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Industry Ministry to ease local content rule on renewable projects
Indonesia hopes revoking a ministerial regulation could encourage investment in renewable energy projects.
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Workers check solar panels at the Tirtonadi Terminal in Surakarta, Central Java, for a Transportation Ministry project capable of producing 500,000 watts of electricity to power operations of the terminal, in this undated photo. (JP/Ganug Nugroho Adi)
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ndonesia is attempting to ease local content requirements to spur investment in renewable energy infrastructure, but observers say there is more to be done in addition to revoking a single ministerial regulation.
The Industry Ministry said it will revoke the Industry Ministerial Regulation No. 54/2012 on guidelines for using domestic products for electricity infrastructure development, according to a ministry letter to the Office of the Coordinating Maritime Affairs Minister on May 13.
The ministerial regulation stipulates that all electricity for public consumption infrastructure must use domestically produced goods and services with an exemption allowing the import of goods if domestic production is not possible, cannot meet the technical requirements or cannot meet demand.
The Industry Ministry did not immediately respond to The Jakarta Post’s request for comment. The letter also did not specify when the ministry would officially revoke the regulation.
Eniya Listiani Dewi, renewables director general at the Energy and Mineral Resources Ministry, explained that revoking the regulation would mean the stipulation on local content would refer to Government Regulation No. 29/2018 on industrial empowerment, which pegs local content obligations for renewables at a 25 percent minimum.
Initially, under Industry Ministerial Regulation No. 54/2012, solar power projects needed to have at least 40 percent local content, hydro power plants at least 50 percent and geothermal at least 30 percent.
“The most current investment [coming into Indonesia] is floating PV [photovoltaic]. There are two projects for floating PV, then there are three projects for geothermal,” she told the Post on Wednesday.
