An ambitious plan by the Indonesian government to drastically cut the use of coal for electricity production in the next 10 years will be difficult to achieve unless incentives for renewable energy projects are available for private investors, say experts.

In its 10-year electricity procurement plan (RUPTL) released recently, the government outlined plans to have just over half the number of power plants targeted for construction to rely on renewable energy, the first time this has happened. The 2021-2030 RUPTL will see renewable power plants account for 51.6 per cent or 20.9 gigawatts of expanded capacity in Indonesia.

Private domestic and overseas investors have regularly been invited to build power plants in Indonesia and sell electricity to state utility PLN, which has the monopoly to supply households.

There are no plans under the latest RUPTL, which is updated annually, to build coal-fired power plants other than those previously committed.

However, experts are sceptical about private sector involvement in renewable energy projects.

"The government has stepped up campaigns and fixed red tape, but more is needed," ReforMiner Institute executive director Komaidi Notonegoro said.

"If we are serious about this, we have to make pricing attractive to investors doing the projects."

Indonesian Solar Energy Association chairman Fabby Tumiwa agreed, noting that the industry has been waiting for two years for changes to the "investor-unfriendly formula" which PLN would use to pay contractors.

The pricing cap PLN has promised to pay contractors for renewable power projects - even to those in high-risk or remote regions - does not reflect fair business practices, Mr Fabby said, adding that pricing should be mutually discussed and take into account differing risks for investors.

He attributed the low investment in new renewable energy projects in Indonesia in the past two years to the pricing issue.

Mr Fabby also suggested that PLN be more forthcoming on information regarding projects on offer and that schedules of tenders be made public at least three years earlier and at regular intervals, so that investors can prepare in advance.

When asked about the government's 2021-2030 renewable energy targets, he said: "If the rules are not revised, among other things, on pricing and auction processes, such targets would remain mere numbers.

"They will not be realised."