The Jakarta Post
State-owned electricity company PLN will delay some of its plans to develop coal-fired power plants and turn to renewable energy sources in a bid to comply with the government's energy policies.
Initially, in its strategic plan on electricity production the company outlined that it would build 42 gigawatt (GW) coal-fired power plants within the 2016-2025 period.
But, ultimately the PLN revised its plans and will develop 34 GW instead.
'The development of some of the power plants has been delayed and we will replace them with power plants using renewable energy sources. We prioritize renewable power plants because we have to comply with the government's target,' said Amin Subekti, PLN director for regional business for East Java and Bali, on the sidelines of a seminar hosted by the Centre for Strategic and International Studies on 'Optimizing Indonesia's energy resources using digital technology'.
The government is targeting the utilization of renewable energy sources to reach 23 percent of the total power generation capacity by 2025.
Currently, most of power plants in Indonesia are fueled with coal or other fossil fuel. By the end of 2015, the renewable energy utilization only stood at about 8 percent of the total 55,000 megawatt capacity.
Aside from delaying coal-fired power plants, PLN is proposing to increase the country's total electrical capacity during the 2016-2025 period. Initially, the company planned to build 70 GW, but now it has revised its target to 78 GW. It means that there will be additional non-coal power plants with a combined capacity of 16 GW to be developed.
During the seminar, Amin presented data that showed a breakdown of the additional power plant projects. There are 4 GW gas-fired plants, 1 GW geothermal power plants and 5 GW hydro-power plants. Another 8 GW in new capacity are expected from other renewable sources, such as wind-power plants, photovoltaic, biomass power plant and nuclear power plants.
'Indeed the investment will be larger compared to previous strategic plans because development of power plants using renewable sources is more expensive,' Amin said.
He, however, declined to detail the investment estimates.
Indonesia has abundant renewable energy resources, which include approximately 28 GW of geothermal and 75 GW of hydropower potential.
However, costly investment, environmental issues and an expensive selling price has hindered the projects.
Development of the country's renewable energy sector for the next 10 years is estimated to cost Rp 260 trillion (US$19.6 billion), said Energy and Mineral Resources Minister Sudirman Said.
However, Said added, the amount of money was still far lower when compared to the Rp 2,600 trillion of fossil-based fuel subsidies spent in the last 10 years.
'We need to work hard to develop renewable energy including by making it high-scale development, which will raise the economics of the projects and by introducing supporting regulations and tariffs,' said the minister.
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