Push for use of renewable energy intensified

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.