The Government of Indonesia has announced plans to subsidise renewable energy (RE) projects as well as open the country’s first nuclear power plant by 2045.
A draft legislation has been submitted to the parliament laying out a strategic framework for future energy projects, with more specific guidelines to follow later. Under the bill, an export tax will be introduced for RE that is supplied to other countries. Additionally, the coal sector will be required to reserve at least 30 per cent of the total output for local consumption. This reserve will have a ceiling price of USD70 per tonne for high-quality coal, compared with current global prices of USD290 per tonne. The government will also establish a nuclear power assembly to oversee the development and operation of nuclear power facilities. Only state-owned firms will be permitted to construct, operate, and terminate operations on such facilities. Additionally, the government will provide tax and administrative incentives to support the development of new energy projects. RE projects will be subsidised in cases where the cost of production is higher than traditional fossil fuels. Resources from the state budget, export taxes and carbon trading will be used to build a RE fund. This fund will be used to finance energy infrastructure, provide incentives for developers and support research.