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.

Initial Steps to Nurture Renewable Energy Ecosystem ASEAN

Jakarta, 13 June 2023 – Southeast Asia is a region with the largest economic growth and energy demand. Economic growth followed by increase in energy demand in the region is projected to continue in the coming years. If the use of environmentally friendly energy sources is not anticipated, this economic growth and energy demand will become the main problem of increasing greenhouse gas (GHG) emissions in the ASEAN region.

In a webinar titled Towards a Decarbonized ASEAN: Unlocking the Potential of Renewables to Advance ASEAN Interconnectivity Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform stated that ASEAN has the opportunity to encourage the creation of a renewable energy industry ecosystem through the cooperation of the ASEAN Power Grid (APG) regional interconnection network.

“ASEAN power grid can be one of the supporting infrastructures to accelerate the use of renewable energy in ASEAN countries while waiting for its market share to grow. ASEAN countries can encourage supply chain cooperation in renewable energy technology, especially solar module cell technology,” he said.

Fabby added that Indonesia, as the holder of the ASEAN Chair this year, has the opportunity to encourage this initiative and encourage the transition of fossil fuel-based industries towards renewable energy. A greener industrial transformation is believed to have a multiplier effect in the form of creating green jobs in the future.

In line with Fabby, Yeni Gusrini, Sub Coordinator of the Gatrik Program at the Ministry of Energy and Mineral Resources stated that in the first phase of development, the ASEAN Power Grid had succeeded in transferring 100 MW of electricity from Lao PDR to Singapore.

“The first phase of APG development succeeded in connecting Lao PDR – Thailand – Malaysia – Singapore. Moreover, APG will be a contributor to economic growth that ensures sufficient energy throughout the ASEAN region,” added Yeni.

Indra Overland, Head of Center for Energy Research, Norwegian Institute of International Affairs, said it is important for ASEAN countries to start thinking about strategies to increase renewable energy in the country and in the region.

“We can take as an example Vietnam which has succeeded in massively adding its renewable energy capacity in the past decade. Strategies such as having a policy framework that supports the development of renewable energy including taxation and ease of licensing are very influential for investors’ interest in investing in the development of renewable energy in an area,” he said.

Added by Overland, one indicator of a country having good policy implementation is when the renewable energy sector has abundant investors.

Zulfikar Yurnaidi, Energy Modeling and Policy Planning Manager, ASEAN Center for Energy, acknowledged that the financial factor which is one of the inhibiting factors for renewable energy penetration in the network. He said that one of the focuses of ASEAN 2021 – 2025 is to build connectivity and integrate regional markets.

“Penetration of renewable energy must be translated into the addition of generation capacity. To support this, network modernization must be carried out to maintain network stability, flexibility, and toughness. All of this requires a large amount of investment, and the government’s current budget is insufficient to finance everything, so the role of private investors is needed here,” Zulfikar explained.

The existence of the ASEAN Power Grid will bring long-lasting socio-economic impacts. The hope is that the traded electricity is clean electricity produced by renewable energy generators. So, this clearly affects the location of fossil power plants which are still quite a lot in the ASEAN region.

Ahmad Ashov Birry, Program Director of Trend Asia, gave an example that Indonesia still has a pile of homework related to this fossil power plant. Starting from an early retirement plan for fossil-based power plants to the construction of new renewable energy-based power plants.

“In this series of processes (ending fossil-based plants and construction of new power plants based on renewable energy, ed), the community needs to be involved, so that they can anticipate the possible damage arising from each stage. So that the transition (energy, ed) that occurs is (transition, ed) that is just, and makes life prosperous,” he explained.

Introducing Rooftop PV and Its Related Aspects to Students of SMK Negeri 7 Semarang

Semarang, 6 June 2023 – The Energy and Mineral Resources Office of Central Java Province is holding technical training on the construction and installation of rooftop solar PV in order to increase human capital in the electricity sector, new and renewable energy, energy conservation, especially for PV installations. The rooftop PV training was attended by 30 representatives of the third grade students from the Electrical Engineering major, SMK Negeri 7 Semarang.

The Head of SMK Negeri 7 Semarang, Haris Wahyudi, warmly welcomed this initiative and believed that the training was the right skill for his students.

“This training is a contextual skill to equip our students, whether they are going to do internships or join the labor forces. This competence is very necessary and very appropriate, we are grateful and grateful for being given the opportunity and having this activity at SMK Negeri 7 Semarang,” he said.

Haris hoped that this training could be motivating and useful, so that in the future there would be high opportunities for rooftop PV – related jobs to be filled by one of his students with good skills and provisions.

This rooftop PV training activity is one of the efforts made by the Provincial Government of Central Java through the ESDM Office to increase the knowledge and skills of the younger generation, so that they are able to take part in facing the energy transition.

Boedyo Dharmawan, Plt. Head of the Energy and Mineral Resources Office of Central Java Province in his remarks said that Central Java has abundant potential for new and renewable energy (NRE), many NRE practices have been built and utilized by the people of Central Java. He hopes that the younger generations will be able to understand and be ready to face the changes in the energy transition that will continue to occur in the future.

“Thirty-five districts/cities in Central Java Province have a lot of PV energy potential, and in the future, we will gradually abandon fossil energy because its availability continues to decrease, this is inevitable, we need to be prepared and ready to face it,” he said.

“Hopefully with this PV rooftop training, youths can build and take good care of PV management. Because if we only continue to encourage and massive development of solar energy, but the maintenance and maintenance is lacking, in the future this can become an opportunity and job opportunities for younger siblings in the future,” he continued.

In addition, Dharmawan also hopes that NRE programs can be supported by all parties, including the educational communities in Central Java Province.

“We really hope that the Education and Culture Office will encourage renewable energy development programs, so that State Vocational High School students in Central Java are ready to face energy transition,” he added.

Rizqi M Prasetyo, regional program officer of, Sustainable Energy Access, Institute for Essential Services Reform (IESR) participated as one of the speakers in the rooftop PV technical training, with the theme “The Green Superheroes: Solar Team is Saving the Planet!”. The presentation of the material began with a quiz on future PV – related job opportunities, which was enthusiastically followed by the participants.

“The material presented is clear, the delivery method is more exciting, so we don’t get bored listening, it combined with quizzes via cell phones, so the material is easy to understand, because the delivery method is so good,” said Aditya Arya Permata, one of the students.

Rizqi also gave descriptions of current and future climate conditions and employment opportunities. It is hoped that the training participants will be literate and have a high awareness that the development of renewable energy, especially solar energy, can open new jobs that are environmentally friendly.

“We hope that the solar PV training at this school can encourage and motivate the younger generation to become a generation that is environmentally conscious and understands the importance of the energy transition, so that in the future they will be able to contribute, innovate, and lead the process of transforming into a low-carbon economy through solar energy,” said Rizqi.

Apart from IESR, training materials were also delivered by the Energy and Mineral Resources Office of Central Java Province and PPSDM EBTKE. This training takes place from 6 – 9 June 2023 with materials covering Rooftop PV Policy and Development in Central Java, PV Regulations and Safety Procedures, PV Systems and Components and ends with the practice of installing rooftop PV.

Possible Intervention Options to Reduce Energy Sector Emissions

Jakarta, 30 May 2023 – Transforming the power sector into a low carbon energy system is an absolute necessity. One of them is to pursue emission reduction targets in order to maintain the increase in global average temperature to be at the level of 1.5 ℃. It is stated in the IPCC AR6 Synthesis Report that from 2011 – 2020, the average global temperature has increased by 1.1℃, amidst various human activities that continue to produce emissions. The energy sector is one of the largest contributors to emissions in Indonesia after forestry and land use. Plans to develop fossil-based energy generators are an obstacle in efforts to reduce emissions from the electricity sector.

Indonesia is in the top three rankings as a country with CFPP in the pipeline after China and India. A total of 13.8 GW of CFPP with various development progresses have been included in the PLN RUPTL 2021 – 2030.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR), during the launching report and public discussion ‘Delivering Power Sector Transition’ said that one of the reasons for the increase in the global average temperature is the burning of fossil fuels.

“Thus, reducing coal capacity in the electricity system is one of the key actions in efforts to achieve the target of the Paris Agreement, which is to keep global temperature rise at 1.5 degrees Celsius,” he said.

In the Indonesian context, commercial issues have become one of the aggravating factors for the coal phase-out. Dadan Kusdiana, Director General of New and Renewable Energy and Energy Conservation, Ministry of Energy and Mineral Resources, conveyed that coal phase out still requires joint encouragement from all parties.

“We still have to fight for this (phasing out coal and adding renewable energy capacity). Because, according to current regulations, they are not in the same regulations. However, I want to encourage that the process must be done in the same rhythm,” he said.

IESR considers the coal phase-out in Indonesia as an important matter, because as one of the recipients of the Just Energy Transition Partnership (JETP) funding commitment, Indonesia has an obligation to reach a peak emission of 290 million tons of CO2 in 2030 and increase the renewable energy mix by 34% in 2030.

“To achieve the target of the Paris Agreement, the target set by JETP is actually not enough. However, this can be a starting point for accelerating the development of renewable energy in Indonesia,” explained Raditya Wiranegara, IESR Senior Researcher who is a member of the study author team.

Raditya added that in the Delivering Power Sector Transition report, IESR found that of the 13.8 GW PLTU planned for construction in the 2021-2030 RUPTL, 2.9 GW could be cancelled, 10.6 GW needed to end operations early, and 220 MW were considered for repurposing with renewable energy-based power plants such as biomass.

Akbar Bagaskara, power sector researcher in IESR added that the reduction in emissions will be directly impact the cost of the electricity system.

“The cancellation of CFPP construction accompanied by early retirement for the existing CFPP will be the best scenario for reducing emissions. Cancellation of CFPP in the pipeline will reduce emissions significantly. However, it is felt that this is still not optimal to achieve the JETP target in 2030,” he added.

IESR calculates that to achieve the JETP target, at least 8.6 GW of coal must be retired before 2030, followed by the phase out of 7.6 GW of coal-fired power plants before 2040.

Gigih Udi Utomo, Director of Energy Conservation at the Ministry of Energy and Mineral Resources, commented that the coal phase-out and the cancellation of the CFPP need to be seen as two different things.

“When we talk about the early retirement road map, we are referring to the mandate of Presidential Decree 112/2022. Early retirement is for existing CFPPs, while this 13.8 GW topic is for CFPP that is not yet operating and is already in the RUPTL, so that each of the options and scenarios offered in the study needs to be explored again and requires dialogue with relevant stakeholders,” he explained.

Independent Power Producers as PLN’s partner in meeting national electricity demands state that energy business actors are basically willing to support the government in the transition.

“However, what needs to be noted is that the participation of projects that will be canceled or CFPP units whose retirement age will be accelerated must be based on the voluntarily principle not mandatory because basically the project owner has secured the contract with PLN,” said Chairman of the Association of Indonesian Private Electricity Producers (APLSI), Arthur Simatupang.

Kirana Sastrawijaya, Senior Partner of Umbra, reminded that it is important to review the PPA (Power Purchase Agreement) document between IPPs and PLN especially for the proposal to cancel the CFPP construction.

“Presidential Decree No. 112/2022 can be used as a legal basis for phasing out coal, but there needs to be list of criteria of which CFPPs unit eligible for phase-out. This Presidential Decree can also become a basis for canceling a CFPP, although it does not specifically talk about cancellation,” she said.

In the context of legal law, Karina stressed that potential legal disputes could occur. So, in addition to the applicable government regulations, the contract document (PPA) must be a reference document because it regulates in detail various restrictions on the parties and funders.