Expert Discussion Webinar: What strategy does Indonesia have in place to achieve its target of a 23% renewable energy mix by 2025?

Background

The Indonesian government ratified the Paris Agreement through Law 16 of 2016, displaying its commitment to addressing climate change. To uphold this commitment, the government established greenhouse gas (GHG) emission mitigation targets in the Nationally Determined Contribution (NDC). These targets have been elevated to 31.89% and 43.2% reduction in GHG emissions compared to the Business as Usual (BAU) scenario for unconditional and conditional goals, respectively. This augmentation in the NDC targets signifies Indonesia’s ambition to achieve Net Zero Emissions (NZE) by 2060 or possibly even earlier.

One pivotal element in achieving Indonesia’s climate targets and fostering sustainable economic growth, as projected in the Low Carbon Development Indonesia (LCDI) by the ministry of PPN/Bappenas, is the energy transition as a GHG emission mitigation strategy in the energy sector. According to the LCDI, Indonesia’s economic growth from 2030 to 2045 can reach an impressive 6-7% per year with a GHG emission trajectory that surpasses the NDC target (in the PRK-plus scenario). To facilitate this achievement, continuous increment in the renewable energy mix within the energy sector is imperative.

In the National General Energy Plan (RUEN), the Indonesian government aims to achieve a primary energy mix of 23% from renewable energy sources by 2025. Currently, the National Energy Council (DEN) is in the process of updating the RUEN to align with Indonesia’s climate policy, which targets achieving Net Zero Emissions (NZE) by 2060 or even earlier. As a result of this climate policy, the renewable energy mix target is projected to exceed 60% by 2060.

However, according to the performance results document from the Ministry of Energy and Mineral Resources (ESDM), Indonesia has only been able to achieve a renewable energy mix of 12.3% in primary energy, which is merely about half of the intended target. To keep pace with this target, the government is taking concrete and strategic measures, including: Increasing the success of the Commercial Operation Date (COD) of Geothermal Power Plants (PLTP) by 1.4 GW and Hydropower Plants (PLTA/micro hydro power, PLTM) by 4.2 GW., Enhancing the capacity of the Power Plants De-dieseling program by 588 MW and Solar Power Plants (PLTS) by 1.2 GWp, along with batteries, Constructing 4.7 GW of Solar Power Plants (PLTS) and 0.6 GW of Wind Power Plants (PLTB), Implementing the co-firing of biomass at PLTU PLN, with an average portion of 10% for coal-fired power plants (PLTU) in Java-Bali and 20% for PLTU outside Java-Bali, facilitating the early retirement of certain conventional Power Plants (PLTU).

Moreover, the government is facing challenges in increasing the renewable energy mix, as certain strategies, like the biodiesel program, have stagnated due to the rising prices of crude palm oil.

The electricity sector presents the most significant opportunity for supporting the achievement of renewable energy targets. However, the development of renewable energy has been sluggish, with growth averaging around 400-500 MW per year over the past five years. To meet the objectives outlined in the National Energy General Plan (RUEN), a minimum of 24 GW of renewable energy generators must be installed by 2025, necessitating a 13 GW increase over the next two years. This translates to a required annual growth rate of 4-5 GW in renewable energy generation.

Given these circumstances, IESR has invited experts to discuss the government’s commitment to achieving the renewable energy mix target and whether, given the current conditions, the energy mix target can be attained within the next two years. The aim of this discussion is for the government and relevant stakeholders to gain fresh perspectives and formulate key strategies to successfully reach the renewable energy mix target by 2025.

Objectives

1. Provide an overview of the current situation and recent developments in Indonesia’s renewable energy mix.
2. Explore challenges and strategies to expedite the growth of renewable energy and achieve the 23% primary energy mix target by 2025.
3. Discuss the hurdles encountered and identify the appropriate strategies to attain the renewable energy mix target in Indonesia.
4. Share details about the Indonesia Energy Transition Dialogue 2023 event.