Government needs policy to encourage investment in renewable energy

Government needs policy to encourage investment in renewable energy

. (ANTARA FOTO/FB Anggoro)

Jakarta (ANTARA News) - The government will need to prepare a policy and regulation that can encourage development of investment in renewable energy in Indonesia.

Muhammad Sofyan, deputy chief for renewable energy and energy conservation of the Indonesian Electrical Society (MKI), noted in a statement here on Saturday that the government should also develop fiscal and incentive space to support investment in the sector.

"With a conducive industrial ecosystem, the private sector can encourage mutual partnership and increase the transfer of technology and investment," he elaborated.

According to Sofyan, demand for the mix of fossil and reBaca juga: Hindari kelangkaan, pemerintah usulkan penambahan pasokan LPGBaca juga: Diluncurkan Contact Center ESDM 136Baca juga: Diluncurkan Contact Center ESDM 136newable energy for sustainable electrical infrastructure will increase to meet the country`s requirement for power.

The government has continued to increase the share of renewable energy as primary energy sources of power plants.

Data of the Energy and Mineral Resource Ministry showed that contribution of renewable energy in the past three years had increased two percent to 12.15 percent by the end of 2017.

However, Sofyan pointed out that the increase might not be able to reach the National Energy Policy target of 23 percent share of renewable energy in the total energy mix by 2025, so it will need private investment.

Meanwhile, an expert of MKI Riki Firmandha Ibrahim remarked that development of renewable energy in Indonesia, especially in the geothermal sector, had faced major challenges, including the electricity selling price, complex licensing process, project funding, fiscal policy certainty, and geological risk.

"There are also issues on preparation of land and infrastructure, non-fiscal policy, access to technology, and human resource competency," he added.

The government has taken some measures to support development of geothermal energy by simplifying the licensing process, access to cheaper project funding, implementation of fiscal and non-fiscal policies, and access to technology, among others, he added.

Reporting by Ade Irma Junida
Editing by Sri Hariyati