IESR: The Importance of Reliable and Green Energy for the Operations of Indonesia’s Data Center

Currently, Indonesia is one of the countries with high economic growth in the Southeast Asia region. This economic growth has also been accompanied by the growth of massive internet users, with around 65% of Indonesia’s population being active internet users. The growth of internet users demands the availability of reliable data centers in Indonesia.

One of the characteristics of the data center is 24 hours of operation, and the energy required is relatively large. Globally, energy use for data centers is 200 Terawatt Hour, so there need to be anticipative steps to get around this large amount of energy demand. Looking at the global trend towards being carbon neutral, it is believed that using renewable energy to meet energy demands in data centers is the right thing to do.

Fabby Tumiwa, executive director of the Institute of Essential Services Reform (IESR) in the Sustainability in Digital Age Webinar, explained that there will be at least two direct benefits when using renewable energy as a power supply in the data center.

(1) Increased energy efficiency

The need for energy supply for 24 hours non-stop makes the data center must look for reliable resources to ensure its prime performance. Seeing the trend of renewable energy becoming more affordable, developing renewable energy is not only a reliable and clean power supply but also financial efficiency in the long term.

(2) Increasing Use of Renewable Energy

In the national scope, currently, Indonesia still has to comply with the Paris Agreement target of achieving 23% of renewable energy. Currently, Indonesia is only at around 11.5%. According to IESR calculations, a mix of 23% will only be achieved if 70% of the electricity generation is from renewable energy. By encouraging industrial sectors such as data centers to use renewable energy it will contribute to the fulfillment of the energy mix target.

In addition, the use of renewable energy on-site will be very relevant for the company’s pursuit of becoming RE100. That big tech companies like Google, Microsoft, or Amazon have joined the RE100 alliance which means they are committed to go zero carbon in a few years.

Fabby said that in order to support the acceleration of renewable energy, especially for rooftop PV, it is necessary to have policy reforms such as improving net-metering rates, revising procedures for changing rooftop PV, as well as disseminated comprehensive information.

“Any changes in terms of regulations and policies will be a positive signal for investors,” he said.

I Made Aditya Suryawidya, Head of Business Solution for SUN Energy, added that the use of renewable energy in the data center will have a positive impact in 3 sectors, i.e: business, costs, and the environment.

From a business perspective, using renewable energy, data center companies will gain relatively fixed rates for the long term, thus helping companies to predict operational costs that must be incurred. Meanwhile, from cost savings, renewable energy will be subject to electricity costs of up to 30%. No less important from an environmental perspective, renewable energy will be able to track the company’s carbon footprint, support the Sustainable Development Goals (SDG) and government programs to increase the use of renewable energy and as a bonus, companies will get a spotlight related to clean energy.

The Need for Supportive Policy for the Indonesian Electric Vehicle Development

In 2019, the government issued Presidential Decree 55 of 2019 concerning the Acceleration of Battery-Based Electric Motor Vehicles (KBLBB). The Presidential Decree stated that the achievement targets for electric car production are 2200 and 2.1 million electric motorbikes by 2025. It is an ambitious target to achieve, considering that currently the electric vehicle ecosystem in Indonesia still needs a lot of development.

The paper “Developing an Electric Vehicle Ecosystem in Indonesia: Lessons learned from the United States, Norway and China” issued by the Institute for Essential Services Reform (IESR), explained that what is meant by an electric vehicle ecosystem includes: (1) charging infrastructure; (2) the model and supply of electric vehicles; (3) public awareness and acceptance; (4) the supply chain for batteries and electric vehicle components; (5) incentives and supporting policies from the government. This study specifically looks at the strategies and policies used by three countries, the United States, Norway, and China, in building their electric vehicle ecosystem.

The study explained that the key to the success of the three countries in increasing the penetration of electric vehicles is by providing an adequate supporting ecosystem. Given the government’s ambitious targets for electric vehicles, it is necessary to immediately develop an adequate ecosystem for electric vehicles.

However, the development of electric vehicles in Indonesia faces various obstacles, one of which is that there is no integrated target and clear road map between the institutions that oversee the development of Indonesian electric vehicles. Currently, there are at least 2 different targets issued by the government regarding electric vehicles. First, the National Energy General Plan (RUEN) states that the target for electric vehicles is 2,200 cars and 2.1 million motorbikes by 2025. The Ministry of Industry (Kemenperin), on the other hand, has an even more ambitious target for these electric vehicles, namely, 20 % of total vehicle production (400,000 cars and 1,760,000 motorbikes) in 2025 to 30% (1,200,000 cars, and 3,225,000 motorbikes) by 2035.

Alief Wikarta, a lecturer and researcher at the Sepuluh Nopember Institute of Technology in Surabaya, stated that the development of an electric vehicle ecosystem cannot be carried out with a business as the usual scheme. The role of private investors is needed to participate in providing the electric vehicle ecosystem in Indonesia.

One of the obstacles for electric vehicles today is that they are still more expensive than conventional vehicles. The component that makes electric vehicles become high cost is the battery. 

“40-50% of the EV price is allocated to the battery price. If there is a business scheme that can incur battery costs from the price that consumers have to bear, the price of electric vehicles will drop drastically, “explained Alief.

Various schemes to reduce the price of electric vehicles were introduced, one of which was introduced by the Ministry of Energy and Mineral Resources, specifically the battery swap scheme. In this scheme, the cost of batteries can be reduced, provided that an investor is willing to invest and open a swap station.

Whatever scheme will be adopted as a solution, the government needs to find investors who are ready to run a marathon in building this battery swap ecosystem, such as by bearing the cost of the battery and making the swap station. This long-term commitment from investors is important because what will be built is a supporting ecosystem so that the domestic electric vehicle industry can compete in the global arena.

“Indeed, we hope that our industry will not only be marketed to the domestic market segment but also be accepted by the global market. So we must ensure that the quality of the electric vehicles we make is good and has an adequate supporting ecosystem, “


Clean Energy Business Integration


The long-term commitment of this investor includes the research and development capabilities of the investor. This research and development capability is essential to establish an ecosystem as a whole, not just an increase in production.

“I try to think in line with the current government’s agenda which is paying attention to batteries. We need to speak more about the second-life battery. The batteries whose capacity is in the range of 80% may no longer be optimal for use in electric cars/motorbikes, but these batteries can still be used for other fields such as rooftop solar power plants or wind turbines. “

What does it mean? We can integrate electric vehicles and renewable energy into one ecosystem, which is cleaner and economically profitable. Meanwhile, conventional vehicles can not have the reuse opportunity. 

“In conventional vehicles, the result of burning fuel is in the form of pollution. We can do nothing. It is different from electric vehicles whose batteries can be used again for other purposes, ”explained Alief.

Yet, the existing policies and the way the government sees electric vehicles as a separate component, as well as the circular economy aspect, has not been much considered.

“Until now, it has only been said that if we use a lot of electric vehicles, our fuel imports will decrease. Yes, it is true, but there are far greater things that we can achieve if we seriously develop this electric vehicle ecosystem, “concluded Alief.

The User of Solar rooftop Increasing, Central Java Government Optimistic to Achieve the Renewable Energy Mix Target of 21.35% in 2025

Semarang, 16 February 2021 – The Provincial Government of Central Java remains firmly committed to realizing Central Java as a province that relies on clean and renewable energy in its regional development. It was emphasized by the Acting Regional Secretary of Central Java Province, Prasetyo Aribowo representing the Governor of Central Java in the Central Java Solar Day 2021 organized by the Central Java Province ESDM Service in collaboration with the Institute for Essential Services Reform (IESR).

“The use of solar energy is very relevant to our need for clean energy. We have also signed an agreement with Bappenas for carbon reduction. As a policy roadmap, it will become mainstream in development planning in Central Java so we don’t rely on fossils anymore, “Prasetyo explained.

Furthermore, Dadan Kusdiana, Director General of EBTKE (Direktorat Jenderal Energi Baru Terbarukan dan Konservasi Energi of MEMR), attended the same event,  also explained that currently, his party is preparing a national energy grand strategy related to energy planning until 2035.  He stated that to achieve a renewable energy mix of 23% by 2025, developing solar power is the fastest way to catch up with the 11.5 percent lag.

The Directorate General of EBTKE is currently also in the process of revising Permen MEMR No. 49/2018 to attract more people to install the solar rooftop.

“At least there are three things that we will do, first adjusting the metering tariff rules 1: 6.5, making the reset process (zeroing) which has been done once every 3 (three) months to once a year and arranging the registration process to address difficulties in obtaining an Exim meter, for example with an online scheme, so those who register will be able to see the availability of the meter and the readiness of the solar rooftop, “explained Dadan.

“In the RUPTL (Rencana Umum Penyediaan Tenaga Listri-PLN’s electricity supply business plan) that is being drafted, we will include everything in Java for lakes, reservoirs, dams. 

“In numbers, there are 1900 MW which we will enter to encourage the use of solar power in the lake as a floating solar PV,” he added.

Embracing Dadan’s explanation, Fabby Tumiwa, Executive Director of IESR explained that IESR has conducted a study on the potential for solar energy development in Central Java, which is also high for ground-mounted PLTS and floating PV. In Central Java, 42 reservoirs have the potential to be developed as a floating PLTS location according to the PUPR Regulation No. 6/2020, for example, Gajah Mungkur Reservoir (148 MWp) and Kedung Ombo Reservoir (268 MWp).

 “The technical potential of floating PV can reach more than 700 MW of floating PLTS if the 10 biggest dams in Central Java are developed,” said Fabby.

He also explained that installing solar rooftops in public facilities, such as government offices, public facilities, and health care centers could reach the order of tens of megawatts while demonstrating the leadership of the Central Java provincial government and seriousness in developing renewable energy.

“The IESR survey also shows the great public interest in installing solar rooftops, however, the information about technology and suppliers is still limited. To encourage the adoption of rooftop PV, it is necessary to provide funding facilities in the form of low-interest, low-interest credit, fixed installments. It can be encouraged by the regional government through Bank Jateng or other state-owned banks, particularly to provide funding assistance for the installation of solar roof-tops for commercial businesses such as MSMEs, “said Fabby.

IESR recommends the government to keep distributing information, such as technical and policy,  as well as installation service providers, to attract more people investing in solar panels.

Furthermore, encouraging the availability of operational and maintenance services at the solar rooftops facilities will ensure the sustainability of the system. Moreover, the government needs to set an attractive financing scheme for public facilities and government buildings, for instance, by leasing, ESCO, third-party financing, and attractive financing schemes for households, commercial and industrial buildings. Indeed, it will be realized with the support of policies, regulations, and incentives from local governments. 

The Head of the ESDM Office of Central Java Province, Sujarwanto Dwiatmoko, is increasingly optimistic that Central Java’s goal of the regional renewable energy mix target of 21.35% in 2025 will be achieved.

“Despite the difficult conditions, the Central Java government managed to pass the target of the renewable energy mix in 2020. From the target of 11.60%, we were able to realize 11.89%. Solar panels are growing quite well, ”he explained.

Sujarwanto also gave an example of one of the efforts that the government has made in 2020 to encourage the penetration of solar panels in supporting the community’s economy is by building an off-grid solar water pump without using batteries in Kaliwungu Village, Purworejo Regency. With a capacity of 12 kWp, the pump raises water from the river and flows 20 ha of agricultural land (rice fields).

“It turns out that even though it operates only during the day, from 8 am to 5 pm, this pump can irrigate 20 ha of rice fields in just 5 (five) days for free. Meanwhile, using diesel will take 10 (ten) days, and you have to buy more diesel oil, ”he explained excitedly.

Besides, in 2020, with funds from the state budget, the Central Java government will build solar rooftops at 14 points in 11 districts/cities with a total capacity of 505 kWp.

“We will increase this number in 2021. The government plans to build around 31 units in about 8 (eight) districts/cities in Central Java. Generally, focusing on UMKM and Islamic boarding schools, “he said.

He hopes that with the solar rooftops, the electrical energy load of MSMEs and Islamic boarding schools will decrease significantly so that the existing savings can be used to develop businesses. The provincial government is also active in disseminating regulations, benefits, and development of solar panels to various groups, including the commercial and industrial sectors.

“Currently, ESDM opens consultations for those interested in using solar panels. As a result, solar panels are quite enthusiastic in Central Java. It can be seen from the increasing number of housing developers who consult at ESDM for new energy-efficient housing packages with rooftop solar installations, ”he said.

Based on PLN UID Central Java – DIY data, the growth of solar roofs is increasing, from 52 customers in 2019 to 138 customers in 2020. R-2 customers, consumers for middle-income households with a power of 3,500 VA to 5,500 VA, are dominated with as many as 41 customers. For the S2 tariff group, for the social group 1300 VA and above, all of them come from Islamic schools, totaling 23 customers.

IESR: The establishment of the Renewable Energy (RE) Implementing Body Won’t Solve the Problem

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR), assessed that the establishment of the RE Implementing Body, which was initiated in the RE Bill, won’t solve the problem of the slow development of renewable energy in Indonesia.

“Don’t get trapped in the logic of cutting the compass, hoping (the formation of) an institution will solve the problem, but instead it will raise new problems (later),” he explained in the FGD FPKB DPR RI (RI House of Representative) (2/2/2021).

Fabby viewed that the RE Bill should have identified the main obstacles in achieving the renewable energy mix target, such as in terms of the policy, institutional, social, technical, and infrastructure so that it can accelerate the development of renewable energy.

“The formation of a special business entity is closely related to the national target, and the institution must adapt to the supporting environment. Meanwhile, the RE Bill is aimed at forming an ecosystem for the development and utilization of renewable energy and overcoming the obstacles that we have experienced so far, “

He analyzed that all this time, the development and utilization of renewable energy was constrained by the PLN factor. As long as PLN’s financial problems are not resolved, the penetration of renewable energy into the PLN system will be hampered. He also mentioned the renewable energy mix target of 23 percent by 2025, which until the end of 2020 still only reaches around 10 percent.

“The 23 percent target of RE in PP No. 70/2014 is not immediately integrated into the 2015 RUPTL and the 35 GW program. While the 35 GW program with coal-fired power plants is running, it turns out that electricity demand is not as big as projected. PLN is in a dilemma condition. Meanwhile, in the next 5 (five) years, PLN will have to add more than 10 GW to reach 23 percent even though they have the capability of only 5 GW, for example, “he explained. 

Fabby took the example of a business entity that the Government of India formed, namely the Solar Energy Corporation of India (SECI) in 2007, to solve the problem of climate change. At that time, more than 70 percent of power plants in India used coal. Meanwhile, India is rich in water, solar, and wind. Finally, the Indian government is targeting the development of 20 GW PLTS by 2022. Since the program launched in 2010, India has succeeded in achieving 100 GW of renewable energy at the end of 2020. 

India’s success is inseparable from SECI’s role. For the implementation of PLTS to run smoothly, SECI is tasked with working on various solar rooftops schemes such as VGF, solar parks, grid-connected rooftop PVs, and others. SECI also coordinates between utilities, transmission companies, regulators, finance and others, so that the development of renewable energy projects is not impeded.

Electricity surplus in Indonesia, can it be exported?

Export of PLTU electricity will not be effective

The government through the Ministry of Energy and Mineral Resources is reviewing the possibility to export electricity to Singapore. This is based on the electricity supply surplus experienced by PLN. With the penetration of power plants from the 35 GW project, and a decrease in domestic demand for electricity. Indonesia will experience a power supply surplus of around 40%. This numerous surplus of electricity supply occurred because of the mismatch of assumptions during project planning and preparation.

“The 35 GW project is made with an economic growth assumption of 7%. With this economic growth, it is projected that electricity demand will increase by around 8%. We know that over the past 5 years, our economic growth averagely only 5% every year, and electricity demand growth is only around 4%, plus in 2020 there is the Covid-19 pandemic which has a direct impact on the economic contraction,” explained Fabby Tumiwa, Executive Director Institute for Essential Services Reform (IESR) in the Market Review segment by IDX Channel.

On the same occasion, Fabby responded to the government’s electricity export plan.

“What needs to be understood is that the export-import scheme for electricity is not impossible, but it needs to be reviewed again for its effectiveness in the current context,” said Fabby.

In the ASEAN context, discussions on the export-import of electricity among ASEAN countries began 15 years ago. Indonesia itself has signed an MoU (Memorandum of Understanding) on ​​the export of electricity with Tenaga Nasional Berhad (TNB) Malaysia to export electricity from the Sumatra system to Peninsula Malaysia. This cooperation takes into account the peak load period between Sumatra and Peninsula Malaysia. It is noted that the Sumatra system experiences a peak load period of electric power at 17.00 – 22.00 while the peak load of Peninsula Malaysia occurs at 8.00 – 16.00. Seeing the difference in the peak load period of electricity, the process of exporting electricity from the Sumatra system to Peninsula Malaysia is possible. This project is planned to start rolling in 2028.

Potential for Foreign Market Revenue

Regarding the potential for the electricity export market, within Southeast Asia, ASEAN countries have talked a lot about clean electricity. This is because several ASEAN countries already have targets for reducing greenhouse gas (GHG) emissions and even zero emissions. Last year, Singapore said it would buy 100 MW of electricity from Malaysia, which comes from renewable energy.

“It needs to be realized and understood that the current global trend is a movement towards renewable energy,” added Fabby.

According to him, based on this fact, electricity from renewable energy will be more attractive to the global market because it is related to the GHG emission reduction agenda of each country. Indonesia needs to think about this, if we want to seriously enter the global market, especially for the issue of electricity exports. Another thing that is no less important to think about is the carbon border tax that will begin to be calculated for each commodity in global trade, including electricity.

“It would not be nice if we built a lot of PLTUs (coal-based power plant), then we exported the electricity, so Indonesia must bear the emissions. When our GHG is high, our reputation (Indonesia-ed) in the global arena will be less good, “said Fabby.

Furthermore, Fabby stated that if the aim is to absorb surplus electricity, electricity exports will not solve the problem in the short term and this solution is not a sustainable solution. The alternatives offered by Fabby in addition to electricity exports to overcome the problem of electricity surplus, i.e reconsider and renegotiate.


Reconsider means that the Government must have the courage to reconsider and even stop the construction of a new coal-power plant (PLTU) and divert it for renewable energy generation. This strategy will avoid oversupply in the next 2-3 years as well as to meet the renewable energy mix target of 23% by 2025. Currently, there are around 7.5 GW of PLTU power plants from the 35 GW project that are still in the planning process (permits, contracts, and others). By diverting the coal-power plant project into renewable energy generation, PLN will have low-carbon power plants, and automatically reduce greenhouse gas emissions from the energy system sector.

Meanwhile, renegotiation means the government’s effort to negotiate with PLTU entrepreneurs to reduce the production capacity of old PLTUs, in order to provide room for renewable energy generation in the energy system. To encourage the penetration of renewable energy in Indonesia’s energy system, it is necessary to reduce the capacity of the current PLTU.

Post-Covid-19 economic growth is projected not to turn positive quickly. Likewise, the growth in demand for electricity. So reconsidering, and stopping the construction of a new PLTU will avoid an oversupply of electricity in the next 2-3 years. Because when there is an oversupply of electricity, the costs (government subsidies) are expensive.