The government is currently drafting a presidential regulation (Perpres) which will regulate the price of electricity sourced from new and renewable energy (NRE).
The move is a breakthrough in government policy to build investor confidence in running the clean energy business by setting a competitive price scheme.
The Director General of New and Renewable Energy and Energy Conservation of the Ministry of Energy and Mineral Resources, FX Sutijastoto, in his statement quoted in Jakarta, Sunday, said that the Draft Perpres on NRE has received full support from related entrepreneurs.
Sutijastoto also said that the current ESDM ministerial regulation was not sufficient to stimulate the birth of new NRE contracts.
Optimizing the NRE market in Indonesia, he continued, is a challenge in itself considering that economies of scale are often considered less competitive, marked by the high purchase price of NRE.
"Hopefully with this Perpres, our market can grow," he hoped.
With the massive utilization of NRE, he added, it will create new economic values and provide many benefits such as producing clean energy, creating affordable electricity prices, and increasing national and regional investment.
In addition, the development of NRE will also encourage industrial and economic growth in the country, encourage the emergence of new entrepreneurs, to increase energy security and the social economy.
He added that another urgency of this Perpres is that there is no power purchase agreement (PPA) for IPP generators, whose procurement process follows the provisions of the Minister of Energy and Mineral Resources Regulation Number 50 of 2017 concerning Utilization of Renewable Energy Sources for the Provision of Electricity.
Meanwhile, technically, the Director of Various Energy, Directorate General of New and Renewable Energy and Energy Conservation, Ministry of Energy and Mineral Resources Harris touched on the pricing mechanism to be determined in the Draft NRE Presidential Decree.
"So, there are only three, namely the feed in tariff, the highest benchmark price (HBT), and the agreement price,"
The government hopes that this new step will receive support from relevant stakeholders as part of the synergy and synchronization of policy instruments that will be implemented in the future.