Realized investment in renewables sector slower than target
Friday, November 10 2017 - 01:52 AM WIB
Petromindo|Lucky
Realized investment in renewable-based power plant sector in the January-October 2017 period totaled only Rp 11.74 trillion, much lower than the realized Rp 21.25 trillion throughout last year, Bisnis Indonesia reported on Friday.
The paper, quoting data from the Ministry of Energy and Mineral Resources, said that the realized investment of Rp 11.74 trillion in the first ten-month period of this year represents only 57.89 percent of the full-year target of Rp 20.28 trillion.
Experts said that the slower realized investment in the renewables sector was mainly attributed to difficulties among project developers in getting the required funding and the relatively low tariff of the electricity to be sold to state-owned electricity firm PT PLN.
The relatively low tariff has in turn created difficulties in getting loans from banks. Domestic banks also charged a relatively high interest rate of more than 11 percent, further undermining the economic feasibility of renewable projects. Tenor of the loans are also relatively short at five years. Banks are also only willing to provide between 50-60 percent of the required funds, forcing developers to come up with greater own equity for the projects.
Given such problems, the government must immediately take measures to help achieve its target of renewables to account for 23 percent of the country?s energy mix by 2025.
Meanwhile, Director General of Renewables Energy at the Ministry of Energy and Mineral Resources Rida Mulyana said that capacity of renewable-based power plants in the country has kept on increasing since 2014. He said that total capacity of geothermal power plants as per October of this year stands at 1,808.5 MW. Total capacity of solar and mini hydro power plants stands at 259.8 MW, and total capacity of bioenergy-based power plants reaches 1,812 MW.
?Between 2014 and 2017, some 471 units of renewable power plants have been constructed with combined capacity of 38.9 MW,? he said. This year, additional capacity of geothermal power plant (PLTP) is expected to reach 215 MW with the completion of a number of projects including PLTP Ulubelu unit 4 (55 MW), PLTP Sarula unit 2 (110 MW), PLPT Karaha (30 MW), and PLTP Sorik Merapi (20 MW). (*)