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Jakarta Post

Indonesia to mend contract scheme to boost green energy projects

  • Norman Harsono

    The Jakarta Post

PREMIUM
Jakarta   /   Thu, February 6, 2020   /  04:09 pm
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Environmentally friendly: The Dieng geothermal power plant in Central Java is one of the main sources of renewable energy in Indonesia. The government plans to introduce a feed-in-tariff pricing scheme to boost investment in the green energy sector.(Tempo/Aris Andrianto)

Renewable energy players are warmly welcoming two proposed changes in a regulation heralded as game changers for the green energy sector. Such players cheered when a government official announced the proposed changes in a discussion in Jakarta on Wednesday, which include the introduction of a feed-in-tariff (FIT) pricing policy and the decompulsorization of the build-own-operate-transfer (BOOT) contract scheme. The former guarantees fixed electricity rates for small renewable power plants and thus it ensures certainty of financial returns. The second proposal eliminates a scheme deemed harmful for the bankability of a renewable project. “There will be a FIT scheme. It assures steady prices,” said the Energy and Mineral Resources Ministry's electrification director general, Rida Mulyana, at the discussion, “Second: BOOT schemes will no longer be compulsory.&...