Investor Presentaiton
2019 OUTLOOK
Low investment in renewables is expected despite
increased urgency for energy transition
IPCC reported in October 2018 that limiting global warming to 1.5oC instead of 20C will avoid us from various catastrophic impacts, requiring
more aggressive transition of the energy sector to renewable energy. This will put more pressure on the regulators to support energy
transition and the financial institutions to divert its investment from fossil industries to renewable industries.
Since there will be a presidential election, no major regulatory changes can be expected to take place next year. The regulators would likely
want to keep the existing regulatory framework to maintain stability.
Low investments in renewables will be expected in 2019. One of the main factors is the unsupportive regulations. Another factor is the
decline in electricity consumption due to the slowing economic growth.
Small scale renewables IPPs find difficulties to obtain sponsors for their projects. Unless there is support from the government in a form of
government guarantee, the small scale projects will be hardly developed in the country.
Domestic biodiesel consumption will increase to 6 billion liters according to MEMR Decree. The number could even be higher if the
government decides to meet the B30 target in 2019. This will likely happen as the crude oil prices are projected to decline but still higher than
2017 prices.
MEMR Reg No. 49/2018 is deemed to negatively affect the rooftop solar PV development. Stagnant growth is expected in residential and
industrial rooftop solar PV due to unattractive clauses in the regulation. It is, however, not expected to hamper the commercial/public sector
since most of the electricity produced by the solar PV will be directly consumed during the day.
IESR (Institute for Essential Services Reform) | www.iesr.or.id
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