CORE: Measurable Green Investment Schemes Required for Energy Transition
Jakarta (ANTARA) - The Centre of Reform on Economics (CORE) Indonesia believes that clear and measurable green investment schemes are essential to support green investment initiatives and the transition from conventional coal-based energy to clean energy in Indonesia.
“There needs to be a scheme to ensure that the initial investments, which are relatively costly in this green energy sector, can be effectively absorbed,” said the Executive Director of CORE Indonesia, Mohammad Faisal, when contacted in Jakarta on Monday.
According to Faisal, power plants based on green energy, such as solar and geothermal, indeed require significant upfront investment. However, this sector is considered highly promising from a long-term business perspective, especially if PT PLN (Persero) can play a role in increasing the development and absorption of electricity from these green sources.
“We need to figure out how to accommodate these green energy sources, whether it be solar, geothermal, or others, into the PLN grid, and subsequently ensure that the resulting electricity output is more competitive,” Faisal said.
“This expensive initial investment needs to be accommodated through a financing scheme, including addressing PLN’s concerns regarding electricity tariffs when these sources are integrated into the grid,” he added.
Therefore, Faisal believes that government intervention regarding incentives and disincentives, as well as coordination between relevant stakeholders, is necessary to ensure the transition to green energy is smooth, sustainable, and profitable.
“The energy transition cannot be rushed because we cannot ignore the fact that, currently, coal remains the cheapest option and the one most aligned with the current purchasing power of the public,” Faisal noted.
“Thus, it must proceed gradually, with a suitable and consistent transition scheme for the future. The critical points mentioned must address the bottlenecks among the various related stakeholders,” he added.
Meanwhile, the Indonesian government aims to mobilise green investments worth US$2 billion (approximately Rp30 trillion) by 2030 through the Green Indonesia Future Initiative (GIFT) 2026-2030.
On the other hand, through the latest Electricity Supply Business Plan (RUPTL), the government also targets an increase in solar power plant (PLTS) capacity to 100 GW. This represents a strategic move by Indonesia to reduce dependence on fossil fuels while supporting the ambitious target of 100 per cent renewable energy electricity within the next 10 years.