Pushing EBT to be Solution for Future Energy Scarcity

By : Dhiyan W Wibowo And Aldo Bella Putra | Sunday, April 01 2018 - 14:30 IWST

Ilstrasi Energi baru terbarukan (Foto Ist)
Ilstrasi Energi baru terbarukan (Foto Ist)

INDUSTRY.co.id - Jakarta, In general, starting from the condition of the fossil energy resources through the current exploitation and production, the government through Government Regulation No. 79 of 2014 on National Energy Policy sets out the strategy to overcome future energy shortages by boosting EBT utilization and braking the use of fossil energy sources.

In the policy, the targeted EBT mix in 2020 is set at 17%.

Meanwhile, by 2025 the utilization of EBT is expected to reach 23%. Next in 2050 the government is targeting new and renewable energy to reach 31% in the national energy mix.

Development of alternative energy is considered urgent to do at this time, in order to anticipate the energy crisis that can happen in the future. Unfortunately the potential of this energy is still much untapped.

Launching data from the Ministry of Energy and Mineral Resources, from the potential of alternative energy in the form of new and renewable energy amounting to 443,208 MW, Indonesia only utilize 8,216 MW.

Of all the alternative energy available on Earth Nusantara located on the equator, obviously solar energy or sunlight has the greatest potential, ie 207,898 MW.

But so far the new utilization of 0.04%, or by 78.5 MW through the use of solar panels or solar cells.

While the largest alternative energy utilization is only done on water-based energy, amounting to 6.4%.

This figure is derived from the development of hydroelectric power that has been built with a capacity of 4,826.7 MW, from the available potential of 75,091 MW.

The development of new and renewable energy is not an easy matter. The government had raised Rp1.600 trillion for new and renewable energy development.

This figure certainly cannot be carried alone by the government which is also holding an infrastructure development program, which also requires massive funds.

So of course private investors are expected to play a role in the development of alternative energy.

Investors themselves are faced with the high rate of credit interest to be paid to banks to finance the EBT development project.

This condition is recognized by the government as one of the obstacles in the development of alternative energy, in order to deal with the depletion of reserves of fossil energy resources.

"Domestic banking provides a high interest rate, surpassing 10%. While banks from abroad offer loans on average under 5%, but usually followed a number of requirements. Like entering export credit or using technology from a lender country," said Deputy Minister of Energy and Mineral Resources (ESDM) Arcandra Tahar in his written statement.

Meanwhile, Energy and Mineral Resources Minister Ignasius Jonan said the lack of investor interest in developing renewable energy in Indonesia is still hampered by the high value of investment.

Meanwhile, from the side of the incentive is also considered relatively less. This condition directly impacts the level of utilization of renewable energy by the community.

Call it the utilization of alternative energy for electrification for example; the high investment of course leads to high electricity tariffs offered to the public.

Meanwhile most people cannot afford the relatively expensive electricity tariffs.

"If I offer cleaner electricity, but the price goes up, here (the room) would want to because the income is large. Try if you earn below Rp1 million a month, definitely not. Well many where (with the able, red)? "Jonan said as a keynote speaker at the event" Energy Talk "in Jakarta (6/3).

Although the development of EBT is very capital intensive, the government still prioritizes affordability for the wider community.

"Affordability is important. Although it is expensive to invest, it should be able to offer competitive prices for the people," said Jonan.

According to him, the government has opened up the widest opportunity for investors to sell electricity from renewable energy at an affordable price, and he urged investors not only to wait for government incentives.

"This is important, the utilization of EBT for electricity, which is affordable by the people and environmentally friendly. So this affordability is as important as the electrification ratio. (Implementation of) the fifth precept of Pancasila," he said.

"Electrification is the most dangerous, not affordable, cannot be bought by the public," he added again.

The government also opens the widest opportunity for foreign investors who wish to participate in the development of electrical energy based on EBT.

Again, the main requirement is the affordable price of energy to be enjoyed by all Indonesian people, especially those in 3T areas (left behind, outer, and in the forefront).

"The task of the Government is to ensure that energy remains affordable for the people, but still strives for an adequate profit for investors," he said.

Meanwhile, concerning high interest rates of banks for investment in the EBT-based electricity sector, EMR Deputy Minister of Energy and Mineral Resources Arcandra said in a statement that it has collected lenders from abroad, including the World Bank and lenders from Europe.

Admittedly there are a number of requirements that must be met, which some clauses of which are considered too tight.

"But we continue to keep the requirements loosened so that entrepreneurs can get access to low-interest funding," he said.

Beyond the funding issue, there are other challenges that are also a constraint, namely land use permits, as well as the diverse range of stakeholders involved.

However, the government promised to issue various regulations to improve the investment climate and accelerate the use of renewable energy in the form of fiscal and non-fiscal incentives.

From the fiscal strategy aspect, the government among others has implemented feed in tariff, the highest price index for regional power cost, applying business to business mechanism between investor and PT PLN (persero) for geothermal and bio-mass generation from municipal solid waste.

In addition, the government has also set the obligation to utilize biofuel for the transport sector for commercial entities through Minister of Energy and Mineral Resources Regulation No. 25 of 2013.

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