Indonesia Prepares Regulation on Renewable Energy Pricing
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2 August 2020 18:00 WIB
TEMPO.CO, Jakarta - The Indonesian Government is preparing a presidential regulation on renewable energy pricing, in a bid to gain investors' trust in the clean energy sector.
Director General of Renewable Energy and Energy Conservation (EBTKE) of the Energy and Mineral Resources Ministry Fx Sutijastoto said in a statement here on Sunday that the draft of the regulation has been fully supported by business operators in the sector.
"We design this (draft on the presidential regulation) along with businessmen. We communicate and conduct project benchmarking. This is expected to facilitate financing for their businesses," Sutijastoto said.
The draft regulation, he added, is expected to complete before year end.
According to Sutijastoto, the current ministerial regulation has yet to successfully stimulate the signing of new contracts in renewable energy projects.
"Therefore, to establish a competitive climate, the renewable energy price will be regulated under the presidential regulation. This is important," he said.
The development of renewable energy has become a challenge for the country with the high purchasing price of the energy has made it uncompetitive.
He took the example of solar energy price in Indonesia that has reached US$1 per watt peak (Wp), while the price in China has reached as low as $20-30 cent per Wp with production capacity of 500 MW to 1,000 MW.
"Hopefully with the presidential regulation, our market can develop further," he continued.
The development of renewable energy will bring many benefit for the nation, including the production of clean energy, affordable electricity price, and increase national as well as regional investment, Sutijastoto said.
It will also boost the growth of industry and domestic economy, encourage the emergence of new businessmen, and improve national energy resilience.
"The source of energy is abundant in this country, so that we can escape the trade balance trap," he said.
Meanwhile the ministry's Director of Various Energy Harris said the regulation will only set three prices namely feed-in tariff, ceiling price, and negotiated price.
The government would need the support from all stakeholders to synchronize the implementation of the policies, he said.
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