Kadin Says Renewables the Key to Heading Off Energy Crisis

Jakarta Globe, FaisalMaliki Baskoro, July 15, 2011


TheIndonesian Chamber of Commerce and Industry has called on the government toshow its commitment to developing renewable energy resources throughregulations and pricing as the nation tries to reduce its reliance on fossilfuels.

Thegovernment had yet to issue any regulations to set the price of renewableenergy, which has hampered business plans for developing the resource, saidHarry Salman F. Sohar, the deputy for new and renewable energy at the chamber,also known as Kadin.

“Renewableenergy is still seen as an alternative, not a solution,” he said. “Developingrenewables is necessary, and the government needs to be more serious aboutthis.”

Theimportance of moving away from fossil fuels and natural gas for electricity generationhas been acknowledged in legislation that prioritizes shifting energy use tonew and renewable resources, including coalbed methane, nuclear, gasified coal,geothermal, solar and wind.

“There’sstill a lack of regulation that is pro-renewables, especially on the pricingmechanism,” Harry said. “Kadin will form a working committee that will provideinput to the government.”

Kadin, hesaid, will propose a feed-in tariff payment plan, which would pay those whooperate renewable electricity systems for every kilowatt hour generated basedon the cost of production by technology. That means homeowners who have solarpanels installed on their roofs would be paid for the surplus electricity thatis generated and transmitted to the power grid.

The FITscheme is already widely used in Europe, Asia and Africa.

Accordingto government data, Indonesia has up to 40 percent of the world’s geothermalreserves, with the potential to produce the equivalent of 28,000 megawatts.

Harry saidcountries had already committed to helping develop Indonesia’s renewable energypotential, including $364 million coming from the United States. Finland hasalso set aside $40 million to develop renewables in South Kalimantan and Riau,he added.

Accordingto Shinta Widjaja Kamdani, Kadin’s deputy for the environment and climatechange, the government needs to act on developing renewables because fossilfuel reserves could run out as soon as in the next 15 years, leaving thecountry with an energy crisis. “A major breakthrough needs to happen soon,” shesaid.

Indonesia’soil reserves are estimated at 4.7 billion barrels, the equivalent of 15 years’worth with average domestic consumption of 1,126 million barrels per day, shesaid, citing data from the BP Statistical Review of World Energy.

At the sametime, the use of renewable energy by way of solar, wind and biodiesel hasincreased significantly over the past four years, she said, citing theInternational Energy Agency.

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