Overseeing the Indonesia Government’s Strategy in Energy Transition in 2022

press release

Jakarta, 18 January 2022 – Entering 2022, the Ministry of Energy and Mineral Resources shared Indonesia’s energy transition strategy in the “Press Conference on 2021 Performance Achievements and the 2022 Work Plan for Energy and Mineral Resources and the EBTKE Subsector”. The Institute for Essential Services Reform (IESR) views that even though the direction of the energy transition is becoming more evident, it is crucial to speed up the energy transition to reduce GHG emissions and align with Paris Agreement pathways to limit the earth temperature well below 1.5 degree Celsius. Moreover, some overlapping strategies need to develop in a more focused roadmap, such as Dimethyl Ether (DME) utilization, gas grids, and induction cooktops to meet household energy needs.

In the 2021-2030 Energy Transition Roadmap, the government focuses on new and renewable energy power plants’ construction which reach 20.9 GW, while the solar rooftop is targeted at 3.6 GW. The solar rooftop construction will be massive in 2031-2050 with a total amount of 279.2 GW.

Based on the IESR study entitled “Deep Decarbonization of Indonesia’s Energy System”, the construction of renewable energy power plants should be accelerated in the 2021-2030 period to achieve the renewable energy mix target, and reach peak emissions in the electricity sector before 2030. In addition, there is a need for at least a 14-fold increase in the total renewable energy capacity in 2020, with around 117 GW coming from solar rooftops and 23 GW from other renewable energy plants.

The government’s report on the achievement of new and renewable energy power generation capacity until 2021 reaches 11,152 MW. Fabby Tumiwa, Executive Director of IESR, feels that the target for adding renewable energy generating capacity has always been below the government’s target since 2019 and is not on track with the renewable energy mix target of 24 GW by 2025.

“The reasons for the low obtainment of renewable energy plants are structural. For instance, the Minister of Energy and Mineral Resources No. 50/2017 makes renewable energy projects unbankable, PLN does not carry out the regular and on schedule basis of the procurement of renewable energy plants, the lack of competitive domestic financing support, and the delay in project realization due to the pandemic,” said Fabby Tumiwa, Executive Director IESR.

Highlighting the investment target for the new and renewable energy sector in 2022, the government has set an investment entry of USD 3.9 billion, up 2.6 times from the previous investment achievement of USD 1.51 billion in 2021. Deon Arinaldo, Program Manager of Energy Transformation, IESR, thought that although the target has almost tripled, it is a small amount to fund efforts to decarbonize Indonesia’s energy system.

“Based on the study of the Indonesia Energy Transition Outlook 2022, investment in renewable energy for the electricity sector alone requires  11.1 billion USD per year for the next decade. Several renewable energy policies and regulations that should have been released last year, need to be finalized immediately to increase investor confidence and the renewable energy investment climate. Renewable energy investments outside of PLN’s RUPTL (National Electricity Supply Business Plan), such as solar rooftop, also need to be fully supported to attract investment from the beginning of this year, “added Deon.

Furthermore, the government’s strategy to maintain fossil energy subsidies will slow down the pace of energy transition in Indonesia. As well as increasing the burden on the state, it is also an easy trap for Indonesia to get into the fossil energy crisis.

“Reflecting on the coal energy crisis earlier this year, it can be seen that the use of fossil energy such as coal and subsidized support (in the form of DMO) also does not guarantee the country’s energy security, but instead creates distortions in the price of electricity generation. The price of electricity generation from coal-fired power plants looks cheaper than it should be and does not create a level playing field for renewable energy,” said Deon.

The government’s strategy to accelerate the national energy transition is constrained by the fact that the Minister of Finance has not yet approved the Draft Presidential Decree for the Purchase of Renewable Energy. Deon believes that there needs to be strategic coordination between ministries to support the acceleration of achieving the carbon-neutral target so that regulatory support that is considered critical should be issued immediately and run effectively.

“Apart from issuing regulations, effective implementation is important, but this is the opposite. For example, Ministerial Regulation 26/2021 regarding rooftop solar power plants, which should be able to support the achievement of the 900 MW rooftop solar power plant target in 2022 according to the MEMR target, however, was delayed earlier this year,” said Deon.

Besides the regulatory perspective, IESR sees the synergy of inter-ministerial carbon neutral targets as important. Reviewing the targets and realization of electric vehicles in 2022, the Indonesia Energy Transition Outlook 2022 found two different targets in the two ministries. The Ministry of Industry plans to produce 750,000 units of LCEV (low carbon emission vehicle), consisting of electric cars and 2.45 million units of electric motorcycles by 2030. Meanwhile, the Ministry of Energy and Mineral Resources (ESDM) targets 2 million cars, electric vehicles and 13 million electric motorcycles by 2030. Different targets and roadmaps in the development of electric vehicles will make it difficult to see a coherent and consistent effort by the government to increase the penetration of electric vehicles in the country.

“An integrated and well-designed national electric vehicle roadmap must be created. Alignment between the electric vehicle (EV) roadmap of the Ministry of Industry and the Ministry of Energy and Mineral Resources, for example, will increase the confidence of EV players. It also will maximize economic benefits for Indonesia in the form of an industrial value chain formed from the transition process from internal combustion engine (ICE) vehicles to EVs,” closed Deon.

In 2022, Indonesia Needs to Strive in Pursuing Energy Transition Ecosystem Readiness

press release

Jakarta, 21 December 2021 –  The unfavorable climate for renewable energy investment in Indonesia and inconsistent political commitments can hinder the achievement of the 23% renewable energy mix target by 2025. Until Q3 2021, the renewable energy mix is ​​still at 11.2%. The Institute for Essential Services Reform (IESR) views that the Indonesian government needs to thoughtfully prepare an energy transition ecosystem to accelerate the decarbonization of the energy system in Indonesia to achieve net-zero by 2050.

In 2021, renewable energy development in Indonesia is still running slowly and not on track to the target of 23% of the renewable energy mix in 2025. IESR, in its annual report Indonesia Energy Transition Outlook 2022, found that until September 2021, the total installed capacity of renewable energy only reached 10,827 MW or increased by about 400 MW. Meanwhile, to achieve the KEN and RUEN targets in 2025, renewable energy generating capacity is estimated to reach a minimum of 24,000 MW or around 2-3 GW of additional renewable energy capacity every year. However, to comply with the Paris Agreement, it takes at least 11-13 GW of renewable energy generation to decarbonize the energy system in Indonesia, which includes the power generation, transportation, and industrial sectors by 2050. Besides, solar energy adoption is also relatively insignificant, only increasing by 18 MW, dominated by rooftop solar power plants. It is so slow compared to the need for 10-11 GW of rooftop PV mini-grid each year to encourage zero emissions by 2045 in the electricity sector. IESR views PV mini-grid as an opportunity to maximize the contribution of the community and business entities to invest in the decarbonization process.

Endeavors to decarbonize the transportation system by adopting electric vehicles and biofuels are still far from the target set. Sales of electric vehicles are still below 1% of total vehicle sales. Only about 2,000 electric cars and 5,000 electric motorcycles are registered, while the total number of electric cars and motorcycles needs to reach 1.7 million and 100 million by 2030. Biofuels are still limited to biodiesel development which is still uneconomical and constrained by sustainability issues. The implementation of B40, previously B30, which is planned for 2022 is also considered as a constraint due to the current price of palm oil.

“The government should focus on strengthening its political commitment to decarbonization by revising the National Energy Policy (KEN) and the General National Energy Plan (RUEN) to align with the goals of Net-Zero Emissions (NZE). The government needs to improve the quality of regulations to increase investment attractiveness, reduce licensing barriers, and accelerate the development and utilization of renewable energy outside PLN by maximizing the contribution of the community and business entities to invest in renewable energy generation and energy efficiency. Thus, 23% of the renewable energy mix in 2025 can be achieved,” said IESR Executive Director, Fabby Tumiwa.

The decarbonization of the energy system in Indonesia requires the readiness of a supportive ecosystem. The Indonesia Energy Transition Outlook 2022 report assesses that its enabling ecosystem is still low. Using the Energy Transition Readiness Framework, IESR evaluates four indicators, i.e. policy and regulatory support, technology and economy, climate and investment realization, and social.

Ineffective energy policy and regulatory support in boosting the development of renewable energy in Indonesia are reflecting the government’s insufficient political commitment to renewable energy. Although in 2021, the government is committed to increasing the share of the renewable energy mix to 51% in the Electricity Supply Business Plan (RUPTL) and reviewing early retirement at 9.2 GW of coal-fired power plants, these efforts are not ambitious enough to achieve carbon neutrality by mid-century, unaligned with Paris Agreement. Furthermore, this commitment needs to be translated into a clear implementation plan in 2022.

“Indeed, in 2021, there have been several policy documents issued such as LTS and RUPTL, but we evaluate these targets are still far from sufficient to limit the increase in the earth’s temperature to below 1.5 degree Celsius. It is important to improve several regulations such as renewable energy tariffs, scheduled and transparent auction and procurement mechanism from PLN, so that these targets can be achieved,” said Julius Christian, Clean Fuel Researcher & Specialist and Lead Author IETO 2022 report.

Energy policies in Indonesia also have not provided a sense of security for developers to invest in renewable energy. MEMR Regulation No 10/2017 leaves the risk to the developer if there is a change in government policy. ESDM Regulation No. 50/2017 drives renewable energy projects as difficult unbankable projects. More than that, the delay in issuing the Presidential Regulation on new and renewable energy tariffs has caused uncertainty and hampered investment in renewable energy projects in Indonesia.

Unfavorable policies had an insignificant impact on renewable energy investment, only reaching USD 1.17 billion compared to 2020 of USD 1.12 billion. This amount is very small compared to the investment needs for decarbonization of energy systems according to the IESR study, as much as USD 20-25 billion per year by 2030.

From a technical and economic point of view, globally, both renewable energy technology and costs have become increasingly competitive in recent years. The results of the last solar PV auction was electricity cost of USD 0.04/kWh, lower than the average coal power plant, which costs USD 0.05-0.07/kWh. The requirements for subsidies and government regulatory support for coal-fired power plants are allegedly making the cost of coal-fired power plants low. If using the actual market price, with a coal price of USD 150/ton (September 2021), the cost of generating electricity from a coal-fired power plant (CFPP) could reach USD 0.09-0.11/kWh.

Although renewable energy projects have become more economical, renewable energy investment is still considered less attractive.

“The main thing that needs to be highlighted is the unfamiliarity of local banks and investors to the risk of renewable energy projects which are lower than fossil energy projects, considering the price of technology in a declining global trend. The length of the permit process and the complexity of the procurement mechanism are also seen as two things that often make the financing costs of renewable energy projects higher than planned. These drive developers difficulties to determine the exact and definite number of investment needs to be submitted to funding institutions, “said Handriyanti D. Puspitarini, Renewable Energy Senior Researcher, IESR who is also involved in writing IETO 2022.

Meanwhile, from a social perspective, based on the results of a survey conducted by IESR on 1000 respondents, there is an increase in awareness and support for the energy transition to clean energy. A total of 56% of respondents (strongly) agree that Indonesia should stop using coal for power generation. The three highest renewable energy sources that receive the highest public support are solar (68%), water (60%), and wind (39%).

IESR in the IETO 2022 report encourages the Indonesian government to capture positive sentiments from the Indonesian people towards renewable energy through collaboration with the private sector, industry, and provincial governments in Indonesia. Several provinces in Indonesia, such as DKI Jakarta, Bali, Central Java, can serve as references and lessons for other provinces in developing a larger portion of renewable energy.

The focus in 2022 can be on policies and regulations that increase the transparency of the renewable energy auction process, identify clear risk allocation through standardization of Project-Based Learning (PJBL), and improve the bankability of renewable energy projects with derisking instruments. A more efficient and punctual licensing process and lower interest rates for project loans are also important factors for reducing initial funding costs and improving the investment climate. 

Indonesia Energy Transition Outlook 2022 report can be downloaded at: s.id/IESR_IETO2022

Clean Energy Acceleration to achieve NZE in the Energy Sector 2050

press release

Jakarta, 20 December 2021 – The Institute for Essential Services Reform (IESR) launched the Indonesia Energy Transition Outlook (IETO) 2022 report. IETO 2022 is an annual report that reviews the development of the energy transition in Indonesia and outlooks the challenges and opportunities of the energy sector in reducing greenhouse gas emissions for the following year. In the 5th year of the launch of the IETO report, IESR highlighted the government’s commitment to decarbonizing the energy sector, policy, and regulatory innovation to attract renewable energy investment and emphasize the role of the private sector and local governments in accelerating the energy transition in Indonesia.

IESR views that deep decarbonization of the energy sector is critical to be in line with the Paris Agreement target of limiting the increase in the earth’s temperature to 1.5 degrees Celsius. Generating as much as 34% of total emissions in 2019 makes the energy sector the second-largest emitter after Forest and Land Use (FOLU) in Indonesia. If there is no planned decarbonization effort, it is projected that the energy sector will become the largest emitter in Indonesia by 2030 and make it even difficult to achieve the Paris Agreement targets.

“In 2022, the government and all stakeholders must strive to increase the use of renewable energy and promote energy efficiency in buildings and industry. In 2025, the government must achieve the target of 23% of the renewable energy mix. Likewise, it must pursue the energy sector emissions to reach their peak before 2030. These two milestones are an indication of whether we can achieve decarbonization in the middle of this century,” said IESR Executive Director, Fabby Tumiwa.

The Indonesian government has set its commitment to making an energy transition by retaining a larger portion of renewable energy generation capacity, 51 percent or as much as 20,923 MW in 2030 in PLN’s RUPTL 2021-2030. However, to align with the 1.5℃ decarbonization target, based on the IESR study, at least 140 GW of renewable energy is needed, which is dominated by PLTS by 2030.

IESR believes that achieving this big target requires a serious evaluation of the quality of the current policies and regulations. In the last five years, since PP No. 79/2014 on KEN was passed, the growth rate of renewable energy tends to be slow. Data from IETO 2022 shows that in the last five years, renewable energy has only increased on average by 400 MW.

Meanwhile, the Indonesian government also puts coal in transition scenarios such as the CCS/CCUS program for coal-fired power plants, coal gasification, and even coal co-firing. IESR stated that using CCS/CCUS technology in steam power plants will result in higher electricity prices and an increased risk of potentially stranded assets due to non-competitive costs. Furthermore, the application of co-firing and clean coal technology such as coal-fired power plants (CFPP) Ultra-supercritical results in insignificant emission reductions, thus making the effectiveness of these technologies questionable.

“The cost of generating electricity from using CCS in CFPP will compete with renewable energy technology plus storage. So far in the world, CFPPs with CCS  still have problems in operating and achieving emission reductions. Even one of the CFPP projects with CCS, such as Petra Nova in Texas, was closed after only operating for approximately 4 years. So, the readiness of today’s technology, as well as the projected price of technology in the coming decades should be the main consideration. The priority must have been given to the technology with the most competitive costs, which are renewable energy,” explained Deon Arinaldo, Manager of Energy Transformation Program, IESR.

One of the authors of the IETO 2022, Handriyanti Diah Puspitarini said that although it had not yet reached the set target, the installed capacity of renewable energy, especially from solar PV, rose to 17.9 MWp, and electric vehicles such as electric motorcycles experienced a slight increase of 5,486 units and electric cars as much as 2,012 units. It needs more to be developed in 2022.

“The Indonesian government needs to encourage the development of locally produced technology to capture bigger opportunities such as decreasing the CAPEX of renewable energy projects. Therefore, it is easier for developers to get technology with high quality and low prices without imports. Thus, there will be a lot of investment not only in renewable energy projects themselves but into the industrial sector in Indonesia in general,” said Handriyanti Diah Puspitarini, Senior Researcher in Renewable Energy, IESR.

IESR realizes that decarbonization of the energy sector requires a large number of funds, around USD 20-25 billion per year, according to the IESR study on Deep Decarbonization of Indonesia’s energy system (IESR, 2021). IETO 2022 reviews some funding opportunities available from private or public entities for climate change mitigation and adaptation, which can be used to finance the energy transition. These funding opportunities include government incentives (fiscal and non-fiscal), international financing assistance, and more unconventional financing mechanisms such as green bonds/Sukuk, regional bonds, Islamic finance, and blended finance.

“Renewable energy financing should not be seen as a burden despite being an opportunity and strategy to shift investment from fossils to renewable energy. There are many sources of funding that can be a source of renewable energy investment. The government can use its APBN to attract investment from these funding sources, for instance by mapping renewable energy resources, conducting technological research, and pilot projects for new renewable energy projects that have not been developed such as marine energy, as well as providing de-risking instruments to attract investment,” closed Fabby.

The complete development of the energy transition will be discussed at IETO 2022.

Indonesia’s Energy Transition Overshadowed by Government Uncertainty

Jakarta, December 21, 2021 – Closing 2021, the Institute for Essential Services Reform (IESR) has launched its annual report entitled Indonesia Energy Transition Outlook (IETO) 2022. Since 2017, IETO – previously called Indonesia Clean Energy Outlook (ICEO), has consistently explained the development of the energy transition in Indonesia in various sectors as well as provided projections of Indonesia’s energy transition in 2022. For the second year in a row, IETO has specifically analyzed Indonesia’s energy transition readiness.

At a global level, 2021 was marked by some important events such as the Climate Summit hosted by the US president, Joe Biden, who called for the whole world to take more ambitious steps to tackle the climate crisis. The G20 Summit and COP 26 reiterated that the commitments and actions to mitigate the climate crisis of all countries are still not sufficient to suppress the increase in the global average temperature of 1.5 degrees Celsius. More ambitious and aggressive climate mitigation actions are needed.

Although not yet in line with the Paris Agreement, Indonesia has begun to show a quite progressive political commitment by setting a net-zero target by 2060 or earlier, plans to retire 9.2 GW  coal-fired power plants early, and the issuance of a new RUPTL which gives the share of renewable energy up to 51.6%. According to IESR, this commitment can be seen as a breath of fresh air for the development of renewable energy in Indonesia. However, this still has not been able to accelerate Indonesia’s energy transition, and achieve the Paris Agreement target of achieving carbon neutrality by the middle of this century.

Julius Cristian, the lead author of the IETO 2022 report, saw some uncertainty from the government.

“For example, although the latest RUPTL has accommodated about 50% of renewable energy or around 20 GW when compared to the need for decarbonization which reaches 130 GW, this plan is certainly far from what is needed. In addition, the government is still relying on strategies that we think are not feasible, such as the use of nuclear and CCS which are more expensive than renewable energy,” he explained.

The IETO 2022 assesses that Indonesia is capable of achieving net-zero by 2050. To achieve this, Indonesia must reach peak emissions before 2030, and after that start reducing them. One of the implications of this is that Indonesia is no longer allowed to build CFPPs and must immediately start retiring old CFPPs.

Considering the potential and availability of resources, solar PV will be the backbone of Indonesia’s decarbonization. However, its growth in 2021 was only around 18 MW, even though the demand will reach 108 GW in 2030, or an average increase of 10 GW per year.

Handriyanti Diah Puspitarini added that there has been a slight improvement in terms of policy quality and social (public acceptance) regarding the energy transition, but commitment from the government and the renewable energy investment climate still needs a lot of improvement.

“We need to see how the implementation of various regulations that will come and have been issued will be implemented. The government must also realize that the public has begun to be aware of this issue and support the energy transition, so the government should also support this already high public support,” explained Handriyanti.

Herman Darnel Ibrahim, a member of the National Energy Council (DEN), stressed the importance of renewable energy to grow exponentially to meet electricity demand and meet international agreement targets. Although throughout 2021 there is a momentum for growing awareness to transition Indonesia’s policy direction, it is still uncertain where it will go.

“For example, RUED, ​​although the regions already have RUED, ​​the authority to execute is centralized in PLN and Pertamina, so these regions have RUED but cannot affect the results,” said Herman.

Faela Sufa, Southeast Asia Director of ITDP, sees that the transportation sector can be one of the drivers of the renewable energy ecosystem in Indonesia.

“For example, for the electrification of public transportation, we need to synchronize together and identify what incentives need to be given so that it can be more tangible in energy use and coordination with various sectors related to renewable energy for electrification,” explained Faela.

Yusrizki, Chairman of the Standing Committee of the Indonesian Chamber of Commerce (KADIN) for New and Renewable Energy, said that KADIN has declared it will become a net-zero organization in 2060 and is actively encouraging its members to have a-net zero target.

“In the 2022 G20 summit, we are expected to have 100 Indonesian companies that have pledged a net-zero target and this is a very ambitious target. We start from education, assisting -helping them to make their agenda-, to pledge their commitment,” Yusrizki explained.

Meanwhile, Arief Sugiyanto, Vice President of PLN’s RUPTL Control, explained that his party is currently trying to meet the energy mix target of 23% by 2025.

“The target of 23% NRE in 2025 is indeed a formidable challenge. One of PLN’s strategies is to change diesel power generators in isolated areas gradually with NRE generators available in those locations,” said Arief.

Net-Zero Emission Agenda Private Sector Opportunity to Increase Competitiveness

Jakarta, 14 December 2021 – 2021 is considered as a progressive period marked by a number of important events and the birth of various commitments aimed to reduce the impact of climate change. A number of heads of state in the world are competing to show their leadership in dealing with climate change. This is not surprising because according to the report from the Intergovernmental Panel on Climate Change (IPCC) AR6, in August 2021, it was stated that the time for us to repress the increased global temperature below 1.5 degrees Celsius is less than a decade. Our climate action in a couple years to go will determine whether we will succeed in achieving the climate target under the Paris Agreement, which is to achieve net-zero emissions by the mid of this century.

To explore perspectives and encourage collaboration from various parties, the Indonesia Business Council for Sustainable Development (IBCSD) held a webinar titled “What Net Zero Emission Means for the Private Sector” on Tuesday, December 14, 2021.

Indonesia through the Ministry of Environment and Forestry has updated its NDC and equipped it with a strategic document, Long Term Strategy – Low Carbon Climate Resilience aligned with the Paris Agreement (LTS – LCCR). Indonesia also announced net-zero emissions by 2060 (or sooner). With climate change increasingly critical, the Government of Indonesia is urged to accelerate its net-zero emission target.

Laksmi Dewanthi, Director General of Climate Change Control at the Ministry of Environment and Forestry, said that the government is aware of the need to accelerate net-zero emissions.

“So, if we want to achieve net-zero faster, we ask all stakeholders to take more roles in Indonesia’s net-zero plan,” she said.

Medrilzam, Director of the Environment at National Development Agency (Bappenas) added, collaboration and concrete actions from all parties will be the key to achieve the net-zero emission target in Indonesia. “The government needs to prepare enabling conditions so that cooperation with the private sector and other parties can run well,” he said.

Medrilzam also emphasized that based on the Bappenas study, low carbon development results in higher economic benefits than business as usual.

Not only for the government, there are various benefits for corporations if they have a net-zero emission target.

“Aligning to climate science is good for business. Because apart from being in line with the government’s agenda, implementing climate commitments also increases the competitiveness of companies. Companies are expected to continue to seize such opportunities,” explained Amelie Tan, Regional Lead for the Carbon Disclosure Project.

On the same occasion, the Executive Director of IESR, Fabby Tumiwa, emphasized that the government needs to intervene in at least four areas to encourage private sectors to move towards low-carbon businesses. The four sectors include (1)policies and regulations, (2) low-carbon technology and infrastructure, (3) innovation, and (4) raising market and consumer awareness to choose low-carbon products.

“Our study shows that the energy system in Indonesia can technically and economically achieve zero emission by 2050 with 4 strategies, namely increasing renewable energy capacity, reducing fossil fuels, electrification, and using clean fuels,” he said.

Fabby also added the importance of carbon emission disclosure for corporations who are committed to reducing their emissions so that the wider community knows which companies have commitments to control climate change. 

The Government’s Electric Vehicle Infrastructure Target is Still Creating Range Anxiety

Electric vehicles have become increasingly popular recently. The Indonesian government itself has stated that the use of electric vehicles is one of Indonesia’s energy transition strategies. The Ministry of Energy and Mineral Resources announced a target of electric vehicle penetration of 2 million electric cars and 13 million electric motorcycles by 2030.

The magnitude of the electric vehicle penetration target certainly needs to be accompanied by a supporting ecosystem such as the availability of charging infrastructure, various models of EV, as well as incentives for electric vehicle users. Zainal Arifin, executive vice president of engineering and technology at PLN, at the IETD 2021, said that to answer the needs of the electrical energy ecosystem, the government opens opportunities for the private sector to develop charging infrastructure. So far, the adoption of electric vehicles has not been very encouraging. Until 2021, there were 5486 units of two-wheeled vehicles and 2012 four-wheeled vehicles have been certified. However, the adoption rate is still 654 units of electric cars.

The limited number of public charging stations is one of the factors that discourage potential consumers from buying electric vehicles. People need assurance if they run out of power in the middle of the trip, there are many charging stations available.

Although for a measured distance, this charging issue can be anticipated and calculated, but, it is necessary to consider the ratio between the number of vehicles and the SPKLU (Public Charging Station). If we fulfill the government’s target, the ratio of electric vehicles to SPKLU will be around 1:70. This ratio is still too small and causes anxiety when people use electric vehicles because of the limited number of charging spots.

Reflecting on the experience of several countries that have successfully penetrated large-scale electric vehicles such as China, the United States and Norway, in terms of providing public charging stations, the ratio between charging stations and electric vehicles is averagely 1:20. Indonesia is expected to continue to improve the EV ecosystem, one of which is charging stations.

“The government must have an attractive business model to provide massive charging stations so that investors are interested in taking part in the project,” explained Idoan Marciano, Electric Vehicle Specialist, IESR.

Electric vehicles are believed to be a clean, low-emissions transportation solution. Massive use of electric vehicles can reduce emissions in the transportation sector. In the context of Indonesia, massive penetration of EV must also be accompanied by rapid deployment of renewable energy in the power generation sector as the main power producer that will be used by electric vehicles.

The price of electric vehicles which are still higher than Internal Combustion Engine (ICE) vehicles is also highlighted. Government intervention to reduce the price of electric vehicles is needed, but also needs to be wise in designing the intervention scheme considering that electric vehicles are currently still targeting the upper middle class economy.

Particular attention can be paid to the development of faster two-wheeled electric vehicles to encourage penetration in society. The price difference, which is not as much as 4-wheeled vehicles, will be one of the driving factors for the electrification of two-wheelers. In addition, the public procurement of official vehicles for the government and public transportation can be a good strategy to transform the transportation system in Indonesia. 

Indonesia’s Triumph in the Next 30 Years Against the Climate Crisis, Decided Now

Jakarta, 4 December 2021-“Everyone has used solar panels, and there are electric motors too. The air feels so fresh!” said Kiara in Kiara’s Dream which describes the environment of Indonesia in 2050. This dream should be the general dream of the Indonesian people, notably the policymakers whose decision will determine the journey of the Indonesian.

The success of Indonesia in 2050 as Kiara’s description depends  on the Indonesian government’s strategy in preparing and providing a better planet for future generations. The step to reach it must start from now by making an energy transition, switching from fossil energy to renewable energy.

President Jokowi in his briefing to the Commissioners and Directors of Pertamina and PLN, even emphasized that the energy transition could not be delayed any longer. Jokowi firmly asked his staff to immediately prepare a concrete, compact, detailed grand design of energy transition. Jokowi said that welcoming the energy transition era, all sectors need to change by developing renewable energy instead of fossil fuels. This is part of the global movement to tackle the climate crisis.

The climate crisis has been a common enemy for years. The struggle against it has been set in the Paris Agreement in 2015 agreed by 197 countries. Each country tries to keep its emissions as low as possible to keep the earth’s temperature well below 1.5 degrees Celsius after pre-industrial times.

Until COP 26 in Glasgow ended on November 13, 2021, as many as 137 countries already had a carbon neutral target of 2050-2070. Indonesia is targeting carbon neutrality by 2060 or sooner with international support. However, these efforts were considered insufficient to limit the earth’s temperature. The results from the Climate Action Tracker state that even with the country’s commitment to achieving carbon neutrality in the 2050-2070 timeframe, the earth will still be heated at 2.5-2.7 degrees Celsius in 2100.

Regrettably, as one of the largest emission contributors in the world, particularly in the forestry & land sector and the energy sector, Indonesia has not yet set ambitious steps in combating climate change. Although taking a positive commitment to the early retirement of 9.2 GW of coal-fired power plants, according to the Institute for Essential Services Reform (IESR), at least a total of 10.5 GW of coal-fired power plants must be retired before 2030 to be in line with the Paris Agreement.

To urge the Indonesian government to be bolder in its efforts to mitigate the climate crisis demands the role of Indonesian people, including young people. IESR through the Clean, Affordable, and Secure Energy for Southeast Asia (CASE) project in collaboration with AIESEC UI at the Global Impact Conference, which was attended by youth across countries underlined the important and impactful things that youth can do, including by sharing information about the energy sector as the second-largest greenhouse gas emission contributor after forestry and land.

“Awareness of the damaging impact of fossil energy to the earth will encourage people to have responsible behavior towards energy consumption, for instance by saving energy,” said Agus Tampubolon (blue tshirt), CASE Project Manager, IESR.

Furthermore, every Indonesian citizen has a significant part in resolving the quality of life for their children and grandchildren by choosing leaders who have a vision and mission to realize low emission development and massive use of renewable energy, both at regional and national levels.

Agus added that to accelerate the energy transition process systematically, local governments play its key in setting a high target for achieving renewable energy in the Regional Energy General Plan (RUED). Local governments must have a detailed mapping of the technical potential of renewable energy in their area, build networks, and prepare relevant regulations to attract more investment in renewable energy in their area. Thus, Kiara’s Dream, our dream, and the dreams of future generations can come true.

 

Open Canvas: IsDB seeks advice on Energy Transition in Indonesia and Southeast Asia Region with IESR

Jakarta, 1 December 2021 – In the past year, the term energy transition has gained traction in the policy advocating process as well as public discourse. The energy sector, as the number one polluter globally, attracts the main spotlight as the world is in the race to limit its temperature to 1.5 degrees Celsius. Energy transition, though it is a need, unfortunately, has no universal formula for each region or country to implement. Each country needs to figure out the most suitable scenario for its energy transition considering the context and situation of the country. However, taking notes on the previous experience in preparing or initiating the energy transition could help to smoothen the process of transition preparation in a region.

Indonesia marked a quite progressive move along the year, starting from the announcement of the net-zero target in 2060 (sooner) and also the recent RUPTL that accommodates a bigger portion, 51.6% of renewables. Though the target is still considered not enough to achieve the Paris Target, the ongoing progress and commitment announced are attracting people to learn on how the government shifts its interest, and finally commits to cleaner energy.

On December 1st, 2021, IESR met the Islamic Development Bank (IsDB), Almaty, Kazakhstan to share the progress of the energy transition in Indonesia as well as lessons learned on the role of non-government stakeholders in accelerating energy transition both at the country and regional level. 

Sitting for the Central Asia region, IsDB identified the low investment and old infrastructure in power generation, transmission, and distribution as the main issue in the area. The potential renewable energy such as hydro and solar is only available during summer. In the winter where the temperature may drop, for instance up to -50 degrees celsius in Kazakhstan, a way to supply the power must be figured out, and what energy can be used to fulfill the demand.

In developing a more sustainable scenario, IESR as an independent think-tank actively advocating energy transition agenda through several means and channels i.e research dissemination, initiating movement, and actively influencing public discourse. 

“For instance, we push solar rooftop penetration into the grid, because we believe the technology could help to democratize energy access which in Indonesia is monopolized by PLN,” Fabby Tumiwa the Executive Director of IESR explained.

In influencing and shaping public opinion, IESR through the Clean, Affordable, and Secure Energy (CASE) for Southeast Asia project actively engaged with the government, media, academic institutions, and public to promote energy transition discourse for a wider audience. In policy advocacy matters, CASE is also in partnership with the Ministry of National Development Planning (Bappenas) to influence the long-term development goal.

Understanding that the energy transition is a multidimensional issue, it requires a collaboration of diverse stakeholders in planning and implementing it.

“That is our next goal, we’ll have a meeting with the Ministry of Energy and talk about the plan, and figure out what we can do to support the deployment of renewable energy and what works for them,” said Edzwan Anwar of the IsDB.

Synergy for Sustainable Development and Solar Technical Potential in Gorontalo

Gorontalo, 26 November 2021- The potential for renewable energy is evenly distributed in all provinces in Indonesia, including in Gorontalo Province. This potential can be utilized by provinces throughout Indonesia as playing their role in reducing greenhouse gas (GHG) emissions and creating sustainable economic, social, and environmental benefits in their respective regions.

Gorontalo Province, based on the IESR analysis in the “Beyond 443 GW” has a large technical potential of solar power reaching 11.97 GWp (equal to 17.47 TWh of generated power). The potential for pumped hydro energy storage (PHES) is up to 14.4 GWh. IESR Senior Researcher Handriyanti Diah Puspitarini calculated that assuming a family consists of 4 people, it makes 292,921 households in Gorontalo. If one house requires 1.72 MWh of power, then the total electricity demand in Gorontalo is 503.8 GWh.

“So actually the potential for solar in Gorontalo Province can cover all household electricity needs in Gorontalo,” explained Hardiyanti.

Indeed, to achieve these benefits, Gorontalo provincial government needs to build an ecosystem that allows the development of renewable energy, especially solar energy plants (PLTS) to all regencies As one of the hosts for the 4th Sustainable Regency Festival, Gorontalo Regency, Gorontalo Province has a synergistic effort with the large potential of renewable energy. Gorontalo Regency has been actively promoting sustainable development through the allocation of green budgets and the use of renewable energy that contributes to the reduction of greenhouse gas emissions.

Cokro R Katilie, Head of BAPPEDA ( Development Planning Agency at Sub-National Level) Gorontalo Regency emphasized in his opening speech at the series of Festival Kabupaten Lestari that climate change mitigation efforts need to be carried out more optimally.

“In Gorontalo Regency, there was a flood in early November, (this) became a lesson, although collaboration and environmental efforts (have been carried out), the intensity of the weather (which causes flooding) is higher. Of course, mitigation efforts must be increased,” said Cokro.

Inviting the Institute for Essential Service Reform (IESR) online on the session on Mainstreaming  Technology Innovation in reducing emissions and preserving the environment, dozens of participants from various regions and institutions listened to Marlistya Citraningrum, Manager of Access to Sustainable Energy Program, IESR  talking about rooftop PV mini-grid technology.

Marlistya explained that rooftop PV is a reflection of energy democratization because its potential is spread throughout Indonesia, anyone can use it regardless of strata or profession, installation can be anywhere because it has various types, it can be on the roof, above ground, or floating.

“Furthermore, the installation does not take long and can be done by skilled workers. Equally important, the price of the technology is getting lower,” she explained excitedly.

Marlistya explained that the results of the IESR market survey in Jabodetabek found that 7 out of 10 people said that rooftop solar PV is attractive to them. However, only 8% of the respondents said that rooftop solar PV is relevant to their needs. Their interest in adopting PV mini-grid roofs also varies. Most of it is due to electricity savings and following sustainable lifestyles.

“In Indonesia itself, the development of solar PV has been reassuring, it has shown significant growth. However, there are still problems with getting solar panels,” she said.

Currently, rooftop solar PV service providers are still limited in big cities. She said the future homework is to connect people in whatever place in Indonesia with rooftop PV service providers. IESR is trying to bridge the information gap by building the solarhub.id portal.

“This can be an opportunity by utilizing village funds for renewable energy. BUMDES (Village-Owned Enterprises) can manage the renewable energy business as a provider of solar panels. Certainly, it will be more interesting if the tourist attraction in this place uses renewable and sustainable energy, “she said again.