Indonesia sees sharp decline in renewable energy investment

Terapung Cirata floating solar power plant on a reservoir in West Java province, Indonesia. (Photo: kompas.id)

Hanoi (VNA) - Indonesia's investment in renewable energy projects in 2023 is forecasted to reach its lowest level in the past six years, despite the nation's goal to reduce carbon emissions in its power sector.

According to the Indonesian Ministry of Energy and Mineral Resources (ESDM), as of the end of November, Indonesia has only attracted 1.17 billion USD worth of investment in new and renewable energy, equivalent to 65% of the 1.8 billion USD target set for this year.

This year's target is predicted to be unattainable, even after the Indonesian Government revised it down from the initial goal of 3.91 billion USD.

Fabby Tumiwa, Head of the Institute for Essential Services Reform (IESR), stated that this year's figure is expected to be the lowest since 2017, partly due to the lack of renewable energy projects auctioned off in the past two years, while deployment has slowed since 2020.

Indonesia has also aimed to promote rooftop solar energy projects with a target capacity of 2.14 GW by 2030. However, as of May, this target has only reached 95 MW.

Experts also pointed out other obstacles, such as the oversupply situation in the Java-Madura-Bali power grid, making it more challenging to sell renewable energy in this region. Unfavourable power purchase agreement terms have also diminished the payment capabilities of these projects./.

VNA