Jakarta (Indonesia Window) - The Indonesian government will issue a new regulation regarding renewable energy sourced-electricity tariffs as it is considered a key factor in increasing the use of environmentally friendly energy.

Indonesian Minister of Energy and Mineral Resources Arifin Tasrif in a statement received by Indonesia Window here on Tuesday said that a more competitive price fix for electricity tariffs could guarantee investors to reinvest in renewable energy development.

"New and renewable energy has attractiveness, but on the other hand, the production costs are still relatively expensive. Hence, we are now preparing a new regulation on tariffs that will be more attractive for potential investors," Minister Arifin said on Monday (Sep 14).

He added that the use of renewable energy sources was still very low compared to fossil fuels.

"We have renewable energy potentials of 417.8 gigawatts, but only 2.5 percent of which has been utilized. We have geothermal energy, sunlight, biomass, hydropower sources, but all of these have not been optimized," Arifin said.

"The problem now is about tariffs. If we can solve this issue, then the renewable energy development will be more attractive and investors will return. The use of renewable energy sources is a very important factor for Indonesia today and in the future because it will reduce the use of fossil energy, although not entirely," Arifin said.

The minister hoped that process to set up the regulation on electricity rates from renewable energy sources could be completed soon this year.

"We hope that this year the tariff regulation can be completed. This process has also gone through several discussions with business players in the new and renewable energy sectors," he said.

"The government has also taken several initiatives, including absorbing the risk of geothermal exploration to reduce investors’ burdens," Arifin added.

The National Energy Policy states that the Indonesian government is targeting the national energy mix from renewable energy to be 23 percent by 2025.

Reporting by Indonesia Window