Indonesia has announced to issue a presidential regulation on a feed-in tariff system in an attempt to augment investment in its renewable energy sector.
According to reports, the feed-in tariffs will be divided into two stages. The first will help to generate a fixed electricity price for twelve years, thus supporting renewable power plant developers.
In the second stage, the government will develop an even lower fixed price until the end of contract. The stage is likely to take place during the plant’s thirteenth year.
“It’s to ensure developers faster returns,” commented Rida Mulyana, director general of electricity at the Indonesian energy ministry.
According to experts, the contract period for renewable power plants usually lasts for a duration of 25-30 years. Furthermore, the feed-in tariffs includes hydro, solar and wind power plants but not geothermal power plants and will only apply to new contracts, explained Mulyana.
In addition, the government is planning a separate law for geothermal energy. The incentives from which will be allotted for exploration activities.