The renewable energy sector in Indonesia has had a very encouraging start to the year, with over $300 million investment in the first quarter.
Indonesia’s Energy and Mineral Resources Ministry has announced that the country attracted $327 million in renewable energy investments during the first 3 months of the year. This represents 23% of the total investment target for the year of $1.37 billion.
The bioenergy sector attracted the largest investment of $250 million, followed by $75 million for geothermal power and $2.4 million for other renewable energy projects. Investment has increased sharply for renewable energy projects as the government has implemented a single-window approval system.
The single-window approval system is among several incentives to bring large investments into its renewable energy sector, one of which could reduce the import duty on equipment used in the development of renewable energy projects. The planned incentives would play a critical role in Indonesia’s endeavor to boost the share of renewable energy sources in the total energy mix to 19% by 2019 and to 25% by 2025, up from its current share of renewable energy sources of between 5% and 6%.
Earlier this year, the Indonesian Government expressed its intention to set up a new utility dedicated to procure electricity from renewable energy projects. The government is considering this measure after reports that the country’s main power utility, Perusahaan Listrik Negara (PLN), is opposed to buying power from renewable energy projects due to the high costs involved in the exercise.
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