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RI renewable energy investment lowest in years amid transition push
Indonesia is expected to see lowest investment in renewable energy projects in the last six years amid unaddressed structural and financial barriers in the sector.
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Officials clean the surface of solar panels installed on top of the Gedhe Market on Dec. 6, 2023, in Klaten regency, Central Java. The rooftop solar panels on the traditional market have a capacity of 207 kilowatt-peak (kWp) and are claimed to reduce the on-grid electricity usage by 40 percent. (Antara/Aloysius Jarot Nugroho)
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ndonesia is expected to see the lowest investment realization in renewable energy projects in six years, despite the country’s aim to decarbonize its electricity sector, which experts suggest it is partly because of a lack of discussion to resolve structural and financial barriers in the sector.
Indonesia has only attracted US$1.17 billion in new and renewable energy investment as of November, just 65 percent of the $1.8 billion target set for this year, according to Energy and Mineral Resources Ministry data.
The desired figure is projected to remain unattainable until the end of this year despite the government slashing the target from last year’s $3.91 billion, which it also fell short of achieving after realizing only 40 percent of the total.
Fabby Tumiwa, the executive director of the Institute for Essential Services and Reform (IESR), said that this year’s figure would be the lowest since 2017, partly because of a lack of renewable energy projects auctioned in the last two years, while deployment has seen contraction as far back as 2020.
“Rising interest rates in the past year have led projects to face reevaluation for their feasibility even though they have reached a power purchase agreement (PPA),” Fabby said on Wednesday.
Fabby projects the country would only add 0.97 gigawatts (GW) of renewable energy capacity out of the targeted 3.4 GW until the end of this year, putting Indonesia at risk of missing its peak emission target because of stagnant decarbonization of the power sector.
