The World Bank’s Executive Board approved a US$380 million loan on September 14 for the development of Indonesia’s first pumped-storage hydropower station, aimed at increasing power generation capacity during peak demand periods while supporting the country’s energy transition and decarbonization Target.

"The Indonesian government is committed to reducing greenhouse gas emissions through the development of renewable energy, energy conservation, and the use of clean energy technologies. The production of new and renewable energy and the application of energy efficiency will promote emissions reduction in the energy sector," the Republic of Indonesia Energy And Arifin Tasrif, Minister of Mineral Resources. More than 80% of the electricity in the Java-Bali grid comes from fossil fuels, which supplies 70% of the country's population. A key measure to support Indonesia’s decarbonization agenda is the development of energy storage in order to integrate renewable energy into the grid. Pumped storage hydropower plays a vital role in this approach.

The financing will support the construction of the Upper West Sokan Pumped Storage Hydropower Station located between Jakarta and Bandung, with an estimated capacity of 1,040 MW. The facility will have huge power generation capacity to meet peak demand, provide huge storage capacity to achieve a wider range of renewable energy penetration, and because it is close to two large demand centers, it will reduce the increasing transmission load on the grid. Therefore, a more environmentally friendly and reliable power supply will benefit consumers in Java and Bali.

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“We are excited about this project because it will be the first such project in Indonesia. It represents a turning point in Indonesia’s approach to decarbonization. The World Bank will continue to support Indonesia’s efforts to achieve resilient, sustainable and inclusive development. This will benefit the Indonesian people now and in the future," said Satu Kakonen, World Bank Indonesia and East Timor Country Director. Pumped storage hydropower uses two reservoirs at different altitudes. When the demand for electricity is low or clean energy such as solar power is sufficient, the electricity from the grid is used to pump water to the upper reservoir. Electricity is generated during peak demand periods, usually at night, because when the cost of generating electricity is high, water is moved down to lower reservoirs using turbines. The project will help increase the flexibility and efficiency of the system in balancing supply and demand, thereby improving the reliability and quality of power services in Java and Bali.Editor/Baohongying