Govt not serious enough, says Kadin
The Jakarta Post. Jakarta - 09/07/2011
The Indonesian Chamber of Commerce and Industry (Kadin) urged the government to be more proactive in developing renewable energy in the country through more concrete action such as offering financial incentives.
Kadin’s vice chairwoman for environment and climate change Shinta Widjaja Kamdani said in Jakarta on Friday that even though the government had long been campaigning for renewable energy, it had done little to prove they were serious about its development.
“The idea may have been widely repeated over the last few years,” she told reporters at a press conference at the Kadin building in South Jakarta. “However, in reality, a question remains: Can the government realize its ‘Vision 25/25’, which aims for the utilization of renewable energy to fulfill 25 percent of total domestic energy demand by 2025?” she asked.
Vision 25/25 was declared late last year by the directorate general of new and renewable energy and energy conservation at the Energy and Mineral Resources Ministry. Its target surpasses the goal stipulated by the Presidential decree No. 5/2006, which requires only 17 percent of the domestic energy demand in 2025 to be fulfilled by renewable energy, including geothermal, wind power, water power, solar heat and sea energy, among others.
However, five years after the decree was passed, Indonesia still uses oil and gas resources to fulfill some 95 percent of the domestic energy demand. Only around 5 percent of the demand is fulfilled by renewable energy.
“The government should provide special tax incentives to encourage businesspeople to use renewable energy,” Shinta said, adding that she believed the Investment Coordinating Board’s plan to implement tax holiday and tax allowance systems for the renewable energy industry starting from August this year was a move in the right direction.
In terms of regulatory framework, Indonesia needs a more comprehensive set of rules to regulate the renewable energy industry as the current set of laws is still incomplete, Shinta said.
Deputy head of Kadin’s standing committee on new and renewable energy Erwin Sudirsan said the Energy Law was not accompanied by a necessary implementing regulation on renewable energy issues.
“The regulation should also regulate pricing policies for various kinds of renewable energy,” Erwin said, adding that the lack of clear pricing policies caused low growth in the renewable energy industry.
He said that the selling price for 1 kilowatt hour (kWh) of electricity generated from various kinds of renewable energy was still higher than the basic subsidized electricity tariffs of Rp 600 (7 cents) per kWh.
“Electricity from solar power plants is currently sold at Rp 5,000 – Rp 8,000 per kWh, while electricity from wind power plants is currently sold at Rp 1,200 – Rp 2,400 per kWh,” Erwin said. (mim)