Indonesia Plans Feed-In-Tariffs to Enhance Renewable Energy Sector

Indonesia has announced that it plans to issue a presidential regulation on a feed-in tariff system in a bid to enhance investment in its renewable energy sector.

The feed-in tariffs will be divided into two stages. The first will offer renewable power plant developers a fixed electricity price for 12 years.

At the second stage, and on the plant's thirteenth year, the government will offer an even lower fixed price until the end of the contract.

"It's to ensure developers faster returns," Rida Mulyana, director general of electricity at the Indonesian energy ministry, told reporters on Wednesday.

The contract period for renewable power plants usually lasts for 25-30 years. The feed-in tariffs will include hydro, solar and wind power plants but not geothermal power plants and will only apply to new contracts, he said.

The government is also planning a separate law for geothermal energy, Mulyana said, adding that incentives will be given for exploration activities.