Since 2000, Indonesia’s electricity demand has been growing at a rapid pace (about 6% annually) under the pressure of a growing population and increasing urbanisation and industrialisation. The country has been responding to this challenge by increasingly deploying its abundant domestic resources of coal and natural gas and partially by utilising its non-intermittent renewable energy potential namely large hydropower, geothermal and biomass.  Currently the energy mix is made of 82% of fossil fuels (coal, gas and oil) and only 18% of renewable energy (hydro, geothermal, biomass, wind/solar). Wind and solar accounts only for 0.1%.

Indonesia targets a share of Renewable Energy in the energy mix of 23% and 31% by 2025 and 2050, respectively. As for wind, until 2050, 28 GW of wind power are planned to be installed, but that implementation lagged by roughly 60% in 2019.

Despite the renewable energy targets set by the government, the development of wind power, and in general renewable energy, in Indonesia is hampered by: unfavourable conditions for bankable PPAs, uncertain pricing schemes, lengthy licensing processes and issues related to grid ability to manage electricity produced by renewable sources.

The Project

The Project is a 75.6 MW wind power project located in Aceh, on the island of Sumatra in Indonesia. There is strong class IIIA wind resource estimated 6.5 – 7.5m/s at 140m height at the site.

Currently, the North Sumatran grid is dominated by fossil-fuel powered plants. The Project will address the immediate requirements of the North Sumatran grid by providing adequate, cost efficient and reliable power through wind power plants. The project will also provide electricity more locally to the centers of demand, hence significantly reducing line losses in the grid system. The Northern Sumatra electricity network still has significant diesel fired power plants in the mix, totaling 15% of the generation.

Indonesia’s National Electricity Corporation (PLN) is expected to be responsible for purchasing the entire project output, under a Power Purchase Agreement (PPA) template for up to 30 years.

Our Impact

Impact on planet: The project will build 75.6 MW of renewable capacity which will displace/avoid GHG emissions in a highly emitting grid.

Market transformation: Utilisation of wind energy in Indonesia has been limited despite the abundant wind resources. This project will help demonstrate bankability of wind farm projects in the country.