Local Government’s Commitment is The Key to Renewable Energy Transition

Jakarta, December 7, 2020 – Each province in Indonesia has a lot of renewable energy potential that has not been developed optimally. Therefore, aside from devising policies that favor renewable energy, regional leaders act as an important key to cultivating renewable energy potential.

Governor of East Nusa Tenggara (NTT), Viktor Bungtilu Laiskodat, said that NTT has 60,000 MW renewable energy potential from sunlight. However, only 100 MW of it has been utilized optimally by the people. To optimize the use of renewable energy, the NTT Provincial Government hopes to take concrete steps through a collaboration with the central government and PLN.

“There is no other choice, we have to shift to renewable energy because this affects other sectors. For example, when we produce seaweed, it is rejected by European companies because it is not produced using 100% renewable energy. This means that the world’s interest lies in renewable energy, we have no choice but to shift, “said Viktor.

Indonesia also has an extraordinary social culture. Therefore, the Central Java Provincial Government uses community movements in villages to participate in building an Energy-Independent Village (Desa Mandiri Energi). Head of the Central Java Energy and Mineral Resources (ESDM), Sujarwanto Dwiatmoko, said that people in the energy-independent village use sunlight, biomass, water flow, and biodigester to generate electricity.

Deputy Regent of Musi Banyuasin, South Sumatra, Beni Hernedi said that several communities in South Sumatra district start to adopt biomass to fuel power plants. That being said, programs from the local government to optimize the energy mix need support from the central government and PLN as the main supplier of electricity.

Bali also needs the central government’s support for the collaboration between smart grid renewable energy and the old grid. According to IGW Samsi Gunarta, the Head of Bali’s Provincial Transportation Agency, this support is needed to support electric vehicles initiated by the Provincial Government. “Besides, it is impossible for us to continue the production without using (the products). Apart from the production, the usage must also be taken into account,” said Samsi.

Chungnam Province, South Korea serves as an example that the regional leaders’ success is the key to successfully directing the society to the energy transition. Chungnam Governor, Yang Seung Joo, along with 300 community organizations, has committed to eliminating carbon emissions. It is hoped that Indonesia can follow Chungnam’s steps in collaborating with the community.

Watch Governor Yang full speech, addressed on the second day of IETD 2020:

All Parties Collaboration Required! Reducing Carbon Emissions through Renewable Energy Development

Day one of  The 3rd Indonesia Energy Transition Dialogue 2020 #IETD2020 #EnergyTransition

Jakarta, 7 December 2020 – Carbon emissions from Steam Power Plants (PLTU) tended to be low during the Covid-19 pandemic due to decreased consumption of electrical energy. However, the target for reducing carbon emissions is not yet on track to meet the Paris Agreement. For carbon emission reduction to be sustainable, the Indonesian government should be able to take advantage of post-Covid-19 recovery by more massively developing renewable energy potentials.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) in his remarks during the opening of the Indonesia Energy Transition Dialogue 2020 (IETD 2020) highlighted the phenomenon of falling coal prices in the international market and the stronger commitment of coal-importing countries such as China, Korea, and Japan to go carbon neutral in 2050.

“Ten years ago, people might not have imagined that solar panel technology would be one of the energies to power electricity. Or, decades ago, people might not believe that coal would become history since it is no longer economical. However, all of that is happening right now. Solar energy is getting cheaper, and coal is becoming unpopular, ”he said.

Fabby also explained that Indonesia has great renewable energy potential from sunlight, geothermal, biogas, and hydropower. Using these potentials, Indonesia must achieve 23% renewable energy use by 2025.

According to the IESR research, Indonesia’s chance of achieving its energy mix target is quite positive. The energy mix penetration in Indonesia can reach 40%. IESR’s recent study with Finland’s Lappeenranta University of Technology (LUT) and Agora Energiewende said that Indonesia could reach 100% renewable energy demand by 2050 cost-effectively without compromising on energy security. Achieving this requires collaboration from all stakeholders in government and community policy.

Although not as fast as ASEAN countries like Thailand in promoting renewable energy development, the Indonesian government through the Ministry of Finance has made various fiscal policies that support the renewable energy industry. Some of them are tax holiday and tax allowance for the renewable energy industry.

In addition, Suahasil Nazara, Deputy Minister of Finance who attended the Indonesia Energy Transition Dialogue (IETD), emphasized the importance of synergy between institutions to determine the direction of Indonesia’s renewable energy.

“The government is basically very passionate about renewable energy development. Come, every institution, especially the Ministry of Energy and Mineral Resources and related institutions, sit together and have a deep discussion, so that we, from the Ministry of Finance, can provide maximum support in terms of encouraging renewable energy investment in Indonesia,” Suahasil said.

The government also continues to improve Indonesia’s economy through various national economic recovery (PEN) programs, namely a fund allocation of Rp318 trillion rupiahs. Thanks to this program, Indonesia’s economy began to improve as seen from the graph of the national income development that rose from -5.32% to 3.49% in the third quarter.

Unfortunately, the economic stimulus has been flowing more towards fossil energy than renewable energy. Therefore, the government provides various sources of funding for the renewable energy industry. One of them is through the issuance of Sukuk hijau.

This article was developed from the recent discussion within the 3rd Indonesia Energy Transition Dialogue, Monday, December 7th. Join and participate in the dialogue virtually, 7 – 11 December 2020, visit ietd.info.

 The second day of IETD 2020, will bring the discussions among The Governors (local government of Indonesia) and Special guest: Governor of Chungcheongnam-do, South Korea with the topic of Local governments lead the way in energy transition.