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RI businesses call for change in PLN’s dominance to hit renewable target
Analysts believe the current investment climate for renewable energy is unhealthy due to PLN's monopoly.
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Clean energy: A solar power plant is surrounded by rice fields in Sengkol village, Central Lombok regency, West Nusa Tenggara, on March 5. Government data show that renewable energy contributed 11.5 percent to the energy mix last year, up from 11.2 percent in 2020. (Antara/Ahmad Subaidi)
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ocal private companies have called for a change in the country's electricity management, which is currently dominated by state-owned power monopoly PLN, following concerns from businesses that the state-run firm’s dominance hampers renewable energy development in Indonesia.
The government has set a target that renewable energy must contribute at least 23 percent to the country’s total energy mix by 2025.
However, the realization has been slow, with the country’s renewable energy mix last year only making up around 12.3 percent, according to Energy and Mineral Resources Ministry data.
Since 2019, Indonesia’s renewable-energy capacity only grew by around 2 gigawatts (GW), which is roughly only a quarter of the amount the country should add to achieve its 2025 energy mix target, Institute for Essential Services and Reform (IESR) data show.
Outgoing Indonesian Employers Association (Apindo) chairman Hariyadi Sukamdani told reporters on Thursday that the slow progress was due to many investments in renewable energy not being commercially feasible, with PLN as the sole off-taker of electricity being one of the main factors in this.
Several pushes from businesses have met obstacles he said, with one being that the country’s current electricity supply, which was mostly generated by coal-fired power plants, exceeded demand.
The government has also set a maximum limit for electricity tariffs, which further contributes to the challenges, he said.
