Global S&T Development Trend Analysis Platform of Resources and Environment
Enhancing Decentralized Renewable Energy Investment to Achieve Indonesia’s Nationally Determined Contribution | |
Muhammad Ery Wijaya; Alke Haesra and Brurce Mecca | |
2020-05 | |
出版年 | 2020 |
国家 | 美国 |
领域 | 气候变化 |
英文摘要 | Indonesia’s economy has seen significant growth in recent years, yet wealth remains concentrated and a large part of the population is low income. Access to electricity is part of the solution for bridging this inequality and improving livelihoods. The government of Indonesia has planned for 100% electrification by 2020, but geographic conditions and uneven demand distribution restricts this plan severely, leaving thousands of islands with limited or no access to electricity. This is especially true in the eastern parts of the country. Decentralized renewable energy (DRE) can increase energy access to Indonesia’s underserved regions and contributes to its National Energy Policy targets. However, existing DRE business models fail to address prevailing barriers in the sector, ranging from policy barriers, limited access to finance, and high investment risks, discouraging private investments. Decentralized renewable energy (DRE) is a possible solution to accelerate electrification in underdeveloped areas. It is also in line with Indonesia’s National Energy Policy target to achieve a contribution of 23% of renewable energy towards the energy mix by 2025 and the National Determined Contribution (NDC). However, there is a 98% gap in investment per year towards improving Indonesia’s energy system through government funding (CPI, 2018). Therefore, it is a requisite for the Government of Indonesia to attract other sources of finance, particularly from private players, to meet the national clean energy and electrification targets.
Table ES1: Risk level of each barrier faced by private investors in DRE This report, produced in collaboration with Hivos, aims to improve the overall financial feasibility of the decentralized renewable energy sector in Indonesia. It identifies innovative business models that address the key barriers for private investments by optimizing the existing regulations. The study uses Sumba Island, in East Nusa Tenggara, as an example case. In order to scale private investment in distributed renewable energy to its potential, policymakers and regulators need to address the sector risks. Policy reform, adopting sustainable business models, and establishing tailored financial instruments, together, can overcome most of these barriers. Through our analysis we found that catalyzing private investments for DRE in Sumba and similar islands would require strong commitment and active participation from the government, particularly to enhance its regionally owned enterprises. Capital injections or asset transfers to commission partnerships with the private sector would be key. Further, we found that the first barrier on the regulatory process to obtain a business area (Wilayah Usaha) is the only barrier that the following business models cannot address.
Table ES2: Maps the aforementioned sector barriers to the business models that can serve as solutions In addition to implementing innovative business models, pioneering financial instruments would be crucial in addressing some of the investment gaps in the sector. If given adequate business scale, as well as risk and return on private investment, the following innovative financial instruments can complement the business model of each DRE project, thereby addressing the challenges.
This paper highlights the DRE opportunity in Indonesia, several key barriers for private investment, and the potential paths to address these barriers, |
URL | 查看原文 |
来源平台 | Climate Policy Initiative |
文献类型 | 科技报告 |
条目标识符 | http://119.78.100.173/C666/handle/2XK7JSWQ/271847 |
专题 | 气候变化 |
推荐引用方式 GB/T 7714 | Muhammad Ery Wijaya,Alke Haesra and Brurce Mecca. Enhancing Decentralized Renewable Energy Investment to Achieve Indonesia’s Nationally Determined Contribution,2020. |
条目包含的文件 | 条目无相关文件。 |
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