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In the quest to decarbonize the electric power industry, the private sector can play a major role in accelerating the transition to renewable energy, says Royal Golden Eagle (RGE) Managing Director Anderson Tanoto.
Speaking at a panel discussion on the electrification of the power sector at the Indonesia International Sustainability Forum 2024 on Sep. 5, 2024, Anderson revealed that a factory owned by Riau province’s largest pulp and paper producer APRIL Group, part of RGE, is powered 88 percent by biomass from renewable sources.
With an aim to reach a rate of 90 percent, the process began with the installation of solar panels at closed landfills three years ago at a rate of US$ 1 million per megawatt (MW). With coal prices hitting record highs in 2022 and solar panel costs coming down, he continued, the investment became a compelling economic reason on its own.
“It wasn't about going green, it was about saving money. The payback for the solar panel at that point in time, by generating power from the solar panel of 1 MW, was about six and a half years. Fast forward five years later, we've installed almost 26 MW of solar panels across all our landfill permits, and we were able to actually generate good return on investment on these projects,” he said, adding that Indonesia’s large surface area can be potentially used to generate approximately 3,000 gigawatts (GW) of electricity annually.
According to Anderson, for the transition to renewable energy to happen in the near future, the private sector must be willing to take the plunge, whether for sustainability or economic reasons.
“With this kind of lower prices of solar panels, as the private sector, the time to seize the opportunity is now.”
On a larger scale, he acknowledged the industry’s energy trilemma, in which stakeholders want energy to be simultaneously cheap, clean and secure. At the same time, he also highlighted the need for lower battery prices, noting that the main challenge in increasing the renewable energy capacity is the high battery and energy storage costs.
“What needs to happen in order for us to accelerate further is to have what has happened in the photovoltaic business also occur on the battery side, so that battery costs can continue to come down,” he explained.
With the energy transition’s capital intensive nature, Anderson also called for further support in financing through competitive rates, which will encourage more companies to turn towards renewables when coupled with a move towards a free market.
“The opportunities are immense from the private sector, and we're happy to be able to participate,” he concluded.
Anderson’s remarks today coincided with the announcement from RGE and Total Energies. Their joint venture, Singa Renewables, has received conditional approval from Singapore’s Energy Market Authority to import 1 GW of solar photovoltaic energy from Indonesia to Singapore.
