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‘No transition without transmission’ as RI calls donors to fund grid
Transmission projects are deemed supporting infrastructure, which means that they generate a small return on investment compared with renewable energy plants despite requiring hefty investment.
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Smoke and steam billows from the coal-fired power plant owned by Indonesia Power, next to an area for Java 9 and 10 Coal-Fired Steam Power Plant Project in Suralaya, Banten, on July 11, 2020. (Reuters/Willy Kurniawan)
T
he government has said Indonesia was unlikely to make significant progress in the energy transition unless there was sufficient funding to build transmission, urging donors to take part in less profitable projects like grids aside from the more lucrative renewable developments in the country.
Rachmat Kaimuddin, undersecretary for transportation and infrastructure at the Office of the Coordinating Maritime Affairs and Investment Minister said in an interview on July 15 that Indonesia urged international donors to set aside funding for grids, as currently most pledges were earmarked for renewable power plants only.
“Sometimes our ‘friends’ out there lack patience. They think ‘Oh Indonesia does not want [to build] renewables’. But the problem is, where are those grids?” Rachmat told The Jakarta Post.
“They say ‘I will give you money’, but its often only for the renewable plants. They don’t want to provide [funding] for the grids,” he added.
According to a draft investment plan for the Just Energy Transition Partnership (JETP), only US$0.4 billion out of $11.5 billion of public funding was earmarked for transmission and distribution. The amount could rise to $8.1 billion if Indonesia could utilize other allocations.
Meanwhile, renewable energy projects get a baseline of $1.2 billion out of the pledged funds and could rise to $9.3 billion when utilizing other allocations.
Rachmat went on to say that many renewable energy sources were located in remote areas far from the demand centers in urban areas, and connecting them required the development of new grids across the archipelago.
