Southeast Asia Energy Sector Development, Investment Planning and Capacity Building Facility

The Ministry of Finance (MoF) planned to accelerate renewable energy (RE) development, particularly geothermal power. This study reviewed various incentives that could be administered by MoF to support RE development and developed an RE subsidy framework to close the gap between the costs of renewable power and conventional power generation, taking into account the additional economic benefits of renewable power for Indonesia. Castlerock work included

• Review of prevailing impediments to renewable energy development in Indonesia
• Identification and evaluation of incentive options that could be provided by Ministry of Finance to support RE development
• Compilation of international experience with RE subsidies
• Formulation of an RE subsidy framework for MoF to close the gap between the costs of renewable power and conventional power generation, taking into account the additional economic benefits of renewable power for Indonesia. The framework considered the legal basis, governance, calculation, budgeting and auditing of the subsidy. 
• Estimation of subsidies that would be payable for new geothermal development over the coming 10 years.