Indonesian government continuing $55m renewable program

The Indonesian government is moving forward with plans to invest more than Rp 700 billion (US$55 million) through the Energy and Mineral Resources Ministry for the development of new renewable energy generation in remote areas.

The project tenders will call for the construction of 86 solar plants in 17 provinces, according to a report in The Jakarta Globe, alongside hydropower and wind power plants. An initial tender for contractors is set to be held between February and March, with initial plants targeted to be operational by the end of the year.

The election of president Joko Widodo last July has been accompanied with hope for the country’s nascent solar industry. According to pv magazine’s research of the archipelago, a third of the country does not have access to electricity, with around half of the population resorting to traditional biomass use for cooking.

While the 86-array project is a positive sign, Indonesian energy observers say that government programs alone won’t see solar bloom across the fast growing Southeast Asian nation.

Barry Greene is chief strategy office at data firm Niometrics. He told pv magazine that investment only from the Indonesian government is not sufficient to grow solar within the country. The key to growth, he says, is to cut through red tape and require the power companies to interconnect. Feed in tariffs would be nice, Greene reported, but not necessary.

Greene added: “This [deregulation of energy markets] frees up the distributed power investment, where each homeowner or office owner is investing in their own power investment. These lessons are not getting out to government offices. So here in Indonesia, they are using the logic from fifteen years ago – focusing on government investment in renewables.”