Unlocking Renewable Energy Potential in Indonesia: Assessment on Project Viability

  • Abstract Indonesian Government has set an ambitious target to achieve 23 percent of renewable energy share in primary energy mix as well as in term of power sector by 2025. This target is then realized by committing a plan to build 56.4 GW additional power generation until 2028 as stated in the Electricity Supply Business Plan (RUPTL) 2019–2028. However, the deployment of RE power plant seems to be threatened due to untoward pricing policy which is considerably lower than the generation cost of RE-based electricity, resulting in the increase of possibility of future RE projects become unfeasible. Using 242 RE projects documented in 2019–2018 RUPTL, this study aims to examine feasibility of future projects under BPP price and identify other factors which could possibly increase project’s viability. The scope of this study includes several technologies such as wind, solar, hydro, mini hydro, biomass, and biogas. Financial model was employed to estimate Net Present Value (NPV) of the project as feasibility indicator. Data for project’s cost structure and financial assumption is obtained by literature review, survey and focus group discussion (FGD) to RE developers. The result shows that only less than 50 percent of the samples are feasible, accounting for only 43 per cent by number of projects (103 out of 242 projects) and 42 per cent by capacity (2,452 out of 5,888 MW). Hydro power becomes RE technologies with the highest feasibility followed by biomass. Projects located in Bangka Belitung, Gorontalo, East Kalimantan, Maluku, and North Sulawesi are all feasible,…
    23 Jul
    23 Jul
  • Abstract In recent years, academic productivity as defined by number of papers published has been the preoccupation of Indonesian research policymakers. A number of policies have been introduced, the most prominent of which is assigning score to number of publications and citations through SINTA. These initiatives, however, have often ignored the complex and heavily bureaucratized Indonesian research and higher education sector. Recently, SINTA score has also perversely incentivized some researchers to illegally increase their Scopus score. This paper is a preliminary attempt at assessing policy alternatives to address the issue of low number of academic publications, asking if there are viable or even better policies than the current point system. Incorporating Indonesia’s academic demography into our analysis, we find that giving monetary rewards for every published paper is the best policy option for lower-rank academics to “push” them into research. On the other hand, point rewards are most effective for upper-rank academics since they only need to be “nudged” into research activities. We also offer several recommendations about other policy alternatives (reforming research grants regime, providing international scholarships, and research collaboration) and the importance of detection and monitoring system to prevent the alternatives from becoming perverse incentives.…
    22 Jun
    22 Jun
  • Abstract This paper aims to review Indonesia’s significant progresses in developing its capacity in providing technical assistance within the framework of South-South Cooperation (SSC). The year 2019 had witnessed some advancements in the management of development cooperation towards the establishment of the future Indonesian Agency for International Development (Indonesian AID). These developments are reflected from the allocation of endowment fund as a source funding, series of studies conducted to prepare the establishment of Indonesian AID, the enactment of regulatory frameworks for the agency, and finally the launching of the Lembaga Dana Kerja Sama Pembangunan Internasional (LDKPI) or the Indonesian AID in October 18, 2019. Aside from reviewing those progresses, this paper also offers some proposals regarding measures and steps to undertake in order to achieve the agency’s main purpose and objectives.…
    22 Jun
    22 Jun
  • Abstract Development aid always sends a message a development problem(s) that it wishes to  solve. Using discourse analysis and interviews, this paper attempts to clarify which problem(s) Indonesia wants to address with its South-South and triangular cooperation and finds a lack of them. Instead, messages found in the communication of Indonesia’s aid are diplomatic, supported by the principles of demand-driven, solidarity, and ownership. The lack of indication of development objects and expected aid quality combined with an emphasis on these principles may lead policymakers and aid practitioners to prioritize the maintenance of good relationships with recipients and donor partners over actual development impact. This paper illustrates this tendency through the case of Strengthening Gender Mainstreaming JEL Classification: F50; O22; Z13 Keywords (SGM), a triangular program conducted with USAID and Fiji. Despite drastic change in design and a brief tension among the stakeholders, SGM was “successfully” conducted. Vague messaging on program goals contributed to this “success” as preservation of good relationships and attainment of direct diplomatic objectives were more important. Taking the new regulations on business process into account, the paper concludes with policy recommendations.…
    28 Mei
    28 Mei
  • Abstract Industrialization is the engine of economic growth. Most of the developing countries shifted from agriculture towards industrialization with the motivation of pursuing higher economic growth since the last few decades. Past studies have shown that there is clear evidence of a strong correlation between energy consumption and economic growth. Hence, this paper aims to contributes on the topic of energy consumption and how it impacts the level of economic growth through industrialization. Our findings show that the association between use of energy at manufacturing sector, which have been proxied using amount of refined energy and petroleum allocated to manufacturing sector, and the development of manufacturing sector, which have been proxied using level of GDP on manufacturing sector, is not a mere correlation.  Estimations using lagged independent variable proves that an increase on use of energy at manufacturing sector has a positive and, to some extent, significant impact on the expansion of manufacturing sector. Furthermore, this study also finds that the effect of use of energy on manufacturing sector on the expansion of manufacturing sector seems to be weaker and even becomes insignificant on the Non-ASEAN Plus countries. One factor that might explain such phenomena is the difference on the commitment from each country to allocate energy for the development of their manufacturing sector. The energy allocation refers to the share of energy which flows to the manufacturing sector instead to other non-manufacturing sector, such as agriculture, services, or even consumption. Higher share of energy which flows to the manufacturing…
    04 Mei
    04 Mei
  • Abstract Tourism has important contribution towards Indonesia’s economy and the role tends to increase thorugh time. However, this study aims to delve deeper into how tourism can impact on poverty reduction and equal income distribution. The study employs Miyazawa’s input-output, econometrics, and micro simulation models. The results of the simulation show that without tourism activity, Indonesia’s poverty rate in 2014, 2015, and 2016 is expected to be 4% higher than the actuality. Tourism also contributes to reducing the depth of poverty from 2.04 to 1.21, as well as lessening the severity of poverty from 0.37 to 0.29 in 2016. This result is supported by econometric analysis showing that regions with tourism as a main economic activity have 1.5% to 3.4% lower poverty rate than those without. Further, domestic tourism activity offers a bigger contribution towards the lower income group when compared to their international counterparts. The implication of the findings towards policy making and tourism businesses is discussed.…
    21 Apr
    21 Apr
  • Abstract This paper analyses the impact of political competition on district government performance in Indonesia. This study uses a new database that covers 427 districts in Indonesia, from 2000 to 2013. Political competition is measured using the Herfindahl Hirschman Concentration Index for the district parliament election. This variable is potentially endogenous, because political competition is likely to be non-random and correlated with unobservable variables. To solve this problem, I use the lag of the average political competition within the same province and the political competition from the 1955 general election, as instrumental variables for political competition. The degree of political competition has been found to boost real Regional Gross Domestic Product (RGDP) per capita and RGDP growth by 3.24% and 1.11%, respectively . This study also find that stiffer political competition is associated with higher public spending (e.g. infrastructure spending) and pro-business policies.…
    21 Apr
    21 Apr
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