As one of the participants at the focus group discussion (FGD) on Permit Procedures for Renewable Energy (RE) Development in ASEAN in Jakarta, Indonesia (26 and 27 January 2016) organised by ASEAN-RESP, Hivos—an international development organisation based in The Netherlands—shared its experience in developing the 100% RE project in the island of Sumba, Indonesia. In describing the project as a best practice, they share in particular about the role of policy and permit procedure in the process.
In 2010, Sumba Iconic Island (SII) was introduced by Hivos, with the support of the Directorate General of New, Renewable Energy and Energy Conservation (Direktorat Jenderal Energi Baru Terbarukan dan Konservasi Energi/DJEBTKE), Ministry of Energy and Mineral Resources of the Republic of Indonesia (Kementerian Energi & Sumber Daya Mineral/ESDM). Access to energy as a driving force for development is what the Iconic Island initiative is about. It is a bold and ambitious plan to showcase how people in a poor, isolated island can take on their own development, facilitated by a supply of 100% RE.
Sumba Island has been chosen as the Iconic Island of 100% Renewable Energy based on a study conducted by Hivos in 2010 together with Winrock International, a non-profit organisation. The study shows that the island has low access to energy with electrification ratio of only 24,55% in spite of the island’s great RE potential (water, bioenergy, wind and solar). The Asian Development Bank (ADB) in November 2012 and the Norwegian Embassy in 2013 have also assumed a role in supporting the implementation of Sumba Iconic Island programme. In 2015, the programme also gained support from the Millennium Challenge Account – Indonesia (MCA-I) through the Green Prosperity programme.
Sumba Iconic Island has achieved an important milestone with the Indonesian government’s endorsement through the Ministerial Decree No. 3051 K/30/MEM/2015 on 1 June 2015. The Decree is significant as a legal basis and acknowledgement of SII as a Ministry-led national programme. However, it creates another challenge for all related stakeholders of the programme as it sets a new ambitious goal to provide 95% RE-generated electrification access in Sumba Island by 2020.
In order to facilitate the coordination of the programme, DJEBTKE/ESDM has issued the Decree No. 556K/73/DJE/2015 on 27 August 2015 about SII implementation team, consisting of the Steering Committee, Organising Committee, and Working Groups.
One of the Working Groups, in charge of Policies and Institutions, are responsible to:
- Prepare blueprint and roadmap for the implementation of Sumba Island as the Iconic Island of Renewable Energy development programme;
- Identify the supporting policies (including incentives);
- Identify the challenges from the aspects of national and local (provincial and regency/district level) regulations and establish coordination to overcome such challenges; and
- Prepare and implement human resources capacity building through education and training.
The challenges related to policy and regulations that this Working Group is handling includes the long and uneasy process of obtaining the licenses. A project developer must have several different kinds of permits or licenses, among others: principle, location, business area, and power plant operating license. Furthermore, such licenses are not available in a single institution, they have to be obtained from several different authorities. However, the Government of Indonesia has tried to simplify this process through the Investment Coordinating Board of the Republic of Indonesia (Badan Koordinasi Penanaman Modal) and continues to improve it.
In terms of opportunities for permit procedure, the SII programme has proposed some scenarios to push the development for the off-grid systems; i.e. to develop a special/customised permit procedure for off-grid development, as well as to develop a support scheme like special incentive, tax holiday, easier licensing, etc. There is also a discourse to establish a special regulation which sets Sumba Island as a special business area for RE development, as part of the effort to boost on-grid RE projects by the private sector.
For more information of the programme, please visit: www.sumbaiconicisland.org