Regulations Needed to Support Energy Startups

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 181.Pers/04/SJI/2020

Date: 28 May 2021

Regulations Needed to Support Energy Startups

The government has been asked to prepare regulations for energy startups because the business has been growing rapidly in the last few years.

"The government, private sector, and academics need to support new startups to run, and existing ones to grow, at present and in the future," said Environmental and Spatial Issues Advisor of the Indonesian Ministry of Energy and Mineral Resources (EMR), Saleh Abdurrahman, at the virtual closing of APEC Workshop on Achieving Business Sustainability for Clean Energy Start-ups on Friday (28/5).

Saleh detailed the types of support needed, which included the assistance to increase expertise, skills, and capacity in renewable energy technology, the aid to foster technological and commercial readiness in renewable energy business, provision of technical and financial assistance to form clean energy startups, as well as technological, business, and market development to reduce costs and increase the use of renewable energy.

According to Saleh, the Covid-19 pandemic has also hit the energy sector industry. The crisis caused by the pandemic has made oil prices very volatile. In fact, fossil-based companies on average have lost 45% of their total market value. "This is the sharpest decline in oil demand in the last quarter of century," said Saleh.

On the other hand, this condition provides fresh air for renewable energy industry. Moreover, renewables investment has become much lower due to increased interest of consumers and investors in the industry. "This factor is an opportunity for clean energy startups to develop their business and expand their market," Saleh added.

Saleh explained that the cost to build new solar PV systems and wind power stations is cheaper than maintaining coal-based power plant operations. For example, replacing 500 Giga Watt (GW) of coal-fired power plants with solar PV systems and wind power stations will reduce costs by up to USD23 billion annually and emissions by about 1.8 Giga Tons (GT) of carbon dioxide, or equal to 5% of the total carbon dioxide emissions worldwide in 2019. In addition, such replacement will generate an investment stimulus of USD940 billion, or equivalent to 1% of global GDP. "Remember, the market tends to be sensitive to price changes," Saleh concluded.

For the record, the APEC Workshop on Achieving Business Sustainability for Clean Energy Start-ups (EWG 02 2020A) is one of the project proposals which funding was approved by APEC and the first project of the Ministry of EMR to be funded by the forum since its formation.

The workshop lasts for two days, from May 27 to May 28, 2021. It aims to provide training to startups, policy makers, and clean energy business players in APEC economies to exchange ideas in developing sustainable clean energy startup business. (IY)

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