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Renewable energy firms demand direct access to consumers
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A worker cleans solar panels that generate electricity for a gas refueling station in the Teras area of Boyolali, Central Java, on Oct. 26, 2022. (Antara/Aloysuis Jarot Nugroho)
T
he government’s recent move to prevent renewable energy firms from selling electricity directly to end consumers is facing criticism from independent power producers (IPPs), who say the policy will deter investment in clean energy and keep the country’s emissions goals out of reach.
Direct sales would involve a process called “power wheeling”, but the government has removed provisions for such a policy from the most recent draft of the new and renewable energy bill, citing fears that it would increase the need for subsidies and create an uneven playing field for IPPs.
Another government concern is the current oversupply of power production capacity, which has been attributed to a miscalculation of future energy demand and hence excessive plant development. The glut poses a risk to state-owned electricity firm PLN’s finances.
“By excluding power wheeling from the bill, what they’re doing is limiting any form of investment in Indonesia’s renewable energy producers,” Fabby Tumiwa, chairman and founder of the Indonesia Solar Energy Association, told The Jakarta Post on Tuesday.
Read also: Explainer: Regulatory paradox hampers Indonesia's green energy bill
The government removed the articles on power wheeling from the bill in November 2022. Power wheeling would let renewable energy IPPs sell electricity to distant end consumers through PLN’s electricity grid.
Current rules require electricity produced by IPPs to be sold to PLN for distribution under the state-run monopoly, which involves terms that can limit the economic viability of clean energy projects.
