Price, Policy Hamper Renewable Energy Development: Kadin

TEMPO.CO, Jakarta - Halim Kalla, deputy for renewable energy of the Indonesian Chamber of Commerce and Industry (Kadin), names two issues hampering new renewable energy development. “Price and policy,” he told Tempo yesterday.

According to Halim, the government could still change current selling price for electricity generated by new renewable energy sources at 15-18 US cents per kilowatt-hour (kWh). Halim said that the tariffs are fair. However, Energy and Mineral Resources Minister Ignasius Jonan had planned to rethink the feed-in tariff policy.

Jonan pointed to low prices of electricity generated from renewable energy in the United Arab Emirates at 2.25-2.99 US cents per kWh.

Halim said that the comparison was not exact. He said that the United Arab Emirates is able to produce electricity at such a low price since the cost to build power plants is also low.

Conversely, Indonesia faces infrastructure problem in several regions. He pointed to poor access to remote areas. Moreover, the government has yet to give reassurance on land procurement.

Halim added that the government needs to provide subsidies to enable profitability for businesses and the government itself. He is confident that electricity prices will decline over time. “Renewable energy is still in its infancy. Prices will go down as it matures.”

VINDRY FLORENTIN