Jakarta turns to new energy sources

JAKARTA: Indonesian parliament proposes inclusion of coal-based power and nuclear power as ‘new energy sources’ in draft new bill tabled yesterday, which also proposes compensation and incentives for renewable energies.

The draft reviewed by Reuters also proposes to increase the so-called Internal Market Obligation (DMO) for coal to 30% from the current 25%, as well as the elimination of all diesel power plants by 2024.

Indonesia, the world’s largest exporter of thermal coal, uses a DMO to ensure the supply of coal to the domestic market to ensure sufficient power supply.

It shocked world markets by abruptly banning coal exports for a month in January to deal with a domestic shortage.

The draft did not provide a breakdown of the targeted share of the energy mix for renewable sources, or explain why coal-based power was included in a bill that was originally only about renewables.

To encourage investment in renewable energy, lawmakers have also proposed that the government provide tax incentives to investors as well as other support such as providing land, infrastructure and government guarantees for loans.

It also asks the government to set aside a budget to compensate the losses of the public electricity company when supplying electricity from renewable sources.

The committee overseeing energy expects the bill to be approved by the full parliament at a meeting next week before being sent to the government for discussion, lawmaker Sugeng Suparwoto said. during a hearing on Tuesday.

“Let’s hope that before the Group of 20 (G20) summit, we already have a new renewable energy law,” he said.

Indonesia, the current chairman of the major G20 economies, is aiming for zero emissions by 2060. It will host this year’s leaders’ summit in November.

In a March statement, Indonesia’s energy think tank, the Institute for Essential Services Reform, criticized lawmakers for backing legislation it said would continue to support the use of coal, despite the country’s climate goals.

He said Parliament was taking into account the interests of the coal industry ‘who want to continue to gain market share when the market for coal for power generation declines’. —Reuters

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