Indonesia proposes renewable power utility

Indonesia could create a new state-owned utility to buy renewable power if PLN, the existing national utility, continues to decline to do so due to the higher costs involved.

Rida Mulyana, director general of renewable energy in the nation’s energy ministry, told local press this week that the new utility would be called PLN Renewable Energy and would be created in response to PLN’s “resisting the purchase of electricity from renewable energy sources” because “they think it's too expensive and financially burdensome.”

The proposed move comes after a power purchase agreement for geothermal steam between PLN and Pertamina Geothermal Energy (PGE), a subsidiary of state-owned oil and gas company Pertamina, was delayed last week due to a price dispute, with PLN arguing that it could not afford to buy geothermal power without increasing its rates, while Pertamina asserted that its higher prices were necessary to support its continuing geothermal exploration.

Energy and mineral resources minister Sudirman Said reportedly said on Thursday that PLN's ability to support the government's renewable energy goals is "limited" financially. "That's why this special utility firm would focus on developing the upstream renewable energy sector," he was quoted as saying.  

Indonesia aims to cut its greenhouse gas emissions by 29 per cent by 2030, and to grow the share of renewables in its energy mix to 19 per cent by 2019 and 25 per cent by 2025.

Currently, renewables supply around 6 per cent of Indonesia’s power.

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