Road to IETD 2023 : Energy Transition in National Electrification Equity

Background

Energy transition, as a strategy to mitigate greenhouse gas emissions in the energy sector, plays a crucial role in achieving Indonesia’s climate targets. This transition also aligns with the goals of sustainable economic growth outlined in the Low Carbon Development Indonesia (LCDI), a plan by the Ministry of National Development Planning/Bappenas. The LCDI projects Indonesia’s economic growth between 2030 and 2045 to be around 6-7% per year, while aiming to control greenhouse gas emissions in accordance with the NDC target (under the PRK-plus scenario). To facilitate these accomplishments, there is a pressing need to further increase the share of renewable energy sources in the energy sector.

The increase in the renewable energy mix must align with the achievement of a reliable, safe, and affordable 100% electrification target. Unfortunately, despite attaining a 99.63% electrification rate in 2022, the electrification ratio indicator in Indonesia has not yet ensured equitable access to electricity. For instance, a village is deemed electrified if at least one facility or house has access to electricity.

The utilization of a multi-tier framework, as proposed by ESMAP, can offer a more comprehensive understanding of how communities attain electricity access. This framework classifies electricity access into five distinct tiers, allowing for an overview of the quality of electricity services provided to consumers across various assessment indicators.

The 2021 NZmates report on the implementation of the energy access program in the Maluku region emphasizes the importance of identifying technical and economic potential in efforts to provide energy access. This identification process must involve local governments to enable their assistance in preparing Regional Energy Use Plans (RUED), thereby providing energy development guidelines for the respective regions. As of June 2023, RUED has been stipulated in 30 out of the 34 provinces in Indonesia. These guidelines not only support regions in achieving the national electrification target but also contribute to the renewable energy mix target.

One of the strategies for achieving national electrification goals involves the procurement of Diesel Power Plants (PLTD), particularly in remote areas. As of 2022, PLN has reported a total of 5,100 diesel power plants still in operation, requiring 2.7 million kiloliters of fuel oil (BBM) which amounts to approximately IDR 16 trillion for their operations. However, for remote areas that do not produce oil, PLTD faces new challenges related to fuel supply due to various factors, including fuel stock management and the lengthy process of fuel distribution and repairs. Consequently, power outages are not uncommon in these regions. This underscores the pressing need to enhance renewable generation capacity and establish reliable networks in such areas.

The Dediselization program has garnered significant government attention and is anticipated to be integrated into the Just Energy Transition Partnership (JETP) funding scheme, a project aimed at expediting energy conversion efforts in Indonesia. In alignment with this initiative, PT PLN has outlined dediselization measures for a 2.0 MW capacity of Diesel Power Plants (PLTD). This PLTD conversion program entails three schemes: conversion to renewable energy with a capacity of 499 MW, gasification to utilize gas as a fuel source for 304 MW, and interconnection with the grid for 1,070 MW. These efforts are projected to conserve 67 thousand kiloliters of fuel, curbing emissions by 0.3 million metric tons of CO2, while also contributing a 0.15 percent increase to the energy mix and fostering equitable access to sustainable energy for the people of Indonesia.

Furthermore, the endeavor to establish network connectivity between electricity generation centers and other regions demands serious consideration. Being an archipelago, the International Energy Agency (IEA) emphasizes the significance of an interconnected system between Indonesian islands to ensure equal access to electricity for all citizens. A dependable interconnection system holds the potential to influence electricity pricing, making it affordable for the general populace. The 2021-2030 RUPTL document outlines plans for the construction of 47,231 kms of transmission lines by 2030, which can be harnessed to support interconnection and the integration of renewable energy.

For the aforementioned reasons, IESR has invited experts to engage in discussions regarding the quality of electricity access in Indonesia, the advancement of dediselization, and the steps toward energy transition to attain the national electrification target. It is anticipated that through these discussions, the government, relevant stakeholders, and the general public will gain a fresh perspective on the energy transition process in Indonesia.

Purpose:

1. To provide information about the status of national electrification and the progress of dediselization as a government program.
2. To discuss the opportunities and challenges related to integrating renewable energy into the national electricity system.
3. To deliberate on the role of renewable energy in expediting a just and equitable energy transition.
4. To outline the implementation plan for the Indonesia Energy Transition Dialogue 2023.