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Analysis of Indonesia’s Renewable Energy Policy: Status, Barriers, & Opportunities
Abstract
Modern energy is the foundation of economic and social development. Thus, providing energy in a sustainable manner for Indonesia has always been the main priority of the government. As an archipelagic state with more than 17,000 islands and possesses abundant renewable resources, Indonesia’s energy demand is growing rapidly to support the stable economic growth. Despite the fact that reliance on fossil fuels has increased in recent years, Indonesia has begun inserting more renewable to its energy supply mix. The country aims to achieve policy target of 23% renewable energy use by 2025 and 31% by 2050.
Recent progress of renewable energy deployment is in modest level. The current policies have already provided a basis for establishing the industry, however, ensuring policy certainty and more attractive incentives for the players to develop new projects are required to reach ambitious target of stepping-up renewable energy development.
This study aims to analyze the current status of renewable energy deployment in Indonesia, to identify barriers the development in the aspects of policy and regulation, market design and technical, and proposes key insights on the opportunities to harness the potential in expanding use of renewable energy in the country to meet the target.
We would like to acknowledge the valuable contribution of Chairman Masyarakat Energi Terbarukan Indonesia (METI), Dr. Surya Darma, in preparation of this report. The financial support from Hibah Program Pengabdian Kepada Masyarakat DRPM Universitas Indonesia (No.2174/UN2.R3.1/ HKP.05.00/2017) is gratefully acknowledged.
... Simplified the licensing procedures of the central government (especially local governments) [18]. Adopt renewable energy portfolio standards to enforce the IPP's renewable energy deployment. ...
Energy is a sector that produced a particular component of the economy that is used everywhere. No production is possible without energy. On the same note, the production of energy is always needed to be concerned when planning to expand any other industries. As the energy industry is encouraged by innovation of a more environmental-friendly production, renewable energy sources had taken the eyes of the energy industry in this middle of the revolution all around the world. Replacing sources to fuel up the adequate amount of energy needed by the world with sustainable and renewable energy sources brings up significant impact to combat climate change and to ensure there is enough energy sources for future generation. However, there are barriers in adapting changes during a revolution. This report discussed renewable energy sources adaptation barriers in developing countries, and it is safe to roughly conclude that the most common barriers among them is in economical aspect since economic growth depends critically on access to reliable energy. In addition of the exponential growth of world population, the demand of energy is skyrocketing as well. Therefore, sustaining the production of energy from various sources had been the big cheese in every 195 countries around the world. Since the each of these countries possess a variety of feature such as the climate and geographical elements, energy sources that could be found may vary.
... The challenges in developing RE for electricity in Indonesia are indeed still very complex. In terms of policy, energy development in Indonesia is mostly still based on the lowest cost without considering environmental factors [2] The problem is that the high technology used for electricity generation from EBT compared to electricity generation from fossil energy sources also contributes to the burden of RE development in Indonesia. In addition to these problems, Indonesia's geography in the form of islands poses its own challenges for the development of RE. ...
The challenges in developing renewable energy for electricity in Indonesia are indeed still very complex. In terms of policy, energy use development in Indonesia is mostly still based on the least-cost electricity. The problem of high technological cost used to generate electricity from renewable energy when compared to electricity generation from fossil energy sources takes part burdening the development of renewable energy in Indonesia. This study aims to determine electricity demand projections and fulfillment of using renewable energy (RE) in South Sulawesi. Electricity demand projection is obtained from the time series model based on historical data. The results show that from 2017 to 2025 the public sector is the highest percentage increase (78 %), while the highest nominal increase is the household sector (971 GWh). In total, there is an addition of 2,285 GWh (43%) of electricity demand in South Sulawesi. Renewable Energy available in South Sulawesi has been able to meet the target of fulfilling electricity demand and the energy mix with the most optimum type of RE is Hydropower at a cost of USD 168,242,725 and the fulfillment of the electricity demand meet from Renewable Energy are 52% from the total electricity demand at year 2025.
... The challenges in developing RE for electricity in Indonesia are indeed still very complex. In terms of policy, energy development in Indonesia is mostly still based on the lowest cost without considering environmental factors [2] The problem is that the high technology used for electricity generation from RE compared to electricity generation from fossil energy sources also contributes to the burden of RE development in Indonesia. In addition to these problems, Indonesia's geography in the form of islands poses its own challenges for the development of RE. ...
Indonesia has committed to the National Energy Policy (KEN) or the National Energy General Plan (RUEN) to increase the Renewable Energy Mix which is at least 23% by 2025. Given that Indonesia is a tropical country, the energy from solar using Solar PV (Photovoltaic) has great potential to be developed and utilized. In this study we conducted an analysis of the application of Solar PV to meet the additional electricity demand for residential sector in South Sulawesi from 2019 to 2025 with certain scenarios. The results of calculations using the center of gravity method show that Makassar is the best location for development of centralized power plant in South Sulawesi. The demand of residential sector increase by 34,88% from 2019-2025. The best option for developing Solar PV Power plant is by individual scale Solar PV rooftop power plant.
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