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Govt reduces renewable energy target

The government has set a lower investment target for renewable energy this year at US$1

Stefanno Reinard Sulaiman (The Jakarta Post)
Jakarta
Fri, January 11, 2019

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Govt reduces renewable energy target

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span>The government has set a lower investment target for renewable energy this year at US$1.79 billion, down 10 percent from last year’s target of $2.01 billion.

Last year, the government failed to achieve its target, booking only 79.6 percent, or $1.6 billion. Nevertheless, the government said it was still a “good achievement”.

The Energy and Mineral Resources Ministry’s renewable energy director general, Rida Mulyana, acknowledged that the target last year was “too ambitious”.

“This year’s target is actually higher than last year’s investment realization so hopefully we can achieve it, as we have set it in accordance with ongoing projects,” he said recently. “Hence, investment in the sector isn’t stagnant because we’ve still managed to gain investors, mainly from foreign countries.”

In more detail, the investment target for 2019 comprises $1.23 billion in geothermal energy, $51 million in bioenergy, $511 million in other various new and renewable energy sources and $7 million in energy conservation.

The ministry’s director for geothermal, Ida Nuryatin, expects this year to put up for auction five working areas with a total potential capacity of 784 megawatts.

“Further, this year we’re also awaiting the commercial operation date for four geothermal power plants [PLTP] with a total capacity of 180 MW,” she said.

The four PLTPs are state energy holding company Pertamina’s 55-MW PLTP Lumut Balai in South Sumatra; the 5-MW PLTP Sokoria in East Nusa Tenggara; the 40-MW PLTP Sorik Marapi in North Sumatra and the 80-MW PLTP Muaralaboh Unit 1 in West Sumatra.

Lumut Balai and Sorik Marapi are expected to operate in March, while Sokoria will start operating no later than June. Muaralaboh will be operational by the end of the year.

The projects are among the units set to boost the installed capacity from geothermal energy from 1.9 gigawatts to 2.1 GW by the end of this year.

For other new and renewable energy sources, the ministry aims to build 21 plants, 14 of which are mini hydro power plants set to operate this year with a total capacity of around 146 MW. The unit director, Harris, explained further that the ministry was upbeat this year about finalizing the financial details of 70 power purchase agreements (PPAs), which were signed in 2017 with independent power producers.

“Only 27 PPAs have yet to find funding, but we have been facilitating these with the Bappenas’ [National Development Planning Agency] Center for Private Investment,” he said, adding foreign funding agencies were also an option.

The ministry will this year seek to draft the biodiesel policy as well as the 100 percent palm oil fuel, also known as the green fuel, plan.

This year the government has set the target for total biofuel production at 7.37 million kiloliters, 29.2 percent higher than the previous target of 5.7 million kl.

Rida explained that the government would continue to enforce the 20 percent blended biodiesel (B20) policy despite criticism over the implementation from various stakeholders.

“We are planning to conduct a road test [for vehicles] for B20 in March and we are also continuing the tests of green fuel,” the renewable energy director general said.

Previously, local energy watchdog Institute for Essential Services Reform (IESR) warned the government that 2019, an election year, would see investment in renewable energy put on the back-burner.

“Investors will halt investments in renewable energy until the outcome of the election and the subsequent policy direction of the new Cabinet in October 2019,” the IESR said in an official statement.

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