Analyst: Government needs to intervene directly in energy transition process

Jakarta – Founder and Advisor of ReforMiner Institute, Pri Agung Rakhmanto, criticised the government’s lack of direct intervention in Indonesia’s energy transition process. According to him, the energy transition should be a momentum to manage national energy more independently.

However, Rakhmanto highlighted that national energy management policies need more direct investment and intervention. “The Indonesian government seems to rely too much on initiatives from businesses or investors without providing sufficient intervention,” he said.

Rakhmanto cited the budget allocation of the Ministry of Energy and Mineral Resources (EMR) in 2024, which is mainly used for community infrastructure development. However, the portion of the budget allocated for the development of new and renewable energy (NRE) is very minimal.

Of the total budget of IDR 6.8 trillion received by the Ministry of Energy and Mineral Resources, only around 34.45% or IDR 2.33 trillion is allocated for infrastructure development and natural resources. Of that amount, the portion to encourage the development of renewable energy directly can be said to be very minimal; the details are solar power generation IDR 99.54 billion (4.27%), micro-hydro plants IDR 54.46 billion (2.46%), and planning IDR 31.98 billion.

“With such a budget composition, it is not surprising that the NRE mix target of 23% by 2025 may not be achieved,” said Rakhmanto.

Furthermore, he said that energy transition funding that relies on concessionary loans will limit Indonesia’s ability to optimise energy resources according to national needs. Rakhmanto underlined the Just Energy Transition Partnership (JETP) scheme, which amounts to USD 21 billion, but most will be done through a concessionary loan mechanism.

Although the government already has sound national policy management principles, as stipulated in Government Regulation (PP) No 79/2014 on National Energy Policy, Rakhmanto said it needs consistency in its implementation without being affected by trends or circulating themes. (Hartatik)

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