Singapore-based developer Sunseap has inked a memorandum of understanding (MOU) with the government of the Indonesian island of Batam to develop a $2bn gigascale array floating solar array with built-in energy storage on a giant water reservoir.

Spread over an area of some 1,600 hectares on top of the Duriangkang Resevoir – formerly a saltwater bay, now supplying 50% of fresh water to the island, the 2.2GW PV project, which will be wired into a giant 4,000MWh energy storage system, is expected to generate more than 2,600GWh of clean electricity a year, offsetting 1.8 million tonnes of CO2 at the same time.

Frank Phuan CEO of Sunseap, said: “This hyperscale project is a significant milestone for Sunseap coming soon after we had completed Singapore's first offshore floating solar farm along the Straits of Johor.

“We believe that floating solar systems will go a long way to address the land constraints that urbanised parts of Southeast Asia face in tapping renewable energy.”

Muhammad Rudi, chairman of BP Batam, which governs the island located in an archipelago between the Strait of Malacca and Singapore, said: “This investment by Sunseap will be a timely boost for Batam's industries as they seek to reduce the carbon footprint of their operations. At the same time, it will create jobs and transfer skills to Batam’s clean energy sector.”

The floating solar array installed on top of Duriangkang Reservoir, the largest in Batam, will help slow evaporation, retaining higher volumes within the reservoir, while the water will also help cool the PV panels, improving efficiency and power output.

Construction of the project, to be financed through a mix of bank loans and BP Batam’s “internal resources”, is slated to start in 2022 and be complete in 2024.

The US Department of Energy’s National Renewable Energy Laboratory (NREL) published a study that said wiring in floating solar arrays to existing hydropower reservoirs around the world could change the face of the global energy system by meeting nearly 50% of total electricity demand.

The researchers estimated that as much as 7.6TW of power could be produced from water-top PV. This works out to about 10,600TWh of potential annual generation – even before output from the hydro plants – compared to worldwide electricity consumption which, according to International Energy Agency 2018 figures cited by NREL, was just over 22,300TWh.

Fitch Solutions forecasts growing levels of government support and investor appetite for floating PV will help drive almost 10GW of new deployment by 2025.