Jakarta – In 2023, Indonesia’s realisation of new and renewable energy (NRE) has only reached 13.1% of the ambitious target of 17.9% to reach 23% emission reduction by 2025, according to the Minister of Energy and Mineral Resources (EMR), Arifin Tasrif when presenting the achievements of the EMR sector in 2023 and the work program for 2024.
Meanwhile, the Institute for Essential Services Reform (IESR) criticised the achievement in contrast to the increase in fossil energy production and utilisation. Systemic factors, such as delays in the auction of renewable energy plants by PLN since 2019, project execution constraints, rising financial interest rates, and the impact of the COVID-19 pandemic, were identified as the causes of the low achievement of targets.
“Several key projects, such as Batang Toru Hydroelectric Power Plant, Baturaden Geothermal Power Plant, and Rajabasa Geothermal Power Plant, were reportedly delayed in their completion, contributing to the low achievement of the renewable energy mix in 2023,” said IESR Executive Director Fabby Tumiwa in a written statement.
Furthermore, he highlighted regulatory barriers, such as the late revision of EMR Ministerial regulation No. 26/2021, which hampered the implementation of rooftop solar power plants. The government plans to pursue the development of large-scale renewable energy plants, including floating solar power plants and wind farms.
A rooftop PV roadmap has also been prepared with a target of 900 MW in 2023 and 1800 MW in 2024. However, according to Tumiwa, the unfinished rooftop PV regulation has caused rooftop PV adoption to drop in the residential and business sectors by 20% and 6%, respectively. As a result, based on IESR’s analysis, as of the second quarter of 2023, the cumulative installed capacity of rooftop PV only reached 100 MW, far below the target of 900 MW by 2023.
Tumiwa noted that the government has two years to achieve the target and suggested accelerating project execution, auctioning large-scale plants, and simplifying the negotiation of Power Purchase Agreements. In terms of investment, he said, of the USD 1.8 billion target, only USD 1.5 billion was achieved. By 2024, the government targets USD 2.6 billion, which is still far from the renewable energy funding needs of USD 25 billion annually until 2030.
IESR proposes an evaluation of the structural issues that led to the non-achievement of the investment target. IESR also highlights the need to reduce emission intensity in the power sector, including early retirement options for PLN’s over 30-year-old power plants by 2025. (Hartatik)
