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Indonesia likely to miss renewable energy target – again
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Powerful roofs: Solar panel modules are showcased at the Renewable Energy and Energy Conservation Conference and Exhibition at the Jakarta Convention Center. Solar panels require little maintenance and can last for more than 25 years. (The Jakarta Post/-)
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ndonesia is set to miss its renewable energy target again this year, but investors are optimistic about the future with a potentially game-changing regulation in the pipeline.
The Energy and Mineral Resources Ministry aims to boost Indonesia’s power production capacity to 74,800 megawatts this year, with only 14.5 percent to come from renewables rather than the 19.4 percent stipulated in the National General Energy Planning road map.
Against the backdrop of such underperformance, President Joko “Jokowi” Widodo is expected to reintroduce this year a fiscal incentive to boost renewables growth, namely a feed-in-tariff (FIT) scheme.
Indonesia has introduced at least two FIT schemes in the past, each eliciting a positive response from investors, but both were later cancelled because the country’s largest utility company, state-owned PLN, was considered financially unable to bear the incentive.
“2020 is the year of recovering investor confidence after three years of almost no progress in many projects,” said energy analyst Fabby Tumiwa of the Institute for Essential Services Reform (IESR), “and investors are at the end of their patience.”
Southeast Asia’s largest economy is chasing an ambitious target of adding 50,000 MW of new power plants between 2019 and 2028 to fuel economic growth. However, in achieving the target, the government is prioritizing fossil fuel power plants, particularly coal plants, at the expense of its renewable energy promise.
Last year alone, Indonesia added 10 new coal-fired power plants with a combined capacity of 3,017 MW – eight times more than the total 376 MW in renewable energy capacity installed in the same year.
