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[News] Indonesia Aims For Renewable Energy
Posted at: 10 April 2019

Industry Minister Airlangga Hartarto said on Feb. 13 that Indonesia aimed for 20 percent of vehicle production to be EVs by 2025, representing about 400,000 vehicles.

The deputy minister for industry, Harjanto, also said last December that Hyundai Motor Co, the world’s fifth-largest automaker, plans to start producing EVs in Indonesia as part of an $880 million auto investment.

In 2005, a small hydropower plant was installed in the Sukajaya district of West Java, Indonesia. This was an off-the-grid project, owned by the community, that provided electricity locally through a mini-grid to about 150 households mainly for lighting. But after 10 years the plant was discontinued when the community was connected to the recently expanded central grid.

This is the story for many such projects in the region, including solar-powered residential systems. Over and over again, the value of renewable energy investments is lost as the installations are left abandoned as the grid arrives. In Indonesia alone, more than 150 villages have abandoned mini-grid projects since late 2000s.

While investing in fossil fuel-based energy has become riskier, there are also unique investment risks with small-scale renewable systems. In developing countries, in many sites relying on off-grid or mini-grid electricity, this infrastructure faces the risk of becoming a “stranded asset” — abandoned infrastructure that no longer holds value — which may work against efforts to limit climate change.

This is a significant issue for the 1.1 billion people that still do not have access to any electricity globally. According to the International Energy Agency, to achieve 100 per cent electrification by 2030, Indonesia need to rely heavily on solutions that do not depend on a central electrical grid.

(source: The Jakarta Post, CNBC)