Government and Industrial Sector Support for Energy Transition in Central Java

Semarang, December 8, 2022Indonesia is setting a target to achieve a renewable energy mix of 23% in 2025. In order to encourage the energy transition in Central Java, the Institute for Essential Services Reform (IESR) and the Central Java Provincial Government are holding the Central Java Stakeholder Gathering 2022 with the theme ‘Energy Transition for Development of Low Carbon Areas’ which takes place annually via hybrid.

Achmad Husein, The Regent of Banyumas, stated that he had closed the two most giant landfills​​ in Banyumas to reduce carbon. Garbage will be sorted into useful, non-organic and organic waste.

“In managing waste, Banyumas uses technological solutions divided into two types, first downstream (community), by using a waste bank. Second, an app initiative to reduce plastic waste upstream, by buying all plastic from the community (various types of plastic). Then, there is also an application for people to sort organic waste and get paid. Each kilogram of organic waste is paid Rp. 100, “explained Achmad Husein.

Tavip Rubiyanto, Head of Sub-Division of Energy and Mineral Resources, Directorate of Synchronization of Regional Government Affairs I, Directorate General of Regional Development, Ministry of Home Affairs, explained the importance of regional development, which can make a significant contribution to national development. However, several cities still need to prepare a Regional Energy General Plan (RUED), so assistance from the Central Government is required in its design. The problem is that regions can only contribute as much as the authority they hold.

“Regional authority for energy transition is relatively small, so its contribution is also relatively small. For this reason, the Ministry of Home Affairs will draft a Presidential Decree for Strengthening Regional Roles. Consequently, the regions need to revise the RUED according to the new authority/budget to support the energy transition target,” Tavip explained.

In line with Tavip, Djoko Siswanto, Secretary General of the National Energy Council (DEN) hopes that there will be better coordination and cooperation between local governments in Indonesia to achieve renewable energy goals. For example, ​​the Central Government can instruct local governments to use electric vehicles in implementing RUED. Even so, there are still obstacles in increasing energy utilization in accordance with regional potential, most importantly funding.

“On the other hand, we need international support to face the funding challenges in the energy transition. For this reason, regional regulations can become a basis for investors in developing renewable energy in the region. It could be with the cooperation of region-owned business entities, the private sector, and international parties,” said Djoko.

To support the acceleration of the energy transition in the region, Muhammad Firdaus, Deputy Head of Bank Indonesia Representative for Central Java Province, explained that green financing (green economy) in Central Java is significant o support a sustainable economy. The green economy is projected to deliver benefits such as job creation, and help ease export barriers. Thus the reduction in production costs is only a maximum of 10%, making it less attractive for companies to implement a circular economy.

“Bank Indonesia is trying to encourage banks to extend credit to the green economy sector. One of the projects that has been carried out is Green Loan to Value Ratio (LTV) 0% (without down payment) and allows buying green bonds to meet the Macroprudential Inclusive Financing Ratio (RPIM),” he said.

Meanwhile, Ignasius Iswanto, General Manager Engineering, PT Djarum OASIS Kretek Factory stated that Djarum had made efforts towards sustainability. For example, Djarum already has a carbon footprint report, water resources management, energy saving, and composting. Furthermore, PT Djarum uses a biomass boiler with wood chip fuel on boilers. Emissions reduced from planting rain trees (trembesi) in the Djarum Bakti Lingkungan Program amount to 4,457,400 million tonnes of CO2e. He also explained that through his efforts to make Djarum an environmentally friendly company, he discovered another energy producing source using wastewater, namely plasma energy.

“Plasma energy should also be considered as a source of renewable energy, where liquid waste can be broken down by plasma into electricity and clean water. However, its use is more suitable for industrial complexes,” said Ignasius.

Central Java Strategy for Realizing Low Carbon Development

Semarang, December 8, 2022 –  The energy transition has become urgent as the world responds to the challenge of building a more resilient energy system. Thus, there needs to be synergy between the government and the private sector. The Institute for Essential Services Reform (IESR) and the Central Java Provincial Government held the Central Java Stakeholder Gathering 2022 with the theme’ energy transition for low-carbon regional development’ to encourage the energy transition in Central Java.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) explained, Central Java has an important role as a beacon of energy transition in Indonesia. Fabby said that the rapid development of the energy transition in Central Java could be a lesson for other regions that leadership, regional innovation and collaboration are the keys to the success of the energy transition’s success toward low-carbon development. 

“Overcoming the threat of the climate crisis is very relevant to what is happening in Central Java. Various practices of using renewable energy in Central Java have occurred and illustrate how the community is able to encourage the energy transition with their own efforts supported by the government to make innovations. This is what we call the Gotong Royong Energy Transition,” said Fabby Tumiwa.

Moreover, the Deputy Governor of Central Java, Taj Yasin Maimoen, stated that Central Java had made a Regional Energy General Plan (RUED) as a guideline for energy development. It has been implemented through Regional Regulation (Perda) Number 12/2018, stipulated on December 19, 2018. This regulation regulates energy conservation, conservation of energy sources, and energy diversification. The government is also pushing for energy autonomy in the villages and utilizing the energy potential in each town.

Wagub Jateng
Deputy Governor of Central Java Taj Yasin Maimoen attended the Central Java Stakeholder Gathering 2022 on Thursday (8/12/2022). Dok. Central Java Provincial Government.

“In one village in Magelang, we saw a huge potential for renewable energy. It is impossible for the provincial government to work without the paradigm of its people. In their case, the farm has been centralized, owned by the community and made into one place. There are hundreds of goats whose feces need to be processed. Not only as fertilizer but can also be made as renewable energy,” said Taj Yasin.

Sujarwanto Dwiatmoko, Head of the ESDM Office for Central Java Province, explained that Central Java has made innovations related to renewable energy through projects such as Central Java Solar Province. This program is expected to help Central Java achieve an energy mix level of 23.32% in 2025.

“The most notable impact of Central Java Solar Province is the increase of capacity in rooftop solar power plants in Central Java from 0,1 MWp in 2019 to 22 MWp in 2022,” said Sujarwanto.

On the other hand, Widi Hartanto, Head of the Central Java Province Environment and Forestry Service (DLHK), his party is currently studying the reusability of wastewater and waste into new, renewable energy.

“This program aims to survey the characteristics of wastewater and garbage and hold focus group discussions related to waste management into renewable energy in cities such as Pati, Sukoharjo, Boyolali, Kab. Semarang, Karanganyar, Grobogan, Kab. Magelang, Magelang City, Temanggung, Klaten, Semarang City, Kab. Semarang, Kab. Karanganyar, Boyolali, Salatiga, and Kudus,” explains Widi.

To realize low-carbon development, M Arif Sambodo, head of the Department of Industry and Commerce in Central Java, emphasized that the industrial sector is the most significant contributor to carbon emissions. Thus, his party plans to strengthen partnerships with the local steel industry to supply solar panel production to reduce greenhouse gas (GHG) emissions.

“Currently, there are demands from consumers for the industry to start using new and renewable energy (NRE) so that it demands the industry to use NRE in its production process,” said Arif.

Meanwhile, Muhammad Iqbal, President Director of Jateng Petro Energi (JPEN) explained three strategies to support the energy transition: strengthening ecosystem institutions, solarpreneurship (creation of green jobs), and capacity building.

“JPEN is committed to encouraging a more massive energy transition, such as floating Solar PV, rooftop Solar PV, Solar PV training, carbon trading, and the construction of public electric vehicle charging stations (SPKLU) which are important parts of the electric vehicle ecosystem,” explained Iqbal.