Sharp ready to start $300m solar power project in Bali

The Jakarta Post, Sat, 03/10/2012

Japanese multinational electronics giant Sharp Corporation will soon conduct a feasibility study on a US$300 million solar energy power plant in Bali with 100 megawatt (MW) capacity, an Indonesian government official says.

Energy and Mineral Resources Minister Jero Wacik previously said the new plant will generate cheaper electricity for the people because the price could almost half the current price using fuel energy, or at about 23 US cents per kilowatt hour (kWh). Following a depreciation period, the price could further dip to 3 to 5 cents per kWh.

Kardaya Warnika, the ministry’s director general of renewable energy and energy conservation, said Friday the memorandum of understanding (MoU) had been signed with Sharp on March 2 and the feasibility study had begin the following day in Bali.

“Bali was chosen because the project targets tourism areas so that they could be supplied by electricity and renewable energy,” Kardaya said as quoted from his office’s website, adding that the feasibility study aims at finding out the intensity of heat, duration of sunlight, and market potential in the “Island of Gods”.

While the study is ongoing, Sharp will develop a smaller capacity solar power plant with capacity of 1 to 2 MW, according to him. If successful, Kardaya added, the project could be expanded to other areas including Jakarta.

Indonesia currently relies on oil, gas and coal as sources for energy, while the use of renewable energy is low. Neighboring countries have diversified to biomass geothermal and extensive use of hydro-electric technology.

The government has pushed efforts to find new and renewable energy sources as prices of oil and coal are on the rise, to provide electricity for the country where infrastructure bottlenecks remain a major issue.

State electric utility PT Perusahaan Listrik Negara (PLN), which acts as the offtaker of Sharp’s project, has embarked on a program to develop solar power plants in 100 islands to provide access to electricity in remote areas. Tropical Indonesia has more than 17,000 islands, many of which have tenuous electricity supply, especially in remote areas.

“But [Sharp’s] project is different with that of PLN. PLN aims at reaching out regions that have not had access to electricity, but Sharp’s project does not target remote areas,” Kardaya said.

The selling price to PLN has not yet been set, and the government is yet to decide on the pricing mechanism—flat rate or gradually decreasing prices, he added.

Every 1 MW solar power plant capacity requires investment of between $2.5 and $3 million and land bank of two hectares, according to Kardaya, meaning that Sharp’s 100 MW project in Bali will need up to $300 million investment and 200 hectares land.

“If they [investors/Sharp] have built [a plant] in Indonesia, the components must come from their Indonesia-based factory,” he added.

— JP/Esther Samboh