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Clean energy sector takes regulatory battle to coordinating minister level
The Office of the Coordinating Economic Minister is expected to take over industry consultation and will review existing regulations issued by the Energy and Mineral Resources Ministry and the Industry Ministry, said Indonesia Solar Energy Association (AESI) chairman Andhika Prastawa.
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Powered by the sun: Students and teachers take a look at a solar farm at SMP 9 state junior high school in Jakarta. The school is one of the few that use the renewable source of energy in the capital city. (The Jakarta Post/Ricky Yudhistira)
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ocal solar energy players are taking their fight against four regulations they consider unfriendly to the clean energy sector to the coordinating minister level.
The Office of the Coordinating Economic Minister is expected to take over industry consultation and will review existing regulations issued by the Energy and Mineral Resources Ministry and the Industry Ministry, said Indonesia Solar Energy Association (AESI) chairman Andhika Prastawa.
Certain policies issued by the energy ministry are considered burdensome to businesses; such as the cap on the selling price of renewable energy at 85 percent of the national electricity supply cost (BPP). Furthermore, the “build, own, operate and transfer” (BOOT) mechanism that underpins the policies mandates that electricity assets be handed over to state electricity firm PLN after 30 years of operation. Also, electricity from solar panel is priced lower, or 65 percent of PLN price according to the regulation.
The contested regulations include energy and mineral resources ministerial regulations No. 50/2017 on renewable energy for electricity and No. 49/2018 on the use of rooftop solar panels by PLN customers. Industry ministerial regulations No. 4/2017 and No. 5/2017 are also considered not business friendly because they, in short, mandate a 60 percent local content requirement (TKDN) for government approval of state-funded projects.
“Because our reports have yet to be responded to comprehensively by the two ministers, they will be brought to a meeting with the Office of the Coordinating Economic Affairs Minister,” Andhika said Tuesday. “The meeting is likely to be held next week, but we still don’t know for sure.”
Opposition to the regulations comes amid a lack of clean energy development in Indonesia, with clean energy contributing less than 10 percent to the national energy mix as of December last year, despite a target of 23 percent by 2025.
The Committee for Acceleration of Priority Infrastructure Delivery (KPPIP), a government committee that reports directly to the President formed to speed up priority projects, confirmed the plan to take the industry group’s reports to a higher level of government.
