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Greater political will critical for progress on renewable energy: Experts
An uncertain investment climate and a lack of political commitment might hamper clean energy development in Indonesia next year, a think tank warns.
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Solar panels are installed on land controlled by Pertamina near the oil and gas company’s refinery in Cilacap, Central Java, in this undated photograph. (Courtesy of Pertamina)
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ncertainty about the investment climate and a lack of political commitment might hamper renewable energy development in Indonesia next year, a think tank has warned.
The Institute for Essential Services Reform (IESR) notes in its report Indonesia Energy Transition Outlook 2022 that the current policy and regulatory framework does not reflect a strong commitment to decarbonization in the energy sector.
“This year shows improving political commitment but it has not yet translated into implementation and improvement of key energy policy documents that guide sector planning [and] development,” the IESR said in the report, which showed that the level of political will in Indonesia remained “low” in 2021.
The IESR went on to say that current energy policies had yet to provide a sense of security for developers to invest in new and renewable energy (NRE).
As a result, NRE investment had missed the target set for this year, the report claimed. Specifically, Energy and Mineral Resources Ministerial Regulation No. 10/2017 on the utilization of renewable energy sources for power generation and Regulation No. 50/2017 on NRE utilization for electricity generation render NRE projects unbankable, according to the report.
“The government needs to focus on improving the quality of regulations to increase investment attractiveness and reduce licensing barriers,” IESR executive director Fabby Tumiwa said at the launch of the report on Tuesday.
Read also: Painstakingly slow progress on renewable energy infrastructure
