ASEAN KEY DESTINATIONS
Green energy in Indonesia pushes ahead
Mochamad Sofyan, head of the new and renewable energy division at state utility PLN, is seeing an increasing number of foreign and local firms file into his office looking to invest in geothermal, hydro and biomass power projects. Solar is also gaining interest.
Government programs to speed investment in power projects, easier regulations and rapid economic growth are lures.
Around a third of Indonesia’s 240 million people are without power supply, and projections are for generation capacity to nearly triple by 2020 to meet a severe power shortage.
Rising investment in green power as well as coal and gas is part of a surge in foreign direct investment, up 21 percent on the year in the second quarter of 2011.
“If I had enough time, I would be meeting investors every day,” Sofyan said in an interview at his office in south Jakarta, where a white board listed his many appointments.
Two years ago, he received just two visits a month. Now, investors from the United States, Japan, Europe, South Korea and China line up for an appointment, he said.
Investors in green power include Itochu , Sumitomo and Marubeni of Japan, and Britain’s International Power.
Earlier this month, the Indonesian government said French firms would invest about $2 billion in geothermal projects.
Indonesia has pledged to cut the growth of greenhouse gas emissions, in part through boosting green power.
It has plenty of clean energy bubbling away under the surface. The archipelago, along the Pacific Ring of Fire, is brimming with volcanoes and super-heated water that can be pumped from deep wells to drive steam turbines.
At present, about 12 percent of Indonesia’s total energy mix comes from geothermal and hydro. By 2019, that is projected to grow to 18 percent, PLN says. Coal will remain as the top energy source, rising to about 60 percent of the energy mix by 2019 from less than 50 percent now.
The challenge is vast. As of 2010, Indonesia’s generation capacity was 30,000 megawatts. For neighboring Australia, with a tenth of the population, it is 51,000 MW.
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