Ocean energy is a new type energy
for Indonesia, and also for the world. Ocean energy has received a greater attention from
universities, government agencies, companies and public.
Among the
source of energies, Utilization of renewable energy is very low especially for ocean energy.
Indonesia is still depended badly on
fossil fuel. The dependency causes loss of many
opportunities in development of the country
because some fund went to high fuel subsidy.
In recent
condition the government has revised energy policies to become more favor for
the renewable energy especially for the ocean energy.
There are two main objective in the renewable energy (Ocean Energy) implementation :
1. To increase the energy access Electricity ratio where currently is about
67% , Limited access to electricity is commonly at small islands populations and less developed
regions
2. To reduce
the oil “addiction” , which takes about 15% of national budget for energy
subsidies
The first guide
in energy activity in Indonesia is Law No. 30/2007 about Energy. This law should be
followed by all stakeholder involved in energy sector. The government in
formulating energy policy is working together with the National Energy Council (NEC/DEN) as a think tank body and finally the
policy is ratified by the parliament.
Law no . 30 Year 2007 about Energy stated that :
- Renewable energy sources are energy sources produced from sustainable energy resources if manage well , such as geothermal , wind , bioenergy , solar rays , stream and waterfall, and the movement and the temperature differences sealayer ( Article 1 number 6 ) .
- Provision and utilization of renewable energy shall be increased by the government and local authorities ( Article 20 number 4 and Article 21 number 2 ) .
- The provision and use of energy from renewable energy sources can obtain facilities and / or incentives from the government and / or the appropriate local government authority for a certain period of time to achieve its economic value ( Article 20 number 5 , Article 21 number 3 ) .
- The Law also creates a National Energy Council ( NEC ) with an authority to design and formulate a national energy policy on behalf of the GOI but the policy must be endorsed by Parliament .
The second guide in implementation of energy project
is Law No. 17/2007 about Long Term Development Planning of
Indonesia.
The Republik Indonesia law no 17/2007 on the long-term national
development plan year 2005 - 2025
(RPJPN, appendix, chapter IV, section IV.1.6, number 2) mandates the
development of ocean energy within the mid-term plan (2010-2014)
The third guide is Presidential Decree No.5 Year 2006 about National
Energy Policy (KEN) stipulates that the Minister of Energy and Mineral Resources set a
National Energy Management Blueprint ( PEN ), which includes among others the
management and utilization of energy resources ( Article 4 , number 1 and number
2 letter c ) .
From this presidential
decree state that The share of renewable energy is growing :
From 4.3% (in 2005) until
17% (in 2025).
Recently, NEC is
reviewing the current energy policy and intends to include the role of ocean enegy in the energy mix of
2010-2050. And we have infomation that
in 28 January 2014 the Parliament has ratified revision of national energy policy. It is ratified that contribution from
renewable energy become 23 % in 2025
bigger than previous policy (17 %).
Incentif in Ocean Energy
There two type
incentif fiscal in renewable energy based on Ministry
of Finance Regulation No. 21/2010.
Income tax reductions. A renewable energy
investor is eligible for net income reduction by 5 per cent of the investment
value each year, over a six-year period ° Accelerated depreciation and
amortization. This allows investments to be depreciated within 2–10 years,
depending on type of asset. This incentive would reduce the income tax paid by
the investors and is expected to encourage expansion of investment (Government
Regulation no 1/2007).
° An income tax reduction for foreign
investors allows them to pay a rate of only 10 per cent on dividends they
receive.
° Compensation for losses for foreign
investors. This is available for more than five years and follows certain
criteria. VAT on imported goods for producing renewable energy can also be
exempted.
2. Import duty and VAT
facilities:
Exemptions from import duty for capital goods and
machinery, provided that the goods are not available in Indonesia, or that their Indonesian equivalents have
unsuitable specifications or are available in insuffcient quantity. While the Decree is specifically directed for renewable
energy promotion, the same import duty exemption is also available for power plant development from
all other sources of energy. The exemption is valid for two years and can be extended for one more
year. Investors need to request the facility by following various procedures
and showing required
documentation. The incentive can also be requested for activities to increase
the capacity of existing
power plants.
° Until recently, Indonesia also offered a tax incentive
for investors in renewable energy projects that would allow the government to
pay for their income tax and VAT for the current year.
Besides that
based on Ministry of
Finance Regulation No. 154/PMK.011/2008 there is an import duty exemption for goods and
machinery in order to build and operate power plant for public purpose.
Feed in Tariff
Nowadays The
goverment of Indonesia has enacted incentif policies for renewable energy through
feed in tarif only for geothermal power plant and photovoltaic power
plant.
The scheme based on higher price that can be reach through negotiation.
For geothermal it could be maximum
11 cent US$/kwh meanwhile for
photovoltaic electricity it could be maximum
18.5 cent US$/kwh depend on
location where if it is outside java
island the price could be reach the highest price.
According to the new national energy policy that has been ratified by the parliament recently,
where the ocean energy included in the renewable energy as part of national
energy mix, we hope that the government of Indonesia will publish feed in tariff
for the ocean energy immediately.
Written By : Shalahuddin Hasan
