Gov’t Encourages Banking to Develop Smart Grids

MINISTRY OF ENERGY AND MINERAL RESOURCES

PRESS RELEASE

NUMBER: 068.Pers/04/SJI/2021

Date: 23 February 2021

Gov't Encourages Banking to Develop Smart Grids

The Indonesian Ministry of Energy and Mineral (EMR) is seeking workable solutions to the challenges in smart grid development. One of the solutions is by initiating funding schemes through the banking sector.

"To accelerate smart grid development, we must understand the principles, technology, and regulations (of smart grids), including how the banking sector can promote smart grid development," explained Director General of Electricity of Ministry of EMR, Rida Mulyana, in a webinar titled Investment in Smart Grids, which is a cooperation between Ministry of EMR and International Energy Agency (IEA). The webinar was held in Jakarta on Tuesday (23/2).

Smart grids, continued Rida, are a relatively new technology in Indonesia. The technology will both improve reliability and create reliability and efficiency at power plants, transmission, and distribution. "It can also help to accelerate the electrification process," he said.

Rida said the Indonesian government is committed to expanding electricity access accross Indonesia under the principles of availability, reliability, and affordability. The commitment is clearly reflected in the electrification ratio that has reached 99.20% at the end of 2020. "This is a huge leap in a 20 year period. In 2000, Indonesia's electrification rasio was only 53%," he said.

As demanded by the Indonesia National Medium-Term Development Plan (RPJMN) of 2020-2024, the government has included smart grid development in draft PT PLN's Electricity Supply Business Plan (RUPTL) currently being finalized. "We've set a target to develop five smart grids annually until the end of 2024," Rida added.

The government has issued Government Regulation Number 25 of 2021 on Administration of the EMR Sector. The GR is a derivative of Law Number 11 of 2021 on Job Creation. "One of the instructions set out in the GR is that Regional Governments should provide a budget and use the budget to develop smart grids in order to accelerate the realization of electrification ratio in their respective region," said Rida.

For smooth development process, Rida expects that synergy is achieved between national government, regional governments, private sector, technology owners, banking sector, and academics in integrating smart grid technology with the curriculum to support research. Smart grid is one of the focuses of Minister of EMR Arifin Tasrif. "Minister Arifin is concerned with smart grid development," Rida stated.

Representatives from the International Energy Agency (IEA) who were present at the webinar gave their insight and constructive input about the opportunity and needs of smart grid investment in Indonesia. They also shared the experiences of other countries that have implemented the tecnology.

Smart grids can reduce distribution losses. It can also be used to develop distributed generation. No less important is that smart grids can increase large-scale integration of renewable energy and lower electricity tariff by controlling peak load.

Smart grids facilitate consumer participation in electricity provision based on local energy sources. They can integrate all actions or activities, from power plants to consumers, in order to provide efficient, sustainable, economical, and safe supply of electricity. (IY)

Head of Bureau of Communication, Public Information Services, and Cooperation

Agung Pribadi (08112213555)

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