A Blue Bird e-taxi leaves a charging station to take a passenger. (JG Photo/Yudha Baskoro)

The Long and Winding Road for Indonesia's Electric Vehicle Ecosystem

BY :DIANA MARISKA

MARCH 01, 2020

Jakarta. A national program to fill Indonesia's streets with more electric vehicles, or EVs, is still in its infancy, government officials have admitted, as regulations governing it continue to be chopped and changed.

Since a 2019 presidential decree on "the acceleration of battery-powered EV program for road transportation" was issued, derivative regulations on its operational aspects are even now still being deliberated on by related ministries and state agencies.

One of the most crucial parts to realize the government's plan to push more EVs out on to the streets is tariff determination for the electricity to be dished out by EV charging stations.

Currently, the government still has not made a decision on a national-standard electricity tariff that can be implemented by privately-owned charging stations.

Dody Suhendra, the assistant manager of meter and control system at the State Power Company (PLN), said the rate is "still being determined."

"We're still discussing the [electricity] tariff for the charging stations. Until the decision is made, PLN has a special tariff called the 'L-rate' of Rp 1,644 ($0.12) per kilowatt-hour [kWh]," Dody told the Jakarta Globe.

He said the Energy and Mineral Resources Ministry has full authority over the determination of the national rate.

Companies interested in opening up charging stations in Indonesia are also wondering if the government would allow some flexibility on the rule to charge higher rates to customers.

Even though PLN is the only state agency with the authority to sell electricity to the public, Doddy said it does not have a say in the above matter.

"According to the current system, the electricity rate in Indonesia is regulated by the government, who subsidizes some of the cost. PLN supports the idea [to let private companies determine their own rates] to turn this [charging station business] into a good business opportunity. Our view is that the rate from PLN to the charging stations should be regulated, but the rate from charging stations to the customers could be regulated a little more leniently. But then again, PLN is only an operator, the decision is with the regulator," Doddy said.

The government has also promised incentives for EV owners in Indonesia but have not decided what those incentives would be, something that has also hindered the growth of the EV ecosystem in Indonesia.

Meanwhile, the government expects 400,000 units of EV will have been rolled out on the streets in 2025.

Mohammad Mustafa Sarinanto, the head of the national laboratory for energy conversion technology at the Technology Assessment and Application Agency (BPPT), said the government would continue to study and inform the public about the potential of the EV business, including the incentives that might be made available by the government. 

"The ecosystem does not just mean the charging stations, but also the other potential businesses involving EV," Mustafa said to the Jakarta Globe.

"The [2019] decree also regulates ministries and state agencies' involvement in the creation of the ecosystem, including the government incentives," he said. 

According to Mustafa, the Energy and Mineral Resources Ministry, along with the Finance Ministry and the Trade Ministry, will regulate the standard electricity rate.

The central bank, Bank Indonesia, and the Financial Services Authority (OJK) will prepare the incentives for business entities.

The Transportation Ministry has been given the order to create regulations on the conversion of conventional internal combustion engine vehicles to EV.

"Hopefully, from April to May, several of these regulations can be issued so we can accelerate the development of the EV ecosystem," Mustafa said.

Ride-hailing company Grab and Indonesia's largest taxi operator, Blue Bird, had already introduced their electric fleets last year.

This move, Mustafa said, has been influential in raising public awareness of the EV program in Indonesia.

"People with the money can see for themselves, can feel for themselves. Once we have the awareness, we'll leave it to the producers to make cars at a sensible price. I'm optimistic with the right incentives, the prices will be competitive. I'd say the EV industry will start growing significantly in the next three to five years," he said. 

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