Industry groups oppose new renewables tariff policy

Industry groups continue to oppose a recently introduced Minister of Energy and Mineral Resources regulation on the selling price of electricity from renewable power plant projects to state-owned electricity firm PT PLN, Bisnis Indonesia reported on Thursday.

The groups said that the new policy, which will effectively make the electricity tariff lower, will discourage investors from entering the renewables sector.

The paper said that the Indonesia Private Power Producer Association (APLSI), the Indonesian Chamber of Commerce and Industry (Kadin), and the Indonesia Renewable Energy Community (METI) have sent letters to President Joko Widodo and Minister of Energy and Mineral Resources Ignasius Jonan calling for the revision of the new policy, but so far there has been no response.

Jonan has recently issued Ministerial Regulation No 12/2017 which limits tariff of electricity from renewable power plant projects at 85 percent of so-called electricity supply cost (or BPP) of PLN in region where the project is located. Industry players said that the limit has made the tariff of electricity sold to PLN lower than the tariff allowed under the previous feed-in tariff policy.

Jonan has said that the new policy is aimed at helping to provide more affordable electricity for consumers. The government via PLN?s latest 2017-2026 electricity procurement business plan (or RUPTL) aims to increase the contribution of renewables in the country?s energy mix to 22.5 percent by 2025, compared to19.6 percent target set under the previous RUPTL. (*)