Govt to Issue New Regulations on Renewables Electricity Tariffs
MINISTRY OF ENERGY AND MINERAL RESOURCES
REPUBLIC OF INDONESIA
PRESS RELEASE
NUMBER: 274.Pers/04/SJI/2020
Date: 14 September 2020
Govt to Issue New Regulations on Renewables Electricity Tariffs
The utilization of new, renewable energy in Indonesia will be increased. The key to increasing new, renewable energy utilization according to Minister of Energy and Mineral Resources (EMR) Arifin Tasrif is more competitive electricity tariffs that guarantee high return on investment.
"New, renewable energy has its own attraction, but on the other hand, the production cost of this energy is high. For this reason, we're currently preparing new regulations on electricity tariffs that potential investors will find more attractive," said Minister Tasrif on Metro TV's Prime Talk program titled Pandemic Plays Offense, Energy Plays Defense aired on Monday (14/9).
Minister Tasrif said that the utilization of renewables sources is very low compared to existing potentials.
"We have renewable energy potentials with a total of 417.8 Giga Watt, but how many percent that have been utilized? Only a tiny 2.5% of the total potential. We have geothermal resources, sunlight, biomass, hydropower resources--none of these has been optimized. Therefore, renewables utilization must gradually be promoted," said Minister Tasrif.
Currently, the challenge of renewables utilization lies in unattractive electricity tariffs: although renewables offer huge potential, corporations are not willing to invest. Therefore, the government will soon issue new regulations offering better electricity tariffs to attract investment in renewables.
"The current issue is tariff. If we can solve the tariff issue, renewables projects will run and investors get a guarantee of their return on investment. Renewables utilization is a key factor for Indonesia today and in the future because it will reduce the use of fossil energy--although we can't completely remove fossil fuels," continued the Minister.
Minister Tasrif estimated the legal drafting of renewables energy tariffs will be complete soon or at least this year. "We hope to complete the renewables electricity tariffs this year. The draft has also been discussed with business actors in renewables subsector. The government has also made a number of initiatives, for example, in geothermal energy, the exploration risks are borne by the government to reduce investors' risks," Minister Tasrif concluded.
As publicly known, the Indonesian people have high hopes for the use of renewables as energy source. The government has targeted 23% of national energy mix from new, renewable energy by 2025. The target is set out in the National Energy Policy (KEN).
The 23% renewables mix policy has been implemented in the National Electricity Master Plan (RUKN) of 2019-2038 which forms the basis for Regional Electricity Master Plan (RUKD) and Electricity Supply Business Plan of (RUPTL) of PT PLN (Persero) of 2019-2028. (IY)
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