The Indonesian government has set a requirement for Singapore to accommodate the use of domestic services and goods or domestic component ratio (TKDN) of 60% for the export of 4 gigawatts (GW) of electricity from 2027 to 2035.
Rachmat Kaimuddin, the Deputy for Infrastructure and Transportation Coordination at the Coordinating Ministry for Maritime Affairs and Investment, stated that the electricity sold to Singapore would come from solar power plants (PLTS).
In addition to agreeing to a high TKDN, the cross-border electricity trade agreement also mandates the development of solar panel and electric battery industries in Indonesia.
However, Rachmat did not specify the location for the construction of the solar panel factory.
“The government’s intention is for this factory to be built, whether it’s in Batam, Java, or anywhere else, and for the industry to generally take shape in Indonesia,” said Rachmat after the Indonesia Sustainability Forum (ISF) event at Park Hyatt Jakarta on Friday, September 8, 2023.
The governments of Indonesia and Singapore signed a cooperation agreement for the export of electricity to Singapore. This plan is part of a memorandum of understanding signed by Minister of Energy and Mineral Resources Arifin Tasrif and the Minister of Manpower and Deputy Minister of Trade and Industry of Singapore, Tan See Leng, at the Ministry of Energy and Mineral Resources on Friday, September 8, 2023.
Trial being planned
Singapore will conduct trials to resolve technical and regulatory issues related to cross-border electricity trade. Singapore plans to import 100 megawatts (MW) of non-intermittent electricity from the Pulau Bulan Solar Power Plant located in the Riau Islands Province, Indonesia.
So far, five Indonesian companies have submitted proposals to provide low-carbon electricity to Singapore. These companies include the Pacific Medco Solar Energy Medco Power Consortium with Consortium partners, PacificLight Power Pte Ltd (PLP) and Gallant Venture Ltd, a Salim Group company, Adaro Green, and TBS Energi Utama.
PT Medco Power Indonesia will develop a pilot project for exporting electricity from the Pulau Bulan Solar Power Plant after obtaining preliminary approval from the Singapore Energy Market Authority (EMA). The project will be carried out in collaboration with the PacificLight Power Pte Ltd (PLP) and Gallant Venture Ltd Consortium, which is part of the Salim Group.
Electricity export scheme
Indonesia has prepared three schemes for the electricity export project to Singapore. First, electricity distribution business entities (Wilus) directly sell electricity to consumers in Singapore. The mechanism involves business entities that apply for Wilus designation, then obtain a general electricity supply business license (IUPTLU) and eventually acquire a cross-border electricity trading business license (IUJBLN).
Second, Wilus-holding business entities become independent power producers (IPPs) like PLN or PLN Batam. Then, these entities sell electricity to consumers in Singapore through a grid-to-grid scheme. Third, cooperation between Wilus holders through a shared power network or power wheeling scheme.
