JAKARTA, KOMPAS – The government target to increase the proportion of new and renewable energy sources by 2025 to 23 percent of the national energy mix may be difficult to meet. This 23 percent is equal to 45,000 megawatts (MW), while the current installed capacity of renewable energy plants is only about 7,500 MW.
The executive director of the Institute for Essential Services Reform, Fabby Tumiwa, said that growth in the use of renewable energy in the country was relatively low. He believed that the government target to increase the renewable energy share would be difficult to meet.
So far,60 total contracts have been signed to sell electricity from renewable energy plants to state-owned electricity company PLN, but not all of them can be fulfilled.
"It\'s hard to reach the 23 percent target. Although many sales and purchase contracts have been signed, not all of them can be realized. It depends heavily on funding from banks,” Fabby said in Jakarta on Tuesday.
In terms of financing, data from the Energy and Mineral Resources Ministry shows that the development of renewable energy plants would require Rp 1.44 quadrillion up to 2030. The production of non-electrical renewable energy, such as biofuels, would require about Rp 84 trillion. The required funding has been adjusted to reflect the 2030reduction target for greenhouse gases.
Energy and Mineral Resources Minister Ignatius Jonan said at last week’s2017 Convention and Exhibition of New Energy, Renewable Energy and Energy Conservation in Jakarta that it would do its utmost to achieve the 2025energy mix target. The government will also ensure that electricity from renewable energy sources will be affordable. "If asked whether we can [reach the target of 23 percent]? No one would dare guarantee it. However, to be fair, we will try our best, and for an affordable price," he said.
The chairman of the Association of Hydro Power Plant Developers, Riza Husni, said that one of the main constraints for investors in the development of small-scale renewable energy plants – that is, below 10 MW – was legal uncertainty. The energy ministry has twice revised regulations on the use of renewable energy sources for generating electricity.
Political support
Meanwhile, the head of the Center for Energy Studies at Yogyakarta’s Gadjah Mada University, Deendarlianto, said that the development of renewable energy also needed political support from the House of Representatives (DPR). For example, the House should back the establishment of the petroleum fund, to be set aside from oil and gas production revenues. The fund is to be used for research as well as the development of renewable energy and its infrastructure development.
"The petroleum fund can be included in the revision to the Oil and Gas Law," said Deendarlianto.
Previously, the government had proposed allocating a Rp 1.1 trillion subsidy for the development of new renewable energy in the draft of the 2017 state budget. However, the proposal was rejected by the House’s budgetary committee.
House budgetary committee vice chairman Said Abdullah, representing the PDI-P, stated that the House was aware that developing new renewable energy was highly important. However, the budgetary committee rejected the proposed subsidy.
"A subsidy scheme is not appropriate for the development of new renewable energy. Subsidies are intended to assist poor people or families. However, in the case of the proposed subsidy for new and renewable energy, the subsidy is for an industry," he said.
Regional development
In some areas, the development of renewable energy has brought a number of benefits. In Sidenreng Rappang regency, South Sulawesi, the location intended for building a 75 MW wind power plant (PLTB) has become a tourist destination.
The 100-hecatare area in Mattiro Tasi village, Watang Pulu subdistrict, which has a view of the mountains, the sea and 30 wind turbines, has become a major tourist destination in South Sulawesi.
"Since the beginning, we spoke to investors that the area would be developed into a tourist destination to be managed by the local government," Sidenreng Rappang Regent Rusdi Masse said last week.
In Surabaya, East Java, the local government uses waste to run a 2 MW biomass power plant that was developed by PT Sumber Organik. Every day, 1,500-1,600 tons of waste is delivered to the 37-hectare Benowo dump.
According to the plan, the capacity of the power plant will be increased from its present capacity of 2 MW to 11 MW by 2019. PT Sumber Organik sells 1.65 MW to PLN, while the rest is used for running the Benowo dump.