Among the frequently complained headwinds is Ministerial Regulation No. 50/2017 – dubbed “Permen 50”. This was the regulation that introduced the BOOT scheme and erased a feed-in-tariff pricing policy, which is widely considered to be a very effective means of boosting green energy growth.
Indonesia FIT
With current pricing scheme not interesting to investors, Indonesia now preparing improved geothermal feed-in-tariff structure based on the investment value or project economics.
THE government’s steps issuing regulations regarding new and renewable energy (EBT) for electricity power plants need to be carried out with great care. Rules that are user-friendly to investors are indeed necessary to develop clean energy. But the government has to ensure the regulations do not provide an opportunity for rent-seekers to come in, and also should not overburden the State Electricity Company (PLN).
Under Regulation 12, all renewable energy tariffs (except for geothermal and waste projects1and projects where procurement using direct selection method is used2 will be capped at 85% of the local production cost (locally known as the BPP) if the local production cost is higher than the national average production cost.
The Energy and Mineral Resources Ministry has recently issued the latest feed-in tariff (FIT) for renewable energy (RE). As one man’s disaster is another man’s delight, the new FIT makes some people happy, while others have worries.
The planned tariff scheme, will set the feed-in-tariffs for electricity generated from renewable energy sources at no higher than 85% of the basic production cost of renewables in respective regions. This will result in different tariffs for different regions and technologies.
A new regulation aimed at setting a fixed feed-in tariff for geothermal power is about to come, clearing uncertainties for investors. However, a lack of accurate data on geothermal reserves in existing fields seems to have curbed investor confidence and impeded price negotiations.
The government is set to introduce a feed-in tariff mechanism this month to push down the huge costs and limit the risks of geothermal exploration, in efforts to reach the country’s target of generating 7,000 MW of electricity from geothermal sources, a ministry official has said.
Indonesia’s first ever feed-in tariff (FiT) for solar PV projects should generate attractive project returns in Java-Bali and Sumatra, according to a Bloomberg New Energy Finance (BNEF) research note.
The government is preparing a feed-in tariff mechanism to assist geothermal developers in a bid to boost the development of the geothermal energy sector in the country, a minister has said.
