Implementation Check Methodology: a Much Needed Mechanism

New York, 21 September 2023 – The global community is urging global leaders to take serious actions to address climate change. During the COP 27 in Egypt, several countries renewed their commitment to reducing greenhouse gas emissions and achieving net zero emission status. However, there are still gaps between commitment and implementation of policy and action to seize the determined target. 

To assess, rate, and monitor a country’s progress during the policy implementation, Climate Transparency, a global partnership of research organizations and NGO in the G20 countries, has developed a methodology to review policy implementation across four categories: legal status, institutions & governance, resourcing, and oversight.  

Yvonne Deng, Energy and Climate Strategy Expert from the 7Gen Consulting, emphasized the importance of having monitoring instruments to review current policy and its role to seize the climate target. 

“We (Climate Transparency) analyze the gap and go deeper to the sectoral approach to recommend what sectoral policy a country should take to pursue the ambition,” said Yvonne.

South Africa, one of the countries receiving global attention lately as the first recipient of Just Energy Transition Partnership funding. Guy Cunliffe, Energy System Researcher of the University of Cape Town explained that as a country receiving international assistance, South Africa needs to showcase accountability during implementation. 

“An implementation monitoring is critical to showcase success of the implementation and as a beneficiary country it is also a way to display progress of the committed project,” he said.

Guy added that as the first JETP recipient, South Africa has increased its climate ambition and tried to integrate significant renewable capacity to its grid. However, during the implementation, the country is experiencing a glitch in terms of electricity supply. This glitch ‘forces’ them to adjust the plan and policy while rapidly changing the energy market. This is only possible with continuous policy monitoring. 

Similar to South Africa, Indonesia, as one of the biggest coal producers, has its electricity generation dominated by coal. In 2022, Indonesia renewed its emission reduction target in enhanced NDC, from 29% to 31.89% (unconditional) and 41% to 43.2% (conditional).

Wira Agung Swadana, Green Economy Program Manager at the Institute for Essential Services Reform (IESR), noted that during the transition away from coal-dependency, there are still conflicting interests among stakeholders, primarily due to the government’s lack of clear guidance on the transition’s meaning and direction transition.

“Though Indonesia has increased ambition and target in its NDC, the enabling environment for the renewable energy developers is not attractive enough yet. There is still no clear incentive for the investors as well as the lengthy process,” Wira explained. 

The in progress New and Renewable Energy Bill (RUU EBET), though believed to provide a robust policy framework, is to some extent attempting to prolong the use of fossil fuels by including CCS technology in the renewable options.

Energy Transition in the Midst of Coal Mining Siege

Samarinda, 7 September 2023 – The energy transition is an unavoidable inevitability. Current world trends show that the earth is getting hotter and to limit the rise in earth’s temperature, structured solutions are needed, including the energy transition, which involves various sectors and multi-stakeholders.

Society and communities are one of the key actors in the energy transition who can initiate the development of renewable energy to answer their energy needs. 

The Institute for Essential Services Reform (IESR) in collaboration with the Clean Affordable and Secure Energy for Southeast Asia (CASE) project and the Department of Energy and Mineral Resources (ESDM) of East Kalimantan Province held the ‘Jelajah Energi Kaltim’ activity to see directly and closer to the development of various initiatives for using renewable energy in East Kalimantan Province.

This series of activity began with a workshop, followed by visits to a number of places. On the first day of the visit, the group saw PV installation at the Pertamina Hulu Mahakam office, TPAS Manggar, and Kariangau Coal plants in Teluk Balikpapan.

The “Jelajah Energi Kaltim” trip continued on the second day starting with a visit to Mulawarman Village to see how the community uses livestock manure to make biogas. The biogas in Mulawarman village is home-sized biogas digester aid from the East Kalimantan Province Energy and Mineral Resources Service.

Mulawarman Village is in Tenggarong Seberang District, Kutai Kertanegara Regency, East Kalimantan. Coal mines surround Mulawarman Village. This condition made the residents of Mulawarman village ask to be relocated.

The East Kalimantan Regional Government is starting to pay attention to Mulawarman village to help the economy of Mulawarman village residents, one of which is by developing livestock groups and providing assistance with biogas installations.

In 2021, the East Kalimantan ESDM Service provided biogas installation assistance to stock farmer group (which had been surveyed) in the village, totaling 20 farmers. This means that people do not have to pay monthly fees for using this biogas.

People who use biogas immediately feel positive impacts, such as savings in costs for cooking fuel. Zaenal Abidin, a resident of Mulawarman Village, who is also a beneficiary of the biogas installation assistance, said that previously, to meet their cooking needs, their family could use up to 4 pieces of 3 kg LPG in one month. Now, he can cut his LPG needs to just 1 piece of 3 kg LPG.

“For everyday cooking (biogas, ed.) is enough. But if there are social events such as recitations, we still have to use LPG gas,” said Zaenal Abidin.

Zaenal also added that the cooking process using biogas fuel takes a little longer than using LPG. This biogas installation assistance is also accompanied by the transfer of knowledge about technology to the stock farmers. So that they can detect technical obstacles that could potentially arise from using this home biogas installation.

The Group continued their journey to Menamang Kanan Village, Muara Kaman District, Kutai Kartanegara Regency. The journey to Menamang Kanan Village takes almost 3 hours with heavy dusty road conditions which result in very limited visibility.

In the past year, residents of Menamang Kanan Village have succeeded in enjoying electricity from a centralized PV installation assisted by the East Kalimantan Energy and Mineral Office with a capacity of 87 kWp. This solar PV supplies basic electricity needs for 600 families in Menamang Kanan Village.

Previously, the residents of Menamang Kanan Village depended on the electricity supply from the diesel generator provided by one of the company’s CSR programs operating around the village. For the operation of this diesel generator, 70 liters of fuel is needed every day to provide electricity for 4 hours.

Zapir, Village Secretary of Menamang Kanan, explained that although electricity from solar PV has increased access to electricity in Menamang Kanan Village, its utilization is still limited to lighting and basic electronic equipment.

“So, it’s just for lighting, and maximumly a fan. It’s still not possible for TVs or refrigerators,” said Zapir.

Zapir hopes that the capacity of this communal solar PV can be increased in the future so that village residents can use electricity for productive activities that have the potential to bring economic value. Not limited to just lighting.

Improving Indonesia’s Energy Transition Strategy

Jakarta, 13 September 2023 – The energy transition is increasingly inevitable as global climate commitments strengthen. The energy sector is one of the sectors highlighted because of its intense emissions. More or less the same thing also happened in Indonesia. The Indonesian Government’s commitment to achieving net zero emission status is accompanied by a set of strategies and plans, one of which is intervention in the energy sector, especially the power generation.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform, explained that the electricity sector is a low-hanging fruit sector or a sector that is quite easy to decarbonize.

“A successful transition in the electricity sector will accelerate the transition in other sectors such as industry and transportation,” explained Fabby in a webinar entitled “Preparing for Indonesia’s Energy Transition & Anticipating Its Implications and Launching the Indonesia Energy Transition Dialogue”.

The Energy Transformation Program Manager, Institute for Essential Services Reform, Deon Arinaldo, added that the electricity sector has a solid enough supporting infrastructure to make the transition.

“The electricity sector provides wide-open access to decarbonization opportunities. “The technology is already available, there is potential for international funding such as JETP, there is already a supporting policy framework such as Presidential Decree 112/2022,” said Deon.

This is in line with the strategy prepared by the Ministry of Energy and Mineral Resources (ESDM). Gigih Udi Atmo, Director of Energy Conservation, Ministry of Energy and Mineral Resources stated that the government’s priority is also the electricity sector.

“In the road map that we have drawn up, the power sector will have zero emissions before 2060, between 2057-2058. The rest is from the hard-to-abate sectors, such as industry and transportation,” he said.

The existence of the will and policy support for the transition is a good thing, but this is not enough by Adam Adiwinata, ASEAN Energy Transition Outlook Consultant, IRENA.

“The effectiveness and consistency of policies must be considered so that the energy transition occurs massively and accelerates. “Indonesia must be agile in looking at a policy, whether the policy can be improved or implemented to support the energy transition in Indonesia,” explained Adam.

A consistent policy framework is one of the enabling environment points to encourage massive penetration of renewable energy. This was stated by economist Faisal Basri, who is also a member of the Indonesia Clean Energy Forum.

“Often, Indonesia’s enabling environment makes it difficult to obtain funding. Policies that are prone to change make institutions or countries hesitate to give money to Indonesia,” said Faisal.

Faisal also added that commitments such as the implementation of a carbon tax which continue to be postponed show Indonesia’s weak commitment to the energy transition.

New Hope in Menamang Kanan

Samarinda, 7 September 2023 – Menamang Kanan Village is located in Muara Kaman District, Kutai Kartanegara Regency. It takes around 4 hours to travel from the city of Samarinda via road to reach this village. Until 2022, the people of Menamang Kanan rely on diesel generators from a company’s CSR (Corporate Social Responsibilities) program to fulfill their access to electricity. Diesel will light up and be a source of lighting for residents for 4 hours every day.

The hope of having longer and better quality access to electricity is slowly starting to come to light in 2022. Through the East Kalimantan Regional Revenue and Expenditure Budget (APBD), Menamang Kanan village received centralized solar PV installation of 87 kWp. Electricity from this PV is distributed to 600 families.

Even though we already have other energy sources, unfortunately the quality of electricity produced is only sufficient for lighting and basic electronics.

“Because we only produce 700 watts/day and it has to be used communally, so it can only be used for lights and fans at most, It can’t be used for TV or cooking rice, let alone the refrigerator,” explained Zapir, Menamang Kanan Village Secretary.

Zapir added that the people of Menamang Kanan hope to increase the electricity capacity they receive so that people can use electricity for other, more productive activities. Not limited to lighting.

The Institute for Essential Services Reform (IESR) believes that the quality of electricity received by society needs to improve because if the electricity they receive is of low quality, society will not be able to carry out productive activities that can improve the economy. Decentralized power plants such as solar PV need to increase massively to supply electricity in rural areas.

Regional governments can utilize their authority in developing renewable energy as regulated in Presidential Decree Number 11 of 2023, in order to improve the quality of people’s access to electricity.

“This additional authority certainly needs to be followed by local government initiatives to design programs that also address the need to provide energy access, especially with local renewable energy. This principle of energy decentralization enables independent energy efforts with the involvement of many parties and is expected to improve community welfare with sustainable energy access,” explained Marlistya Citraningrum, Sustainable Energy Access Program Manager, Institute for Essential Services Reform (IESR) in the webinar “Energy Transition in Equity National Electrification”.

Decentralization of energy by utilizing renewable energy sources will open up opportunities for wider and participatory exploration of utilization so as to facilitate access to electricity and increase the reliability of its quality.

Assessing the Readiness of Coal Producing Regions for Socio-Economic Transformation

Jakarta, 1 September 2023 – In 2022, Indonesia will be the third largest coal producing country in the world. This has had a number of good and bad impacts on Indonesia, especially coal producing areas, such as Paser Regency in East Kalimantan and Muara Enim Regency in South Sumatra. The coal industry sector directly contributes to Gross Regional Domestic Income (GRDP). The contribution of the coal sector to regional income is quite large. In Paser Regency, East Kalimantan, 70% of GRDP comes from the coal sector. The coal sector also contributes to 20% of the East Kalimantan provincial APBD. Meanwhile, in Muara Enim Regency, the coal industry contributes to 50% of the GRDP and 20% of the APBD of South Sumatra Province. 

Julius Christian, Research Manager of the Institute for Essential Services Reform (IESR), explained that the downward trend in global coal use and demand will accelerate in line with the increasing climate commitments of Indonesian coal export destination countries such as China, India and Vietnam. 

“If these countries increase their climate commitments to be compatible with the Paris Agreement targets, there will be a drastic reduction in Indonesian coal. “This will certainly have an economic and social impact on Indonesia’s coal producing regions,” said Julius. 

Economic dependence on this one sector has become a concern for local governments. This was explained at the launch of the IESR Study entitled “Just Transition in Coal Producing Regions” (1/9). IESR Social and Economic Analyst, Martha Jesica, said that coal producing regional governments sometimes do not understand the risks of the energy transition. However, they understand that economic dependence on one sector is not good. 

“As an effort to get out of this dependency, the regional government is supporting the company’s CSR initiatives and starting to identify opportunities for economic diversification,” explained Martha. 

Ilham Surya, IESR Environmental Policy Analyst, added that preparing human resource capacity is an important point in making a just transition. 

“Considering that there will be changes from economic sectors that are familiar to them, such as mining, towards clean energy, there needs to be capacity building which includes education (including) financial literacy and health quality,” he added. 

Differences in education levels are one of the reasons why local communities in coal-producing areas can only access work at the sub-contractor level. In the response session, Dedi Rustandi, Intermediate Expert Planner, Coordinator of Renewable Energy and Energy Conservation at the Ministry of National Development Planning/Bappenas, conveyed the importance of preparing society for the transition. “Energy transition is an inevitability. Now is the right moment to increase public awareness of the energy transition issue. Our coal reserves actually don’t have that much anymore.” 

On the same occasion, Aris Munandar, Young Expert Policy Analyst, Sub-Coordinator 1, Directorate General of Regional Development, Ministry of Home Affairs, added that the energy transition in coal-producing areas is not only related to the ESDM sector. “We will support it through the RPJMD (Regional Medium-Term Development Planning). The regional vision will be very important to include in these strategic documents because 2024 will be a political year. 

“Regional heads must be thorough in seeing what things must be included in the RPJMD,” he added. 

Verania Andria, as Senior Adviser for Renewable Energy Strategic Program UNDP/Chair of JETP Indonesia’s Just Transition Working Group, believes that there are a number of things that need to be considered in the coal transition process, one of which is economic diversification. 

“The important thing to pay attention to in this economic diversification is related to financial sources that must continue to be explored, we cannot just depend on CSR funds from coal companies (as was the study’s findings),” he said. 

The same thing was also expressed by Uka Wikarya, Head of Regional and Energy Resources Policy Research Group, LPEM UI. 

“The quality of human resources really needs to continue to be improved through education and improving the quality of health. “For the economic sector, it is necessary to look for activities or MSMEs that are independent (not dependent for their operations on coal industry activities), so that the interventions carried out can be sustainable,” explained Uka.

JETP’s Emission Cap Requires Reduction of Coal Capacity

Jakarta, 2 August 2023 – During the G20 Summit in November 2022, Indonesia received a Just Energy Transition Partnership (JETP) funding commitment from International Partners Group (IPG) countries in the amount of USD 20 billion. JETP is a cooperation mechanism for climate finance, and Indonesia is the second country to receive this funding commitment after South Africa.

Indonesia is required to draw up a Comprehensive Investment Policy Plan (CIPP) and complete it on August 16, 2023. The scope of areas that can be included in JETP funding is the electricity sector including power plants owned by PLN as well as the private sector.

Described by Deon Arinaldo, Energy Transformation Program Manager, Institute for Essential Services Reform (IESR) in the webinar “JETP Energy Transition: What and How Does It Work?” organized by AJI (Independent Journalist Association) Jakarta, that this JETP momentum is an opportunity to accelerate the energy transition and policy reform, particularly in the electricity sector.

“One of the expected outputs is a comprehensive investment plan and policy document. This document should be used as a guide for the energy transition roadmap in Indonesia,” explained Deon.

Deon also added that the JETP agreement included discussions on the development of the renewable energy industry and aspects of sustainability. The sustainability aspect is one of the important components in this partnership as well as an aspect that takes time to design because it is hoped that this sustainability aspect can mitigate the negative impacts that arise on communities affected by the energy transition.

Deon continued, to achieve the electricity sector emission reduction target agreed in JETP, which is a maximum of 290 million tons of CO2 in 2030, Indonesia needs to cut coal power plant capacity by 8.6 GW before 2030.

Ahmad Ashov Birry, Program Director for Trend Asia, stressed the importance of paying attention to the sustainability aspects of the Just Energy Transition Partnership scheme.

“It is important not to treat JETP with a project approach, but with a policy approach so that it has strong legal binding,” added Ashov.

Ashov assessed that although JETP is currently subject to Presidential Regulation 112/2022, it is still not strong enough because Presidential Decree 112/2022 itself has not yet sent a strong signal to stop coal operations.

The Bersihkan Indonesia Coalition formulates guidelines on aspects of justice for JETP including ensuring that the investment plan preparation process is accountable, transparent, participatory, fulfills human rights, is ecologically & economically just, and transformative.

Assessing Solar Market in ASEAN Member State

Jakarta, 25 July 2023 – Southeast Asia has emerged as a focal point for both economic development, and energy growth. The increasing energy demand within the ASEAN region is to be expected to be met through the expansion of renewable energy. Notably, certain ASEAN countries have achieved noteworthy progress in renewable energy development, exemplified by Vietnam’s exponential growth in solar energy over recent years. 

Fabby Tumiwa, the Executive Director of Institute for Essentials Services Reform and the Chairman of The Indonesia Solar Energy Association said that ASEAN must establish strong cooperation in developing solar PV manufacturing capability.

“Southeast Asia countries must ensure affordable access to this technology by establishing a solar PV manufacturing and supply chain that includes silicon ingots, wafers, cells, and other components such as low-tempered iron glass, as well as the balance of system components such as inverters and controllers,” he said.

Fabby added that Southeast Asia has the potential to become a solar PV manufacturing hub, supplying both domestic and global demand. Currently, seven Southeast Asia countries already have manufacturing capacity in various stages, with a total annual capacity of 70 GW of solar module production, with Vietnam supplying half of this capacity. 

Monika Merdekawati, research analyst for sustainable renewable energy development, ASEAN Centre for Energy (ACE) during the ASEAN Solar Summit 2023 explained that while solar energy adoption in ASEAN is on the rise, the pace of progress is insufficient to accelerate the energy transition. Vietnam’s remarkable strides in augmenting its solar capacity have been associated by diversification efforts in its renewable energy development plan in its PDP8 (Vietnam’s energy planning).

“It’s similar to Thailand who started to look for biomass development in its priority program plan,” said Monika.

She further highlighted the necessity for Indonesia to devise innovative strategies to attain its goal of achieving a 23% renewable energy mix in 2025.

Within the context of Indonesia, the state-owned utility company PT PLN heavily relies on the 2021-2030 RUPTL (Electricity Supply Business Plan) famously recognized as “green RUPTL” to expedite its renewable energy endeavors. Warsono, the EVP for electricity System Planning, PT PLN on the same occasion said that PLN aims to incorporate5 GW of renewables by 2030.

“The main challenge to deploy renewables, particularly solar, is the fulfillment of local content requirements of the PV component. It means we need to grow the local industry for solar PV components,” he said. Furthermore, PLN is committed to ensuring equilibrium between energy supply and demand of energy.

Mohammad Nazri bin Mizayauddin, Chief Strategy Officer Sustainable Energy Development Authority, Malaysia shared his view on Malaysia strategy to enhance renewable energy penetration.

“People usually look at the large-scale ground mounted solar PV, but now let’s realize the other potential in the solar rooftop. The rooftop itself is an asset,” he said.

According to Nazri, Malaysia has been facing issues related with the energy subsidy therefore the Government must make sure that the market is mature enough to slowly detach the subsidy.

Eka Satria, Director and CEO of Medco Power Indonesia presented the indispensable correlation between growth of the solar PV component industry and expanding market demand. He stressed the importance of compiling and implementing a comprehensive roster of potential projects to instill investor confidence. 

“To accelerate solar energy deployment, we need a strong PV industry in Indonesia. To grow the PV industry a long list of committed projects to guarantee the investors that their money wouldn’t be lost,” Eka explained.

Eko Agus Nugroho Director of Machinery and Agricultural Machinery Industry, Ministry of Industry agreed that the solar cell technology is advancing rapidly, urging Indonesia to accelerate its pace in keeping up with the advancement.

“There are 21 local producers making solar modules currently and the total capacity is still below 500 WP. The ministry wants to map the capability of the (solar) industries to fulfill the need from the PLN and other developers,” he said. 

Eko also revealed plans for the upcoming announcement of a consortium dedicated to local solar industry manufacture in the ensuing months.

Renewable Energy Becomes Attraction for Investors

Semarang, 4 July 2023 – Electricity is not only the essential need for households, but also drives economic activity to a large industrial scale. In addition to the need for a reliable electricity supply, large-scale industries are starting to pay attention to the source of the electricity supply. In fact, for export-oriented industries, the production process needs to be carried out with minimal emissions in advance since the implementation of carbon footprint calculations on products exported to certain countries. This means that goods or components of goods produced n from fossil energy generation will receive a higher carbon tax.

Central Java Province, which is currently developing a number of regional industries, pays close attention to the development of alternative energy sources other than fossils. This was said by the Deputy Governor of Central Java, Taj Yasin Maimoen, in his remarks at the Central Java Renewable Energy Investment Forum 2023 which was organized by the Institute for Essential Services Reform (IESR) in collaboration with the Central Java Energy and Mineral Resources Provincial Office, Tuesday 4 July 2023.

“The growth of industrial infrastructure is accompanied by high growth in energy needs. Currently it is not just energy, but energy that comes from new, renewable energy,” said Taj Yasin.

Taj Yasin added that Central Java has abundant potential for renewable energy, but its utilization has not been optimal. To drive the use of renewable energy, the Provincial Government of Central Java is promoting the installation of PV rooftops on government buildings.

“From the installation of rooftop PV in government buildings, it shows that there are 30-40% savings on electricity bills for the institutions that install them,” he said.

Previously, the Executive Director of IESR, Fabby Tumiwa, said that the availability of electricity from clean energy is the main attraction for investors to invest in one country.

“If we want to increase investment competitiveness, we must increase the availability of green energy. The supply of electricity from renewable energy is a new indicator for investors to invest their capital,” said Fabby.

Sakina Rosellasari, Head of the Central Java Investment and One-Stop Service Office (DPMPTSP), stated that Central Java is currently designing 23 projects to be offered to investors. Part of the project is related to the development of renewable energy.

“Investment interest is already approaching pre-pandemic times. We hope this meeting will improve communication and encourage investment realization in Central Java,” she said.

This trend is in line with the Indonesian Low Carbon Development study, that efforts to reduce GHG emissions must be carried out in an integrated manner in development plans to push Indonesia out of the middle-income country trap by ensuring economic growth of 5%.

IESR: Indonesia Needs Comprehensive Package Policy for Energy Transition

Jakarta, 27 June 2023 – The urgency to shift energy transition into a cleaner, more sustainable one has become increasingly crucial, as highlighted by the IPCC synthesis reports, which states that global temperature has already increased 1.1 degree Celsius. Energy, as the driver of economic growth, has been a key factor in economic activities since the very beginning of fossil minerals mining. However, transitioning to cleaner energy systems brings consequences of decreased coal demand, posing a serious threat to regions heavily reliant on the coal economy.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform during the panel discussion of the ASEAN Sustainable Energy Finance on Tuesday, 27 June 2023, emphasized the situation in several provinces in Indonesia which need to consider alternative economic streams, as their local revenue currently comes from coal mining-related activity.

“We need to pay attention to some provinces such as East Kalimantan, which produces 40% of Indonesian coal, and South Sumatera which produces 15%. We need to build local capacity to generate revenue from sectors other than coal,” Fabby said.

Fabby added that the government needs to prepare a comprehensive package of transition finance. The funding should cover not only the technical costs, such as retiring coal fleet, development of renewable energy, improving the grid, but also preparing the community, particularly those employed in the coal mining industry, to adapt into the new labor market. It includes the reskilling and retraining to align their skill with market demand.

“The national government must provide special assistance for regions heavily reliant on coal economics,” Fabby emphasized.

Eunjoo Park-Minc, Senior Advisor on Financial Institutions Southeast Asia of Financial Futures Centre (FFC), agreed on the significant role of government during the transition, especially in designing a supportive policy framework which enables the private sector to participate.

“The role of the investors during this transition time is to develop innovative financing mechanisms. To make it more catalytic, we need a supportive policy framework to make it work,” she said.

Besides that, Eunjoo pointed out the need for international cooperation, as most of the (transition) projects are taking place in the developing countries while the financing primarily comes from the developed countries. 

The Asian Development Bank (ADB), as one of the multilateral banks financing the energy transition emphasized the importance of justness aspects. This is explained by Veronica Joffre, Senior Gender and Social Development Specialist at ADB. 

“One of the aspects of ETM (Energy Transition Mechanisms) is the justness. It means potential social impact should be assessed and managed, including employment, supply chains, and the environment,” said Veronica.

She added that as achieving net-zero emissions is the path for the future, the transition towards that direction should be consciously designed.