Defining Just and Ensuring JETP Commitment

Jakarta, 18 April 2023 – Addressing the climate change issue needs not only commitment but it requires a huge amount of resources. Financing has become one of the biggest challenges for countries like Indonesia which rely on coal plants and need to transform them into renewable-based power generation to cut emissions from the power sector. This definitely needs huge financing.

International Partnership has committed to distributing funding to several countries to accelerate the energy transition. The funding is called the Just Energy Transition Partnership. Until April 2023, two countries i.e., South Africa and Indonesia, received the funding commitment. 

Vietnam, one of the Asian countries that rapidly developed renewable energy in the past few years, is in intensive communication to receive the funding. Minh Ha Duong, chairman of the Member Council VIETSE, during the webinar “Between Vision and Reality: Navigating JETP in South Africa, Indonesia, and Vietnam” said that the JETP will “reheat” the development of renewables in Vietnam.

“For several years, we can say that the renewable development in Vietnam is booming until we can have several gigawatts of renewable energy online, but it’s frozen lately. Therefore, this JETP will reheat the development so that we can have more renewables online,” he said.

South Africa, which became the first country to receive JETP, noted points worth considering for other countries and the IPG members in replicating the project in other countries.

“The JETP financing acts more like a catalyst during the energy transition process. Sure, it is not enough to cover the whole fund needed to transform the power sector and its social, and economic impact but it still can accelerate the transition,” Tracy Ledger, energy transition program lead at Public Affairs Research Institute (PARI) said. Tracy highlighted that public participation during the JETP negotiations was very limited. 

Securing the JETP commitment of USD 20 billion during the G20 meeting last November, Indonesia has established a dedicated task force for JETP under the Ministry of Energy and Mineral Resources. 

Institute for Essential Services Reform (IESR), which is actively involved in and reviews the energy sector in Indonesia and continuously gives input to definite policy makers, points out that the USD 20 billion is what is committed, but the disbursement can be dependent on many things. Therefore, Indonesia needs to prepare the ecosystem to welcome the funding.

The Indonesian government at least needs to work on the following issues: availability of bankable projects, a definite auction schedule for renewable plants, and an enabling environment for developers kicking their projects in Indonesia.

“We also need to define what is meant by ‘just’ in the JETP term. Our (IESR) context of ‘just’ involves labor and economic transition especially those who are in coal production provinces,” Fabby Tumiwa, executive director of IESR explained.

Indonesia’s JETP deals target emission reduction of 290 million tons of CO2 and a renewable mix of 34% by 2030. This target requires coal phase-out as a prerequisite for cutting down emissions from the power sector. As one of the impacts, coal production will drastically decrease and it will impact the coal-producing regions such as East Kalimantan, and South Sumatra.

Local economic activity will definitely shift as the mentioned provinces rely heavily on coal production for their gross domestic product. The quality of energy access that differs from one place to other challenges Indonesia’s JETP implementation. 

“The 34% target of renewables is not enough to decarbonize Indonesia’s energy system but it’s a good start to accelerate renewable energy utilization, nor the USD 20 billion. Yet, it can unlock more opportunities for energy transition,” Fabby said.

Fabby added that the establishment of renewable energy industries like battery and solar panel manufacturing become one of the keys to the success of the energy transition.

Strengthening Indonesia’s Role in ASEAN Through the Energy Transition

Jakarta, 11 April 2023 – Indonesia’s leadership at the international level continues. After being considered successful in becoming the leader of the G20 countries in 2022, in 2023 Indonesia is entrusted with becoming the chairman of ASEAN. As a country with the largest population, economy and energy demand in the ASEAN region, Indonesia has an important role in various aspects of the development of the ASEAN region.

One of the priority issues discussed while Indonesia held the G20 presidency was the energy transition. One of the energy transition guidance documents produced is the Bali Compact which contains the basic principles of accelerating the energy transition which will serve as a guide and reference for the G20 countries in carrying out the energy transition.

Energy transition will be discussed again during Indonesia’s leadership in ASEAN. With this commitment, Indonesia must also accelerate its energy transition process. The success of Indonesia’s energy transition in carrying out energy transitions can affect the energy transition status in ASEAN, especially impression and acceptance from other countries related to energy transition issues.

In an interview for the Indonesia Menyapa program broadcast by RRI Pro 3, Executive Director of the Institute for Essential Services Reform, Fabby Tumiwa said that Indonesia has a number of policy instruments that can be used as principal for its commitment to energy transition.

“Indonesia is one of the countries in ASEAN that has a net zero emission target. In addition, the government also issued Presidential Decree 112/2022 which regulates the acceleration of the termination of coal-fired power plants,” said Fabby.

Even though it has a good record at the policy setting level, Fabby reminded that in terms of developing and adding the installed capacity of renewable energy, Indonesia is quite far behind other ASEAN countries such as Vietnam and the Philippines.

Fabby highlighted that one of the renewable energy projects that has been included in the 2021-2030 PLN RUPTL is also experiencing various obstacles.

“In PLN’s RUPTL, during 2021 – 2025 there should be an additional around 10.5 GW of renewable energy, but the implementation has not been smooth. Take it in the last 5 years, the addition of Indonesia’s renewable energy capacity is sluggish and we need to work hard to fix this,” said Fabby.

One of the reasons why Indonesia is not yet optimal in developing its energy transition is the notion that coal produces cheap electricity and renewable energy is expensive. This perspective was implied when the 35 GW program was launched which made fossil energy infrastructure more common in the electricity system in Indonesia. The availability of fossil energy infrastructure makes the government’s preference more inclined towards the use of fossil energy in planning to meet energy needs in Indonesia. This is increasingly supported by the policy of subsidizing a number of fossil energy commodities such as the DMO (Domestic Market Obligation) price of coal.

“The thing that needs to be considered from these choices is that encouraging the use of coal means closing the opportunity for renewable energy to grow and develop because it will continue to be considered expensive,” explained Fabby.

Fabby closed this interview with an appeal to the government and PLN to pursue the target of adding renewable energy capacity that had been planned in the RUPTL to become a game changer in boosting Indonesia’s influence in the Southeast Asian region.

Comparing Each Technology and Average Electricity Generation Cost Fairly

Jakarta, 24 March 2023 – The development of various renewable energy generation technologies continues to experience developments which have an impact on the price of the electricity produced. Apart from technology, several types of power plants are also influenced by various factors, including fuel commodity prices, as well as the geopolitical situation.

In opening remarks for the launch of the report and tool for calculating the levelized cost of electricity (LCOE) and levelized cost of storage (LCOS), Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) said that there are two contradictory conditions between renewables and fossil generators.

“Almost all renewable energy generators have decreased prices. Solar PV decreased by 90% and wind decreased by around 80%. Until now, the price of fuel or fossil fuels continues to be influenced not only by costs, but also by geopolitical conditions. Renewable energy power plants will not be affected by fuel prices, because they do not use fuel,” he said.

The author of the report “A 2023’s Update on The Levelized Cost of Electricity and Levelized Cost of Storage in Indonesia” His Muhammad Bintang explained similar findings. According to him, in Indonesia, electricity from coal-fired power plants is believed to be cheaper than electricity from renewable energy plants, even though there are many factors that cause this to happen.

“The price of coal electricity is cheap because of the Domestic Market Obligation (DMO) policy. This policy makes the PLTU have a relatively cheap and stable generation cost,” said Bintang.

Bintang added that without the DMO policy, the price of electricity from coal-fired power plants could increase up to three times when global coal prices rise.

Another policy that will affect the cost of energy generation is the implementation of carbon economic values such as carbon caps and carbon taxes. The application of carbon economic value needs to be ensured to be effective by ensuring a competitive carbon quota (cap) or price. Determining the appropriate carbon economic value is expected to reduce the use of fossil energy and encourage the development of renewable energy.

On the same occasion, Mustaba Ari Suryoko, Coordinator of Services and Oversight of Various NRE Businesses, Directorate General of EBTKE, Ministry of Energy and Mineral Resources, explained that changes in the movement of renewable energy prices at the global level actually occurred in Indonesia.

“We identified that the price reduction was relatively related to technology. For example in solar and wind, biomass is related to feedstock, and some are stagnant such as hydro,” Mustaba said.

Mustaba explained, the Ministry of Energy and Mineral Resources is currently drafting regulations equivalent to laws for the development of renewable energy. Previously in Presidential Decree No. 112/2022 is mandated to carry out price evaluations. The existence of LCOE and LCOS calculating devices will assist in carrying out this evaluation, of course by adjusting the assumptions used as parameters.

One of the key actors in the development of renewable energy and the energy transition in general is PLN, which acts as an offtaker of the electricity generated by the generator. The development of technology, which has an impact on the price of electricity, has not escaped PLN’s attention.

As stated by Cita Dewi, EVP of New and Renewable Energy at PT PLN, the trend of decreasing electricity prices from renewable energy plants is included in PLN’s monitoring.

“PLN welcomes this, because we realize that to make the energy transition we need a lot of EBT generators,” said Cita.

Apart from generators, PLN also has the mandate to build a renewable energy ecosystem and ensure that renewable energy development projects in the RUPTL are implemented properly.

Looking deeper into the technology side, the decline in solar energy prices is one of them influenced by the increase in the efficiency of solar modules.

“The increased efficiency of solar modules increases solar energy production without increasing costs. In addition, the development of mechanical technology such as nano cells can also reduce production costs or selling costs. This will significantly reduce the cost of solar modules,” explained Andhika Prastawa, Main Engineering Researcher at BRIN.

Evvy Kartini, founder of the National Battery Research Institute, also reminded about the important role of storage or battery technology in the energy transition ecosystem.

“The cost of this energy transition will depend on the battery. Take the example of an electric vehicle, 45% of the price of an electric vehicle is the price of the battery, so if the battery is cheap the price will go down.”

In addition to technological developments, the regularity of the auction schedule is also an important factor in ensuring the development of renewable energy.

“Regarding the risks of developing PLTS in Indonesia, there are certainly risks at every stage. At the development stage, we expect certainty, like providing information about auction schedule and capacity in one year as is done in other countries,” said Refi Kunaefi, Managing Director of Akuo Energy Indonesia.

Don’t Hinder People’s Willingness to Use Clean Energy

Jakarta, 21 March 2023 – As one of the countries that participated in ratifying the Paris agreement in 2015, Indonesia is committed to reducing its greenhouse gas emissions. In 2022, ahead of the G20 Summit, Indonesia will renew its emission reduction commitment in the Enhanced NDC which targets Indonesia’s own emission reduction of 31.89% in 2030 and a renewable energy mix target of 23% in 2030.

On various occasions, solar energy has been said to be the backbone of Indonesia’s electricity system in calling for renewable energy mix targets and reducing emissions. Given its abundant technical potential, the speed of installation, and the flexibility of sizes that can be easily expanded, solar is the right choice for Indonesia’s current condition, which must increase its renewable energy mix in a short time.

Unfortunately, in the last year’s development, the support for the PV rooftop has been lacking from the electricity offtaker (PT PLN). Since 2022, PT PLN has renewed the capacity to install rooftop PV, which is only 10% -15% of the installed capacity. This limitation has an impact on the economic value of rooftop PV which becomes less attractive, both for consumers and rooftop PV entrepreneurs.

In a press conference held by the Indonesian Solar Energy Association (AESI), Association of Indonesian Rooftop PV Installers (PERPLATSI), Rooftop PV Association (APSA), Rooftop Solar Electricity Users Association (PPLSA) and Association of Indonesian Solar Module Manufacturers (APAMSI), Fabby Tumiwa , the Chairman of AESI stated that various challenges were still hindering efforts to increase solar energy in Indonesia.

“Planning large-scale solar PV in Indonesia is difficult to develop because there is no long term in the electricity system before the 2021-2030 RUPTL, the auction process is less consistent and less competitive, economies of scale are difficult to achieve because the auction is launched and on a scale of less than 20 MW, until the regulations of local content requirement (TKDN) which is not supported by the readiness of the domestic industry,” said Fabby.

The Ministry of Energy and Mineral Resources, starting in January 2023, revised the Minister of Energy and Mineral Resources Regulation No. 26/2021 concerning PLN customers installing PV rooftop. The revision of Permen ESDM 26/2021 has pros and cons, one of which was conveyed by Muhammad Firmansyah, General Treasurer of PERPLATSI, who stated that revision points such as eliminating the export-import of electricity from PV users will reduce the interest of potential customers to switch to renewable energy. Planning for a quota system per power grid system is also considered to hinder the development of rooftop PV.

“By imposing a quota for rooftop PV, it is like waiting for death to come. Because if the quota in one system is full already, customers can no longer install rooftop PV that are connected to that network,” said Firmansyah.

Yohanes Sumaryo, General Chairperson of PPLSA, stated that there is a change in the behavior of PV users. “Some of us are starting to change the rooftop PV system at home so that it is not connected to the PLN (off-grid) network, especially to avoid licensing problems and other burdensome requirements. Generally potential users are also confused by the new rules regarding settlement and new conditions such as load profiles.”

According to Yohanes, many users in cities with relatively high-power rates have started installing batteries so that they can make maximum use of rooftop PV. However, the Minister of Energy and Mineral Resources No. 26/2021 needs to be fought for to properly protect PV users.

The ESDM Ministerial Regulation No. 26/2021 has an impact on various supporting sectors for PLTS, such as the solar panel industry, which is becoming difficult to develop. Linus Sijabat, Chairperson of APAMSI, said on the same occasion that regulations related to TKDN are still a challenge for the development of the domestic solar panel industry.

“The TKDN issue in domestic industrial panels requires consistent regulation and serious implementation accompanied by financial support from the government, banks and financial institutions to improve the quality of domestic solar panels and make their quality competitive with imported solar panels,” he said.

Since 2013, APAMSI has attempted to invest in large amounts to advance the domestic solar module industry but has not been successful because the captive market and demand for solar energy in Indonesia are not yet clear.

The impact of completing the installation of the rooftop PV is also being felt by the people of Bali. Several cases stated that the community had installed the PV system according to Permen 26/2021 but could not fully use it.

“In Bali itself there are many obstacles, for example the rooftop PV installation that has been installed but not fully approved by PLN so that the installed rooftop PV system cannot be used in part, even though the community installed it according to Permen ESDM 26/2021, which is 100% of the installed power of the building,” explained Erlangga Bayu representing APSA Bali.

There are also many people who have even paid a DP (down payment) to install a rooftop PV but in the end canceled it because of the capacity limitation. Even though the community installs PV at their own expense and awareness with the motivation to save electricity costs and preserve the environment. Limiting the capacity of rooftop PV seems to be blocking the real contribution of community cooperation to achieving renewable energy targets and reducing greenhouse gas emissions.

Strengthening the Solar Energy Narrative

Jakarta, 9 March 2023 – Solar energy has the potential to be developed massively in Indonesia. The Institute for Essential Services Reform in its report entitled “Beyond 207GW” states that the technical potential of solar energy in Indonesia reaches 20,000 GW. Unfortunately, the use of solar energy is still minimal. It is noted that the installed capacity of new solar energy is around 270.3 MW until 2022.

In the talk show “Bincang Energi Surya”, the collaboration of six institutions namely the Institute for Essential Services Reform (IESR), Solar Scholars Indonesia (SSI), the Indonesian Student Association (PPI) Australia, the Korean Indonesian Research Association (APIK), the New Generation Solar Energy Institute (Insygnia) ), and Solarin, Anindita Satria Surya, Vice President of Energy Transition and Climate Change of PT PLN stated that the development of solar energy is very necessary for the development of renewable energy.

“The description of the JETP scenario is first, building a large baseload such as hydropower, second, building a strong transmission network, and third, building supporting plants such as PLTS,” he explained, explaining the big picture of PLN’s plans to build renewable energy generators in the next few years.

In addition to a comprehensive investment plan for implementing the Just Energy Transition Partnership program, the development of renewable energy generators is also guided by the RUPTL. In the 2021-2030 RUPTL, it is planned that Indonesia will have more than 50% of the energy used come from renewable energy sources. Solar energy itself is planned to increase by 4.6 GW until 2030.

Widi Nugroho, Sub-Coordinator of Supervision of Various New and Renewable Energy Businesses, Ministry of Energy and Mineral Resources emphasized that to pursue the target of a renewable energy mix of 23% by 2025, fulfillment will be prioritized with solar energy.

“For the development of NRE generators, priority is given according to the 2021-2030 RUPTL where solar will increase by 4.6 GW in 2030,” he explained.

Based on the government’s plan, solar energy will be the main pillar of Indonesia’s electricity system with a capacity of 461 GW in 2060. As Indonesia receives the Just Energy Transition Partnership (JETP) funding, it opens up various funding opportunities for renewable energy projects and technology research.

On the same occasion, Muhamad Rosyid Jazuli, Policy Researcher, Paramadina Public Policy Institute, stated that currently there is one main challenge from the policy side, namely the accumulation of a number of commitments that are not accompanied by derivative regulations so that progress towards achieving the promised commitments does not run smoothly.

“The high dominance of coal in Indonesia’s electricity system and the price of coal which is considered relatively cheaper is one of the challenges in developing renewable energy, especially solar,” explained Rosyid.

Rosyid also added that in addition to policies, public perceptions need to be developed in relation to renewable energy and low-carbon technologies so that behavior changes can occur. At present, renewable energy or other low-carbon technologies, such as electric vehicles or rooftop PV, have not become the people’s first choice. Limited information related to technology and prices that are still relatively expensive are some of the aggravating factors in society.

Bincang Energy Surya is a series of public dissemination events about solar energy. Solar energy thematic dissemination will be held regularly, every two weeks until June 2023, covering topics; Indonesia’s solar energy landscape, current policies, technology, industry, socio-economic and human resource readiness to support the Just Energy Transition Partnership (JETP) and Net Zero Emission (NZE) targets.

Driving Solar Energy Development through Gerilya

Jakarta, 1 March 2023 – The energy transition requires the participation of all parties to make it happen. The education sector is predicted to be one of the strategic pillars to ensure that there are high quality experts and technicians who are ready to take part in the realm of renewable energy development.

Secretary General of the Ministry of Energy and Mineral Resources, Rida Mulyana reminded the importance of energy transition and the use of solar energy.

“Currently, our electricity is 86% coming from fossil energy, and one day it will run out. With the energy transition, we want the quality of national energy security to increase, no longer depending on fossil energy. We have renewable energy sources, and they are abundant. This means that if we want the transition from fossil to non-fossil, the sources already exist,” said Rida at the launch of the Gerilya program, Wednesday, March 1, 2023.

Rida also added that the second urgent reason is global pressure on climate change mitigation. Weather is hard to predict, even in a tropical country like Indonesia. That is, because of global warming, due to the increasing amount of GHG emissions which then makes the earth’s temperature rise, not only does sea level rise, but the weather is also unpredictable, and that is already happening.

The Ministry of Energy and Mineral Resources specifically formed GERILYA (Solar Electricity Initiative Movement) as part of the Certified Independent Study and Internship Program (MSIB) as a result of the collaboration between the Ministry of Energy and Mineral Resources and Merdeka Belajar Kampus Merdeka, Ministry of Education and Culture-Research and Technology

In the GERIYA program, students are placed in various institutions and companies engaged in various aspects of solar energy development. In his remarks on the same occasion, Director of Various Energy and EBT, Ministry of Energy and Mineral Resources, Andriyah Feby Misna stated that energy transition efforts in Indonesia need to be balanced with the availability of competent and qualified human resources.

“For this reason, the Gerilya program continues to improve itself by improving the solar energy curriculum and re-joining the fourth batch of MSIB,” explained Feby.

The intended curriculum improvement includes, among other things, the background of the participants, which initially only came from STEM majors, but now students majoring in social and humanities can join them. The time for students to be involved in projects was also extended to four months and the briefing time was shortened to one month.

A total of 2,456 applicants from 280 universities throughout Indonesia were selected, with the result that 62 students from 34 universities were declared to have passed the GERILYA selection stage. Of the number of students who passed the selection stage, 24 people or 38% of them were women. This is a form of commitment to gender equality in the implementation of the MSIB Gerilya Batch 4 program.

 

The Institute for Essential Services Reform (IESR) has supported the Gerilya program since its first batch and provided a place for students to learn about policy changes related to solar energy development from the perspective of civil society through scientific studies. In batch 4, IESR will host four Gerilya students.

IEVO 2023: Reviewing Indonesia’s Electric Vehicle Ecosystem

Jakarta, 21 February 2023 – The transportation sector contributes almost a quarter of the energy sector’s emissions in 2021. Most of the transportation sector’s emissions come from fuel, of which 52% comes from imported fuel. Given the Indonesian government’s target of achieving net-zero emission status by 2060 or sooner, it is important to decarbonize the transportation sector.

Adapting the ASI approach, i.e: Avoid – Shift – Improve, the Institute for Essential Services Reform (IESR) is looking at one of the decarbonization strategies for the transportation sector, namely electric vehicles. Explained by Fabby Tumiwa, Executive Director of IESR during the launch report of the Indonesia Electric Vehicle Outlook 2023, that the number of electric vehicles in Indonesia has continued to increase in the last 5 years, but the market share is still low.

“However, the electric vehicle market share is only 1% of total vehicle sales in Indonesia per year. Several factors still make potential buyers reluctant, such as the high initial price, and supporting ecosystems such as charging stations which are still limited in number,” he explained.

As one of the supporting ecosystems for electric vehicles, charging stations, both Public Charging Stations (SPKLU) and Public Battery Swapping Stations (SPBKLU) have an important role in accelerating the adoption of electric vehicles. Psychologically, the number of charging stations influences the decision of potential EV consumers.

“In numbers, the number of SPKLUs actually continues to grow. But currently it is still concentrated in Java and Bali. Only 12% of SPKLU are located outside Java – Bali,” explained Faris Adnan, IESR Power System researcher.

In addition to the number of charging stations, Faris stated a few more things, including the type of charging system, which currently most of the SPKLU is slow charging type one. It is necessary to look for a comprehensive location to determine the type of charging used. Office areas and shopping centers where people will stay around can use medium or slow charging. However, for places such as public charging on roads, it must use the fast-charging type.

Standardization of charging ports is also one of the discussions in this report. Faris explained that currently there are 3 types of charging ports for four-wheeled electric vehicles. This is one of the obstacles for prospective SPKLU investors because the obligation to provide these three types of ports has an impact on the investment capital that must be provided.

“If the government manages to standardize port charging, the investment value for SPKLU will be more attractive,” explained Faris.

Ilham Fahreza Surya, IESR environmental policy researcher, who is also the author of IEVO 2023 added that the government’s discourse to provide price incentives for electric vehicles should focus specifically on public transportation, logistics vehicles, and two-wheeled vehicles.

“We recommend that the government give priority to two-wheeled vehicles to get incentives to cut prices, and also combine this incentive plan with TKDN rules. So those who are entitled to receive incentives are motorbikes that come from manufacturers who have complied with TKDN regulations,” explained Ilham.

From an industrial standpoint, electric vehicle assembly is the most advanced industry compared to the other supporting electric vehicles component industry. One of the highlights is Indonesia’s plan to downstream nickel into batteries.

Pintoko Aji, IESR’s renewable energy researcher, sees that the Indonesian government’s plan can be utilized by the electric vehicle industry that intends to operate a factory in Indonesia.

“With the existence of a domestic battery industry, domestic electric vehicle manufacturers can use domestically produced batteries in their vehicles as a strategy for fulfilling TKDN components,” explained Pintoko.

In a panel discussion following the presentation of the Indonesia Energy Transition Outlook 2023 report, Wildan Fujiansah, Coordinator of Electricity Technical Feasibility, the Ministry of Energy and Mineral Resources explained that, to answer several issues in the provision of electric vehicle ecosystems in Indonesia, they issued a MEMR ministerial regulation No.1/2023 which regulates one of them regarding standardization charging port, power and battery size.

“Ministerial Regulation No. 1/2023 also regulates SPKLU investment, which previously had to provide 3 charging ports, now only 1 is enough. One of the objectives of this regulation is indeed to boost SPKLU investment,” explained Wildan.

Riza, Senior Researcher for Electric Vehicle Charging Infrastructure, BRIN stated that from a technical point of view the electric vehicle charging process is not just a device with a certain technology.

“In its development, the charging process must match the battery features while the EV continues to develop, “said Riza.

From the user side, two-wheeled electric vehicles are currently widely used by ride hailing companies for their driver partners. However, to increase the confidence of potential users to switch to using electric vehicles, the number of supporting infrastructure, especially battery swapping stations, needs to be increased.

Rivana Mezaya, Director of Digital and Sustainability Grab Indonesia emphasized that from an industrial point of view, electric vehicle users can explore various efforts to own electric vehicle units, but support is needed regarding the availability of supporting infrastructure such as battery swapping stations.

“This collaboration with various parties will encourage the general public to be able to take part in the energy transition in Indonesia,” said Meza.

In addition to collaboration to create an ecosystem that supports electric vehicles from upstream to downstream, dissemination of comprehensive, easily accessible and discoverable information is very important to encourage changes in people’s behavior. This was said by Indira Darmoyono, Chairperson of the Environmental and Energy Transportation Forum, Indonesian Transportation Society.

“Good practices in using electric vehicles and important information such as where conversion workshops are certified, conversion costs, incentives in various forms must be widely publicized so that people have sufficient information and are motivated to switch to electric vehicles,” concluded Indira.

The Indonesia Electric Vehicle Outlook report is one of the main IESR reports, and can be read through https://iesr.or.id/pustaka/indonesia-electric-vehicle-outlook-ievo-2023 

Time Moves On, Has Indonesia’s Energy Transition Moved Forward?

Indonesia’s energy transition journey is entering a critical period considering that the available time is getting shorter. Indonesia’s closest target is to achieve 23% of the renewable energy mix by 2025. Meanwhile, the Just Energy Transition Partnership (JETP) agreement committed at the 2022 G20 Summit targets 34% of renewable energy by 2030.

In this increasingly shorter time span, the progress of the energy transition in Indonesia is unfortunately still stagnant. The Transition Readiness Framework developed by the Institute for Essential Services Reform (IESR) since 2020 records that in 2022 there are no significant developments in various energy transition sectors in Indonesia. Political commitment and energy transition policies, as well as the investment climate for renewable energy plants are in the low category. This can be interpreted as a challenge in the development of renewable energy as well as a factor that needs to be considered so that Indonesia does not fail to achieve its targets.

It is undeniable that there is an increase in the installed capacity of renewable energy every year. However, this additional capacity is not fast enough to meet Indonesia’s renewable energy capacity targets in an effort to limit the increase in the average global temperature below 1.5 degrees Celsius.

Why is it important for Indonesia to achieve its renewable energy targets? Indonesia is included in the top ten largest emitting countries in the world. Thus, Indonesia has a responsibility to reduce its greenhouse gas emissions significantly. Indonesia’s emissions are dominated by two sectors, namely land use change and the energy sector.

From the energy sector, emissions can be reduced drastically by focusing on the electricity sector by increasing the share of renewable energy generation and switching to electric systems (electrification) for vehicles and industry.

The Indonesia Energy Transition Outlook 2023 sees an opportunity to add renewable energy capacity in 2023. The existence of international assistance to reduce emissions, especially from the energy sector, must be a catalyst for accelerating renewable energy capacity as well as a means of creating a portfolio to attract more investment for renewable energy. To achieve net zero emissions status by 2050, Indonesia needs USD 25-30 million annually.

Systematic changes to improve the investment climate are needed. According to renewable energy developers, there are at least three points that need to be improved, namely the need for FiT (Fit in Tariff), fiscal incentives, and soft loans.

The Long Way to Change Indonesia’s Energy Policy

(Jakarta, 20 December 2022) – The development of renewable energy in Indonesia is still very slow. Solar energy for example, data from the Ministry of Energy and Mineral Resources notes that the potential for solar energy in Indonesia reaches 3300 GW. However, its utilization is still less than 1% of the existing potential.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) and Chairman of the Indonesian Solar Energy Association (AESI) at the Inspirational Talks: Renewable Energy, Our Future organized by RESD and the Mentari Program (20/12) said there were a number of factors which currently hampers the development of renewable energy in Indonesia.

“Reducing the shares of fossil energy is not easy because there is a perception that fossil energy is more reliable and renewable energy such as solar and wind is not always available (intermittent). This makes renewable energy as the second choice when planning,” said Fabby.

One of the consequences of this policy is that financial institutions are less interested in financing renewable energy projects. Thus, the development of renewable energy is also very slow at the moment.

What needs to be done is to amend planning documents and energy policies based on credible evidence or studies (evidence based). IESR through its evidence-based studies then provides recommendations to policy makers to make or change policies to transition towards a cleaner energy system.

Even though studies and research have proven that a cleaner energy system will bring more benefits to the government and society, the process of policy change often takes a long time. For this reason, qualified advocacy and communication skills are needed to oversee and urge cleaner energy policies.

Fabby said that it is important to ensure equitable, quality and clean access to energy in the community because by having access to electricity, people or communities will be more prosperous. When people have access to quality electricity, they tend to have a better standard of living because they have more ability to carry out productive activities.

In his closing remark, Fabby emphasized that renewable energy is the future of Indonesia’s and even the world’s energy system. So, it is important to prepare a workforce that is suitable for future needs, especially for prospective workforce who are currently still in school or college.