RI increases legal certainty to boost renewable energy investments

JAKARTA (ANTARA) – The Indonesian government continues to create a favorable investment climate to support the development of renewable energy, including by improving legal certainty, according to Investment Minister Rosan Roeslani.

He said at the Indonesia International Sustainable Development Forum 2024 in Jakarta on Thursday that the government is also implementing a new, more competitive tariff structure to encourage more investment in renewable energy.

The new tariff negotiated directly between independent power producers (IPPs) and state-owned energy company PT PLN was expected to attract more investors to participate in the development of clean energy projects in Indonesia.

He noted that tariff flexibility tailored to project technology and location will also promote efficiency and innovation in the renewable energy sector.

As Roeslani noted, Indonesia has a potential of 3,700 gigawatts of diverse renewable resources, although less than one percent has been harnessed so far.

The International Energy Agency (IEA) has revealed the huge renewable energy potential in Southeast Asia.

The IEA estimates that by 2040, renewable energy will account for almost three times its current level of overall electricity generation in the region. Solar and wind will dominate, accounting for 70 percent of the region’s total electricity.

However, he added that developing countries like Indonesia often face challenges when transitioning to renewable energy, such as insufficient infrastructure, high initial investment requirements and difficulty in obtaining financing.

Related News: RI Offers Solutions to Attract Investment in Energy Transformation in ASEAN

“In 2022, the upfront investment costs for renewable energy projects in low-income countries were 6.5% higher than in high-income countries,” he noted.

However, he added that Indonesia remains committed to developing renewable energy with the aim of achieving net zero emissions by 2060.

He stressed that Indonesia has managed to increase the share of renewable energy in the energy mix to 13 percent by 2023 thanks to several large projects financed by domestic and international investors.

One of the projects was the 330-megawatt Sarulla geothermal power plant in northern Sumatra, which was built in cooperation between Indonesia, the US and Japan.

“Last month, we also inaugurated Indonesia’s largest ground-mounted solar power plant, a 100-megawatt plant, in West Java, in cooperation with China,” he noted.

He also encouraged developed countries, financial institutions and investors to work together to help developing countries develop clean energy.

“We need green investment and finance, technology transfer, research and development, and access to broader markets to achieve the full potential of renewable energy. Indonesia is committed to being an example in the renewable energy sector,” he concluded.

Related news: W Sumatra invites you to invest in renewable energy sources from Norway

Related news: Indonesia, Saudi Arabia discuss renewable energy investments