Luhut: President Jokowi orders to promptly implement the energy transition

Jakarta, 20 September 2021 – Indonesia needs to take several steps to accelerate the transition and development of renewable energy by 2050 by aligning regulations and policies and encouraging investment in renewable energy.

Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan said that basically, the Indonesian government always stays committed and tries its best to prevent the increase of earth’s temperature to more than 1.5 degrees Celsius. He stressed that President Jokowi’s directions explicitly ask for an immediate energy transition as the government is currently preparing an energy transition mechanism, especially for Indonesian coal-fired power plants.

“Financial support is significant to support the transition to renewable energy. We need help from developed countries to achieve carbon neutrality by 2060 or sooner. Currently, the transition from coal to renewable energy is underway. There are coal-fired power plants that must be replaced (by renewable energy) and are being prepared with PLN. We are optimistic it can be done faster because technology is also developing. So it is more efficient,” said Luhut in The 4th Indonesia Energy Transition Dialogue (IETD) organized by the Institute for Essential Services Reform (IESR) and the Indonesia Clean Energy Forum (ICEF), Monday (20/09/2021) virtually.

He said that the Indonesian government is targeting tourism areas, especially Toba Lake and Bali to be carbon neutral in 2045 or the 100th anniversary of Indonesia’s independence.

“Toba Lake is possible (to phase out from fossil fuel-ed) because it has 1,000 megawatts of geothermal and some hydropower energy. Therefore, the community there no longer needs to use fossil energy, so as Bali,”  he added.

In his opinion, the change is undeniable even in the next six years. Currently, all industries worth almost USD 100 billion have started to use renewable energy.

“We have great potential for renewable energy. By 2050 Europe will not use fossil fuels. We have goods from renewable energy or green products. PLN must also participate and make a start,” he said.

On a different occasion, at the Press Conference of The 4th Indonesia Energy Transition Dialogue (IETD) 2021. The Director of Electricity, Telecommunications and Information at the Ministry of National Development Planning (Bappenas), Rachmat Mardiana, said that Bappenas had compiled several studies on net-zero emission. The study comprises considerations of social, economic, environmental, and the needed funding to accelerate decarbonization in Indonesia.

“Indeed, we also need to explore the efforts to reduce coal dependence through several endeavors. For instance, studying future technological developments, the potential of hydrogen energy to meet the needs of transportation, industry, power plants,” said Rachmat at the Press Conference of The 4th Indonesia Energy Transition Dialogue (IETD) 2021, Monday (20/09/2021) virtually.

Director-General of New, Renewable Energy and Energy Conservation of the Ministry of Energy and Mineral Resources, Dadan Kusdiana, said that the transition to renewable energy needs to wait for the National Electricity Supply Business Plan (RUPTL). 

“We will complete the RUPTL, examine it from the budget side, whether it needs a state budget or replacement costs. Then we will inform the Ministry of Finance of the Presidential Decree on New Renewable Energy (EBT). It has been processed, soon the National Electricity Supply Business Plan (RUPTL) will be discussed, then the Ministry of Finance will only do the budget calculations,” said Dadan. 

Furthermore, the integration of renewable energy needs to be supported with solutions to overcome the oversupply from power plants. The Executive Director of the Institute for Essential Services Reform (IESR), Fabby Tumiwa said that it can be overcome through deep decarbonization in the industrial and business sectors.

 “The solution is by substituting heating energy that uses fossil fuels to electrification. The second solution, the most effective,  is with rooftop solar PV. Official data from the government in 2019, the solar PV only covered 186MV, but data in the Solar Energy Association is much larger, on 2020-2021 both in the pipeline and complete stage until July shows the total of 480 MW, “says Fabby.

Fabby said the government needs to scale up investment opportunities for renewable energy projects. The IESR study shows that to meet the target of 23 percent of the renewable energy mix by 2025, it requires investment of around US$14 billion to US$15 billion, or equivalent to Rp. 210 trillion. 

Meanwhile, to achieve net zero-emission, IESR estimates that the required investment until 2030 will reach US$25 billion to US$30 billion per year, or around Rp 420 trillion per year. This number will be higher in 2030–2050, reaching about US$50 billion to US$60 billion per year. The investment cost includes the development of low-carbon technology in the electricity, transportation, and industrial sectors. Fabby said the investment also includes the development of green hydrogen, as well as synthetic fuels for the transportation sector that are difficult to electrify such as planes and ships.

In terms of the coal industry, a member of the Indonesia Clean Energy Forum (ICEF), Widhyawan Prawiraatmadja said the coal industry needed a robust signal through a carbon tax to participate in the transformation and support the decarbonization of the energy system. 

“In this context, we apply the tax carbon US$ 5 per ton. The fossil fuel producer will think that it is okay to deal with such a tax (low tax-ed). So, it means that the regulation is not working. Unless like in another country where the tax is about USD 50 (per ton). It will drive you to deeply consider using fossils,” said Wawan. 

Deep Decarbonization of Indonesia’s Energy System in 2050 Needs Social Political Support

Jakarta, 20 September 2021– Indonesia’s commitment, incompatible with the Paris Agreement by not increasing the mitigation target in the updated Nationally Determined Contribution (NDC) and only targeting carbon neutrality by 2060 in the Long Term Strategy for Low Carbon and Climate Resilience (LTS-LCCR) document, is predicted to harm the environment and the Indonesian economy in the future. Indonesia is among the top 20 countries that are severely affected by the impacts of climate change in the form of extreme weather. Moreover, the global trade trends are embedding forward the green aspect of their manufactured products. Therefore, the Indonesian industry must compete harder with other countries in the world that have already developed renewable energy technologies and various policies to reduce carbon emissions by 2050 at the latest. 

The energy transition is the right step to overcome the earth temperature’s rise and keep Indonesia competitive in global trading, however, it needs clear and appropriate socio-political support to oversee the energy transition process. It was expressed by Prof. Dr. Kuntoro Mangkusubroto, Chairman of the Advisory Board of the Indonesia Clean Energy Forum (ICEF), at the opening of the annual Indonesia Energy Transition Dialogue (IETD) 2021 organized by ICEF and the Institute for Essential Services Reform (IESR).

“For developing countries like Indonesia, the phase-out of fossil fuel energy development is crucial otherwise it will be too late and too expensive to reduce greenhouse gas emissions and air pollution,” he said.

 

He said that the Indonesian government still has significant homework to do, such as immediately regulate an integrated national energy plan, mitigate the impact of the energy transition on the fossil fuel industry, use low-carbon technology in the transportation industry, and consider the just energy transition. 

Fabby Tumiwa, IESR Executive Director on the same event emphasized that based on the IESR’s study, Deep Decarbonization of Indonesia’s Energy System stated that Indonesia can achieve the target of the Paris Agreement carbon neutral by 2050. He added that this decade is vital because Indonesia must soon reach the peak of emissions in the energy sector by 2030 and boost the renewable energy mix in the electricity sector to reach 45%.

“It implies that the development and investment of renewable energy must be increased 7 to 8 times from the current status, including energy efficiency on the demand side, and start phasing out the thermal power generation to accommodate large-scale renewable energy, and modernizing our grid,” explained Fabby.

At the IETD 2021, Suharso Monoarfa, Minister of National Development Planning/Head of Bappenas in his remarks at the IETD 2021, said that the Indonesian government realized that the energy transition process needed to be carried out to reduce carbon emissions. He revealed that several steps are to be taken to decarbonize Indonesia’s energy system to accelerate the energy transition to renewable energy and develop new renewable energy.

 

“Another strategy is the energy efficiency program by considering the alignment between resource management, financial policy variables, and the role of all sectors,” he continued.

 

Still projecting carbon neutrality in 2060, Arifin Tasrif, Minister of Energy and Mineral Resources added that based on the scenario prepared by the government, the electricity demand in 2060 will be 1885 TWh. To meet electricity demand and achieve net-zero emissions, several policy steps have been taken including phasing out coal power plants, massive new renewable energy development, development of Indonesia’s super grid interconnection, and implementation of energy conservation. 

 

“All of these electricity needs will be fully supplied by new renewable energy power plants in 2060. Massive addition of variable capacity of renewable energy such as solar and wind will be carried out starting in 2031. Meanwhile, the utilization of geothermal and hydro energy will also be optimized to be able to maintain a balanced system,” said Arifin Tasrif.

 

Affirming Arifin Tasrif’s statement, Dadan Kusdiana, Director General of New, Renewable Energy and Energy Conservation, Ministry of Energy and Mineral Resources said that one of the challenges to realizing zero emissions in Indonesia by 2060 is to mobilize all sectors, not only the energy sector.

 

“Currently, in the electricity sector, the technology has already improved, while in the non-electricity sector, it still requires a more specialized study. The development of renewable energy has now begun, such as geothermal projects,” he explained.

 

IETD 2021 is held for five days, from 20-24 September in collaboration with Clean, Affordable, and Secure Energy for Southeast Asia (CASE), a partnership project from several countries in Southeast Asia and funded by the Federal Government of Germany. Further information can be accessed at ietd.info.

Kontan | Pursuing the New Renewable Energy mix target in the midst of a surplus of electricity, here are the MEMR and IESR solution options

Portions mix of renewable energy (EBT) in the national energy mix by 2020 only reached 23% of the target in 2025. The RUPTL is expected to increase the share of renewable energy-based electricity generation to 20 GW based on the grid. According to Fabby, Executive Director of IESR, the solution for using PLTS is quite effective in overcoming oversupply conditions, especially in Java and Sumatra.

Read more at Kontan

Bisnis | Indonesia Needs to Invest IDR 10,000 Trillion to Reach Zero Target

The Director-General of New, Renewable Energy and Energy Conservation (EBTKE) of the MEMR, Dadan Kusdiana, said that Indonesia needs an investment of at least Rp. 10,000 trillion to achieve the zero-emission target by 2060. According to Fabby, Executive Director of IESR, the investment figure will change in line with the economy in the future. The IESR study shows that to meet the NRE target by 2025, the investment required is around US$14 billion or equivalent to Rp210 trillion. Hopefully, this opportunity can be an investment. Not only attracting fees but also opening up investment opportunities

Read more at Bisnis

Antara | Emil Salim: We need a generation that masters environmentally friendly technology

Environmental expert, Prof. Dr. Emil Salim, said that currently we need a young generation who masters environmentally sound science and technology, so that they can reduce the rate of greenhouse gas (GHG) effects from carbon dioxide emissions. This effort to suppress global warming as a result of climate change is for the benefit of the younger generation. If from now on we do not try to reduce carbon dioxide emissions to reduce the effects of GHGs, then future generations will suffer the consequences.

Read more at Antara

Kompas | Indonesia still has a lot of homework to do in the energy transition

Some notes in the energy transition are preparing an integrated national energy plan, mitigating the impact of the energy transition on the fossil fuel industry, using low-carbon technology in the transportation industry, and considering the principle of equity during the transition period. According to Fabby, Executive Director of IESR, in this decade it is important for developing countries such as Indonesia to be able to achieve the decarbonization target of up to 45 percent. This can be achieved based on the IESR Deep Decarbonization study of Indonesia’s energy system.

Read more at Kompas

Katadata | Ministerial regulation on Rooftop-PV completed, Ministry of Energy and Community Resources says implementation is still problematic

Director General of New Renewable Energy Energy Conservation of the Ministry of Energy and Mineral Resources, Dadan Kusdiana, said that all processes in the preparation of ministerial regulations were in accordance with procedures, but this ministerial regulation was related to the presidential regulation, namely the issuance of a permit to the president. The Ministry of Economics and Community Resources continues to communicate with the Cabinet Secretariat of the Republic of Indonesia to resolve the issue. Fabby stated that if a regulation in Indonesia had been released, then the regulation should have taken effect. However, it should be realized that there are still pros and cons regarding the issuance of this regulation

Read more at Katadata

Sindo | Energy Mix Target Requires IDR 213 Trillion Investment

The Director-General of New, Renewable Energy and Energy Conservation (EBTKE) of the MEMR, Dadan Kusdiana, said that Indonesia needs an investment of at least Rp. 10,000 trillion to achieve the zero-emission target by 2060. According to Fabby, Executive Director of IESR, the investment figure will change in line with the economy in the future. . The IESR study shows that to meet the NRE target by 2025, the investment required is around US$14 billion or equivalent to Rp210 trillion. Hopefully, this opportunity can be an investment. Not only attracting costs but also opening up investment opportunities

Read more at Sindo