Jakarta. The Indonesian government has formalized a collaboration with Australian renewable energy company Sun Cable, taking the first step to create an energy distribution network that should unlock an estimated $115 billion green industry's economic potential in the archipelago over the next decade.
According to Sun Cable's statement on Tuesday, Indonesia's Ministry of Energy and Mineral Resources (ESDM) and the company signed a memorandum of understanding at the G20 Summit in Bali, committing to inter-island grid connectivity policy and technical program development.
"Sun Cable is honored to partner with the Ministry of Energy and Mineral Resources as it shapes Indonesia's policy and technical program for grid connectivity," David Griffin, Sun Cable's founder and chief executive officer (CEO), said.
"We are looking to share Sun Cable's expertise in solar energy generation and long-distance transmission with Indonesia as it shapes its policy and technical approach to inter-island connectivity," Griffin said.
The Australian company currently working on the world's largest solar generation, battery, and subsea cable project, the Australia-Asia PowerLink, seeks to generate solar power from the continent's hinterland and distribute it to Singapore.
The project would generate 17-20 gigawatts (GW) of power, create a battery energy storage system at 36-42 gigawatt-hours (GWh), and the world's longest subsea cable transmission system at 4,200 km, primarily through Indonesian waters.
The subsea cable infrastructure could also serve as an example of the archipelago's inter-island power grid network. The country needs to generate up to 298 GW of renewable energy to supply the zero-carbon demand of its households and industry by 2035, or 25 times the current capacity. But most of their locations are far away from the population or industry centers.
"Energy infrastructure is very important to connect the centers of great energy production to centers of high energy consumption," Minister for Energy and Mineral Resources Arifin Tasrif said.
"Thus, Indonesia is planning to build a super grid to address the mismatch between renewable energy resources and the location of high electricity demand areas, as well as maintaining the electricity system stability and security," Arifin said.
$115-Billion Economic Potential
Development of the green industry in Indonesia could add at least $115 billion to the country's economy and create five million jobs by 2035, according to a study released on Tuesday.
The whitepaper, titled "The Green Komodo: Indonesia's opportunity in the Green Industrial Revolution," said the country has a unique opportunity to reap the benefits from the so-called green industry or business whose competitiveness, growth, and social acceptance rely on zero-carbon electricity.
The whitepaper highlighted preliminary findings of a joint study from the ministry and Sun Cable. According to the report, five critical industries in Indonesia have the potential to become green, namely mining and minerals processing, energy and fuels, transport manufacturing, food processing, and agriculture, as well as IT infrastructure.
The study said that by linking these industries to renewable energy sources, Indonesia could supply domestic and global consumers who are increasingly critical of the environmental impact of the products they consume.
"These industries will see significant shifts over the next decade as new markets emerge. For example, Indonesia's vehicle manufacturing industry has the potential to grow from its current domestic focus into a global hub for EV and battery manufacturing, fully integrated with green metal mining and refining," the researchers wrote in the whitepaper.
"This economic growth will create as many as five million new jobs and upskill the existing workforce into future technologies. Significant investment in produced assets for green industries will be required to unlock this potential, reaching $40 billion, or Rp 550 trillion, annual investment by 2035," the researchers wrote.
In comparison, Indonesia's direct domestic and foreign investments—outside banking and finance, oil and gas, and small- and medium-sized enterprise sectors—were at around Rp 900 trillion last year.