Danish-Indonesian cooperation confirms that renewable energy is competitive

By State of Green, January 24, 2019

Moving from 0 to 58 percent renewable energy over the coming decade will make sound socioeconomic sense without jeopardising energy supply security, shows a joint Danish-Indonesian study of energy sustainability on island communities.

The Danish Energy Agency’s country cooperation with Indonesia has led to two new studies on the energy system of Lombok. The work behind the studies consists of contributions by Lombok’s local government and power supply company, the Danish Embassy in Indonesia, Danish consultants and the Danish Energy Agency. Current results of the projects  were presented at a conference in Jakarta in December but are now publically available.

The first report – “Lombok – Prefeasibility Studies on RE Solutions” – documents that solar, wind and biomass are competitive on a private economic scale in Lombok’s energy system. The study is sponsored and implemented by the Danish Embassy in Jakarta in a close cooperation with the Danish Energy Agency. It draws to conclusion that burning waste is less competitive under the current ruleset despite the fact that Indonesia is struggling to handle waste treatment.

The second report – ”Lombok Energy Outlook 2030” – shows that reaching a share of almost 60% renewable energy is cost-efficient from a socioeconomic perspective.

“Lombok Energy Outlook 2030 shows a promising potential for renewable energy in combination with reductions of local emissions and price-reductions in relation to energy costs for the population of Lombok. We are looking forward to continuing the successful cooperation with our Indonesian partners in the future,” said Deputy Director Martin Hansen, Danish Energy Agency.

Lombok, Indonesia

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Danish-Indonesian energy cooperation

The Danish Energy Agency has partnered with Indonesian authorities on energy planning for years. Through the established energy partnership the Danish Energy Agency supports the green transition on islands and regional energy systems. Hereby, the Danish Energy Agency encourages the implementation of Indonesia’s climate goals on a regional scale. Lombok is the lighthouse in the existing island cooperation.

As part of the energy cooperation, Danish authorities and consultants assist the Indonesian authorities on the basis of the Danish experience on best practice planning and implementing renewable energy in the power grid, while taking economy, local environment and climate into consideration. Denmark has extraordinary wind resources whereas Indonesia has a more broad selection of energy resources available, such as solar, wind, hydro, geothermal and biomass.

Fast growing power consumption in Indonesia and Lombok

Power consumption in Indonesia is growing so fast that the expansion of new electricity production can hardly follow the same pace. Security of supply is the dominant first priority in the Indonesia energy system, as absence of power can result in reduced economic growth. Furthermore, Indonesia is home to large coal reserves that can seem appealing to government to produce local jobs. Therefore the coal price is artificially held down and the Indonesian government is planning to expand the power capacity by 35 GW of coal plants in order to ensure the security of supply for the population and industry.

Lombok has a population of 3.5 million, and yet only has a peak power consumption of 260 MW. In comparison, Denmark has a peak consumption of about 6000 MW, and hereby a max consumption about 14 times larger per capita, which is also the case for the average Dane’s annual power consumption compared to average Lombok resident. While the Danish power consumption has been constant in recent years, the power consumption on Lombok is expected to double towards 2030, as it also doubled from 2011 to today.

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Background information

The programme of Strategic Sector Cooperation (SSC) between Denmark and Indonesia started in 2016 and is a close partnership between the Ministry of Energy and Mineral Resources of the Republic of Indonesia (MEMR) and National Energy Council (NEC). The aim is to support development of policies, strategy and solutions expanding the electrification while reaching the long-term goals on renewable energy and energy efficiency.

The two projects on Lombok are co-produced in cooperation between NEC, the local Lombok government, Lombok’s local share of the power supply company (PLN NTB), Ea Energianalyse, KPMG, the Danish Embassy in Jakarta and the Danish Energy Agency.


Danish Energy Agency

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