New and renewable energy development should be encouraged considering Indonesia is now a net importer of oil. The subsidy for transportation and electricity more than 300 trillion rupiahs. Presidential Decree No. 5, 2006, mandates the target energy mix by 2025 is 17% for new and renewable energy. The demand growth of energy in Indonesia around 7%, compare to developed country only 2 â 3%. This study aims to develop renewable energy policy models in particular biomass for rural electrification; to identify the factors that influence the price of feed in tariff policy, in particular wood-based biomass,; andÂ designing the role of socialÂ forest for raw materials bio-pellet industry in a sustainable supply chain. Research using soft systems methodology, then it has analyzed by Interpretative Structural Modeling (ISM) and the Strategic Assumption Surfacing and Testing (SAST). The results showed key element of development policy model of renewable energy for community-based forest industry that is sustainable biomass energy tariff, competent human resources, coordination among related local government offices, community participation, funds and investment business, microfinance, community leaders, state forest lands, smallholder plantations policy, spatial regions, financial institutions, NGOs and professional associations energy field. The strategic assumptions have been identified which is sufficient supply of raw materials, industrial raw materials available, available alternative industrial biomass potential of raw materials in the local, the obvious trade system, support regulatory and local governments, inventory of land and forest, and the support of community leaders.
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