Indonesia's Evolving Energy Sector

Home to over 278 million people, Indonesia has seen rapid urbanisation and economic development in the last decade. With those came increased pressure on the national grid. Since 2010, primary energy demand has increased by 3% per year. In 2019, the country recorded a record-breaking 2,404 TWh of primary energy usage.

Against this backdrop, Indonesia has overcome regulatory and geographical bottlenecks to accelerate its renewable energy capabilities, and recently announced bilateral initiatives that will help shore up resources to fulfill its clean energy ambitions. Earlier this year, Singapore and Indonesia signed a memorandum of understanding to channel billions of dollars towards the development of renewable energy projects and a logistics port hub in Indonesia. In the same month, Japan and Indonesia agreed to cooperate in the development and deployment of technologies to boost decarbonisation efforts.

International events in the last few months have further complicated the energy landscape. The crisis in Ukraine has seen global natural gas supplies disrupted and prices spiking, making the need for countries to keep power generation cost-efficient greater than ever.

Under all these circumstances, part of what Indonesia needs to do is to diversify its energy mix and invest in the domestic production of various cleaner energy sources such as biomass, geothermal and zero-carbon fuels.

Increasing Bioenergy Production

A renewable source of energy, biomass can be used as a standalone fuel or co-fired in fossil fuel-fired plants. Combined with carbon capture and storage (CCS), biomass offers an alternative renewable fuel that Indonesia can harness as it continues its energy transition.

In 2020, experts cited that Indonesia’s bioenergy capabilities have the potential to deliver around 50 GW of power to the country, with palm shells, pellets and wood tips widely available for domestic use. The country plans to make biomass co-firing in power stations mandatory as part of its efforts to reduce reliance on fossil fuels.

Mitsubishi Power has long been working to ramp up biomass usage in Indonesia’s power generation and developed a power generation system capable of 100% biomass firing. Together with various local partners, we recently submitted a policy proposal on biomass co-firing at thermal power plants to the Indonesian government. Our hope is that this proposal will spur greater adoption of this key fuel for the country. We will continue to lend our expertise in biomass co-firing technologies to help select the appropriate biomass fuel components and assess the extent of upgrading that power plants need to undergo.

Tapping Geothermal

Besides biomass, another renewable energy source that will play an increasingly critical role in Indonesia’s energy sector is geothermal. Located along the Pacific Ring of Fire, Indonesia is a geothermal energy hotspot with an estimated potential of 29 GW of geothermal energy resources and so far, less than 2.3 GW has been tapped. Plans have been made to transform the country into a geothermal powerhouse, with an additional 3.3 GW planned to be added to the grid by 2030.

Utilising highly pressurised steam and hot water produced by molten-hot magma beneath the earth’s surface to generate power, geothermal power generation does not require any combustion on the ground. Geothermal power also complements other renewable power generation as it is unaffected by weather conditions.

Mitsubishi Power has been a part of the journey to utilise geothermal energy sources in 13 countries around the world. In Indonesia, we have geothermal units installed in Darajat and Kamojang, both on Java island. As an EPC services provider, our strength in the optimisation and integration of power plants ensures the maximum output from geothermal energy in different regions in Indonesia, increasing power generation capacity to meet the country’s power needs.

Charting the Future with Zero-Carbon Fuels

In the long run, Indonesia will need to transition using more zero-carbon energy sources such as hydrogen and ammonia.

The country has the potential to produce hydrogen from renewable energy sources such as wind and solar, which have been estimated to have a potential capacity of up to 9.5 GW and 32.5 GW respectively. We have observed a growing appetite for hydrogen in Indonesia, with companies such as Pertamina exploring the production of green and blue hydrogen to increase its clean energy power generation capacity by 2026.

We at Mitsubishi Power have been helping to build a hydrogen society in Indonesia and around the world. To date, we have successfully demonstrated more than 3.5 million hours of hydrogen co-firing and have achieved 30% hydrogen co-firing in our advanced-class gas turbines. But our capabilities do not stop there; we are working hard to achieve the commercialisation of 100% hydrogen firing gas turbines by 2025.

In addition to hydrogen, ammonia is another zero-carbon fuel option that Indonesia is looking to incorporate into its energy mix, and we at Mitsubishi Power have been developing power generation solutions that will ease the adoption of the zero-carbon fuel. We have conducted combustion tests for ammonia and coal co-firing and ammonia-exclusive firing using a small-scale combustion test furnace. In March 2021, we announced the start of the development of the world’s first 100% ammonia-fired 40MW class gas turbine system. By the time that this technology is commercialized around 2025, it will mark the world’s first commercialised gas turbine to make exclusive use of ammonia as fuel in a system of this scale.

To expand Indonesia’s hydrogen and ammonia capabilities, collaboration with local partners will be crucial. Since 2020, we have been conducting joint feasibility studies with the Institut Teknologi Bandung on these alternative energy sources and have been providing lectures to train Indonesia’s future engineers. We have seen fruitful outcomes from this partnership, and we will continue to conduct joint research on various clean energy solutions to decarbonise Indonesia. For instance, we are currently exploring a feasibility study on the use of ammonia sourced from a local fertiliser company to power a combined cycle gas turbine power plant which utilises two units of our H-25 gas turbines. All these lay the foundation for the potential establishment of a joint R&D center, enabling local innovation efforts that will hopefully lead to greater adoption of these zero-carbon energy sources.

Our Unwavering Commitment

For over 50 years, Mitsubishi Power has been a significant contributor to Indonesia’s energy sector. As Indonesia forges forward in its energy journey, I am excited to see what is in store. Regardless of what happens, one thing is for sure: Mitsubishi Power will continue to support the country’s efforts to evolve its energy sector and create a cleaner future for the people of Indonesia.

Written by:
Osamu Ono
Senior Vice President, Chief Regional Officer, Asia Pacific & India, Mitsubishi Heavy Industries, and CEO, Mitsubishi Power Asia Pacific