"We also want future bidding to no longer be on a small scale of 50 megawatts, 100 megawatts, but we want to create a bidding block of 1 gigawatt (GW), 2 GW, so that we can get the scale and the acceleration to pursue 24 GW of renewable to occur in the next 10 years in the future," Deputy Minister of SOEs Kartika Wirjoatmodjo remarked at the National Economic Outlook National Seminar in Jakarta, Friday.
The deputy minister, familiarly known as Tiko, highlighted that demand for new and renewable energy (NRE) generators has started to increase. In terms of equity, several world-scale energy companies are interested in entering Indonesia.
One of the companies from the United Arab Emirates, Masdar, collaborated with PT PLN Nusantara Power to build a Floating Solar Power Plant in the Cirata Reservoir, West Java.
“But they want a large-scale bidding block, so that economies of scale are achieved in sufficient capacity. We will encourage this through the procurement mechanism at PLN," he remarked.
Related news: Indonesia secures Japan's support for 24 energy transition projects
Although the block bidding scheme can be a solution to accelerate the energy transition target, Tiko admits that bidding for large-scale NRE power plants requires large-scale and long-term financing in the form of the US dollar.
Until now, the funding, especially in the long term, is not yet available domestically. Hence, the government will seek international funding.
"Therefore, we must be able to engage with international multilateral organizations, ESA, and the international banking community, such as through JETP and so on, so that there is a long-term, large-scale pool of fund scheme," he stated.
Tiko remarked that multilateral funding in the context of cheap, long-term funding is also needed for transmission and green projects that have recently produced a low Internal Rate of Return (IRR).
"We are currently planning this with PLN, so that there is a division between economies with high IRR and those with more public service in the context of transmission," he noted.
Related news: Awaiting next leader's concrete action on energy transition
Translator: Kuntum Khaira Riswan, Cindy Frishanti Octavia
Editor: Yuni Arisandy Sinaga
Copyright © ANTARA 2023
