Consideration factors in domestic investment for renewable energy development in Indonesia

Septi Riansyah, Dony A. Chalid

Research output: Contribution to journalConference articlepeer-review

Abstract

Development of renewable energy seen as one of the solutions when we talk about the climate change issue. Rapid growth and uncontrolled fossil fuel usage start to have an impact on world society. Renewable energy is a reliable solution to reduce further fossil fuel exploitation. This research is aiming to know consideration factors for domestic investors' decision to support the development of renewable energy in Indonesia as one of the funding beside FDI. Data gathered by the two-stage collection process - the first stage is in an expert interview to determining frameworks (AHP model) of factors related to domestic investment. The second stage is testing the framework using the AHP approach for each level in a pairwise comparison. This research showed that the domestic investors perceived access to the grid is crucial due to the market condition where government-owned companies fully control all power distribution. Getting the transparency on project clarity also critical for the independent power producers (IPP). By having it, the IPP can get a clear picture of the project requirement and provide the best proposal to the prospective investor. The last important factor is having Feed-in Tariff (FIT) pricing policy, which allowed guarantee fixed electricity prices. The IPP will be able to get financial return certainty and be relatively more comfortable forecasting their project cash flow.

Original languageEnglish
Article number08002
JournalE3S Web of Conferences
Volume202
DOIs
Publication statusPublished - 10 Nov 2020
Event5th International Conference on Energy, Environmental and Information System, ICENIS 2020 - Semarang, Indonesia
Duration: 12 Aug 202013 Aug 2020

Keywords

  • Domestic Investment
  • Feed-in Tariff
  • Independent Power Producers
  • Renewable Energy

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