IESR Executive Director Fabby Tumiwa reminded the government that it was necessary to look at the initial goal of biodiesel development. Fabby said that there are two options, namely whether biodiesel is only a substitute for energy or when reducing emissions.
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According to RE100, a movement initiated by United States-based NGO The Climate Group, a growing number of multinational companies worldwide are committed to consuming 100 percent renewable electricity. In 2019, 5 percent of RE100 companies had operations in Indonesia, Institute for Essential Services Reform (IESR) data show.
Bali, 30 August 2022 – Local governments and communities can be the catalyst for accelerating the energy transition. The decentralized energy transition requires a relatively shorter time because it is carried out on a small scale and the impact can be directly felt and seen by the community.
Ganjar Pranowo, Governor of Central Java, in the G20 parallel seminar “Decentralizing energy transition: Advancing the role of the community and subnational government” (30/8), that in the context of developing renewable energy, asymmetric decentralization is needed, which means that each local government is given sufficient space to design the development of renewable energy according to the potential and situation of the region.
“The potential for energy independence in these villages, from a business perspective, is not good because the scale is relatively small for a business scale, but if we don’t make examples such as installing 20 kWp solar PV for 8 MSMEs in Jepara, off grid solar PV for water pumps, or micro-hydro with a capacity of 15 kWp that electrifies 75 households, by really utilizing the potential that exists locally, it will not be realized, so we need the courage to change,” said Ganjar.
Ida Ayu Giriantari, Special Staff for the Governor of Bali, stated that the community, especially the Balinese, have a high enough awareness to protect the environment and switch to more environmentally friendly energy sources.
“Clean energy has been the foundation of Bali’s life and vision for development since the beginning and was stated in Pergub 45/2019, when the central government made clean energy policies nationally, we felt that there was support from the central government,” he said.
In March 2022, the Governor of Bali issued a circular letter for government offices and tourism buildings to install rooftop solar. This is one of the ways to pursue Bali’s target of achieving carbon neutral status by 2045.
“With the cooperation of all stakeholders and the community, I am optimistic that we can achieve Bali Net Zero Emission 2045,” said Ida Ayu.
Passed by the Batang Hari river, Jambi province began to introduce the use of renewable energy in the 2000s including hydropower, wind (Tanjung Barat and Timur), and solar.
“Currently we are preparing an integrated energy consumption assistance program for kitchens and households, or what we call the Boenda program. We will launch it soon,” explained Abdullah Sani, Deputy Governor of Jambi at the same event.
Sani continued that the Jambi provincial government is committed to working with the central government and the private sector to develop energy transition because the available resources are considered abundant but still need to transform them into usable energy.
Bob Saril, Director of Commerce and Customer Management of PT PLN stated that his party as an electricity provider in Indonesia has designed an energy transition scheme through the RUPTL (General Plan for the Provision of Electricity) based on renewable energy.
“In the current RUPTL, the share of renewable energy reaches 52%, this is the first step in the transition we are planning. That after 2022, we will no longer add new coal commitments,” said Bob.
Chrisnawan Anditya, Head of the Planning Bureau of the Ministry of Energy and Mineral Resources, stated that the differences in NRE potential in various regions are a technical challenge as well as a great opportunity for our energy system.
“This allows the sharing of NRE-based energy, when the area experiences energy abundance or scarcity. In order for this to happen, an integrated power system is needed (SmartGrid and SuperGrid),” explained Chrisnawan.
The energy sector is expected to become a major emission contributor if not taken seriously. Togap Simangunsong, Expert Staff to the Minister of Home Affairs for Social Affairs and Inter-Agency Relations, the Ministry of Home Affairs, explained that his party continues to monitor the provinces in drafting the RUED (Regional Energy General Plan) as a derivative of the National Energy General Plan (RUEN).
“27 out of 34 provinces already have Regional Regulations on RUED and a number of provinces are still in the process with various progress for the preparation of their RUED,” said Togap.
Fabby Tumiwa, Executive Director of IESR reminded regional leaders to align the RUED with the RPJMD so that the policies made are in line so that their implementation can run smoothly. He also emphasized the importance of community participation in energy transition initiatives in the regions
“The community can participate in investing in renewable energy by installing rooftop solar panels in their respective homes. Local governments can also contribute by allocating budgets to this sector. If domestic investment grows well, foreign investment will be more interested to chip in, ” explained Fabby.
Bali, 29 August 2022 – The electricity sector is one of the biggest emitters after the forest and land use sectors. As the window of opportunity to keep the global temperature at the 1.5 degrees level is getting tighter, the urge to decarbonize the electricity sector is becoming more and more crucial. Power utility companies will be the main driver of the decarbonization effort to reach net zero emissions.
Philippe Benoit, Adjunct Senior Research Scholar Center on Global Energy Policy, Columbia University, during the seminar “The Role of G20 Power Utilities in Climate Mitigation Effort” hosted by C20, emphasizes the importance to reform state-owned power companies (SPC), realizing its roles as power producers, power purchasers, and network owner/operator to accelerate the energy transition.
“SPCs are multidimensional. When we talk about decarbonization we have to think about SPC as they are the ones who will set the pace of decarbonization,” he said.
Philippe continued that market-based scenarios such as carbon tax, carbon trading, and regulatory pricing can be an instrument to influence SPCs to decarbonize. Moreover, the government can also make resources available to SPCs by supporting them, doing advocacy and directly exercising government shareholder power.
Mahmoud Mohieldin, High-Level COP 27 Champion Egypt, proposed several points to address, including the comprehensive energy policy covering fossil fuel phase-out, energy access and the development of green hydrogen.
“The budget of the state should reflect the priority of the climate agenda in SDGs development framework.”
On the same occasion, Joojin Kim, Managing Director of Solution for Our Climate (SFOC), South Korea, presented the fact that currently, renewable energy is facing some curtailments in several regions to avoid ‘unsold’ energy.
“Globally, there is a significant increase of renewable capacity but mostly built in either the US or Europe. To keep the balance between supply and demand in electricity, some areas start to apply curtailment to renewable energy,” he said.
Joojin said that this condition is not conducive to reaching the net zero target. To align with the 1.5-degree Celcius pathways, the G20 country must have 75% renewable energy in 2040. According to him both South Korea and Indonesia are not in a good situation to reach that if there is no urgent action taken.
According to Dennis Volk, Head of Division Bundesnetzazagenturn (BNetZa), Germany, political will from the government is the key to decarbonising the electricity sector.
“A strong political commitment is needed to drive the electricity sector to the decarbonization path. The second important thing is the supporting scheme including financing,” said Dennis.
Youngjin Chae, Vice President of Strategy and Planning Korea Power Exchange (KPX), South Korea, explained that currently there are around 19% of renewables in South Korea. Issues related to flexibility, storage, and feasibility are what become a concern as renewable energy is locally concentrated.
Indonesia is planning to achieve carbon neutrality in 2060 or sooner. PLN as the nation’s power utilities company, through its Director of Corporate Planning, Evy Haryadi, said that PLN needs to build 413 GW of power capacity with around 75% renewables and 19 GW of interconnection for net zero in 2060.
“We (PLN) think that at least five major things should be transformed, from the battery storage system, interconnection, green industry cluster, coal retirement mechanism, to new technology development,” Evy concluded.
A couple of serious challenges are faced by countries in developing renewable energy. Considering each situation, every country must figure out the solution as the IPCC has warned that our carbon budget is limited.
“Every country must be able to answer the issue of solving climate change, customer demand for reliable and affordable electricity, workforce needs to upgrade their skills, regulation from the government, and more technology to provide green energy,” Fabby Tumiwa, the Executive Director of IESR concluded.
Jakarta, 29 July 2022 – Southeast Asia is a strategic area with the second largest economic growth in Asia after China. Southeast Asia is predicted to continue to develop economically. Energy demand is also predicted to continue to rise. With the condition that fossil energy is still abundant in the Southeast Asian region, joint efforts between countries in Southeast Asia are needed to achieve decarbonization without compromising economic growth.
South Korea and China, which are investors in various fossil projects, especially coal-fired power plants in the Southeast Asia region, have committed to no longer finance PLTU projects abroad in 2021. This commitment is expected to be a signal that will lead to more massive renewable energy investment.
Dongjae Oh, program lead for climate finance, Solutions for Our Climate (SFOC) in a webinar entitled “The State of Southeast Asia Energy Transition” stated that South Korea’s commitment to no longer finance coal-fired power plants is indeed quite surprising but there are other things that should be wary of related South Korean investment preferences.
“Despite having withdrawn funding for coal-fired power plants, South Korea continues to invest in the oil and gas sector in Southeast Asia with a value of 10 times, namely $127 billion from coal investment of only $10 billion. Indonesia is the largest recipient of oil and gas investment from South Korea,” Dongjae explained.
Dongjae added that gas is considered by the Korean government as a clean alternative energy for the transition period.
China also announced that it would no longer finance overseas coal projects in September 2021. A number of Chinese foreign and domestic policies have changed since then. Isabella Suarez, a researcher at the Center for Research on Energy and Clean Air, explained that the Chinese government has begun to include a clause on the termination of coal financing in their law.
“A number of local Chinese banks are also starting to state that they will no longer finance coal projects,” Isabella added.
The withdrawal of South Korea and China in financing coal-fired power plants is expected to urge ASEAN countries to develop renewable energy more massively.
Meanwhile, the energy transition situation in several Southeast Asian countries still needs a lot of encouragement and incentives.
Handriyanti Diah Puspitarini, a senior researcher at the Institute for Essential Services Reform (IESR), said that the current state of the energy transition in Indonesia is quite slow and not enough to meet the climate mitigation target to limit global temperature rise to 1.5 degrees.
“If Indonesia doesn’t do something to accelerate the penetration of renewable energy, according to the IESR calculation in 2025 we will only reach 15% renewable energy in the energy mix and 23% in 2030,” explained Handriyanti.
Handriyanti emphasized the importance of the Indonesian government to seek funding models and have consistent political will in Indonesia’s energy transition process, considering that the transition process takes a long time and requires large amounts of funds.
Similar to the situation in Indonesia’s electricity sector, the Philippines is still dominated by fossil energy in its electricity sector. Albert Dalusung, energy transition advisor, Institute for Climate and Sustainable Cities (ICSC) said that the Philippine government is currently focusing on reducing the use of oil in the transportation sector and developing renewable energy.
“The president has stated that renewable energy is at the forefront of the climate agenda, the high price of fossil energy has also made the government change its energy policy,” explained Albert.
Indonesia’s neighboring country, Malaysia, has a target of 31% renewable energy by 2025 and achieves carbon neutral status by 2050. Antony Tan, executive officer (Sustainability & Finance), All Party Parliamentary Group Malaysia on Sustainable Development Goals (APPGM – SDG), stated that currently Malaysia is optimistic that it can achieve this target.
“However, there are things that need to be improved in energy policy in Malaysia, namely the need for a specific ministry of energy and a more holistic policy to design a more sustainable transportation system,” Antony explained.
Jakarta, August 5, 2022 – The Institute for Essential Services Reform (IESR) has officially launched a tool for calculating individuals’ emissions/carbon footprints called “Jejakkarbonku.id”. This website-based carbon calculator application was developed by IESR to improve similar tools that IESR has had since 2012. This update on Jejakkarbonku.id is expected to help individuals calculate the number of emissions from daily activities more comprehensively, as well as provide recommendations on how to reduce individual emissions.
Indonesia is included in the top 10 countries with the largest emissions in the world. IESR views that individual awareness of calculating their carbon emissions and adopting a low-emissions lifestyle will contribute to the achievement of emission reduction targets under the Paris Agreement. Based on the IPCC AR6 WG3 report, the global carbon budget (carbon emission quota) only has 300-500 Gton CO2e (>50% confidence level), meaning that with global annual carbon emissions reaching 59 Gton CO, only 5-9 years left before the increase the global average temperature of 1.5 degrees Celsius has been exceeded.
Fabby Tumiwa, Executive Director of IESR, said that apart from technological advances in reducing greenhouse gas emissions, there is also a need for systemic changes in human behavior.
The civil movement to reduce personal emissions is expected to encourage the government to increase its emission reduction targets. Because, if referring to the figures currently set, it is not enough to keep global warming at 1.5 degrees level.
Farah Vianda, Green Economy Program Officer IESR, said that several data updates on this carbon calculator have been made to provide a more detailed calculation of greenhouse gas emissions. She mentioned that the Jejakkarbonku.id carbon calculator provides a calculation of emissions from 3 sectors i.e household, food and transportation. IESR still maintains the competitive features to encourage a stronger emission reduction spirit. The highest rating means that the emissions produced are getting smaller.
“Every human activity can produce greenhouse gas emissions. The contribution of each individual to reduce GHG emissions is needed to overcome the climate crisis. The more emissions produced, the more the earth’s surface temperature and the frequency of occurrence of natural disasters will increase. The IPCC estimates that global emissions must be halved by 2030, one of which is by making a massive energy transition. Based on these problems, we offer a carbon calculator to calculate emissions and find ways to reduce emissions individually,” said Farah.
Fatmah, a Lecturer in the School of Environmental Science at the University of Indonesia revealed that public awareness of the carbon footprint will trigger a change in attitudes to reduce emissions.
“Carbon footprint education needs to be given to the community. There are many behaviors that can be educated in the community. This application is very good and can be done in collaboration with academics to provide carbon footprint education not only to the younger generation but also to other generations,” she concluded, who was also present on the same occasion.
Jakarta, 27 June 2022 – Energy transition has been a global concern lately. As the urge to address climate change rises, energy transition becomes one of the key actions in keeping the global temperature. Fossil fuel burning is believed to be one of the biggest pollutants of GHG that causes temperature rises. Therefore, shifting the energy system into a renewable one is essential to cut polluting emissions.
Minister of Energy and Mineral Resources of Indonesia, Arifin Tasrif, in the G20 seminar titled “Unlocking Innovative Financing Scheme and Islamic Finance, to Accelerate a Just Energy Transition in Emerging Economies” said that during this time, energy transition is challenging.
“With the Covid-19 and the escalation of conflict between Ukraine and Russia, energy transition is challenging as well as for Indonesia as the G20 presidency this year,” he said.
Minister Tasrif added that with a comprehensive strategy, Indonesia can boost energy transition. Financing has become one of the issues as Indonesia needs around 1 trillion USD by 2060 for the energy transition.
The Vice President of the Republic of Indonesia Ma’ruf Amin encouraged the development of the Islamic bond to fund the energy transition. He also emphasized the role of shariah finance in energy transition.
“One of the potentials to finance the transition is Sukuk/Islamic bonds as an instrument to raise funds from the public for the energy transition. Sukuk innovation and promotion need to be improved so that people are more interested to invest,” Amin said.
At the same event, the Minister of Finance, Sri Mulyani, explained that Indonesia is currently looking for a strategic way to finance energy transition through various schemes.
“We just launched Energy Transition Mechanism (ETM) with ADB to support coal retirement. We will also apply a carbon pricing mechanism for CFPP, as well as develop blended finance. Since 2018 Indonesia successfully issued green sukuk, and it is allocated for the green sector and climate mitigation project,” she concluded.
Sri Mulyani also added that to fulfil Indonesia’s NDC target, the state budget is only able to cover around 34% of the required budget. For the rest, we need to figure out a way, in order to finance the transition.
The fossil fuel economy has supported Indonesia’s economy for decades. Not only the economy, but the electricity and energy system is also dominated by fossil fuels. No wonder shifting it into a renewable-based system is challenging, not to mention requires huge investment. However we cannot just stay in the fossil-based economy either. Coal demand around the world will be declining as the climate commitment strengthened, and the coal mining region will see the impact soon in 2030. Coal has brought revenue for Indonesia especially for the coal mining region, transforming from coal meaning that we will lose this revenue. This has to be anticipated or else there will be a catastrophic impact on the coal transition.
Fabby Tumiwa, the Executive Director of the Institute for Essential Services Reform highlighted that providing sufficient finance for transition is not only addressing the finance issue but also the impact of the energy transition itself.
“This (providing finance for transition) is a key for Indonesia to reach a just and inclusive transition that leads to equitable development,” Fabby said.
Besides seeking affordable financing, there should be a shift in the behaviour of the financial institution. Indonesia’s financial institutions usually lack the technical ability to assess the risk of renewables projects. Amjad Abdulla, Head of Partnership IRENA, emphasized this matter.
In terms of moving away from coal, the government needs to calculate how much it can be covered by the just transition mechanism, and how much is left behind so we need to prepare for them; this includes upskilling workers, creating economic diversification, etc.
Udetanshu, Climate Transition Analyst, said that besides the budget that should be prepared, the government also needs to ensure that the local workers who previously worked in the CFPP get new job opportunities.
“If possible, the new plant (that will be renewable) should be built near the old one, to ensure that the workers can be hired locally,” she said.
Jakarta, July 25, 2022 – Indonesia has a large technical potential for wind energy. The Ministry of Energy and Mineral Resources noted that the total wind power potential reaches 155 GW consisting of 94.2 GW offshore wind and 60.6 GW onshore wind. Until now, the utilization of new wind energy is 131 MW or only about 0.1% of the existing potential. The government itself through the green RUPTL targets the development of wind energy to be installed up to 597 MW by 2030.
Cita Dewi, EVP Planning and Engineering for NRE at PLN, stated that one of the challenges in developing wind energy is that it has to be well prepared and its location is mostly in remote areas, so it requires massive infrastructure support for wind speed measurement surveys and development.
“Development of this wind power plant requires one accuracy, namely wind data. To see how much energy can be generated. This wind measurement is at least one year in one location to see the wind speed during certain seasons as well as at the change of seasons,” explained Cita Dewi at the Green Talk event on Berita Satu.
Agung Hermawan, General Chairperson of the Indonesian Wind Energy Association, explained that one condition that hinders the development of wind energy is the project auction mechanism which must be centralized through PLN.
“Before 2017, as long as we have comprehensive wind data, we just have to negotiate with PLN regarding the price and we can build it right away. Now, since 2017 procurement has been carried out through the PLN tender mechanism, so even though we already have measurement data, if the procurement mechanism has not started, we can’t do anything,” explained Agung.
Agung added that his party was aware of the difficult position of PLN as the offtaker who had to regulate the development of wind energy while maintaining the availability of electricity throughout Indonesia. However, he emphasized that openness is needed to collaborate with each other to encourage the acceleration of wind energy in Indonesia.
Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR), emphasized several things that will become a wind energy development ecosystem, first the need to invest in accurate wind measurement data in potential locations so that when PLN will open an auction there will already be data available.
Second, there is a need for improvement in terms of regulation. Fabby emphasized that the Presidential Decree regarding the price of new and renewable energy is highly anticipated. Because this rule will give a positive signal for investors and developers of renewable energy.
Third, there must be a strengthening or infrastructure development in places that will become PLTB locations such as access roads and ports. This requires coordination with relevant ministries and agencies outside the Ministry of Energy and Mineral Resources.
Fourth, it is necessary to design a low financing scheme to make it easier for PLTB developers to access funding. For example by involving local banks to provide this funding.
Fifth, the auction mechanism at PLN needs to be made transparent and scheduled so that developers and all parties know when the next auction will be held.
“The challenge for developing wind energy is on the logistic costs which is quite large, so it takes more than just policy reform and reform of the auction system,” concluded Fabby.
Jakarta, July 6, 2022 – The global commitment to reduce the use of fossil energy, as well as the increasing climate ambitions of coal-using countries such as China, Japan, South Korea, the United States, the European Union and South Africa have caused global coal demand to fall significantly.
As one of the largest coal exporting countries in the world, Indonesia needs to pay close attention to this. Coal contributes a lot to national non-tax revenues (PNBP), for coal-producing regions, the role of coal commodities for regional income can be very large.
The Institute for Essential Services Reform (IESR) tries to see the implications of the policy of eliminating coal use and the global and domestic climate on the Indonesian economy, especially for workers in the sector through the study “Redefining Future Jobs: Implication of Coal Phase-Out to the Employment Sector and Economic Transformation in Indonesia’s Coal Region”.
This study also aims to see opportunities for economic transformation in coal-dependent areas and provide better welfare for workers. Julius Christian, the author of this study, explained that data from the Ministry of Energy and Mineral Resources showed that in 2020 there were 167,380 workers in the coal mining sector. Demographically, these workers are on average under 40 years old, so they will still be of productive age in the next 10 years.
“In terms of the workforce, because most of them are young, there is an opportunity to conduct training in preparation for entering other industries,” said Julius.
Preparing for economic transformation after the coal economy era is full of challenges but must be done. This is to anticipate the demand for coal which could drop more drastically. Fabby Tumiwa, Executive Director of IESR stated that if the countries of the world had more ambitious climate action to pursue the Paris agreement targets, there would be a 20% reduction in coal demand by 2030, 60% by 2040 and 90% by 2050.
“This decline in production must also be anticipated because it will definitely affect the absorption of labor in the coal sector,” Fabby reminded.
Hendra Sinadia, Executive Director of APBI ICMA (Indonesian Coal Miners Association), also added that to target workers who are potentially affected, it is necessary to map coal reserves by company.
“So that the transformation process is effective and efficient, we can map the reserves for each company so that we can see how long their operating life will be. For small companies, maybe in 2030-2040 their operational period will be finished so it can be prioritized for their workers to receive training,” explained Hendra who was present virtually at the focused group discussion launching the study “Redefining the Future Job”.
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