Lessons Learned from Fukushima, Nuclear Power Plant Development Has Entered Its Sunset Years

press release

Jakarta, March 11, 2022 – Amid energy decarbonization efforts to achieve carbon neutrality as soon as mid-century or in 2060, the Indonesian government is considering developing a Nuclear Power Plant (NPP). However, several nuclear power plant accidents in the world, such as Three Mile Island (1979), Chernobyl (1986), and Fukushima (2011), indicate that nuclear power plants are full of security risks and adverse economic impacts. Commemorating 11 years after the Fukushima nuclear power plant accident, the Institute for Essential Services Reform (IESR) and the Earth Rekso Society (Marem) held a Webinar “Dynamics of the Development of Nuclear Power Plants after the Fukushima Accident”.

Even though it has been regulated in PP No. 79 of 2014 concerning nuclear as a last choice, the government and PLN are still discussing nuclear power plants, such as small modular reactor technology, as one of the solutions on the net-zero roadmaps that is being prepared. However, Fabby Tumiwa, Executive Director of IESR, views that in energy policy the government should prioritize technology that is reliable and can be built quickly so that it can overcome the urgent climate crisis.

“If the government relies on unreliable technology, it will only waste resources that should be used to encourage the development of other energy sources that are safer, more reliable, and effective in dealing with climate change,” said Fabby.

Learning from Japan’s experience, Tatsujiro Suzuki, Professor at the Research Center for Nuclear Weapons Abolition at Nagasaki University, who also served as the Japan Atomic Energy Commission (JAEC) (2010-2014) stated that the Fukushima nuclear power plant accident has changed the energy sector and public perception of Japan. Before the Fukushima tragedy, there were 54 units of nuclear power plants operating, but this number was reduced to 10 units by 2021. The Japanese public perception changed drastically from 87 percent (2010) who thought nuclear power plants were a necessary power plant, to only 24 percent in 2013. As a result of the accident, investment in nuclear power plant safety and accident costs increased so that the cost of nuclear power plants was no longer the cheapest in Japan. Based on data from the Japanese Ministry of Economy, Trade, and Industry (METI), the average cost of generating nuclear power plants in 2021 will be around 11 yen/kWh, higher than solar and wind energy, which costs 8-9 yen/kWh.

Furthermore, Suzuki explained that the Fukushima accident cost around USD 322 billion up to USD 719 billion according to data from the Japan Center for Economic Research. The government’s calculation is lower, namely USD 74.3 billion up to USD 223.1 billion because it does not include the disposal costs of the remaining radioactive fuel of nuclear power plants. Moreover, radioactive waste from the Fukushima nuclear power plant contaminates water, soil, and food. Meanwhile, out of 35,000 refugees (as of April 2021), only 2.5 percent of people returned to affected cities such as Okuma City and 9.2 percent to Tomioka City.

“The impact of the accident is not only from the engineering section, we have to consider social economics, political, and ethical points of view. In addition, the government needs to involve independent scientific institutions in the policy making process and finally be able to increase public trust, because policy without science is a gamble,” said Suzuki.

He also added that nuclear power plants are like medicine which has a strong effect. It should not be taken if not needed.  

In line with Suzuki, MV Ramana, Professor, and Director of the Liu Institute for Global Issues from the University of British Columbia emphasized that the golden era of nuclear power plants has passed, about 3 decades ago. According to him, many factors have contributed to the decline in nuclear power plant development, including the cost of making reactors too expensive compared to the declining prices of solar and wind power. Ramana explained that the innovation of the Small Modular Reactor (a nuclear reactor designed in a size of less than 300 MW and consisting of modules/parts that can be built separately) is also not able to solve all of the problems in one design.

“Even if we assume the learning (about the nuclear industry) ends up with a positive rate, you still have to manufacture hundreds, if not thousands of small reactors before it can be as cheap as large reactors. While the large one is not economically competitive against solar or wind,” said Ramana.

Ramana views that instead of building a nuclear power plant with all the risks, it is better to use the investment for other sustainable solutions.

 

“On solar and wind power, 20 years ago people used to say more than 20% Variable Renewable Energy (VRE) in the grid will make it unstable. Now, the planners say you could go as high as 80%, maybe 90% on just VRE with the rest being storage or base load plants,” he explained.

Herman Darnel Ibrahim, a member of the National Energy Council on the same occasion said that without nuclear power, Indonesia can achieve carbon neutrality in 2060 by maximizing renewable energy; hydropower, geothermal, and biomass, and developing massive solar energy with a capacity of hundreds of GW.

“The conditions needed to be able to fulfill are the successful discovery of technology for penetration of up to 75% of the electricity grid, the successful development of cheaper energy storage that allows the development of Variable Renewable Energy (VRE) with storage capacity, as well as Levelized Cost of Electricity ( LCOE) solar and wind energy with storage is cheaper than a nuclear energy LCOE,” he concluded.

Women’s Groups and Farmers’ Groups on the NRE Bill “Not New Renewable Energy but Clean Energy”

Jakarta, March 4, 2022- The House of Representatives of the Republic of Indonesia (DPR RI) has submitted the Draft  Bill on New and Renewable Energy (RUU NRE) to the Legislation Agency (Baleg) for harmonization. However, the aspirations and needs of the community such as women’s groups (and also communities in the 3T area-Frontier, Outermost, Disadvantaged) as well as the gender approach have not been reflected in the existing draft of the NRE Bill. Therefore, the Indonesian Women’s Coalition (KPI) in collaboration with the Institute for Essential Services Reform (IESR) held a webinar entitled “The NRE Bill: A Further Look at Gender Perspectives Accommodated in Energy Policy”.

Energy plays an essential part in women’s lives, which are closely related to household activities. The use of this type of energy will affect the productivity and lives of women. The type of energy that is full of emissions and pollution will harm women’s health and the environment, especially in 3T areas in Indonesia. Besides, women have only been positioned as energy consumers, even though there should be opportunities for the general public, including at home, to produce energy and use it themselves.

Addressing women’s need for energy, KPI encourages the DPR RI and the government to see women as energy producers. Moreover, in terms of energy policy, KPI urges to develop clean affordable renewable energy that can be found locally instead of relying on fossil and nuclear energy.

Dian Aryani, National Presidium of the Indonesian Women’s Coalition of  Farmer Families speaks on her concern that women are often not involved and trained in NRE energy development. She also views the NRE terminology as inappropriate. She said instead of developing new energy, it is better to focus on utilizing clean energy that does not contain pollutants and renewable energy. The existence of an article that regulates the protection of community initiatives in building, developing, and utilizing renewable clean energy is crucial, especially for the household scale and non-commercial community scale.

“Furthermore, the government needs to implement gender mainstreaming in policies, planning, implementation,  and evaluation of NRE development,” she added.

Maftuh Muhtadi, Ministry of Women’s Empowerment and Child Protection (KPPPA) in his presentation acknowledged that women are still seen as the main consumers of electrical energy.

“So far, energy management has always been attached to women’s responsibilities regarding their domestic roles. Energy consumption tends to be inefficient and the role of women is important to improve the efficiency of energy use and management,” he explained.

Highlighting that there is still a portion of fossil energy in the NRE Bill in the form of coal downstream, Maftuh cannot one hundred percent refuse fossil energy. He stated that the most important thing is to ensure that the production, distribution, and consumption of energy have few negative effects.

On the other hand, Mohamad Yadi Sofyan Noor, Head of the Mainstay Farmers and Fishermen Contact (KTNA) views that including nuclear energy in the NRE Bill is not a wise action. His party objects to the construction of nuclear power plants because it has the potential to harm the economy of farmers and fishermen.

“The construction of nuclear power plants increases the risk for farmers and fishermen because it absorbs large funds that are possible to be allocated to other programs such as food security. The required land for building nuclear power is large enough to threaten the access and economic activities of farmers and fishermen. The risk of a nuclear power plant accident is borne directly by the farmers and fishermen who are around the nuclear power plant,” he concluded.

Rinaldy Dalimi, the Expert Council of the Indonesian Renewable Energy Society (METI) said that the presence of nuclear energy in the NRE Bill would complicate the development and exploitation of renewable energy.

“The NRE Bill, if studied in more depth, will not be passed soon because at least the central government should consider building 5 new institutions, and must provide various incentives and radioactive waste disposal sites,” he added.

Rinaldy believes that in the future there will be a time when everyone can produce their energy, it won’t be a concern to the government.  Energy will become a household matter. Thus, the role of women will be crucial in managing the energy sector.

Sugeng Suparwoto, Chairman of Commission VII DPR RI on the same event informed that the NRE Bill in the next 3 months can already be ratified. He also stated the development of renewable energy is a must. However, he admitted some challenges in developing NRE, such as the big political power still leaning towards fossil energy.

Sugeng explained that in the process of drafting the NRE Bill, the participation of all stakeholders, including the involvement of women, had been carried out. Responding to the nuclear issue in the NRE Bill, although he stated that he was open to any suggestions and input, he repeatedly explained that nuclear is one of the technology options with minimal emissions.

Regulatory Support: Key to Unlock Indonesia’s Solar Potential

Jakarta, February 24, 2022 – The development of solar energy in Indonesia since 2018 has been increasing, although not significantly. The Ministry of Energy and Mineral Resources noted that there was an increase in installed capacity for rooftop solar to 48.79 MW at the end of 2021 from only 1.6 MW in 2018. Progressive developments have also occurred in utility-scale PLTS, with the lowest PLTS electricity price being below 4 cents USD/kWh. One of the reasons for the increasing adoption of rooftop solar, apart from developing technology, is also due to the policy of the Minister of Energy and Mineral Resources Regulation number 49 of 2018 as the first official rule regarding rooftop PV.

The Institute for Essential Services Reform (IESR) projects an increase in the capacity of rooftop PV in the next 10 years, which will come from the government setting a target for solar PV of 4.7 GW in the RUPTL 2021-2030. The enactment of the Minister of Energy and Mineral Resources Regulation number 26 of 2021 provides new hope for PLN customers who will install rooftop PV because this new rule is considered beneficial to all parties.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR), and Chairperson of the Indonesian Solar Energy Association (ISA) in a webinar entitled “Indonesia Solar Chapter: Unlocking the Unlimited Potential to Embrace a Greener Future” (24/2/2022) stated that solar energy continues to grow in Indonesia both for household and utility-scale.

“In the coming years, solar energy has promising potential in Indonesia because the government has quite a lot of targets for using solar PV, such as the target of 3.6 GW in 2025 and replacing diesel with solar plus battery,” he said.

However, Fabby underlined a number of challenges in the development of solar PV in the country such as the policy framework that is not strong enough, as well as the role of PLN as the sole off-taker for the electricity produced so that the development of solar PV is highly dependent on the condition of the PLN grid. The Local Content Requirement (LCR) for solar panels also makes investors less confident to invest in Indonesia.

“The domestic solar panel industry is not yet mature enough to produce tier-1 solar modules. IN which for bankable PV projects, they are required to use a tier-1 module,” he explained.

Fendi Liem, Founder/Managing Director of PT Selaras Daya Utama (SEDAYU), agrees that the clarity of government regulations is the trigger for the exponential growth of rooftop solar. The issuance of the Minister of Energy and Mineral Resources Regulation 49/2018 has undeniably provided a sense of security for both investors and potential customers of rooftop solar power plants since 2018. Fendi reminded all government stakeholders to accelerate coordination and synchronization when there are new regulations.

“We often encounter rules that are out of sync between institutions in the government. This of course creates a bad impression from the entrepreneur. The desire to invest can be reduced because the rules between government institutions are not in harmony,” explained Fendi.

Fendi sees 2022 as a momentum for the rise of rooftop PV after the MEMR Ministerial Regulation 26/2021 applies which provides more benefits for rooftop PV customers, don’t let this momentum pass by. One of the government’s homework is to capture this momentum by strengthening the policy framework so that both developers and consumers will no longer hesitate to invest in rooftop PV.

Erik Peper, Country Director of Indonesia Infunde Development, sees the development of solar energy to accelerate the energy transition in Indonesia as the right thing to do. However, there are a number of obstacles such as scalability, land acquisition, and project clustering. Erik also sees that there is still uncertainty from the Indonesian government to use clean energy technology.

“The energy transition must be prepared carefully and look at the possible developments of the situation in the future. Technology that is currently cheap/economical may become expensive in the future. If there is a financial cost (of the transition) let be it, as in the long run it will be beneficial, it should be treated as an investment.”

Encourage Regional Level Energy Transition Acceleration through the Regional Energy Forum (FED)

Jakarta, 23 February 2022 – Through their respective authorities, local governments play an essential role in achieving national development targets related to renewable energy (RE) development to support the acceleration of the energy transition in Indonesia. In collaboration with the Ministry of Energy and Mineral Resources (ESDM), the National Energy Council (DEN), the Institute for Essential Services Reform (IESR) organized the Regional Energy Forum (FED) in accelerating the energy transition at the regional level.

Secretary-General of the National Energy Council (DEN), Djoko Siswanto; Member of the DEN, Musri Mawaleda; and the Director-General of New, Renewable Energy, and Energy Conservation, Dadan Kusdiana, as resource persons in this virtual activity. Also present were the Head of the ESDM Service and the Head of Provincial Bappeda throughout Indonesia, who conveyed the development of the use of Solar Power Plants (PLTS) in their area.

IESR Executive Director Fabby Tumiwa, in his remarks, said that the Regional Energy Forum is part of a series of road-to- Indonesia Solar Summit (ISS) 2022 activities. “This FED activity is motivated by the net-zero emission target. (NZE) in 2060 or sooner, because the potential for solar energy in Indonesia also reaches more than 3,400GW so that it can be the spearhead to achieve NZE 23% of EBT in 2025, “said Fabby.

In his presentation, Musri said that Indonesia has committed to climate change mitigation efforts through ratifying the Paris Agreement as stipulated in Law no. 16 of 2016 and further reaffirmed the commitment in the Glasgow Climate Pact, which aims to limit global temperature rise to below two degrees Celsius. This commitment has consequences, especially in the development direction of low-carbon development.

“The government has made several efforts to mitigate climate change in the energy sector, namely the fulfillment of the renewable energy mix target of 23% by 2025, the reduction of greenhouse gas (GHG) emissions by 29% and 41% with international assistance, the NZE target in 2060 or more fast, and setting a target for adding new renewable energy plants (EBT) to 51.6% or around 20,923 MW as stated in the 2021-2030 Electric Power Supply Business Plan (RUPTL) document. Specifically for solar power plants (PLTS), the target for constructing additional power plants by 2030 in the RUPTL reaches 4,680 MW or 22% of the total NRE power generation capacity,” said Musri.

Musri said that the support and efforts of local governments, especially the ESDM Service and Bappeda, were needed in accelerating low-carbon development and realizing the targets stated in the RUED matrix or accordance with the capabilities and potential of the local area. He also emphasized that one of the easiest and cheapest power plants to build with and with great potential in Indonesia is solar power.

Secretary-General of the National Energy Council, Djoko Siswanto, said that until now, there are still 12 Provinces that are finalizing the Regional Regulation on the Regional Energy General Plan (Perda RUED), 5 of them are in the process of facilitating the registration number at the Ministry of Home Affairs, 3 Provinces have submitted the draft RUED Provinces in the Program Formation of Regional Regulations (Propemperda) in 2021 and 2022 have also discussed with the Regional People’s Representative Council (DPRD). Four new provinces will discuss with DPRD.

Furthermore, Djoko explained that several governors had issued Governor Regulations (Pergub) and Regional Regulations related to clean energy, electric vehicles, PLTS, and made solar panels mandatory, especially in housing, apartments, and buildings. Some of these provisions are used as the basis by governors to make regulations in their respective provinces.

Director-General of New, Renewable Energy and Energy Conservation, Dadan Kusdiana, said that solar energy development is part of achieving the target of 23% of the renewable energy mix by 25. He is optimistic that this target can be achieved considering Indonesia is very ready and complete planning. However, he said that in terms of management, things might be delayed, so a more significant portion of rooftop solar power plants is needed as a safety net so that the 23% target can be achieved.

“In the development plan has three main groups: rooftop solar power plants with a 2025 target of 3.61 GW. Then the two large-scale PLTS with a 2030 target of 4.68 GW and floating PLTS with a potential of 26.65 GW. Apart from the issue of PV mini-grid revitalization, it is not only rooftop PV mini-grid; in the regions, several technical problems are not minor in number for operations and maintenance. We will also think about the technical implementation for revitalizing renewable energy plants, especially PLTS,” added Dadan.

The ESDM Office from several regions was also present in the discussion. One of which was the Central Java ESDM Office, represented by the Head of New and Renewable Energy, Eni Lestari. According to Eni, increasing understanding of renewable energy at the grassroots level and encouragement from local governments can help accelerate the development of renewable energy.

“The Central Java provincial government will create an energy instructor at the regional level so that each village can have a guide to understand and adopt renewable energy. The regional secretary’s circular in 2021 that the business, industry, and government building sectors to contribute to the utilization of rooftop solar power plants already exists and can be carried out,” said Eni.

He also added that the financing scheme for PLTS in various sectors is still an obstacle. Therefore, the accelerated renewable energy in the regions cannot rely on the APBD alone but requires contributions from multiple sectors, including the private sector.

In line with Eni, Irfan Hasymi Kelrey from the ESDM Office of NTB said that local governments can encourage renewable energy development with regulations. Still, its implementation requires support and concrete steps from the community in various sectors, especially the private sector.

“Currently, we are drafting the Green Energy Governor’s Regulation related to utilizing all renewable energy, including its potential. We have also distributed a circular for hotels to install rooftop solar power plants in Kab. Sumbawa and Kab. Bima this year is in the process of 10MW. From some of these things, we are optimistic that the West Nusa Tenggara (NTB) NZE target will be achieved faster than Indonesia,” said Irfan Hasymi Kelrey, NTB’s Energy and Mineral Resources Office, when sharing his regional plans and achievements.

Going a step further, the Bali Manpower Office for Energy and Mineral Resources, Ida Bagus Ngurah Arda, revealed that Bali was the first to have Pergub No. 45 of 2019 concerning Clean Energy and will issue a circular with a broader scope, not only in the BUMN or government sector which includes all sectors, involving the private sector, including individuals (rooftop PLTS). Ida also said that the construction of PLTS in various forms continues in Bali.

“Currently, there are several PLTS developments, namely 3.5 MWp in Nusa Penida and 400KWp on the Bali-Mandara toll road,” said Ida.

Meanwhile, Expert Policy Analysis as Coordinator for ESDM affairs, SUPD I, Directorate General of Development, Regional Development (Bangda), Ministry of Home Affairs (Kementerian Dalam Negeri or Kemendagri), Tavip Rubiyanto revealed the challenges faced in being able to synchronize central and regional programs as well as integrating the Regional Energy General Plan (RUED) into the Regional Medium-Term Development Plan (Rencana Pembangunan Jangka Menengah Daerah or RPJMD).

“Local governments can use several instruments, for example, the governor’s instructions, to encourage the acceleration of ET. Regarding codification and budget nomenclature, issues related to NRE budgeting in the regions will refer to Minister of Home Affairs Regulation or Permendagri No. 50. And currently, Bangda is preparing to encourage local governments to integrate RUED into the RPJMD and ESDM Renstra documents to be operationalized in regional planning. So that the RPJMD 2023-2026 can be a way to insert several steps to achieve the ET target,” said Tavip.

The results of the Regional Energy Forum are a follow-up to the Governor’s Forum on Energy Transition (Governor’s Forum), which is one of the events leading up to the 2022 Indonesia Solar Summit. The Indonesia Solar Summit (ISS) is the culmination of a series of multi-stakeholder events to mobilize Indonesia’s solar energy investment potential and accelerate the use of PLTS to achieve the National Energy Policy’s targets (KEN) RUEN. ISS was organized to open up the market and support the development of the solar energy ecosystem in Indonesia and as an ingredient of the G20 presidency in Indonesia.

Approved! The New Revised Solar Rooftop Regulation Targets the development of 3.6 GW of Rooftop Solar by 2025

The issue of government policies of the Minister of Energy and Mineral Resources Regulation No. 49/2018 in terms of rooftop solar in Indonesia since 2018 has proven to have increased the adoption of PV mini-grid roofs from initially only 609 customers in 2018 to 4,262 customers in 2021. In 2021, the Minister of Energy and Mineral Resources (MEMR) revised regulation No. 49/2018 to  Regulation No. 26 of 2021.

“The implementation of the MEMR Regulation No. 26 of 2021 is expected to boost the development of the rooftop solar PV market, especially with the stipulation of a target of 3.6 GW of rooftop solar power in the National Strategic Project (PSN),” said Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) in the Indonesia Solar Week 2022 (10/2/2022). He is also the Chairman of the Indonesian Solar Energy Association (AESI).

The MEMR Regulation No. 26 of 2021 is the third revision of MEMR No. 49/2018. The Minister of Energy and Mineral Resources Regulation No. 26 of 2021 has been issued since August 20, 2021. After experiencing a delay in ministerial approval finally, it was agreed to be implemented on January 18, 2022. The following is a comparison of the improvement in the provisions of the three MEMR Regulations:

Revision

Rooftop Solar MEMR Regulation
No. 49/2018No. 16/2019No. 26/ 2021
Electricity export65%As in MEMR Ministerial Regulation No.49/2018100%
Availability of export-import kWh metersMax. 15 business days after SLO (Operation Worthiness Certificate) received by PLNMax. 15 business days after SLO (Operation Worthiness Certificate) received by PLN
Period for setoff of the unused creditMax. 3 months6 months
Timeline for solar rooftop ApplicationMax.15 days5 business days without an adjustment to the Electricity Sale and Purchase Agreement (PJBL) and 12 days with an adjustment to the PJBL
CostumerOnly PLN’s CustomerPLN customers and customers in non-PLN Business Areas (IUPTLU holders).
Industrial CustomerSubject to capacity charge and emergency electricity purchase
with the formula:

Capacity cost = total inverter capacity (kW) x 40
(minimum load limit of electricity in one month) hours x electricity tariff. then multiplied by the electricity tariff.		Subject to capacity charge with
formula :

Capacity cost = total inverter capacity (kW) x 5
(five) hours x electricity tariff.
Subject to capacity charge with
formula :

Capacity cost = total inverter capacity (kW) x 5
(five) hours x electricity tariff.
Online reportingNANAAvailability of submitting the application, reports , and supervision of the solar rooftop program;
Complaint CenterNANAAvailable
Othersthe possibility for trading carbon credits generated from solar PV systems

The government hopes that the improvement of the rooftop solar regulation will encourage the achievement of the target of 3.6 GW of PV mini-grid by 2025. The target of 3.6 GW of rooftop solar is the MEMR proposal that is included in the National Strategic Project as stated in the Coordinating Ministry for Economic Affairs Regulation No. 7 of 2021. The potential positive impacts of the projected growth of 3.6 GW Rooftop PLTS include absorbing 121,500 workers and reducing Greenhouse Gas (GHG) emissions by 4.58 Million Tons of CO2e.

As part of the implementation of the MEMR Ministerial Regulation No. 26/202, Fabby encouraged the government to immediately establish a solar rooftop Customer Center per article 26 of the MEMR Ministerial Regulation. In addition, Fabby hopes that the solar rooftop application process and permits are clear and concise following the latest provisions. On the other hand, problems that are often faced by potential customers such as the length of time to obtain an Exim meter can also be overcome, thereby increasing the installation of rooftop solar power plants in the future.

ASEAN is Still Relying on Fossil Fuel yet Has the Opportunities to Transform its Energy System

Jakarta, 9 February 2022 – ASEAN is one of the most populated regions in which the economy is growing and energy demand grows rapidly. Economic growth emerged at time when there was a global effort to reduce greenhouse gas emissions. To maintain economic development and energy demand growth, a cleaner energy system should be developed by the government. The current situation shows that Southeast Asia’s energy system still relies on fossil fuels i.e coal. 

To identify the challenges and opportunities, representatives of Indonesia, the Philippines, and Vietnam present in Energy Transition Dialogue hosted by Australia National University in Collaboration with CASE (Clean, Affordable, and Secure Energy) for the Southeast Asia project on Wednesday, 9 February 2022. 

Sirpa Jarvenpaa from the Energy Transition Partnership highlighted that if the policies continue as they are (business as usual) the economy and energy growth in Southeast Asia will at the same time pollute the region as well as the world. She also emphasized the importance of knowledge for policy makers in order to establish strong commitment.

“Ambitious climate projects founded in knowledge so we need to encourage the business sector to make those investments in energy transition, and for the government to create conducive investment environments, as well as streamlining regulatory and legal framework,” she said.

Sirpa added that Southeast Asia needs to ramp up investment in renewable energy and energy efficiency to ensure a clean and healthy future for the region and the world.

Though 8 of 10 countries in the region have already announced their net-zero target, the earliest 2050 and latest 2065 – coal-fired power plant generation is still expanding in Southeast Asia, especially in Indonesia, the Philippines, and Vietnam according to the International Energy Agency (IEA). It means that greenhouse gas emissions for the Southeast Asia region are yet to peak.

Fabby Tumiwa, Executive Director of Institute for Essential Services Reform (IESR), explained that there are a set of challenges for reaching net-zero emissions in the region such as policy, grid, and regional market integration, as well as non-technical issues related to perception and knowledge sharing. Long-term energy planning still relies on fossils even though policy says to reduce fossil usage. 

“Fossil fuels are still considered as the main components of energy security, and renewables continue to be perceived as unreliable and expensive,” Fabby explained. 

Fabby also stressed out the ‘just transition’ aspect as a thing to be kept in mind especially to regions heavily reliant on the coal industry.  East Kalimantan, for instance, is one of the biggest coal producers provinces in Indonesia. When the global coal price declines to below USD 40/ton, its GDP growth halts and it affects other sectors. 

“We need to identify a way in order a province’s economy will not crash once there is a massive transformation and coal is no longer needed,” he said.

Frank Jotzo from Australia National University added that the development of clean energy technology results in the declining cost of renewables installation such as solar and wind, making the transformation feasible. 

“Yet, there are also challenges like how to mobilize large energy systems investments, ensuring the transition is technically successful, and how to maximize economic opportunities, and minimize social disruption,” Frank reminded.

PLN Should Follow Global Transformation to a Cleaner Energy

Kendari, 7 February 2022 – The world is facing major changes in response to the increase in the earth’s temperature which has increased by 1.1 degrees Celsius since the pre-industrial era. Various global commitments have been agreed to limit the increase in the earth’s temperature to no more than 2 degrees Celsius by the middle of this century. The rise of the global temperature is caused by carbon emissions produced by burning fossil fuels, one of which is in the energy sector.

Indonesia is committed to reducing its emissions by 29% with its own efforts and 41% with foreign assistance, and achieving net-zero emissions by 2060 or sooner.

Dr. Kuntoro Mangkusubroto, senior energy observer, during the “Seminar Pertambangan” – mining seminar, celebrating Indonesia’s National Press Day, said that the energy sector plays a crucial role in reducing greenhouse gas emissions.

“But keep in mind, it doesn’t mean that the net-zero emission issue will only become a burden for PLN because it is related to energy issues. It needs collaboration from various parties to ensure that the 2060 target is achieved,” he concluded, ending his keynote speech.

PLN has a big role in creating a market for renewable energy. To achieve the target of renewable energy, the involvement of the private sector is needed. Therefore, policies and a conducive investment climate need to be orchestrated.

Dadan Kusdiana, Director General of EBTKE at the Ministry of Energy and Mineral Resources said that Indonesia is still aligned and on track to meet the international agreement commitments, but there are options for various accelerations.

“We have compiled a national roadmap to achieve net-zero emissions by 2060, and we keep looking for possible options to accelerate existing targets,” he stressed.

Specifically from the electricity sector, Evy Haryadi, Director of Corporate Planning at PLN, stated that his party was currently in a dilemma. On one hand, currently available power plants at affordable prices are fossil generators (coal power) that produce high emissions, replacing them with renewable energy plants requires a huge investment.

“We see a declining trend in electricity prices from renewable energy such as solar and wind currently ranging from 18-21 cents per kWh, compared to coal (6-8 cents/kWh) for now electricity from renewable energy is still more expensive.”

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR), reminded that PLN needs to be careful in looking at investment trends in the electricity sector. The commercial and industrial sectors make clean energy the main need and prerequisite for investing in a country.

“Coal-fired power plants are not the cheapest power plants. Government subsidies through the DMO (Domestic Market Obligation) scheme keep coal prices at USD 70/ton, making the price of electricity from PLTU look cheap. Even though the price of coal in the market currently reaches USD 150/ton,” he explained.

Fabby continued, if the coal price of USD 150/ton is transferred to PLTU, the cost of electricity generation will increase by 32% – 61%.

Energy system disruption is happening all over the world. To ensure the reliability, affordability and sustainability of Indonesia’s energy system, PLN must carry out a transformation. This transformation will also reduce the risk of stranded assets for PLN and IPP (Independent Power Producer). As technology develops, it is estimated that in the next few years the cost of installing solar PV and batteries will be cheaper than the operating costs of a coal-fired power plant.

To achieve the common goal of achieving net-zero emissions by 2060 or sooner, increasing the capacity of renewable energy must be carried out. The currently operating coal power plant needs to be managed wisely and gradually reduced. The Indonesian government’s plan to phase down 9.2 GW of coal-fired power plants through the Energy Transition Mechanism scheme is the right step, but the government has the opportunity to take more aggressive steps.

Indonesia Needs Inter-island Electricity Interconnection for 100 Percent Renewable Energy Development

Jakarta, 26 January 2022 – The energy sector which is dominated by fossil energy accounts for ⅔ of global emissions. In order to reduce greenhouse gas (GHG) emissions exponentially, massive use of renewable energy is an important thing to do. One of the efforts to empower 100 percent of the technical potential of renewable energy, which is widely spread across all provinces in Indonesia, is the construction of an interconnection of the archipelago’s electricity network. 

Jisman Hutajulu, Director of Electricity Program Development at the Ministry of Energy and Mineral Resources, in the HK Experts webinar (26/1/2022), stated that the government through the Ministry of Energy and Mineral Resources has plans to connect the grid system between islands in Indonesia.

“This is to support the 2060 net-zero emission plan. One of the things we want to encourage is the use of NRE, but many NRE sources are far from the many demand sources in Java. So we have to transmit that energy to our load center,” Jisman explained.

Jisman said that his party encouraged PLN to complete interconnections within major islands in Indonesia, which is expected to be fully completed in 2024, later to be connected between islands gradually.

Jisman admits that building this transmission system takes a lot of investment. So the ministry is making a study about priority, to analyze and determine which transmission will be built first. Furthermore, Jisman also mentioned the potential inclusion of this transmission development plan in the Problem Inventory Draft (DIM) of the NRE Bill to ensure the priority of the work.

On the same occasion, Fabby Tumiwa, Executive Director of IESR, believes that this interconnection system should be seen as an investment, not a burden from the choice of shifting to clean energy.

“According to IESR, Indonesia has abundant renewable energy potential. For solar alone, the potential can reach 7,700 GW with the largest potential based on land suitability, located in East Kalimantan, Central Kalimantan, and South Kalimantan,” said Fabby. 

Fabby also revealed that the initial investment needed for grid interconnection development until 2030 is still relatively small, around USD 3.3 billion because there is no inter-island integration yet. However, the required investment will increase in 2040 and 2050, respectively at USD 34.8 billion and USD 53.9 billion.

Other benefits that Indonesia can enjoy from inter-island grid interconnection include increased reliability and concentrated power reserves.

“For instance, excessive power reserves in Sumatra can be sent to Bangka, and vice versa,” said Fabby.

In addition, an integrated inter-island network can reduce investment requirements for developing new power generation. According to him again, the interconnection of the grid will create a diversity of generation mix and supply security, which is different from fossil energy systems that only come from one energy source. Furthermore, Fabby explained that if this interconnection system is already running, the cost of generating renewable energy will decrease by 18% – 46% by 2030.