Policy Green Light Fully Open: Why is Indonesia Willing to Spend Heavily to Boost Energy Storage Shortcomings?

The Indonesian government approved the "Village Cooperative Million Solar Plan" in August this year, which will deploy 100GW of photovoltaic capacity over the next five years, with 80GW being constructed in the form of "1MW photovoltaic + 4MWh storage," meaning that a 320GWh storage market is about to explode.The content you provided is already in English.

The reality behind this massive plan is Indonesia's energy structure dilemma—being the world's largest archipelagic country, Indonesia consists of about 17,000 islands, of which only 6,000 are connected to the national power grid, while the remaining remote islands generally rely on diesel generators or face power shortages.。

Even cities connected to the power grid, such as Jakarta, are troubled by unstable power supply, with an average annual power outage exceeding 200 hours.The content you provided is already in English.

The Indonesian government has recently introduced a series of supportive policies to pave the way for the energy storage market.

The MEMR 5/2025 regulation is the most critical link, as it extends the purchase agreement period for renewable energy to 30 years and supports the BOO (Build-Own-Operate) model, providing investors with long-term stable income guarantees.The content you provided is already in English.

The regulation also clarifies the flexibility of the electricity price structure. For electricity that exceeds the contracted energy or availability, the state electricity company PLN can purchase it at a price not exceeding 80% of the electricity price, which creates additional revenue space for energy storage projects.The content provided is already in English.

At the financial level, Indonesia's National Consumer Protection Agency coordinated a special fund of 1 billion USD to support the construction of off-grid "solar + storage" systems in remote areas.The content you provided is already in English.

The fundamental driving force behind this energy revolution is the significant economic benefits brought by solar storage systems.

According to calculations by the Jakarta Institute for Basic Services Reform, the levelized cost of electricity for solar storage microgrids is only $0.12–0.15 per kWh, which is significantly lower than the $0.20–0.40 per kWh for diesel generation.The content you provided is already in English.

This means that over a 25-year operational period, the solar storage system can save more than 30% of energy expenses for rural households and small micro-enterprises.The content provided is empty. Please provide the text you would like to have translated.

Located along the equator, Indonesia has abundant solar energy resources, with an average solar radiation of over 4.8 kilowatt-hours per square meter per day.This natural advantage provides ideal conditions for photovoltaic power generation, while energy storage is the key to achieving reliable power supply 24 hours a day.

Indonesian Minister of Energy and Mineral Resources Arifin Tasrif emphasized: "Photovoltaics are the starting point, and supporting energy storage is the key to achieving 24-hour power supply and economic sustainability."

The energy storage capacity of 320GWh has attracted the attention of global enterprises.The content you provided is already in English.

Chinese energy storage companies have taken the lead. CATL has signed a framework supply agreement with a Singapore renewable energy developer to supply a total of 2.2GWh of battery energy storage systems in batches for the integrated solar storage project in Indonesia's Riau Islands.The content you provided is already in English.

Yongfu Co., Ltd. won the bid for the 200MWac photovoltaic and 80MW/80MWh energy storage general contracting project at the Morowali Industrial Park in Sulawesi, Indonesia.The content appears to be empty. Please provide the text you would like to have translated.

However, opportunities and challenges coexist. The Indonesian energy storage market is still in the early stages of commercialization, and the "first batch of pioneers" may face numerous tests.

In terms of products, Indonesia lacks energy storage environmental assessment standards, the battery recycling system is not yet established, and corporate projects are easily affected by environmental protection controversies, impacting delivery schedules.The limitations of dispersed islands and grid infrastructure also increase the difficulty of grid connection.。

In addition, when participating in the bidding for procurement projects of Indonesian state-owned enterprises, it is necessary to meet the TKDN localization ratio requirements of the corresponding industry.Indonesia has introduced a 60% localization rate requirement.The content you provided is already in English.

To address these challenges, leading companies have taken proactive actions. CATL has partnered with Indonesian state-owned enterprises to build a battery factory in West Java, with an initial capacity of 6.9GWh, which can supply large-scale solar storage projects.The content you provided is already in English.

Sungrow Power has established a factory on Batam Island, with a localization rate exceeding 60%, allowing for a quicker supply of key components such as inverters.The content you provided is already in English.

Facing the complex and diverse geographical environment and electricity demand, the islands of Indonesia are exploring different technological routes.

Bali has developed a comprehensive phased roadmap for achieving net-zero emissions, planning to deploy up to 54GWh of battery storage systems by 2045.。

Sulawesi Island has adopted a layered strategy, utilizing batteries for daily peak shaving and managing weekly operations through inter-island connectivity.The content you provided is already in English.

The island of Sumba has proposed a unique approach, which is to replace fossil fuels with green hydrogen and ammonia.The content you provided is already in English.

In the field of household energy storage, market demand is also considerable. Some companies entered the Southeast Asian market in 2022, achieving an annual sales revenue of 50 million yuan that year.。

Data from the General Administration of Customs of China indicates that from January to July 2024, the amount of inverters exported from China to Southeast Asia reached 1.95 billion yuan, a year-on-year increase of 17%, reflecting a steady increase in household storage demand.The content you provided is already in English.

The Indonesian government's ambition to promote energy storage development is not only about addressing the current electricity shortage but also relates to the overall national energy security and economic development.

According to Indonesia's "2025–2034 Electricity Supply Plan," the goal is to add 69.5GW of new energy generation capacity by 2034, including 42.6GW of renewable energy and deploying 10.3GW of energy storage.The content you provided is already in English.

The plan will enable renewable energy to account for 35% of the energy structure by 2034, while Indonesia's goal is to achieve net zero emissions by 2060.。

After the project is fully operational, it can reduce carbon dioxide emissions by more than 80 million tons each year, equivalent to planting 2.2 billion trees.At the same time, the demand for diesel power generation is expected to decrease by 60%, saving the country approximately 4 billion US dollars in foreign exchange expenditures each year.。

By activating the grassroots energy autonomy, village cooperatives will gain diversified income from electricity sales, operation and maintenance services, and it is expected to create over 500,000 green jobs.The content you provided is already in English.