Indonesia's State Utility Plans to Build 32 GW Renewable Energy Capacity

ENERGY - JAKARTA. Indonesia's state utility Perusahaan Listrik Negara (PLN) plans to add 32 gigawatt (GW) of renewable energy capacity and invest in grids that would be able to connect to more renewable power sources, its chief executive said on Wednesday.

The plan is part of the company's efforts to speed up adoption of renewable power and reduce reliance on coal, which is used to generate about half of Indonesia's power output.

PLN is revising its power supply master plan to incorporate more renewables, Chief Executive Darmawan Prasodjo said.

Under the current plan for 2021-2030, the company targeted expanding renewables-sourced power capacity by 20.9 gigawatt, or 51% of its total new additional power generation capacity for the period.

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"With this accelerated renewable energy development, 75% of our additional generation capacity will be based on renewables and 25% will be gas-based," Darmawan told reporters on the sideline of ASEAN Indo-Pacific Forum.

Darmawan did not specify how the planned change would affect Indonesia's power source mix. Currently, around 14% of power is generated from renewables.

The company is also planning to renew its grid to be able to connect more renewable energy to its electricity networks, allowing PLN to increase its variable power load from renewable sources to 28GW from currently 5GW, he added.

Indonesia hopes funds pledged under the Just Energy Transition (JETP) would help finance PLN's planned grid installation, senior cabinet minister Luhut Pandjaitan said at a separate event on Wednesday.

U.S. Vice President Kamala Harris discussed Indonesia's JETP in a bilateral meeting with President Joko Widodo on Wednesday at ASEAN regional bloc meetings.

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The challenges and delays faced by Indonesia's JETP investment blueprint were among the top issues discussed at business forums held on the sideline of the summit.

Fabby Tumiwa, executive director at think tank Institute for Essential Services Reform and part of JETP working group, said Indonesia needs to overhaul power tariffs policy to allow wider adoption of renewables.

Meanwhile, the government has revised local content rules for solar panels to encourage more investment, official Rachmat Kaimuddin said.

Indonesia had required 60% components of a solar panel to be made locally. This requirement has been pushed back to 2025, according to a government regulation made public this week.

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"The problem is there is not enough industry in Indonesia to support it," Rachmat said. "By 2025, we would already have the industry and can handle the 60% local content"