Indonesian government pushing ahead with reforms to jump-start renewable energy transition

first_imgIndonesian government pushing ahead with reforms to jump-start renewable energy transition FacebookTwitterLinkedInEmailPrint分享The Jakarta Post:The government aims to jump-start stalled renewable energy projects through a recently issued regulation as it races against time to catch up with Indonesia’s green energy commitments.The Energy and Mineral Resources Ministry issued last month a regulation that scraps the unpopular build, own, operate, transfer (BOOT) scheme. Many renewable energy players have said the scheme undermined their projects’ bankability. The new regulation also enables Indonesia’s sole off taker, state-owned PLN, to sign power purchase agreements without conducting a bid under certain conditions.The ministry’s various renewables director, Harris Yahya, told The Jakarta Post on Wednesday that these “few changes” were meant to get stalled renewable projects going before a more powerful presidential regulation (Perpres) on renewable electricity pricing – slated to be issued this year – put new projects on the table.The government is aiming for renewables to contribute 23 percent of power production by 2025, yet regulatory headwinds are setting the country back from achieving its goal. Regulation stipulates that Indonesia should have reached a 17.5 percent renewable power mix by 2019 yet the country only hit 12.36 percent that year.Among the frequently complained headwinds is Ministerial Regulation No. 50/2017 – dubbed “Permen 50.” This was the regulation that introduced the BOOT scheme and erased a feed-in-tariff pricing policy, which is widely considered to be a very effective means of boosting green energy growth. As a result, out of 75 renewable energy projects signed between 2017 and 2018 in Indonesia, 27 remain without financial close and five have been terminated as of October last year, according to records from the Jakarta-based energy think tank Institute for Essential Services Reform (IESR).The new regulation also introduces guarantees for government-backed renewable plants “in improving their economics.” The regulation authorizes the energy minister to order state-owned power firm PLN to buy electricity from hydropower plants attached to government-built reservoirs from state-funded waste-to-energy power plants and from state-funded renewable energy power plants.[Norman Harsono]More: Government issues regulation to jumpstart stalled renewable energy projectslast_img

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