Indonesian Solar Project Tender to Be Based on New Feed-in-Tariff Regulations

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--In early April, the Indonesian government will call for tenders for the construction of solar power stations at several locations throughout the country. The combined installed generating capacity of the projects will be 150 megawatts (MW), and they will involve an investment of $195 million.

The Energy and Mineral Resources Ministry will issue regulations on feed-in tariffs (FiTs) this week, and the tender will be based on these. The tender process will require about two months.

Rida Mulyana, the director of New and Renewable Energy and Energy Conservation, said that it would take about three months to carry out the solar project.

"The construction of the solar power stations can be completed in a short time," he said. He was optimistic that the construction of the solar power stations could be completed on schedule, as both local and foreign investors are now awaiting the tender.

In addition to constructing the solar installations, companies winning the tender also will prepare plots of land and networks to be connected to state-owned PT PLN's system.

According to the draft of the regulation on FiTs, the maximum selling price of the electrical power must be 25 cents per kilowatt hour (kWh), which will apply to all regions in Indonesia. The price set in the tender will be final and will serve as a reference of contract with PLN.

The new ministerial regulation on FiTs is seen as a breakthrough and will attract investors to develop solar power projects in the country. This development has been inhibited to date by the high investment needed, coupled with the low selling price to PLN, which says it cannot pay a high price without a possible addition to the existing subsidy burden.

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