The Need for Supportive Policy for the Indonesian Electric Vehicle Development

In 2019, the government issued Presidential Decree 55 of 2019 concerning the Acceleration of Battery-Based Electric Motor Vehicles (KBLBB). The Presidential Decree stated that the achievement targets for electric car production are 2200 and 2.1 million electric motorbikes by 2025. It is an ambitious target to achieve, considering that currently the electric vehicle ecosystem in Indonesia still needs a lot of development.

The paper “Developing an Electric Vehicle Ecosystem in Indonesia: Lessons learned from the United States, Norway and China” issued by the Institute for Essential Services Reform (IESR), explained that what is meant by an electric vehicle ecosystem includes: (1) charging infrastructure; (2) the model and supply of electric vehicles; (3) public awareness and acceptance; (4) the supply chain for batteries and electric vehicle components; (5) incentives and supporting policies from the government. This study specifically looks at the strategies and policies used by three countries, the United States, Norway, and China, in building their electric vehicle ecosystem.

The study explained that the key to the success of the three countries in increasing the penetration of electric vehicles is by providing an adequate supporting ecosystem. Given the government’s ambitious targets for electric vehicles, it is necessary to immediately develop an adequate ecosystem for electric vehicles.

However, the development of electric vehicles in Indonesia faces various obstacles, one of which is that there is no integrated target and clear road map between the institutions that oversee the development of Indonesian electric vehicles. Currently, there are at least 2 different targets issued by the government regarding electric vehicles. First, the National Energy General Plan (RUEN) states that the target for electric vehicles is 2,200 cars and 2.1 million motorbikes by 2025. The Ministry of Industry (Kemenperin), on the other hand, has an even more ambitious target for these electric vehicles, namely, 20 % of total vehicle production (400,000 cars and 1,760,000 motorbikes) in 2025 to 30% (1,200,000 cars, and 3,225,000 motorbikes) by 2035.

Alief Wikarta, a lecturer and researcher at the Sepuluh Nopember Institute of Technology in Surabaya, stated that the development of an electric vehicle ecosystem cannot be carried out with a business as the usual scheme. The role of private investors is needed to participate in providing the electric vehicle ecosystem in Indonesia.

One of the obstacles for electric vehicles today is that they are still more expensive than conventional vehicles. The component that makes electric vehicles become high cost is the battery. 

“40-50% of the EV price is allocated to the battery price. If there is a business scheme that can incur battery costs from the price that consumers have to bear, the price of electric vehicles will drop drastically, “explained Alief.

Various schemes to reduce the price of electric vehicles were introduced, one of which was introduced by the Ministry of Energy and Mineral Resources, specifically the battery swap scheme. In this scheme, the cost of batteries can be reduced, provided that an investor is willing to invest and open a swap station.

Whatever scheme will be adopted as a solution, the government needs to find investors who are ready to run a marathon in building this battery swap ecosystem, such as by bearing the cost of the battery and making the swap station. This long-term commitment from investors is important because what will be built is a supporting ecosystem so that the domestic electric vehicle industry can compete in the global arena.

“Indeed, we hope that our industry will not only be marketed to the domestic market segment but also be accepted by the global market. So we must ensure that the quality of the electric vehicles we make is good and has an adequate supporting ecosystem, “


Clean Energy Business Integration


The long-term commitment of this investor includes the research and development capabilities of the investor. This research and development capability is essential to establish an ecosystem as a whole, not just an increase in production.

“I try to think in line with the current government’s agenda which is paying attention to batteries. We need to speak more about the second-life battery. The batteries whose capacity is in the range of 80% may no longer be optimal for use in electric cars/motorbikes, but these batteries can still be used for other fields such as rooftop solar power plants or wind turbines. “

What does it mean? We can integrate electric vehicles and renewable energy into one ecosystem, which is cleaner and economically profitable. Meanwhile, conventional vehicles can not have the reuse opportunity. 

“In conventional vehicles, the result of burning fuel is in the form of pollution. We can do nothing. It is different from electric vehicles whose batteries can be used again for other purposes, ”explained Alief.

Yet, the existing policies and the way the government sees electric vehicles as a separate component, as well as the circular economy aspect, has not been much considered.

“Until now, it has only been said that if we use a lot of electric vehicles, our fuel imports will decrease. Yes, it is true, but there are far greater things that we can achieve if we seriously develop this electric vehicle ecosystem, “concluded Alief.

Otosia | Indonesia Have to Learn from China in Developing Electric Cars

OTOSIA.COM – Indonesia is arguably trying to be able to produce its own electric vehicles. This includes developing electric car batteries that can be produced domestically.

According to the Executive Director of the Institute for Essential Service Reform (IESR), Fabby Tumiwa, the Indonesian government must learn from Norway, the United States and China to develop electric vehicles. The three countries are considered successful in encouraging the adoption of electric vehicles.

Original article

CNBC | This is A List of Inputs for The New and Renewable Energy Bill

Jakarta, CNBC Indonesia – The Draft Law (RUU) on New and Renewable Energy (EBT) is being worked on by the Indonesian House of Representatives (DPR) and is targeted for completion in October 2021.

Executive Director Of Institute For Essential Services Reform (IESR) Fabby Tumiwa said the challenges faced today are providing affordable, sustainable, and reliable energy.

Original article

Indonesia – Germany Collaborate to Accelerate the Energy Transition in the Electricity Power Sector through the Clean, Affordable, and Secure Energy for Southeast Asia (CASE) Program


The Kick off workshop of the Clean, Affordable, and Secure Energy for Southeast Asia (CASE) program (2/2/2021) signifies the collaboration between the Indonesian and German governments to support the energy transition, especially in the electricity sector in Indonesia and also the Southeast Asia region.

Norbert Gorrißen, Deputy Director-General of the German Federal Ministry for the Environment, Nature, Conservation and Nuclear Safety (BMU), said in his opening remarks that climate change is currently the concern of many major countries in the world. He pointed out regarding Japan, China, Philippines that have taken a commitment to fulfill the Paris Agreement to maintain the earth’s temperature below 2°C by reducing the use of coal in its energy sector. He pointed out that Indonesia, as one of the most influential countries in Southeast Asia and the G20, should also do the same.

“The energy situation in Indonesia is indeed very complex, but there is no other way than to do an energy transition. The CASE project is a big project between Germany and Indonesia. Through it, we are ready to share experiences related to the energy transition that Germany has undertaken. Currently, in Germany, more than 50 percent of electricity comes from renewable energy, ”he explained.

Lisa Tinschert, Program Manager for CASE Indonesia for GIZ Indonesia, stated that one of CASE’s most prominent challenges to overcome to achieve its goal is a low capability and political will or the limited and decent or sufficient information about the energy transition.

“The next challenge is policies, regulations, and plans that are not always consistent and do not prioritize the development of decentralized renewable energy, as well as business ecosystems and access to funding that are not very supportive of the energy transition,” explained Lisa.

Fabby Tumiwa, Project Lead CASE Indonesia from the Institute for Essential Services Reform (IESR), explained that the energy transition is not only by developing and increasing the number of renewable energy power plants but also stopping the construction of (new) coal-fired power plants after 2025, and phasing out the older coal-fired power plants than 20 years as soon as possible.

“Although growing modestly, there will be an increase in renewable energy development in 2020, generally coming from hydro and solar power as much as 28.8 MW. The total capacity of renewable energy generators installed until 2020 is around 10.5 GW, “he added.

According to Fabby, our homework in the energy transition is energy efficiency. Several programs to support energy efficiency in Indonesia need to be monitored, such as reducing energy consumption in the transportation sector, updating and introducing Minimum Energy Performance Standards (MEPS), and requiring the inclusion of Energy Saving Labels for electrical appliances, as well as utilizing the potential of green buildings. Quoting the latest IESR report, Indonesia Energy Transition Outlook 2021, Fabby stated that the lack of funds and the lack of monitoring made the extensive potential in green building energy wasted. 

“Increasing energy efficiency will stop energy demand, thereby reducing the burden on building power plants, especially coal power plants in the future. Increasing renewable energy development and energy efficiency are the keys to accelerating the energy transition, “he added.

Answering the mandate of the renewable energy mix with a target of 23 percent by 2025, PLN’s EVP Electricity System Planning Edwin Nugraha Putra said that PLN committed to achieving it. One of its efforts is by intensifying co-firing at coal-fired power plants. However, he realized that the biggest challenge for co-firing is the availability of feedstocks, up to 16 million tons of biomass/year.

“We hope that by working together with CASE we will be able to solve problems regarding demand and encourage renewable energy investment. We are ready to build renewable energy by (one of them – red) renewable energy based on economic development (REBED), “said Edwin.

Zulvia Dwi Kurnaini, Senior Policy Analyst, Fiscal Policy Agency, Ministry of Finance also highlighted renewable investment strategy.

“The finance ministry is committed to an energy transition. CASE will be a partner in providing fiscal policy input that supports renewable energy investment to accelerate this energy transition. Currently, the government is doing its job to supply affordable electricity by providing subsidies for fossil energy. However, on the other hand, the government also has other obligations to develop clean energy. Even though the state budget (APBN) is still very limited, “she said.

Zulvia hopes that Bappenas as the political partner of the CASE program can play its role as a locomotive to see various aspects of the energy transition such as the fitness of PLN condition, the state budget, and the economy of renewable energy into one integral part.

Representing Bappenas, Director of Electricity, Telecommunications and Informatics, Rachmat Mardiana, hopes that working together on the CASE program can help provide solutions to problems in the electricity sector in Indonesia, starting from the primary energy side such as dependence on fossil energy, transformation in the electricity system, including not yet integrated and synergistic, as well as obstacles at end-users, such as unequal access to electricity.

The programme “Clean, Affordable and Secure Energy for Southeast Asia” (CASE) aims to drive change in the power sector in SEA towards increased ambitions with regards to climate change. It focuses on the four main SEA countries including Indonesia in terms of energy demand and also foresees regional activities.

Anchored in Indonesia with the political partner “Ministry of National Development Planning”, with support of a country implementation team and international partners, CASE will propose evidence-based solutions to the challenges met by decision-makers in the design and implementation of the energy system of the future and build societal support around those solutions. A joint fact-finding approach will be applied, involving expert analysis and dialogue to work towards consensus by narrowing areas of disagreement.

CASE will also support dialogue and coordination in the Indonesian power sector, provides technical and policy support, and facilitate dialogue around a new energy vision. Through these activities, CASE will directly contribute to the transition of the power sector towards an innovative, economically successful, and environmentally friendly model for SEA. CASE functions as an aligned programme to the SEA Energy Transition Partnership (SEA ETP).

Presentation materials

Fabby Tumiwa_CASE KickOff_Energy Transition Status in Indonesia


CASE Kick-Off Workshop - CASE Intro - Lisa Tinschert final


02.02.2021 - (rev5)Presentasi Direktorat KTI - Kick Off CASE


02.02.2021 - (Pak Yusuf?) Outlook and Agenda


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