Floating Solar Makes Perfect Fit For Asia Renewables Push – EQ Mag Pro

Projects can be brought to market faster as land acquisition issues avoided

Asia is well-positioned to lead the way to develop floating solar as an asset class. In Southeast Asia, for instance, there is a lot of hydropower potential, and floating solar is a logical extension of that potential in the region.

This is exemplified by the 145-megawatt (MW) Cirata floating solar power plant being developed in Indonesia, which is located on the 6,200-hectare Cirata reservoir in the West Java province.

The Cirata project, which reached financial close in August, is another illustration of a large-scale floating solar that can be constructed in Asia following the 180MW floating solar power plant built in Taiwan by Chenya Energy Company in 2020.

Vietnam and Laos also offer floating solar opportunities as both countries have significant hydropower capacity. There are also projects being developed in Malaysia and in the Philippines, but these are on a smaller scale.

Floating solar also suits a country such as Singapore where land is scarce. In July this year, Sembcorp Floating Solar Singapore, a wholly-owned subsidiary of Sembcorp Industries, and the national water agency PUB officially opened the Sembcorp Tengeh floating solar farm at the Tengeh reservoir.

The 60MW project, one of the world’s largest inland floating solar photovoltaic (PV) systems, is capable of generating electricity that is sufficient to power Singapore’s five local water treatment plants – offsetting about 7% of PUB’s annual energy requirements and reducing PUB’s carbon footprint.

There are a number of reasons – economic, logistical and environmental – why floating solar is attracting interest from project sponsors and developers. Daniel Mallo, managing director and head of natural resources and infrastructure in Asia-Pacific at Societe Generale, explains: “We’ve done a number of ground-mounted solar power projects across the region, such as in India and Australia, and we’ve found that you will get more output from the megawatt installed from floating solar installations.

You will be able to generate higher energy production from floating solar and this is a function of the water having a cooling effect on the solar panels. So, everything else being equal, you will be able to generate more output, more revenues and cash flows from floating solar installations compared to ground-mounted installations.”

Logistically, floating solar projects can be built in areas where there is already energy production such as in hydropower plants that are located in reservoirs. This means the developers can combine two renewable energy projects in the same location and in doing so, they can tap into existing transmission infrastructure, thus accelerating the development of floating solar.

Floating solar projects can also be brought into the market faster than ground-mounted projects since the developers do not have to deal with the complex process of land acquisition, which can be a major cause of project delays in countries such as Indonesia.

The environmental attributes of floating solar projects are also positive as they tend to reduce water evaporation. “Floating solar installations reduce the level of water evaporation particularly during the dry season,” Mallo points out. “They also tend to reduce the formation of algae in the water with less sunlight penetration, which is beneficial to marine life.”

The Cirata floating solar project represents a major step forward for Indonesia in terms of its renewable energy potential in general and floating solar potential in particular. Being the first of its kind in the country, the project required an in-depth assessment of risks around technology and the impact on the environment.

The project also needs to meet the local content requirements in Indonesia for 41% of project costs. And since solar is still relatively new in Indonesia, there haven’t been, until recently, many established large-scale manufacturers of solar panels in the country. Most solar panels are currently being imported from China.

In light of the market potential, some Chinese companies are now starting to build manufacturing facilities to produce solar panels in Indonesia and the Cirata floating solar will be one of the first large solar power plants to use the Indonesia-made solar panels.

Apart from serving the Indonesia market, the Chinese manufacturers are also building solar panel facilities in the country to serve the United States and other markets, and avoid trade tariff constraints that might be applicable to exports from China.

Indonesia is targeting to generate 23% of its energy mix from renewables by 2025 under its electricity infrastructure acceleration programme and the Cirata floating solar represents an emerging renewable energy source.

The project is being developed by PT Pembangkitan Jawa Bali Masdar Solar Energi, a joint venture between Masdar (or Abu Dhabi Future Energy Company) and PT PJBI, a subsidiary of Indonesia’s state-owned electricity company Perusahaan Listrik Negara (PLN). Construction work on the project has begun and the plant is expected to commence commercial operation in the fourth quarter of 2022. It will provide enough electricity to power 50,000 homes and it will reduce carbon dioxide emissions by 214,000 tonnes a year.

Source: theasset