The government expects to attract more environmentally friendly investment
The government will continue to encourage the development of new and renewable energy projects during the next five years, while trying to reduce the dependence on fossil-based fuels as their reserves are depleting.
The development of renewable energy projects is crucial to supporting the governments target to build several power plants that will be able to produce 35 thousand megawatts (MW) of electricity by 2019.
Renewable energy would contribute 8,750 MW, or 25 percent to the total capacity. The contribution would come from geothermal power plants accounting for 1,751 MW, hydropower plants contributing 2,438 MW, and "bioenergy" power plants providing 1,156 MW.
A combination of power generated by solar energy, wind energy, sea waves, and other sources of renewable energy would contribute around 3,405 MW.
In this regard, the government would require a short-term investment of Rp403 trillion in the next five years.
"I invite every stakeholder to study and make every effort in order to achieve the targets," Minister for Energy and Mineral Resources (ESDM) Sudirman Said stated during a speech at the International Geothermal Convention and Exhibition on August 19, 2015.
During the convention, a number of memoranda of understanding were signed by the minister and related stakeholders, including the electricity power purchase agreement and the delivery of assets related to a number of renewable energy projects.
"There were a number of cooperation documents signed by the minister, valued at Rp106.3 trillion for the next five years, which will produce 2,400 megawatts (MW) of electricity," Minister Said revealed.
On the occasion, the government symbolically handed over business licenses to 11 companies for the exploration and management of geothermal energy.
When delivering his opening remarks in the convention, President Jokowi instructed the ESDM minister and other concerned officials to closely monitor the progress of renewable energy development projects to ensure their timely completion.
"Firstly, I have asked the ESDM minister and the president director of state electricity company PLN to monitor the process after the investors have received the licenses. This is to keep track of whether they are implementing the projects whose licenses have been issued," the head of state noted.
Do not allow any renewable energy development projects to become idle after the licenses for them are issued, he stated.
The ESDM ministry and PLN must help the investors facing any obstacles, such as problems related to land acquisition, the president emphasized.
Jokowi affirmed that they could directly report to him if investors required his intervention to solve serious problems concerning land acquisition.
"I hope we can immediately put an end to our dependency on fossil fuels by taking concrete steps in utilizing geothermal energy sources," he said.
The use of fossil fuels in the country is still high and reaches 95 percent of the nations energy consumption comprising 45 percent oil, 24 percent gas, and 24 percent coal, while the use of renewable sources of energy only constitute around five percent.
"As a nation keen to achieve self-sufficiency in energy, we must not rely on fossil fuels. The fact now is that Indonesia has become a net importer of oils, while in due course of time, fossil fuel reserves will become exhausted," the head of state remarked.
In view of this, the diversification of energy sources needs to be carried out immediately through facilitating the development of new and renewable energy sources.
"One of the new and renewable energy sources that we need to exploit is geothermal energy, which is abundant, clean, and environment-friendly. The national energy policy has set a target to increase the use of this energy to 23 percent by 2025," he noted.
He noted that Indonesia has a geothermal potential of 29 thousand MW in Sumatra, Java, and Papua. The country has 40 percent of the worlds geothermal potential found in Sumatra, Java, Nusa Tenggara, Maluku, and Papua that had yet to be optimally exploited.
Recently, President Jokowi conducted the groundbreaking of the Ulubelu Unit III and IV geothermal power plant projects and inaugurated the operations of the Kamojang V geothermal power plant.
In the meantime, the ESDM ministry's Director General for New and Renewable Energy & Energy Conservation, Rida Mulyana, recently said some foreign investors have expressed an interest in exploiting new and renewable energy in Indonesia.
"Investors from Japan, the Netherlands and the United Kingdom among others, are ready to exploit new and renewable energy in Indonesia," Rida Mulyana noted recently.
According to Mulyana, the state budget could not afford to finance the new and renewable energy projects reaching Rp420 trillion.
"Therefore, the government needs to aggressively attract investors, who have the money, expertise, and technology to manage the energy potential of Indonesia in a sustainable manner," Mulyana remarked.