Jakarta. State-owned utility company Perusahaan Listrik Negara and the Danish Energy Agency signed an agreement on Wednesday (29/11) on the integration of renewables into Indonesia's electrical grid as part of ongoing cooperation in the energy sector between the two countries.
The Indonesian government plans to increase the country's power capacity by 35 gigawatts within the next three years, with the goal of 100 percent electricity access nationwide by 2025.
It also seeks to increase the renewable portion of the country's energy mix to 23 percent by that time.
Energy and Mineral Resources Minister Ignasius Jonan said Indonesia remains committed to this goal, despite slow progress.
"It's not an easy job, or an easy goal. So far, we have reached less than 50 percent of the commitment but we will try, for the next eight years, to achieve as much as we can," Jonan said during the signing ceremony in Jakarta.
The new cooperation will support PLN to model the consequences of various contracting strategies for thermal capacity, combined with renewable energy, in Indonesia's electrical grid.
Indonesia and Denmark initiated bilateral energy cooperation in 2015, during the visit of Queen Margrethe II.
Current cooperation includes efforts to improve the energy efficiency of existing power plants, increase operational flexibility in the electrical grid and facilitate higher penetration of fluctuating renewable energy in the most cost-effective way.
"Our government-to-government cooperation indicates that it will also be cost-effective for Indonesia to incorporate large shares of renewable energy into [its electrical grid] ... and Denmark is keen to assist," Danish Prime Minister Lars Løkke Rasmussen said.
Denmark aims to end the burning of fossil fuels in any form by 2050, including in electricity production and transportation. The country has transitioned from dependency on fossil fuels to an energy mix consisting of 40 percent renewables, with the instruction of a pioneering wind-power program.
Meanwhile, Indonesia is mainly relying on hydropower and geothermal sources in its quest to make green energy the backbone of the country's power sector.
"Denmark now has a highly competitive energy sector, which provides not only affordable, but also clean energy to all its citizens," Rasmussen said.
Rasmussen brought along a Danish business delegation with a "keen interest" in developing partnerships with Indonesian counterparts, especially in the energy and environmental sectors.
The Cleantech Roundtable Discussion took place at the Ciputra Artpreneur in Kuningan, South Jakarta, on Wednesday to facilitate such partnerships.
Jonan encouraged more investment in the renewable energy sector and emphasized that "one day, renewables will be a lot cheaper than fossil [fuels]."