Association Expresses Concern Over Clean Energy Investment

TEMPO.CO, Jakarta - The Indonesia Bioenergy Electricity Producer Association (APLBI) predicted that investments in the biomass power plant projects will remain stagnant if the government decided to reduce feed in tariff for clean energy. The Association asserted that biomass energy business will lose its appeal compared to fossil energy if it is being sold very cheap.

"Biomass electricity producers will stop [doing business]. Because they would be powerless, unable to compete with other energy [producers]," said Jonathan Handojo, a member of APLBI Advisory Council in a discussion on renewable energy held by Tempo in cooperation with the Energy and Mineral Resources on Wednesday, December 21, 2016.

Jonathan asserted that biomass power plant developers are currently facing troubles because of a policy applied by the State Electricity Company (PLN), who refused to purchase biomass-produced electricity at US$13.5 per kilowatt hour (kWh). Jonathan explained that the price will allow developers to apply for a loan from banks.

Jonathan said that his company had developed eight biomass power plants with a capacity of 15 Megawatts (MW) since 2008. Jonathan added that he will cancel his investment on power plants in North Minahasa next year if the government decided to cut down biomass electricity subsidy. "If [reduction] happens, we will [sell] the land that we have purchased," Jonathan said.

Energy and Mineral Resources Minister Ignasius Jonan said that he is currently in the process of revising a regulation on selling price of electricity generated using new and renewable energy. Jonan argued that the initial price of US$22 per kWh was too expensive.

"All new and renewable energy must be able to compete with fossil fuel. Selling prices must be competitive," Jonan said.

DIKO OKTARA