Driving the Energy Transition: Solar Power Export Potential from Kundur Island to Singapore

Co-authored with Safitri Adawiyah

The demand for clean energy in Singapore continues to grow in line with the country’s commitment to decarbonize its energy sector. Currently, Singapore remains heavily reliant on natural gas-fired power plants, making its electricity pricing structure highly sensitive to fluctuations in global fuel prices. Data from the Energy Market Authority (EMA) shows that electricity prices in Singapore’s competitive market have been trending upwards, largely due to rising fuel costs and strong economic growth. As a result, diversifying energy sources — including importing renewable electricity — has become a strategic priority.

In an effort to reduce fossil fuel dependence and stabilize electricity prices, Singapore has launched several cross-border electricity import initiatives. One of the pilot projects under development involves importing electricity from Indonesia via a dedicated subsea cable. This initiative opens up significant opportunities for renewable energy exports from Indonesia, a country rich in renewable resources.

Kundur Island, located in Indonesia’s Riau Province, has been identified as a promising site to support this initiative. The island offers ideal conditions for the development of a utility-scale solar photovoltaic (PV) plant, with a low population density of approximately 227 people per square kilometer. By utilizing around 432.5 hectares of available land, Kundur Island is estimated to accommodate a solar PV facility with a capacity of up to 500 MWp. This capacity could supply electricity up to 800,000 households with 900 VA connections if integrated with an energy storage system. Kundur Island’s strategic location — just about 70 kilometers from Singapore — enables the development of an economical and efficient subsea cable interconnection. Moreover, the island could also be linked to the Sumatra power grid, potentially eliminating the need for large-scale energy storage systems.

The study focuses on an initial financial feasibility assessment, incorporating several necessary technical assumptions to evaluate how the project could provide mutual benefits, particularly for Indonesia as the energy supplier. By the end of the discussion, the study will at least present how the electricity sales scheme can be financially beneficial for Indonesia through a competitive electricity selling price. The financial feasibility data is obtained by simulating the financial load of planned generation and transmission expansion, as well as the total energy that can be sold. This simulation is conducted using the EnergyPLAN software.

EnergyPLAN is a free energy system modeling software developed since 2000 by the Sustainable Energy Planning Research Group at Aalborg University, Denmark. The tool is designed to simulate energy systems holistically, including electricity, heating, transport, and industry sectors, on an hourly resolution throughout an entire year. EnergyPLAN is widely used to support the planning of sustainable energy systems and scenarios for transitioning to 100% renewable energy, while accounting for cross-sectoral integration in what is referred to as smart energy systems. In this study, EnergyPLAN is chosen for its ability to calculate energy production based on actual load curves and total annual energy consumption, which is relevant for analyzing Indonesia’s potential for electricity exports.

Furthermore, EnergyPLAN enables project cashflow analysis by incorporating capital expenditures (CAPEX) and operational expenditures (OPEX). It also allows simulation of electricity trading schemes, including the investment costs for interconnection infrastructure and the flexibility to set electricity selling prices dynamically. However, for the sake of simplicity in this discussion, the selling price is assumed to be constant. EnergyPLAN’s user-friendly interface facilitates flexible input adjustments, making it particularly useful for sensitivity analysis across various technical and financial parameters. The simulation using EnergyPLAN in this study is focused on a one-year period in 2030, which is selected as the commercial operation date (COD) for the Sumatra–Kundur Island–Singapore interconnection and electricity export project to Singapore.

To run the simulation, several datasets are needed: projected annual energy-consumption figures for Kundur Island in the Riau Archipelago, accompanied by representative daily load-profile curves for every day of the year; an inventory of existing power plants as of 2025 plus generation-expansion plans through 2030; assumptions on submarine-cable landing points and the total distance between them; CAPEX and OPEX estimates for the additional power plants slated for 2030 — including facilities intended to export power to Singapore; corresponding financial data for building the Sumatra–Kundur–Singapore transmission interconnection; and finally, detailed technical parameters such as generation efficiencies and associated carbon-emission factors.

In addition to those datasets, assumptions, approximations, or conceptual elements related to the simulated project were made. In 2030, based on interpolation and approximation of the Riau Archipelago’s forecast data available in the 2021–2030 RUPTL, Kundur Island is projected to have a peak load of 12.96 MW and an annual energy consumption of 68.87 GWh. The daily load curve profile for one full year is approximated using a typical Indonesian residential load curve, with the peak load occurring in the evening between 18:00–19:00, and a load factor of 60.6% for Kundur Island. It should be noted that this load factor is also derived from interpolation of the Riau Archipelago forecast data accessed through the 2021–2030 RUPTL.

In 2030, the planned generation capacity on Kundur Island consists of: 8 MW of solar PV (PLTS), 4.9 MW of biomass power plant (PLTBm), and 16 MW of diesel power plant (PLTD). These figures are approximations based on the Generation Expansion Plan (GEP) for the Riau Archipelago in the 2021–2030 RUPTL, which indicates that the development of distributed solar PV will begin in 2025, with additional biomass and solar capacity to be developed starting in 2029. To supply electricity to Singapore, a 500 MWp solar PV plant is proposed to be built in the western part of Kundur Island, requiring a total land area of approximately 432.5 hectares. The selection of solar PV as the main supply source considers Singapore’s commitment to Net Zero Emission energy targets. Although the intermittency and variability of renewables need further technical study, the decision to connect the Sumatra Grid with the isolated grid of Kundur Island and subsequently export electricity to Singapore is considered justifiable by the author.

For a rough estimation of interconnection distances, it is assumed that there are four main landing points: starting from Sumatra through the 500 kV Perawang substation in Riau, then to the Soengailakar landing point in Sumatra, and subsequently to the Kundur landing point. The interconnection distance from Sumatra to Kundur Island is approximately 204 km. Meanwhile, the distance from Kundur Island to Singapore is around 75 km. An HVDC technology with a voltage level of 320 kV and a transfer capacity of 500 MW is selected, considering the interconnection distance and the required active power delivery. More specifically, although this decision requires further study, the VSC (Voltage Source Converter) HVDC technology is chosen to allow more flexible operation and to support weak infeed conditions on Kundur Island. Financial data related to interconnection technology will be based on this assumption.

The financial assumptions for the planned energy infrastructure include a 500 MWp solar PV plant with a total CAPEX of USD 480 million and an OPEX of 0.78% per year (relative to the investment). Diesel and biomass power plants are also considered for local electricity supply. Their OPEX rates are assumed at 1.01% and 4.28%, respectively. Additionally, a 320 kV HVDC transmission line with 500 MW capacity is planned, with a CAPEX of USD 131 million and an annual OPEX of 2%. Both PV plant and interconnection system have 25 years of lifetime.

The feasibility study indicates that the planned 500 MWp solar PV plant on Kundur Island could generate approximately 680.70 GWh of electricity per year. This energy would be fully exported to Singapore via a subsea cable of around 275 km, with additional interconnection to the Sumatra power grid to enhance system flexibility. The total estimated project investment amounts to 611 million USD, covering the construction of the solar PV plant, local grid infrastructure, as well as the subsea cable and HVDC conversion systems. Assuming an export electricity price of 150 USD/MWh, the project is expected to achieve a payback period of 8 years, have an internal rate of return of 11%, and generate a net present value of 209 million USD over its operational lifetime with 7% discount rate. These findings suggest that the Kundur Island solar project is not only technically feasible, but also financially and strategically promising in supporting cross-border clean energy integration.