NRGI’s Indonesia country manager Emanuel Bria recently spoke with Jemma Purdey for the University of Melbourne’s Talking Indonesia podcast. Their discussion focused on the tension between coal and renewable energy developments in Indonesia. Bria said that the country’s high dependence on and support for fossil-based energy sources has raised concerns among renewable energy investors.

Listen to the full podcast:

Three key points that Bria made:

1. Subsidies remain a significant obstacle to changing the energy mix. The Indonesian government is still subsidizing the coal sector both in terms of supporting policies as well as preferential pricing. If this continues, the country’s shift towards renewables will be further delayed as not only will it take time for the people to change their behavior and mindset, it will also send a sign to investors that the government is not yet ready to support their business.
2. Incentives to invest in the renewable energy sector are still lacking. While the coal sector is highly incentivized by the government, Indonesia has not made significant moves in attracting more investment into the renewable energy sector. Meanwhile, investors would need assurance that putting money into the development of renewables would bring them profits.
3. Indonesia’s state companies must quickly adjust to the changing energy trend. While discussions around renewable energy use in Indonesia continue, state electricity and oil companies PLN and Pertamina still rely heavily fossil fuels.

Fikri Muhammadi is an Asia-Pacific associate with the Natural Resource Governance Institute.