Clean energy investment hampered by revocation of electricity local component rule

Jakarta—According to Industry Minister Agus Gumiwang Kartasasmita, revoking the Domestic Component Level (TKDN) rule in the electricity sector is hampering investment in new renewable energy (NRE) projects. To address this, the government is taking relaxation steps to attract investment into the clean energy sector.

“After further consideration, we will revoke Permenperin 54/2012,” Agus Gumiwang wrote in an official letter signed on May 13, 2024, addressed to the Coordinating Minister for Maritime Affairs and Investment.

According to him, one of the main reasons for revoking this regulation is to enable more efficient electricity infrastructure development in accordance with the ministry’s authority to handle energy affairs.

However, polemics related to the TKDN requirement have previously stalled some foreign investments, especially in constructing solar power plants (PLTS). Director General of New Renewable Energy and Energy Conservation (EBTKE) Eniya Listiani Dewi stated that an investment of IDR 49 trillion in solar power plants was hampered from entering Indonesia due to strict TKDN requirements.

“Many things are hampered because all investments must include TKDN elements,” she said.

The government and Commission VII of the House of Representatives have agreed to provide relaxation in installing solar power plants, especially if local components cannot meet the needs. However, the relaxation will be granted through an application process to the Ministry of Industry and coordination with the Coordinating Ministry for Maritime Affairs and Investment (Kemenko Marves), the national team of the Domestic Product Usage Improvement (P3DN) program.

These relaxation measures are expected to open wider doors for NRE investment in Indonesia while accelerating the transition to cleaner and environmentally friendly energy sources. (Hartatik)

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