Jakarta, August 19, 2024 – President Joko Widodo inaugurated Bahlil Lahadalia as Minister of Energy and Mineral Resources (MEMR) for the remainder of the 2019-2024 term, replacing Arifin Tasrif at the State Palace, Monday (19/8/2024).
The Institute Essential for Services Reform (IESR) congratulates Bahlil Lahadalia on his inauguration as the new Minister of Energy and Mineral Resources. IESR also expressed its gratitude and appreciation for the dedication and performance of former Minister of Energy and Mineral Resources 2019-2024, Arifin Tasrif.
The Executive Director of IESR, Fabby Tumiwa, stated that under the leadership of Minister of Energy and Mineral Resources Arifin Tasrif, several strategic steps were taken to encourage the development of renewable energy and lay the foundation for energy transition in Indonesia. One of them is Presidential Regulation (Perpres) Number 112 of 2022 concerning the Acceleration of Renewable Energy Development for Electricity Supply. This Perpres also regulates the strategy to accelerate the end of the PLTU operational period.
“During his tenure as Minister of Energy and Mineral Resources, Arifin Tasrif sought to drive the energy transition by setting a net-zero emission target in 2060 or earlier, accelerating renewable energy through the regulation of rooftop solar power plants and the 3.6 GW rooftop solar power plant National Strategic Project (PSN) in 2025, implementing electric vehicles, ending power plant operations and laying the foundation for the implementation of the Just Energy Transition Partnership (JETP), which was launched in November 2022, on the sidelines of the G20 Summit. Although renewable energy is not growing as expected, Arifin Tasrif’s decision to end the construction of new power plants by PLN, provides a strong foundation for increasing renewable energy penetration, as electricity demand begins to increase back to the pre-pandemic period,” Fabby said.
Fabby hopes that the commitment to the energy transition to net-zero emission (NZE) 2060 or earlier can be continued and that efforts to achieve the 23 percent renewable energy target in 2025 are strengthened under the leadership of Bahlil Lahadalia as the new Minister of Energy and Mineral Resources.
IESR assesses several crucial tasks that Bahlil Lahadalia needs to complete, including the implementation of the road map for the termination of CFPP operations mandated in Presidential Regulation No. 112/2022. This roadmap, which should have been developed by the Ministry of Energy and Mineral Resources with the approval of the Ministry of Finance and the Ministry of BUMN, provides legal certainty for PT Perusahaan Listrik Negara (PLN) in implementing the PLTU early retirement program, including the Cirebon 1 CFPP Early Retirement in December 2035 with the Energy Transition Mechanism (ETM) scheme.
“The IESR study shows that all coal fired power plants (CFPP) must be phased out before 2045, and 80 percent of them must be stopped before 2040 to be in line to limit global warming by 1.5 degrees Celsius according to the Paris Agreement. This step will accelerate the penetration of renewable energy which must reach 40 percent in the primary energy mix by 2030,” Fabby said.
IESR reminded that it is important to accelerate the utilization of renewable energy to reach 23 percent by 2025. Unfortunately, the renewable energy mix was only around 13.09 percent in 2023, and still far from the target in 2025.
“Reflecting on these conditions, Indonesia’s energy transition requires strong leadership, from the President and the Minister of Energy and Mineral Resources to orchestrate high renewable energy utilization. Given that the cabinet tenure is only two months, in the short term Minister Bahlil needs to ensure that PLN is committed to increasing renewable energy capacity in the 2024 RUPTL, encourage “power wheeling” to be included in the draft EBET Bill as a strategy to increase private and BUMN participation to invest in renewable energy, and complete the discussion of the National Energy Policy RPP without reducing the renewable energy mix target and ensuring targets that are in line with the Paris Agreement,” Fabby added.
IESR also reminds the new Minister of Energy and Mineral Resources, Bahlil Lahadalia, to ensure that the implementation of the Just Energy Transition Partnership (JETP) can proceed as planned, by prioritizing the preparation of a list of bankable renewable energy projects and reforming policies that have hindered renewable energy investment. Minister Bahlil needs to provide assurances that the Indonesian government will not back down from its energy transition commitments to maintain the confidence of partner countries to support the energy transition in Indonesia.
“JETP implementation requires consistency and long-term commitment. Therefore, the new Minister of Energy and Mineral Resources needs to maintain policy continuity and ensure that support from international partners remains solid in encouraging the energy transition in Indonesia,” Fabby concluded.
