The Emergence of Solar Photovoltaic Technology in Indonesia: Winners and Losers

Abstract

As the solar energy technology has been more competitive recently, it is common to see studies which examined how solar photovoltaic can technically emerge in the energy system in Indonesia. However, less research is conducted to study how the emergence of solar photovoltaic might impact different stakeholders in the electricity market in Indonesia. The increase of solar photovoltaic deployment will create winners and losers among the main stakeholders which are: the consumers, the national electricity company (PLN), independent power producers (IPP), and the Government of Indonesia. This paper asserts that consumers in Indonesia who do not have access to the grid will get benefits from the solar photovoltaic competitive costs. The consumers who have access to grid, however, will be indifferent in their position. In the longer term, these consumers will face the death spiral unless PLN, forced by the regulation, takes the loss. PLN will face bankruptcy due to the loss unless they invest in the distributed energy resources infrastructure. IPP will not gain in position due to unsupportive government regulations. Moreover, solar photovoltaic IPP will be vulnerable due to the policies that support imbalanced competition among renewable energies. On the other hand, the government will get some advantages that support their political agenda during the proliferation of solar photovoltaic.

Trust in the Process: Renewable Energy Governance in Malaysia and Indonesia

“…As the bulk of scholarship on these two countries has highlighted the potential for, and challenges to, RE transitions or focused on specific RE projects (Bujang, Bern, and Brumm 2016; Kunaifi, Veldhuis, and Reinders 2020; Marquardt 2014; Qolbi 2020; Solangi et al . 2013; Sovacool and Bulan 2012; Sovacool and Drupady 2011), we add to the literature on RE policy support and policy‐making dynamics in Malaysia and Indonesia by analyzing trust.…”

“…As a consequence of the Indonesian public's reliance on and preference for cheaper rather than clean technology, election‐based campaign considerations and domestic political turmoil have incentivized the perpetuation of fuel subsidies and artificially suppressed fuel prices; prior to the 2019 Presidential Elections, Widodo retracted promises to reduce fuel subsidies, for example (Adi 2019). Furthermore, commitment toward RE development is at risk due to increasing competition among RE projects instead of against the conventional energy industry (Qolbi 2020, 3‐4). In 2014, the government tried to spur RE investment by setting higher FiTs rates on electricity, though this was later reduced because it was too high compared to FITs for thermal power plants (Singgih 2018).…”