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Administrative problems impede growth in Indonesia's energy sector
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Energy duo: Energy and Mineral Resources Minister Ignasius Jonan (left) and deputy Arcandra Tahar prepare for a hearing with lawmakers on Nov. 22. (Antara/Agung Rajasa)
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takeholders in Indonesia’s energy sector have to spend too much time dealing with administrative problems, preventing them from allocating enough resources to create innovations that could improve the industry, an official has said.
Deputy energy and mineral resources minister Arcandra Tahar said that for players in all energy sectors, including electricity, mining, renewable energy and oil and gas, administrative issues were the root causes that reduced their productivity.
“In the electricity field, for instance, we are still discussing about the [business] relationship between independent power producers [IPPs] and PLN,” he said, referring to the government’s ambitious 35,000 megawatt electricity-procurement program, in which the IPPs will handle the construction of power plants with a total generating capacity of 25,000 MW and PLN handling the remaining 10,000 MW.
Similarly, in the mining sector, the country has spent a lot of time on the revision of the 2001 Oil and Gas Law; while in the renewable energy field, a prolonged discussion was being held to settle the feed-in tariff mechanism, Arcandra said.
“We still haven’t talked about what kind of technology is suitable to solve our problems [in the energy and mineral sector],” he added.
Arcandra said that Indonesia should learn from Peru, a small country in South America, which successfully introduced a new technological development in oil offshore drilling, called buoyant tower, in less than 20 months.
“The technology in Peru could also be installed in Indonesia, but it would take about five years because of administrative problems,” he said. (win/hwa)
