Push for use of renewable energy intensified
Leony Aurora, The Jakarta Post, Jakarta
To help promote the use of clean fuel and renewable energy in generating electricity and bring European investors to the region, the ASEAN Center for Energy (ACE) has launched a small power station financing competition.
Developers of the top ten best proposals to build power plants with a capacity of below 10 megawatts (MW) each will be invited to the Czech Republic and Spain to meet suppliers and banks, which may be interested in financing such projects, ACE's policy advisor to the executive director Terry Lacey said on Thursday.
Terry said the initiative could ideally bring European banks and state electricity firm PT Perusahaan Listrik Negara (PLN) closer together, so they can understand the needs of each other.
"No one has really put anything together, and that's what we're really trying to do with the project," said Terry.
The competition, which serves as a pilot project before being extended to other ASEAN and European countries, targets power stations in Indonesia using new and renewable energy, including mini hydro plants, those that use biomass, solar energy, geothermal power and clean coal.
Project owners are required to present proposals including technical, managerial and financial components, a draft of the power purchase agreement (PPA) with PLN, as well as Environmental Impact Assessments and all other necessary permits.
Screening workshops will be conducted between September and December and the official selection will be held in January 2006.
Although the projects are not guaranteed to get funding, with improved documentation from developers and PLN, which will receive technical assistance from ACE to improve its PPA, Terry said there was "a very good chance" that some would be financed.
The use of renewable energy in Indonesia has been hampered as such projects, which make use of alternative technology, will be more expensive than conventional fuel-fired plants.
According to the Indonesian Renewable Energy Society (IRES), despite massive potential, renewable energy makes up a very tiny share of the country's total installed capacity of more than 25,000 MW of electricity.
The installed capacity of power generated using mini and micro hydro power plants is only 54 MW, while those utilizing geothermal sources and biomass fuels are 800 MW and 302 MW, respectively.
The government aims to raise the use of new and renewable sources to produce energy from 0.2 percent currently to 4 percent by 2020.