Energy transition hampered by lack of renewable energy investment in early 2024

Jakarta – Indonesia’s renewable energy transition appears to be hampered in early 2024, with the realization of new renewable energy (NRE) investment projected to remain quiet, according to the Ministry of Energy and Mineral Resources (EMR).

EMR Ministry data until November 2023 shows that investment realisation in new, renewable energy and energy conservation (NRE-EC) has only reached USD 1.17 billion, or 64.49 per cent of the USD 1.8 billion targets. Although there is no official data until the first quarter of 2024, several factors caused the realization of NRE investment to remain low at the beginning of this year, including the implementation of the general election and the absence of renewable energy plant auctions by PLN.

Director General of New Renewable Energy and Conservation (DG NRE-EC) Eniya Listiani Dewi stated that official figures are not yet available, and her office is still waiting for further data after the Lebaran celebration.

Meanwhile, the Institute for Essential Services Reform (IESR) estimates that renewable energy investment this year will be higher than in 2023. However, IESR Executive Director Fabby Tumiwa expressed uncertainty about achieving the USD 2.6 billion NRE investment target the Ministry of Energy and Mineral Resources set.

“Developments until the first quarter of 2024 still do not show any realization of investment in large renewable energy projects from PLN, nor has there been a renewable energy plant auction realized this year,” he said in a written statement.

Surya Darma, chairman of the Indonesia Center for Renewable Energy Studies (ICRES), revealed that renewable energy investment is experiencing substantial challenges due to misaligned policies and unequal business treatment of fossil energy. He says, “These challenges are further exacerbated by policies that do not support renewable energy development.”

Surya also highlighted concerns over the government’s reduction of the renewable energy target from 23 per cent to 17 to 19 per cent, which shows a lack of seriousness in efforts to achieve the new renewable energy target.

With this condition, the prospect of renewable energy investment this year is still filled with uncertainty. Clear and supportive policies and attractive regulations are needed to encourage the growth of renewable energy in Indonesia. (Hartatik)

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