already made great leaps toward increased reliance on renewables.

Some nations are already leapfrogging to renewables

The Climate Reality Project details how Morocco, Nicaragua and Kenya have been able to turn their power generation sectors into ones that are more sustainable and resilient. Morocco, for one, has set a target of 42 percent renewable energy production by 2021 and 52 percent by 2030. It has stayed on track by building up its solar and wind power infrastructure. The North Africa country, in fact, now hosts one of the largest solar farms in the world.

After experiencing rolling blackouts due to energy insecurity a decade ago, Nicaragua is now on its way to sourcing 80 percent of its electricity from sources of renewables. By late 2020, Nicaragua’s burgeoning geothermal industry had brought the nation to 72 percent reliance on renewable energy sources.

Energy accessibility has been expanding in Kenya as decentralized solar has spread across the nation. The country is also making use of its geothermal power, which may reach 50 percent of its energy mix by 2040.

Clean energy can support a more resilient and healthy economy

These cases show that a dramatic shift to renewable energy can increase energy accessibility and stability. The economic case is significant. IRENA reported in 2016 that a doubling of renewables by 2030 could mean global GDP increases by over one percent, boosts social welfare investments by almost four percent and can add more than 24 million jobs.

While some nations have proved leapfrogging possible and beneficial, the authors of the Carbon Tracker and CEEW study note that there are serious barriers to building renewable energy reliance. Such hurdles include the intermittency of renewable sources, system costs, policies and deeply vested interests — but international actors can make a difference. The report recommends that international policymakers should focus their attention on countries currently dependent on fossil fuel imports that also have governments more amenable to policy solutions.

Finally, the authors contend that such nations are more receptive to a transition than countries that are more politically fragile. They are also in a stronger position than countries with economies largely driven by coal and gas exports. The result is that these countries that have found success with energy leapfrogging can become examples for their neighbors and help to bring more emerging nations closer toward a clean energy future.

Image credit: Antonio Garcia/Unsplash  

Oman plans to build world’s largest green hydrogen plant

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Laura Paddison in The Guardian. Oman plans to build the world’s largest green hydrogen plant that Renewable power is slowly replacing fossil fuel usage at all levels as a world trend shows the way. This article reporting such a piece of news that is as unnecessary as unproductive because solar, wind power is the future, and fossil fuels usage would be binned forever within the near future for good. 

The picture above is for illustration and is of WindPower Monthly.

Oman plans to build world’s largest green hydrogen plant

Oil-producing nation aims plant powered by wind and solar energy to be at full capacity by 2038

A solar plant in Chile, Latin America. The Oman plant construction is scheduled to start in 2028 in al-Wusta governorate on the Arabian Sea. Photograph: Reuters

Oman is planning to build one of the largest green hydrogen plants in the world in a move to make the oil-producing nation a leader in renewable energy technology.

Construction is scheduled to start in 2028 in Al Wusta governorate on the Arabian Sea. It will be built in stages, with the aim to be at full capacity by 2038, powered by 25 gigawatts of wind and solar energy.

The consortium of companies behind the $30bn (£21bn) project includes the state-owned oil and gas company OQ, the Hong Kong-based renewable hydrogen developer InterContinental Energy and the Kuwait-based energy investor Enertech.

Once online, the plant will use renewable energy to split water in an electrolyser to produce green hydrogen, which is able to replace fossil fuels without producing carbon emissions. Most will be exported to Europe and Asia, said Alicia Eastman, the co-founder and president of InterContinental Energy, either as hydrogen or converted into green ammonia, which is easier to ship and store. The facility aims to produce 1.8m tonnes of green hydrogen and up to 10m tonnes of green ammonia a year.

Oman currently relies heavily on fossil fuels, generating up to 85% of its GDP from oil and gas, but its fossil fuel reserves are dwindling and becoming increasingly costly to extract. In December 2020, the country published its Oman Vision 2040 strategy, a plan to diversify the economy away from fossil fuels and increase investment in renewables.Advertisement

Green hydrogen could play an important role, said Eastman, thanks to the Oman’s combination of plentiful daytime sun and strong winds at night. “Oman is one of the places in the world that I’ve called the ‘future renewable superpowers’,” said Michael Liebreich, the founder of BloombergNEF, “because what you really want [to produce green hydrogen] is very cheap solar and very cheap wind.”

While electrification is the most efficient way of decarbonising most sectors, it’s limited when it comes to energy-intensive industries such as steel, chemicals, aviation and shipping. Green hydrogen will be vital to help fill these gaps, said the International Energy Agency in its report published this week, which called for an end to fossil fuel investments if governments are serious about climate commitments.

A wave of net zero-emissions pledges has already led to a slew of hydrogen strategies, including from the European Commission in 2020, which predicted the share of hydrogen in the EU’s energy mix would rise from 2% to 14% by 2050.

Yet green hydrogen currently makes up less than 1% of global hydrogen production. The majority is still produced using fossil fuels such as gas and coal, in a process that emits about 830m tonnes of carbon annually, equivalent to the emissions of the UK and Indonesia combined. “Blue hydrogen” is a cleaner version, as emissions are captured and stored, but it is still produced using gas – and is seen by some oil companies as a way to keep using fossil fuels.

One of the stumbling blocks for green hydrogen has been cost, partly because of the huge amounts of energy required. But as renewables and electrolysers become cheaper, and fossil fuel prices rise, costs could fall by up to 64% by 2030, according to research from the consultancy Wood Mackenzie.

“Most green hydrogen products will not be competitive for at least another decade,” said Falko Ueckerdt, a senior scientist at the Potsdam Institute for Climate Impact Research, who sees the Oman project as “a sign that investors anticipate large future demands for hydrogen-based fuels after 2030”.

Oman’s proposed plant is just one in a slate of green hydrogen mega projects planned globally. Eastman said InterContinental Energy has a number of other plants in the works, including a 26GW wind and solar green hydrogen plant in the Pilbara, Western Australia. If constructed, this $36bn (£25.5bn) plant would be the world’s biggest energy project. The first phase is expected to be online by 2028.

In March, the renewables company Enegix Energy announced the construction of a green hydrogen plan in Ceará state, north-eastern Brazil. Once built, which the company estimates will take about four years, the plant would produce more than 600,000 tonnes of green hydrogen per year from 3.4GW of wind and solar power.

“People are upping the gigawatts, and they should,” said Eastman, “there’s so much room in the market.”

Why Should You Consider Solar Panels?

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Solar Panels are an effective and low-maintenance way to generate your own renewable energy. Here’s why you should consider installing them on your roof!

Why Should You Consider Solar Panels?

With energy prices rising to pre-pandemic levels, many of us have noticed that our energy bills have begun to rise in recent weeks. And if you’ve been with the same energy supplier for a long time, you’re likely on a standard variable tariff. Which means that if your energy costs haven’t increased in recent weeks, they’re likely to in the near future.

Now’s the perfect time to consider investing in photovoltaic (PV) solar panels. Today’s investment could result in decades of savings, add value to your home, and help you to drastically reduce your household’s carbon footprint. Solar power is on the rise in the MENA region, with investment reaching $1 trillion in the 2019-23 period in the region. Here we’ll look at some of the reasons why you should consider installing them on your roof.

Can solar panels really save me money?

Absolutely! Switch-Plan estimates that by installing solar panels, you can save anywhere from £85-£200 per year GBP with a full solar array. Depending on the size of your solar array and the daylight hours in your region, your solar array could become profitable in less than 10 years. If you’re a DIY enthusiast, you may be able to install your own solar panels, drastically reducing your costs.

As the solar market in the area grows, and becomes more competitive, households have more options than ever.

Don’t solar panels only work on sunny days?

The MENA region is known for its hot and sunny climate. But solar panels still work on cloudy, rainy and overcast days. As long as the sun shines in the sky, your PV solar panels will generate energy for your home.

Want to generate energy through the night as well? Solar arrays can be combined with domestic wind turbines to create hybrid systems that generate energy through the day and night.

Would you like your energy company to pay you?

Around 50% of the energy generated by your solar panels throughout the day is fed back into the grid. The good news is that your energy companies can pay you for this via Feed in Tariffs. These pay a flat rate per kWh of energy generated which can further offset the cost of the grid energy you use.

You’ve paid your energy company enough over the years. Isn’t it time they started paying you?

Combine energy tariffs with Feed In Tariffs to optimise savings

It’s important to note that you don’t have to use the same company for your energy tariff and your Feed in Tariff. By comparing energy plans and FiTs from different companies, you can optimise your savings, offsetting the cost of your installation and helping it to become profitable faster. All while helping to reduce the MENA region’s reliance on fossil fuels and pave the way for a renewable future.

Saudi Arabia says focus on renewable energy will save them $200 billion

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Industry Leaders published a point of view narrated by Anna Domanska that Saudi Arabia says focus on renewable energy will save them $200 billion. Do you believe it?

Saudi Arabia says focus on renewable energy will save them $200 billion

Saudi Arabia, which is actively looking to expand its economy beyond its dependence on fossil fuels, believes it can save over $200 billion over the next decade by replacing liquid fuel used for domestic consumption with gas and renewable energy sources, according to its finance minister.

The top oil exporter is modernizing its economy and create new jobs for its citizenry by venturing into new modern industries beyond oil. Hit by the volatile oil prices and the economic downturn due to the pandemic, the desert kingdom has ventured into a multi-trillion-dollar spending push led by state oil company Aramco and the powerful $400 billion sovereign fund, Public Investment Fund.

“One initiative we’re about to finalize is the displacement of liquids,” said Finance Minister Mohammed al-Jadaan. “This program would represent savings for the government of about 800 billion riyals ($213.34 billion) over the next 10 years which can be utilized for investment.”

Earlier this month, the government signed seven new solar power purchase agreements to optimize the energy mix used for electricity production. “Instead of buying fuel from the international markets at $60 and then selling it at $6 for Saudi utilities, or using some of our quota in OPEC to sell at $6, we’re going to actually displace at least 1 million barrels a day of oil equivalent in the next 10 years and replace it with gas and renewables,” said Jadaan.

“Between now and 2025, and possibly until 2030, fiscal sustainability is a priority for us. We believe that until we achieve all the targets that Vision 2030 has set, we need to maintain fiscal sustainability and control government expenditure,” said Jadaan.

The whole shift in outlook in Saudi Arabia is led by Crown Prince Mohammed bin Salman’s Vision 2030, envisaged as a mega plan to wean the economy off oil and invest in other industries such as infrastructure and technology, all with private participation and create jobs for the people.

The Kingdom is facing unprecedented unemployment, with figures running up to 15 percent last year. It has been pushed down to 12.3 percent this year. The aim is to bring it down to 7 percent by 2030. ”We are maintaining our unemployment target for 2030 but because we are not out of the woods yet it is very difficult to say what the unemployment rate is going to be for 2021,” said Jadaan.

“Our aim is to reduce the number so we will end up the year below where we ended up in 2019, pre-COVID, but I can’t tell you this is going to happen for certain.”

The Vision 2030 launch has seen renewed interest in the country from foreign investors. Foreign investment in Saudi Arabia passed the SR2 trillion ($0.53 trillion) mark for the first time at the end of 2020, despite the financial impact of the COVID-19 pandemic.

The total value of investments from overseas rose 9 percent year-on-year, or SR173.3 billion, in 2020, from SR1.833 trillion at the end of 2019, according to the Saudi Central Bank (SAMA).

According to an analyst, the increase in capital flowing into the country was due to an improvement in the investment environment and some relaxation in investment laws in the Kingdom.

Anna Domanska is an Industry Leaders Magazine author possessing a wide range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.