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Green Globe: Indonesia's renewable regulations impede development

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Green Globe: Indonesia's renewable regulations impede development

SNL ImageA farmer below Mt. Agung, an active volcano on the island of Bali, Indonesia. The Asian country aims to develop its renewable capacity, particularly hydro and geothermal power.
Source: Associated Press

Renewable developers in Indonesia are concerned that recent regulations by the government have become stumbling blocks to advancing the sector.

One example is the cap on payments by government-owned electric utility PT PLN of Indonesia for renewable energy, The Jakarta Post reported Aug. 7.

Under this rule, hydropower and geothermal power must be as cheap as locally produced energy, while power from solar and wind must be 85% lower than the local average cost to be available for purchase.

"That means in places like Java, which have lots of cheap coal-fired power, solar will struggle to be competitive," James Guild, a doctoral candidate at the S. Rajaratnam School of International Studies in Singapore, told the Post.

Indonesia aims to generate 23% of its electricity from renewable sources by 2025. The country's biggest renewable potential lies in hydropower and geothermal, given its location on the "ring of fire," the vast horseshoe-shaped rim of volcanoes and seismic activity that stretches from New Zealand to the coast of Chile, in the Pacific Ocean. Hydro currently accounts for 7.17% of Indonesia's total electricity generation, while geothermal contributes 3.48%.

Meanwhile, four wind farm operators in Australia are being sued for allegedly breaching national electricity rules during a September 2016 blackout.

The Australian Energy Regulator, or AER, alleges that AGL Energy Ltd., Neoen SA, Pacific Hydro Pty Ltd. and Tilt Renewables Ltd. failed to ensure that their plants complied with a requirement to continue generating during certain disturbances.

Severe weather conditions resulted to significant damage to South Australian transmission lines and the subsequent loss of wind generation contributed to a statewide blackout. According to AER, approximately 850,000 customer connections in South Australia lost power on that day.

"The AER has brought these proceedings to send a strong signal to all energy businesses about the importance of compliance with performance standards to promote system security and reliability," AER Chair Paula Conboy said. "Providing timely and accurate information to [the Australian Energy Market Operator] is critical in ensuring power system security and the effective operation of the wholesale energy markets."

There were 94 wind farms in Australia delivering nearly 6 GW of capacity at the end of 2018, according to the Australian Renewable Energy Agency.

Brazil approved seven renewable projects, totaling 108 MW, from its May 31 auction.

The three biofuel and four biomass projects must begin operations by June 28, 2021, Renewables Now reported Aug. 7.

The country will hold an auction on Oct. 17 for 100,874 MW of registered renewable energy projects and two more auctions on Dec. 6 for power supply contracts from existing biomass and natural gas projects.

According to law firm Norton Rose Fulbright, Brazil's renewables sector, including hydropower, represents more than 39% of the country's internal energy supply. The country has committed to expanding non-hydro renewables to 20% of its electricity supply by 2030. Its wind potential is currently estimated at 300 GW.

Elsewhere

* Actis has acquired BioTherm Energy (Pty) Ltd. from private equity firm Denham Capital. South Africa-based BioTherm Energy has a renewable portfolio totaling 288 MW.

* Namibia's NamPower plans to add 220 MW of renewable capacity, pv magazine reported Aug. 2, with initial plans for two 20-MW solar projects and 40 MW each of biomass and wind.

* Togo is moving forward with a 30-MW solar power project in Blitta as part of its efforts to reduce dependence on electricity imports, pv magazine reported Aug. 2.

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