EBT Electricity Prices, Ministry of Energy and Mineral Resources Reviews Regulation 19/2016

The Ministry of Energy and Mineral Resources (ESDM) is again reviewing the ministerial regulation that includes the selling price formula for electricity from solar-based power plants.

Director of Various Energy at the Directorate General of New, Renewable Energy and Energy Conservation (EBTKE) of the Ministry of ESDM Maritje Hutapea said that her party is currently focusing on reviewing ESDM Regulation No. 19 of 2016 concerning the Purchase of Electricity from Photovoltaic Solar Power Plants by PLN. This review is in accordance with the direction of ESDM Minister Ignasius Jonan.

Previously, Jonan said that his party would formulate a more competitive price for PLTS electricity. "In accordance with the direction of the Minister, we will review it again as soon as possible," said Maritje at the Renewable Energy for Indonesia (RE4I) 2016 Conference in Jakarta, Wednesday (December 7, 2016).

According to Maritje, in order to get a more competitive and cheaper PLTS electricity price, several things must be considered. These include ease of land acquisition, economical capacity, fiscal incentives in the form of tax reductions and loan interest relief, and non-fiscal incentives in the form of ease of licensing.

In Regulation No. 19/2016, the government changed the PLTS development scheme to be developed by private power producers (Independent Power Producers/IPP) with a first in first out (FIFO) mechanism.

For the initial stage, PLTS with a total capacity of 250 MW will be offered with locations spread throughout Indonesia. In the regulation, the rates offered vary depending on the location of the PLTS. He stated that the cheapest rate is US$14.5 cents for PLTS located on Java Island. Meanwhile, the rate is US$25 cents for Eastern Indonesia.

With the high rates offered, the government will conduct a strict selection for developers who want to participate. All participants must submit accurate data and have financial and technical capabilities. His party also provides an opportunity for interested parties to conduct feasibility studies at predetermined locations.

On the other hand, Jonan said that the tariff offered should be competitive with fossil energy. He gave an example like the United Arab Emirates (UAE) whose development of renewable energy can exceed the utilization of fossil energy because its government policy can make renewable energy compete with coal, gas and oil. Meanwhile, in the UAE the price of electricity from PLTS is set at US$2.9 cents/kWh. "If Indonesia were in the position of western Europe which has 20 years to exploit its gas, then the renewable energy policy would be different, but here it is not like that," said Jonan.

Source: bisnis.tempo.com

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