Urgent Breakthrough

Posted by AsiaViews | Dec 18, 2017 | 0 |

Tempo

15 Dec 2017
Debate around the pricing of new and renewable energy (EBT) supplies ought not to have become so contentious if the government from the outset had been serious about drafting a rate formulation which is attractive to investors. The current protracted tug-of-war has instead obstructed the growth of environmentally friendly energy in Indonesia.

As of last week, the Ministry of Energy and Mineral Resources renegotiation with EBT electricity providers was still ongoing. The government insists the selling price of electricity must be set no higher than 85 percent of its basic cost of production. Businesses find this very burdensome.

The State Electricity Company (PLN) claims the signing to date of power purchase agreements covering 1,189 megawatts is proof that any renegotiation is unnecessary. In reality, most of these projects are at a standstill. In other words, although the PLN reference price has been revised several times, it remains unattractive for private-sector electricity providers.

It is time for the government to draft another strategy. A scheme offering incentives for renewable energy producers could be one such alternative. In other countries, this stimulus may take the form of a reduction in taxes and import duties, provision of free power station sites, as well as reductions in interest rates on loans. Such incentives successfully reduced the selling price of electricity in the United Arab Emirates, for instance, to under US$0.5 per kilowatt-hour (kWh).

Improvements must not just stop there. The business model used for the construction of power stations by private sector producers needs fundamental restructuring. To date, the PLN remains the only purchaser of electricity in Indonesia. This monopoly leaves a crack open for moral hazard to slip through because the government-owned company is then free to set highly profitable prices. As a result, only those private sector producers with strong connections to the authorities are able to get proper pricing.

The government should already have reworked this business model that still provides opportunities for such agreements under the table. To avoid this PLN monopoly, private sector producers ought to be allowed to sell power directly to consumers.

Law No. 30/2009 on Electrical Power Supplies does allow for the possibility of just such a breakthrough move. Its Article 11 states: if the State is ever unable to meet the demand for electricity, the government may then allow the private sector to sell electricity to consumers. The pre-condition is that the electricity producers must first obtain regional business licenses, as nominated by the government.

Government Regulation No. 14/2012 on Business Activities for the Provision of Electrical Power also allows a scheme for leasing out PLN’s transmission and distribution network, with the rental price to be approved by the Minister of Energy. Similar business models are widely adopted in other countries, but not yet in Indonesia. To date, the PLN has been reluctant to provide private sector producers with any opportunity to use its transmission network.

Consequently, it is only to be expected that the growth of environmentally friendly energy supplies in Indonesia still lags far behind that in other nations. At the end of last year, the percentage of renewable energy here was just 7.7 percent of the total energy produced, markedly lower than Malaysia, where it was 11.64 percent.

The government cannot be half-hearted in its support for the environmentally friendly energy program. Global warming and climate change are clear and present threats to us all. Without a more profitable business scheme on offer, the government’s ambition to pursue a target of a renewable energy mix of 23 percent by 2025 is likely to remain only wishful thinking.

(https://en.tempo.co/read/news/2017/12/15/314914122/Urgent-Breakthrough)

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EXTRICATING NDONESIAN CHILDREN FROM ISIS INFLUENCE ABROAD

Indonesia urgently needs to revisit the possibility of repatriating the neediest of its young citizens stranded abroad, whose families had earlier joined ISIS. Most of these children are in camps in northern Syria but there are also small numbers in the Philippines, Afghanistan and Iraq. “Extricating Indonesian Children from ISIS Influence Abroad”, the latest report from the Institute for Policy Analysis of Conflict (IPAC) argues that the government could begin by bringing back small groups of unaccompanied children under ten years of age, who pose minimal security risk and are most vulnerable to deteriorating conditions in the camps.“The problem is that health and security conditions are worsening by the day in the Syrian camps, and the children are growing older,” says Dyah Kartika, IPAC analyst. “They need access to schools, a nurturing environment, and medical attention. If the government waits too long, the children will be further exposed to ISIS ideology.” The new report examines a 2019 list of Indonesians in camps and prisons run by the Kurdish Syrian Democratic Forces (SDF). The Indonesian government has been trying to verify their citizenship, but with pseudonyms, misspellings and bad transliterations, it is a daunting task. At the time the data was collected, between March and June 2019, there were 555 Indonesians in SDF camps and prisons, including 367 children. Among the children, approximately 277 were under the age of ten and 34 were unaccompanied. In June 2021, there are fewer than ten children who are both unaccompanied and under the age of ten that could be prioritized for return. Bringing back children of ISIS families is no easy task. The report analyses the main challenges faced by the Indonesian government. These include definitional issues, bureaucratic competition, the difficulty of verifying nationality, evaluating the toll of exposure to conflict, assessing security risk, and finding relatives or others willing to provide care once the children are returned. In addition, COVID has meant stringent restrictions on travel, placing further obstacles in the way of repatriation. There are several models for rehabilitation of children exposed to violent extremism in Indonesia that could be modified to accommodate the needs of children repatriated from abroad. The report examines these models and argues that the government does not need to have every detail of rehabilitation programs in place before it starts extricating children from ISIS influence. It can start by bringing back the most vulnerable children and then modify programs as needed.

“It’s important that the government see these children as victims” says Dyah. “They deserve a chance to be children again.”

Urgent Breakthrough