Caution in the 320GWh energy storage market in Indonesia, watch out for these pitfalls!

The Indonesian government's "Village Cooperative Million Photovoltaic Program" has stirred waves in the global energy storage industry—100GW of photovoltaic installed capacity paired with a 320GWh energy storage system, a figure that is enough to excite any energy storage company.。

Facing the market that may become the largest rural electrification project in Southeast Asia, Chinese energy storage companies are gearing up.。

However, behind this grand blueprint lie multiple risks related to policy, technology, and finance. This article will reveal the true nature of the Indonesian energy storage market, helping you avoid those fatal "pits" on your path to striking gold.

The "One Million Solar PV Program for Village Cooperatives" issued by Indonesian President Prabowo indeed demonstrates an astonishing ambition.The content provided is empty. Please provide the text you would like to have translated.

The core of the plan is to deploy a microgrid system of 1MW photovoltaic + 4MWh energy storage in 80,000 villages across Indonesia, forming a distributed energy network with a total of 80GW photovoltaic + 320GWh energy storage, along with an additional 20GW of centralized photovoltaic power stations as a supplement.The content you provided is already in English.

The first batch of 10,000 village solar storage systems is planned to be connected to the grid for power generation by August 2025.The content you provided is already in English.

From an economic perspective, the plan is quite attractive. According to the Institute for Essential Services Reform (IESR) in Jakarta, the levelized cost of electricity for this solar-storage microgrid is estimated to be only $0.12-0.15 per kWh over the next 25 years, which is significantly lower than the $0.20-0.40 per kWh for diesel generation.The content you provided is already in English.

The fluctuation of policies is the first potential risk.

The Indonesian government has set a target for renewable energy to account for 23% by 2025, but actual progress has been slow, with this proportion only reaching 13.1% in 2023, far below the target of 17.9% for that year.The content you provided is already in English.

Some analysts have pointed out that the government is even considering lowering the renewable energy target for 2025 from 23% to 17%-19%.The content provided is already in English.

There are contradictions between policies. The solar energy target in the "2025-2034 Power Development Plan" released by the Indonesian state electricity company (PLN) is only 17.1GW by 2034, which is a huge gap compared to the village-level plan's target of 100GW.The content you provided is already in English.

The TKDN (local content requirement) policy in Indonesia is a barrier that cannot be ignored.The content you provided is already in English.

The Indonesian government has stipulated that the minimum local content requirement for solar modules is 60%.Although the Ministry of Energy and Mineral Resources has proposed to lower the TKDN requirement for solar modules to 40%, the proposal has not yet been approved.。

This means that overseas companies need to establish local production lines in Indonesia or collaborate with local enterprises.

Leading companies have actively responded, such as Sungrow setting up a factory on Batam Island, with a localization rate exceeding 60%; CATL has also partnered with Indonesian state-owned enterprises to build a battery factory in West Java, with a phase one capacity of 6.9GWh.The content you provided is already in English.

But for small and medium-sized enterprises, the financial investment and operational complexity required for localization constitute a towering barrier.

The financing model of this plan has serious hidden dangers.The content you provided is empty. Please provide the text you would like to have translated.

As part of the KDMP plan, which amounts to a total of 25 billion USD, its funding mainly comes from state-owned banks providing credit lines to the newly established cooperatives.Each cooperative is expected to receive loans of up to 3 billion Indonesian rupiah (approximately 185,000 USD), which must be repaid.The content you provided is already in English.

Financial experts warn that issuing large loans to 80,000 newly established cooperatives, which lack operational experience and credit history, poses a serious risk of massive bad loans.The content you provided is already in English.

More concerning is that the relevant regulations allow the use of village funds originally intended to support rural development as collateral when cooperatives are unable to repay loans.This constitutes a hidden debt risk, which may trigger a chain collapse of the rural economy once a large number of cooperatives default.

The shortage of talent is the most direct challenge faced in project implementation.。

According to IESR analysis, the construction of a 1MW solar power station and a 4MWh battery storage system requires 30-50 workers with different skill levels over a period of 9 to 12 months.The content you provided is already in English.

Currently, there are very limited high-skilled and medium-skilled workers in Indonesia capable of constructing and maintaining photovoltaic and energy storage systems, and their distribution is uneven.The content you provided is already in English.

The Indonesian Ministry of Energy and Mineral Resources has launched the "Thousand Villages Technical School" program in collaboration with universities, focusing on training village-level operation and maintenance engineers.However, it is extremely difficult to quickly train tens of thousands of technical personnel with long-term operation and maintenance skills.The content you provided appears to be a single punctuation mark (a period). Since it is already in English, there is no translation needed.

Geographical dispersion also increases project complexity. Indonesia consists of over 17,000 islands, and this geographical dispersion presents unique challenges for achieving universal electrification.The content you provided is already in English.

The domestic solar energy supply chain and industrial foundation in Indonesia still face severe challenges.The content you provided is already in English.

Despite the domestic production capacity of solar modules reaching 10GW, the market absorption rate is still very low.Local manufacturers find it difficult to compete on price with cheap imported products from China, as the latter has a significant advantage in large-scale production.。

In addition, the domestic lack of production capacity for core upstream components such as glass and aluminum frames has further increased the cost of local products.The content you provided is already in English.

This constitutes an "industrialization paradox"—if there is a heavy reliance on imported components to meet schedule and cost-effectiveness requirements, it may stifle the nascent domestic solar industry; if one insists on "technological sovereignty" and "strengthening domestic industries," it will inevitably increase project costs and financial risks.The content you provided is already in English.

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