A new review from energy watch dog International Energy Agency (IEA) has listed high grades for Indonesia’s operation of energy groups and state-owned institutions, but also noted that the country still has much to do in order to ensure a sustainable future.
The report — titled “Energy Policies Beyond IEA Countries: Indonesia 2015” — details that even though Indonesia is still a net energy exporter due to the growth of its coal and liquid biofuel generation, the county is still using more energy than ever thanks to rising living standards, population growth and increasing urbanisation.
According to the IEA, the Indonesian government’s decision to decrease gasoline subsidies is a positive step towards the change needed to build a strong renewable energy market. However, the IEA also issued recommendations for the country to fine-tune its coal-mining market’s sustainability, develop a more transparent domestic natural gas market, update its national energy plans and policies in tandem and streamline its central-level institutions.
Maria van der Hoeven, IEA executive director, said: “Multi-layer government approval procedures, unrealistic targets and unclear regulations, difficult land and licensing acquisition, and limited options in private financing for small and medium-sized project developers are all major barriers to investment in Indonesia’s energy sector development.”