On September 8, 2023, Indonesia and Singapore will formally cooperate in the low-carbon energy sector. One of the key elements of this agreement is a cross-border power purchase agreement that will allow Indonesia to export electricity to Singapore.
Indonesia's Minister of Energy and Mineral Resources Arifin Tasrif and Singapore's Deputy Minister of Trade and Industry Tan See Leng signed the agreement, which was ratified at the Ministry of Energy and Mineral Resources office.
Secretary General of Indonesia's Ministry of Energy and Mineral Resources, Dadan Kusdiana, further explained the contents of the agreement. One of the main focuses is the effort to connect the electricity trade between Indonesia and Singapore. According to Dadan, the MoU will have an initial term of five years, with an option to extend for another five years to ensure continuity in this relationship.
The agreement also includes other important elements. These include the exchange of information on policies, regulatory approvals, and frameworks that will support the commercial implementation of cross-border power trading projects. This will provide a solid legal basis for the development of similar projects in the future.
In addition, the agreement covers another important aspect, namely the possible development of cross-border power trading projects that take into account carbon credits in accordance with the applicable legislation in each country. Thus, this cooperation is not only about electricity, but also about protecting the environment through a sustainable approach to energy.
This energy cooperation is an important complement to the previous Memorandum of Understanding (MoU) signed between the Indonesian Ministry of Energy and Mineral Resources (MEMR) and the Singapore Ministry of Trade and Industry (MTI) on January 21, 2022.
These areas of cooperation cover a wide range of aspects, from the development of low-carbon energy technologies such as solar PV, hydrogen, and CCS/CCUS technologies, to efforts to develop regional power grids, cross-border interconnections, energy trading, facilitating energy project financing, and enhancing human resource capacity in this area.
Indonesia's Director General of Electricity, Jisman P Hutajulu, emphasized that the implementation of the agreement on electricity interconnection is still awaiting concrete steps from Singapore. This step will then be combined with the role of PT PLN (Persero) to move this project forward.
Singapore has already shown its commitment by agreeing to import two gigawatts of clean, low-carbon electricity from Indonesia. This power will be supplied by a number of private companies active in green energy development. This demonstrates a strong push to move the energy sector in both countries in a more sustainable direction.
At the Indonesia Sustainability Forum (ISF) (9/8), Singapore's Deputy Minister for Trade and Industry, Tan See Leng, revealed ambitious plans. Singapore has set a target of importing four gigawatts of sustainable electricity by 2035. To meet this commitment, half of its electricity import needs will be met through cooperation with Indonesia.
In addition to laying the groundwork for power imports, this cooperation will create a strong framework to support commercial projects in sustainable energy development, as well as cross-border power trading and grid development between the two countries. As such, this cooperation is an important step towards a greener and more sustainable energy future in the region.