Using Solar PV, Commercial and Industrial Sector Play a Strategic Role Reaching Target of 23% Renewable Energy

Semarang, 6 October 2021– With the technical potential of solar energy reaching 193–670 gigawatt peak (GWp), and the potential for generation from solar power plants of around 285–959 terawatt-hours (TWh) per year, the Central Java Provincial Government is earnestly encouraging the use of solar PV. Increasing consumer awareness of environmentally friendly products, the availability of regulations, and a supportive ecosystem, as well as the benefits of using PV mini-grid is gravity for the commercial and industrial sectors to install PV mini-grid. The more industrial sectors involved in the utilization of solar PV will be the catalyst for the fulfillment of Central Java Solar Province and the achievement of the national renewable energy mix target of 23% in 2025. 

 

Chrisnawan Anditya, Director of Various New Energy and Renewable Energy, Directorate General of New, Renewable Energy and Energy Conservation, Ministry of Energy and Mineral Resources said that until August 2021, there were 4,133 rooftop solar PV users in various sectors in Indonesia with a total capacity of 36.74 MWp. Based on these data, the number of solar PV rooftop users in Central Java and DIY is the third-largest in Indonesia (5.88 MW). The Indonesian government through the Ministry of Energy and Mineral Resources itself has tried to accommodate the needs of the industrial and commercial sectors in installing rooftop solar panels with several strategies, including a clause on reducing parallel capacity costs for industrial customers from 40 hours to 5 hours per month which has been in effect since 2019.

 

Chrisnawan added that the role of various parties, including the commercial and industrial sectors, is crucial for the achievement of Indonesia’s climate targets, while encouraging the competitiveness of green operations and products.

 

“The commercial and industrial sectors will face global challenges in the future, especially if the European Union implements a carbon border tax in 2026. In the future, the economy will grow towards a green economy supported by a green industry. RUPTL currently contains 51% of the power plants to be built are new and renewable plants. In its transition period, the industry is encouraged to balance it with the use of rooftop solar power plants,” he explained in a webinar organized by IESR with the Central Java Government entitled “Roof Solar Energy for the Commercial and Industrial Sector in Central Java” (6/10/2021).

 

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) revealed that the potential for rooftop solar PV in the industrial sector in Central Java and Yogyakarta reaches 3.5 GWp or 10 percent of the PV mini-grid market potential from industrial sector customers throughout Indonesia.

 

“The IESR market survey shows that there is a potential of 9.8% or 16 thousand businesses in Central Java to utilize rooftop solar power. To succeed the decarbonization efforts and climate control efforts, the industrial and commercial sectors can identify the needs and strategies for implementing the energy transition by having an energy transition roadmap, including the use of rooftop solar power plants and encouraging collaboration and synergy of various parties to create a supply chain to produce competitive green products,” explained Fabby.

 

Central Java itself, since declaring Central Java Solar Province in 2019, until mid-September 2021 recorded 48% (4.3 MWp of 8.8 MWp) of the total installed solar PV capacity coming from the commercial and industrial sectors. Supporting policy and regulatory packages have also been prepared, including the Regional Energy General Plan, the Central Java Provincial Energy, and Mineral Resources Strategic Plan, and the Governor’s Circular Letter for the use of rooftop solar power plants in government, public, commercial, and industrial buildings. However, in his opinion, the most important thing besides policies and regulations is market demand.

 

“Market demand (market-driven) due to global demands to reduce house gas emissions is effective in encouraging the industrial sector towards a green industry that uses renewable energy sources,” said Head of the Central Java Province Energy and Mineral Resources and Minerals Agency (ESDM), Sujarwanto Dwiatmoko.

 

“Several industries in Central Java have independently implemented green and sustainable industrial practices, including the use of renewable energy in the form of solar energy. The Central Java Provincial Government will continue to provide training support, certification facilitation, and green industry awards,” continued M. Arif Sambodo, Head of the Industry and Trade Office of Central Java Province.

 

At the same event, M. Irwansyah Putra, General Manager of PLN Central Java and DIY Distribution Main Unit, revealed that there are 20 businesses and industries that have installed rooftop solar power plants. The five highest rankings in terms of capacity, respectively, are PT Tirta Investama (2.3 MWp), CV Jaya Setia Plastik (0.48 MWp), PT Djarum (0.26 MWp), PT. Busana Rejeki Agung (0.17 MWp) , PT Busana Remaja Agracipta (0.15 MWp), and PT Prambanan Dwipaka (0.04 MWp).

 

“PLN certainly supports solar PV optimization by providing various facilities, such as easy access to information, billing systems, providing sufficient reserve margin, running a fair business scheme for consumers as well as PLN, preparing solar PV rooftop Total Solution service products,” said Irwansyah.

 

Experienced the direct benefits of using rooftop PV in his industry, Syaiful, Manager at CV Jaya Setia Plastik targets to increase the PLTS capacity from 0.48 MWp to 1.3 MWp to reduce electricity costs, especially during the day.

 

“Moreover, with the on-grid system, excess electricity can be exported to PLN, the cost of maintaining solar PV is also low, and this is proof of the use of environmentally friendly energy,” he said.

 

With investment costs still considered expensive, several solar energy developers in Indonesia have offered to install rooftop solar power plants with financing schemes other than direct purchases. With a performance-based rental scheme, for instance, the company does not need to invest upfront but has a long-term contract (15-25 years) with the developer for the production of electricity generated from the installation of rooftop solar power plants. Some developers offer leasing or installments over 5 years.

Preventing Energy Crisis, Indonesia Needs to Accelerate Renewable Energy Development

Jakarta, 11 October 2021– The energy crisis in Europe is a lesson for many countries, especially Indonesia to maintain their energy security by reducing dependence on the fossil energy market, preparing prudently for the energy transition, and diversifying energy, especially for renewable energy. 

William Derbyshire, Director, Economic Consulting Associates (ECA) UK explained that the UK’s dependence on fossil energy is reflected in its power generation mix which places a share of gas as much as 42%, while for renewable energy it is only dominated by Wind Power Plants (PLTB) with a share of 16 %.

“If high fossil fuel prices are the problem, the answer is to reduce dependency on coal and gas, rather than to add more fossil fuel,” explained William in the online webinar “Energy Crisis in UK and Europe: Lesson learned for Indonesia Energy’s Transition” ( 11/10/2021) organized by Clean, Affordable and Secure Energy for Southeast Asia (CASE).

 

So far, wind power has become the UK’s backbone for generating electricity from renewable energy plants. However, this wind power has high variability even though it can be projected from historical records of wind patterns and speeds at a certain point. But according to Gareth Davies, Managing Director, Aquatera, this variability can be overcome if we can identify new areas with high wind speeds and build new plants there.

“By spreading (wind power) production across the wide geographical area we can help to increase resilience and reduce the dependency and reliance on other sources. So this effectively becomes a balancing mechanism for our energy supply,” said Gareth.

The Executive Director of the Institute for Essential Services Reform (IESR), Fabby Tumiwa, emphasized that the volatility in primary energy prices, such as fossil energy, is a common thread of the widespread fossil energy crisis.

“It should be remembered that the current energy crisis is a fossil energy crisis. The volatility of fossil energy prices is very high. The increase in the price of each fossil energy affects each other,” said Fabby.***

 

The event of  Energy Crisis in UK and Europe: Lesson learned for Indonesia Energy’s Transition could be accessed on YouTube IESR  https://youtu.be/YnRd_GIy0eE.

Emissions are rising across the G20, again – warns a report

Emissions are rising across the G20, again – warns a report

Despite net zero commitments and updated NDCs, the G20’s climate action is leaving the world far from meeting the 1.5°C global warming limit

Jakarta, 15 Oktober 2021-After a short period of decline, due to the COVID-19 pandemic, greenhouse gas emissions (GHG) are rebounding across the G20, with Argentina, China, India and Indonesia projected to exceed their 2019 emissions levels. This is one of the key findings of the Climate Transparency Report – the world’s most comprehensive annual stocktake and comparison of G20 climate action.

 

In 2020, energy-related CO2 emissions plunged by 6% across the G20. In 2021, however, they are projected to rebound by 4%. “Rebounding emissions across the G20, the group responsible for 75% of global GHG emissions, shows that deep and fast cuts in emissions are now urgently needed to achieve net zero announcements,” says Gahee Han from the South Korean organisation Solutions For Our Climate, one of the lead authors of the report.

 

The report also notes some positive developments, such as the growth of solar and wind power among G20 members, with new records of installed capacities in 2020. The share of renewables in energy supply is projected to grow from 10% in 2020 to 12% in 2021. And in the power sector (energy used to make electricity and heat), renewables increased by 20% between 2015 and 2020, and are projected to become nearly 30% of the G20’s power mix in 2021. At the same time, though, experts note that apart from the UK, G20 members have neither short- nor long-term strategies in place for achieving 100% renewables in the power sector by 2050.

 

In spite of these positive changes, dependence on fossil fuels is not going down. On the contrary, the consumption of coal is projected to rise by nearly 5% in 2021, while the consumption of gas has increased by 12% across the G20 from 2015-2020. The report finds that the growth in coal is mainly concentrated in China – the largest global producer and consumer of coal – followed by the US and India.

 

At the same time, recent announcements signal that most G20 governments are aware of the need for a transition to low-carbon economies. Net zero targets should be reached by latest 2050 to limit global warming to 1.5°C, something that according to the Climate Transparency Report, has been acknowledged by the majority of G20 governments. By August 2021, 14 G20 members had already committed to net zero targets covering almost 61% of global GHG emissions.

 

As stated in the Paris Agreement, each Party is expected to submit a Nationally Determined Contribution – a climate plan that lays out targets, policies and measures that each government aims to implement. By September 2021, 13 G20 members (including France, Germany and Italy under the EU’s NDC) had officially submitted NDC updates, with six setting more ambitious 2030 targets. Yet, even if fully implemented, current targets assessed by April 2021 would still lead to warming of 2.4°C by the end of the century, experts caution. “G20 governments need to come to the table with more ambitious national emission reductions targets. The numbers in this report confirm we can’t move the dial without them – they know it, we know it – the ball is firmly in their court ahead of COP26,” says Kim Coetzee from Climate Analytics, who coordinated the overall analysis.

 

Key selected figures from the report:

 

    • Due to governments’ responses to the COVID-19 pandemic, energy-related CO2 emissions declined by 6% in 2020. However, in 2021, CO2 emissions are projected to rebound by 4% across the G20, with Argentina, China, India and Indonesia projected to exceed their 2019 emissions levels.
    • The G20’s share of renewables increased from 9% in 2019 to 10% in 2020 in Total Primary Energy Supply (TPES), and this trend is projected to continue, rising to 12% in 2021.
    • Between 2015 and 2020, the share of renewables in the G20’s power mix increased by 20%, reaching 28.6% of the G20’s power generation in 2020 and is projected to reach 29.5% in 2021.
  • From 2015 to 2020, the carbon intensity of the energy sector has decreased by 4%

across the G20.

  • Coal consumption is projected to rise by almost 5% in 2021, with this growth driven by China (accounting for 61% of the growth), the USA (18%) and India (17%).
  • The USA (4.9 tCO2/capita) and Australia (4.1 tCO2/capita) have the highest building emissions per capita in the G20 (average is 1.4 tCO2/capita), reflecting the high share of fossil fuels, especially natural gas and oil, used for heat generation.
  • Between 1999 and 2018 there have been nearly 500,000 fatalities and close to USD 3.5 trillion of economic costs due to climate impacts worldwide, with China, India, Japan, Germany, and the USA being hit particularly hard in 2018.
  • Across the G20, the current average market share of electric vehicles (EVs) in new car sales remains low at 3.2% (excluding the EU), with Germany, France, and the UK having the highest shares of EVs.
  • Between 2018 and 2019, G20 members provided USD 50.7 billion/year of public finance for fossil fuels. The highest providers of public finance were Japan (USD 10.3 billion/year), China (just over USD 8 billion/year), and South Korea (just under USD 8 billion/year).

 

Most G20 members also missed opportunities related to leverage COVID-19 recovery packages to promote climate mitigation goals. Only USD 300 billion of the total USD 1.8 trillion in recovery spending went to the much-heralded “green” recovery whilst fossil fuels continue to be subsidised. “It is extremely disappointing that a decade has passed since the commitment to rationalise and phase out inefficient fossil fuel subsidies was made, but G20 members are still pumping billions of US dollars into dirty fuels, which are causing climate change,” says Enrique Maurtua Konstantinidis from Fundación Ambiente y Recursos Naturales (FARN) in Argentina. In 2019, G20 members, excluding Saudi Arabia, provided at least USD 152 billion in subsidies for the production and consumption of coal, oil, and gas.

 

Effective carbon pricing schemes could encourage the transition to a low-carbon economy, according to the authors of the report. However, only 13 G20 members have in place some form of explicit national carbon pricing scheme. Brazil, Indonesia, Russia and Turkey are currently considering introducing such a scheme.

 

The Climate Transparency Report was developed by 16 research organisations and NGOs from 14 G20 members and compares the adaptation, mitigation, and finance related efforts of the G20; analyses recent policy developments; and identifies climate opportunities that G20 governments can seize. This is the 7th edition of the annual review of G20 climate action.

 

About Climate Transparency:

Climate Transparency is a global partnership of 16 think tanks and NGOs that brings together experts from the majority of G20 countries. Our mission is to encourage ambitious climate action in the G20 countries: we inform policy makers and stimulate national debate.

Solar PV Answers Industrial and Commercial Needs to Provide Green Products

Semarang, October 06, 2021 – The Commercial and Industry sectors are potential partners to accelerate the penetration of renewable energy. The increasingly strong market demands for green products encourage the commercial and industrial sectors to switch to environmentally friendly technologies in order to maintain their existence in the global market. Solar PV is a strategic choice for the commercial and business sectors considering its relatively fast installation, as well as the availability of solar energy sources that are evenly distributed throughout Indonesia. In addition, investing in solar PV can reduce production costs.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) explained that currently in line with efforts to reduce greenhouse gas (GHG) emissions, the industrial sector is faced with the obligation of the economic value of carbon. Especially for goods that are exported such as to European countries, America and Japan. The carbon footprint of a product that exceeds the specified maximum will be taxed. In addition, public awareness about sustainability issues is increasing, as stated by a survey by WWF and The Economist which found that searches on search engines with the keyword ‘sustainability’ increased by more than 71% during 2016-2020.

“Shareholders of companies have asked that all these companies commit to use 100% renewable energy. So if we want Central Java to become an industrial center, access to renewable energy must be facilitated,” said Fabby at a webinar organized by IESR with the Central Java Government entitled “Rooftop Solar Energy for the Commercial and Industrial Sector in Central Java” (6/10/2021).

In general, in terms of adoption, the number of rooftop solar PV users in Indonesia is increasing. Based on data from the Directorate General of EBTKE, until last August 2021, there were 4,133 rooftop solar PV customers in Indonesia, with a total installed capacity of 36.74 MWp. Judging from the capacity of rooftop PV by region, Central Java and DIY were ranked third with a rooftop solarcapacity of 5.83 MWp.

Chrisnawan Anditya, Director of Aneka EBT at the Ministry of Energy and Mineral Resources, explained that the government has given priority to the development of rooftop solar power plants considering its huge potential, fast installation, and very competitive prices.

“The medium-term strategy that is being pushed for the development of PV is rooftop solar which is targeted at 3.6 GW by 2025. In addition, we also continue to encourage utility-scale PV,” explained Chrisnawan on the same occasion.

To support infrastructure and services towards the energy transition, PLN must also improve on preparing grid adaptations and adapting to a business model that accommodates large amounts of renewable energy.

“This rooftop PV has an impact on the current PLN grid due to its intermittent nature. So PLN must provide a standby unit to supply electricity when the power generated by the PV rooftop cannot meet the existing electricity needs,” explained M. Irwansyah Putra, General Manager PLN Central Java – DIY.

Irwan also explained that in supporting the carbon tax mechanism, PLN has issued an REC (Renewable Energy Certificate). By purchasing this certificate, PLN will distribute electricity obtained from clean energy to the industry.

Questioning policies to encourage renewable energy in Central Java Province, the Head of the Central Java Province ESDM Office said that his party had prepared various policies. However, according to him, to encourage certain changes, in this case the transition from fossil energy to renewable energy (Solar PV-ed), policy support alone is not enough.

“Change will happen more quickly if it is driven by a market driven mechanism, so it’s not just complying with certain rules. The Central Java ESDM Office has tried to make policy packages that cover this market aspect with input from various parties such as the government, universities, and NGOs,” explained Sujarwanto.

The Central Java Regional Government also provides assistance to the commercial and industrial sectors in Central Java which are transitioning to green industries. “There are several steps taken to implement the green industry, i.e. training, facilitating certification for the green industry as well as awarding the green industry. Several companies in Central Java received this award,” explained M. Arif Sambodo, Head of the Industry and Trade Office of Central Java Province.

Opportunities for the commercial and industrial sectors to adopt solar PV are getting wider with the availability of various Solar PV investment schemes such as installments and leases. Anggita Pradipta, Head of Marketing for SUN Energy, said that there are three schemes offered by SUN Energy for prospective rooftop solar PV customers, namely Solar purchase, Performance Based Rental, and Solar Leasing.

“For the commercial and industrial sectors who want to install solar panels but are constrained by the initial installation cost, we recommend taking a performance based rental scheme. With this scheme, the customer will be bound by a contract for 15-25 years, where all the costs of maintaining the solar PV unit will be borne by SUN Energy, after the contract ends, the assets will become the property of the customer,” explained Anggi.

Check out 6 Differences in Indonesia’s 2016 NDC and 2021 Update Results

Since signing the Paris Agreement in 2015, Indonesia has begun to prepare a Nationally Determined Contribution (NDC) document as an official statement for its emission reduction commitments. Indonesia’s first NDC was submitted to the UNFCCC in 2016. Along the way, many parties considered that the NDC owned by Indonesia had not been able to answer the challenges of the climate crisis and efforts to reduce emissions.

In 2021, with input from various parties, Indonesia will update its NDC document. In terms of emission reduction targets, nothing has changed, but the most noticeable difference is that various adjustments have been made to the 2020-2024 RPJMN and Indonesia’s Vision 2045. In addition, the Ministry of Environment and Forestry (KLHK) has also issued a Long Term Strategy document to complement this latest NDC. Other things added to the latest Indonesian NDC can be seen in the following comparison table.

NoPointNDC 2016NDC 2021
1Alignment with national strategyAlign with the Nawa Cita concept.
Alignment with RPJMN 2020-2024 and Indonesia Vision 2045 through NDC
2Projected GHG emissions at BAU
Energy CM2: 1.271MTon CO2e

FOLU CM2: 64 MTon CO2e

Emission reduction targets

CM2 Energy: 398 MTon CO2e

FOLU CM2: 650 MTon CO2e		Energy CM2: 1,407 Mton CO2e

FOLU CM2: 68 Mton CO2e

Emissions reduction targets:

CM2 Energy: 441 MTon CO2e

FOLU CM2: 692 MTon CO2e
3Long Term Strategy (LTS) Document
Not available
Available, fulfilling the mandate of the Paris Agreement Article 4.19 (include gender equality and decent work issues)
4Explanation of assumptions in business as usual (BAU) projections and targets
Not available
Available
5Information about Indonesia's commitment to various international conventions
Not availableAvailable
6Translating the Katowice Package as a Guide for Implementing the Paris Agreement
Not translated
Translated

In the latest document, the Government of Indonesia describes 3 climate change risk mitigation scenarios, namely CPOS (Current Policy Scenario), TRNS (Transition Scenario), and LCCP (Low Carbon scenario Compatible with Paris Agreement). In addition to emission reduction targets, these three scenarios have a direct impact on per capita income and investment costs that must be paid by the government.

Are Indonesia’s emission reduction targets relevant to achieving the Paris Agreement targets?

Indonesia’s steps to improve its NDC have drawn appreciation and criticism. Appreciation is given for efforts to clarify points that have not been included in the NDC document, such as aspects of gender equality and decent work, adding a Long Term strategy (LTS) document, and including Indonesia’s commitment to the International Convention on adaptation.

On the other hand, criticism comes because the ambition to reduce emissions has not increased from the previous document. The emission reduction target in Indonesia’s NDC does not reflect the sense of urgency to respond to the current climate crisis. In fact, the IPCC AR6 report launched in August 2021 states that the time to prevent the earth’s temperature from rising below 2 degrees Celsius is less than a decade away. As one of the top 10 largest emitting countries in the world, Indonesia should be even more ambitious in reducing its emissions.

In addition, in the energy sector in the electricity sub-sector, coal-fired power plants that produce high emissions will still be chosen as a source of power generation even until 2050. However, the reasons for choosing CCS/CCUS technology implementation, both technically and economically, are not explained in detail. It also does not explain the differences in assumptions used between CPOS, TRNS, and LCCP scenarios. The lack of transparency regarding the assumptions used in this document makes it difficult for academics, policy makers, or the general public to study this LTS – LCCR document

IESR considers that the importance of increasing climate ambition is not only to fulfill international agreement commitments but also to realize national economic resilience and mitigate the risk of large costs incurred to fix climate problems in the future. In response to this, IESR compiled a recommendation for the President of the Republic of Indonesia regarding the updating of Indonesia’s Nationally Determined Contribution (NDC) 2021 which can be downloaded as follows IESR Recommendation to President Joko Widodo on Updating NDC – IESR

Youth Coalition Concerned for Renewable Energy: “Remove Brown Energy Sources from the EBT Bill!”

Jakarta, September 29, 2021 – Indonesia has set its target on achieving a carbon neutral target by 2060 or sooner. One strategy is to use renewable energy. Encouraging the optimization of renewable energy development in Indonesia and providing a clear legal basis. The House of Representatives of the Republic of Indonesia has the initiative to draft the New and Renewable Energy Bill (EBT Bill). However, along the way, the EBT Bill still contains elements of fossil energy which has drawn protests from the Youth Coalition for Renewable Energy.

“Initially, the EBT Bill raised our hopes about the development of renewable energy as a mitigation measure for the climate crisis, but our hopes have faded because the current EBT Bill includes unclean energy sources. Here, Indonesia’s commitment to the energy transition and reducing its emissions is questionable,” explained Satrio Swandiko Prillianto, representative of the Youth Coalition Concerned for Renewable Energy at the webinar ‘Youth Aspirations for a Fair EBT Bill’, which was supported by the Institute for Essential Services Reform (IESR).

Not only that, through Satrio, this Coalition that consisting of students from various universities in Indonesia, also summarized their 3 points of objection to the EBT Bill as follows:

  1. The Youth Coalition Cares for Renewable Energy demands the House of Representatives Commission VII to remove unclean energy sources from the EBT Bill,
  2. The Youth Coalition Cares for Renewable Energy asks the government to regulate incentive regulations for renewable energy,
  3. The Coalition of Youth Concerned for Renewable Energy asks the government to consider scientific suggestions and aspirations of the people from various circles as an effort for economic growth and decarbonization of the energy sector.

Sugeng Suparwoto, Chairman of Commission VII DPR RI on the same occasion stated that the long process of making the New Renewable Energy Law has now reached the synchronization stage in the legislative body of the DPR RI. It is planned that this law will be completed by the end of 2021. He explained that this bill is important to deal with energy problems in Indonesia.

“Our fossil energy reserves are low, besides that it is also polluting because it produces high carbon emissions, so we need to switch to renewable energy and need a strong legal basis for the development of the ecosystem,” explained Sugeng.

Although the EBT Bill is not yet perfect, Ratna Juwita Sari, a member of Commission VII DPR RI believes that this EBT Bill will ensure that the energy system in Indonesia to be strong, independent, sufficient, affordable, fair and sustainable, and clean.

“We are aware that some articles still raise pros and cons, such as the chapter on nuclear, but the impact of this bill socially, economically and environmentally will be large and good,” explained Ratna. 

Measuring the Urgency of EBT Bill

Jakarta, 10 September 2021 – Since January 2021, the Indonesian House of Representatives Commission VII has prepared an academic paper for the New and Renewable Energy (EBT) Bill and is currently in the process of consolidation. This bill is considered important to provide legal certainty for the development of renewable energy in Indonesia. Even so, until now several parties have expressed objections to the substance or questioned the urgency of this law.

The development of renewable energy in Indonesia itself over the last five years has not been encouraging. The average additional installed capacity per year is only around 400 MW. In fact, Indonesia has a commitment to achieve 23% of renewable energy in the primary energy mix by 2025. Currently, Indonesia’s achievement is still in the range of 11-12%. As time is running out, various strategies are needed to accelerate the development of renewable energy in Indonesia. In collaboration with Soegijapranata Catholic University, the Institute for Essential Services Reform (IESR) held a webinar entitled “New and Renewable Energy Bill: for Whom?”. This webinar aims to explore the perspectives of various fields and hopes to formulate recommendations for this bill.

In his opening remarks, Fabby Tumiwa, Executive Director of IESR reminded the importance of the public knowing about the New and Renewable Energy (EBT) Bill and having the space and opportunity to provide their views on this Bill.

“In the midst of Indonesia’s current condition of pursuing net-zero emissions of 2060 or faster, the development of renewable energy is one of the keys to achieving this target. The role of the EBT Bill is important here,” explained Fabby.

Sonny Keraf, the Indonesian Minister of the Environment from 1999 to 2001, revealed that the problem of renewable energy which is slow in progress is not a problem in the regulations, but lies in the government’s seriousness in transitioning from fossil energy to clean energy.

“So if the big question is do we need this New and Renewable Energy Law? The answer could be no. Because we already have enough regulations that regulate energy in detail,” he said.

Irine Handika, Lecturer at the Faculty of Law, Gadjah Mada University, has a similar argument with Sonny. From the legal aspect, according to her, there are several things that are problematic about the New and Renewable Energy (EBT) Bill. One of them is the term ‘new energy’ which will make this law die before it is born. This is because the ‘new energy’ parameter itself is uncertain and unclear.

“We see that currently the main problem is at the implementation level of existing energy regulations, so making new laws may not be the right solution. Even if it is considered that there are things that have not been covered in existing regulations, the solution that can be taken is revisions or amendments to existing regulations or laws,” explained Irine.

On the other hand, Kardaya Warnika, DEA, member of the Indonesian House of Representatives Commission VII, explained that the EBT Bill aims to provide legal certainty for the development of new and renewable energy in the future. In the future, this law is projected to become a guideline for achieving national new and renewable energy targets.

“We see that the energy transition is very big, this law is a way for the state to be present to lead the energy transition process. I agree that the progress of NRE is bad because the government is not very supportive of renewables, even though the state must be present and lead the energy transition process. So it is hoped that this law will provide legal certainty forever for the development of renewable energy,” said Kardaya.

The partiality of the new law will really be seen when the draft law is finalized, but we need to ensure that the substance of the EBT Bill is not counterproductive to Indonesia’s decarbonization ideals to become net-zero emissions by 2060.

10 IETD 2021’s Recommendations to Achieve Indonesia’s Decarbonization Target

Jakarta, 24 September 2021 – Boosting the efforts to achieve energy system decarbonization targets in Indonesia, the Institute for Essential Services Reform (IESR) and the Indonesia Clean Energy Forum (ICEF) summarized 10 recommendations to the government and stakeholders referring to the dynamics of discussions during the five days of Indonesia Energy Transition Dialogue (IETD) 2021.

First, establishing a bold policy in the manifest of Indonesia’s political support to encourage decarbonization and the development of low-carbon technologies.

“As we observe today that, several policies that are correlated with decarbonization efforts are not sufficient yet. If we observe at KEN and RUEN in 2050, the portion of fossil energy is still quite large, and renewable energy is low, therefore this target needs to be changed,” said Fabby Tumiwa, the Executive Director in stating the 10 recommendations at the IETD 2021.

Fabby said the energy decarbonization process would take at least the next three decades. Hence, decarbonization needs to be supported by long-term policy certainty which is consistent and unflinching.

Second, determining the policy that creates a level playing field between renewable energy and fossil. Because the economy of renewable energy can compete with fossil energy.

“Solar and wind energy can knock out fossil energy. However, there are still existing policies that shape fossil energy as cost-cheap, therefore we need the policy to eliminate the fossil energy subsidies,” said Fabby.

By removing subsidies on fossil energy or defining the right carbon price in boosting the renewable energy economy, it will accelerate the development of renewable energy.

Third, developing a national energy plan based on reducing carbon emissions and considering the potential for expanding existing low-carbon technologies. Fabby said there have been several plans for technology utilization. But the plan needs to consider the speed of innovation in each of the world’s low-carbon technologies.

“Moreover it is also necessary to consider how the price of this low-carbon technology will be until 2050. Therefore, energy policies, particularly those related to costs, must be considered in the long term. What is affordable today, due to market distortion, could be expensive in the future,” said Fabby.

Fourth, determining the optimal plan to retire coal-fired power plants (CFPP) based on data analysis on each CFPP unit. This analysis can be used to define several strategies and the suitable implementation time for each CFPP unit.

“Then we also have to think about how much capacity remains and we must supply it (with renewable energy) when the power plant retires,” said Fabby.

Strategies to overcome the issues are such as refinancing to accelerate the retirement period of the CFPP, retrofitting the power plant, and diverting funding and investment from thermal energy to renewable energy.

Fifth, increasing the bankability of renewable energy projects by improving the project scale and comprehensive regulatory support. The development of renewable energy on a large scale has been proven to drive highly competitive renewable energy prices.

Sixth, increasing the adoption of electric vehicles by establishing the electric vehicle ecosystem. Fabby continued that it needs combinations of several policies to accelerate the penetration of electric vehicles. For instance, stipulating disincentive usage of fossil fuels such as the prohibition of using fossil vehicles and the establishment of standards for fossil fuel efficiency.

Seventh, determining the role of clean fuels towards 2050 in the deep decarbonization of the transportation system. Electric vehicles will have been dominant in the sector of passenger vehicles.

“Yet the role of clean fuels also needs to be prepared to support the decarbonization of the transportation sector which is difficult to be replaced by electric vehicles,” said Fabby.

Eighth, Indonesia needs to provide integrated policy support from multiple parties. Furthermore, Indonesia needs collaboration from various parties to attract investment in renewable energy.

“In the short term, until 2025, efforts need to be made to improve the investment climate and encourage the deployment of renewable energy. Currently, there are many national and international funding sources ready to support it. However, Indonesia is now only waiting for the government’s commitment to renewable energy targets through government policies,” said Fabby.

Ninth, the government needs to develop a low-carbon industry as a national priority industry. Indonesia has identified its potential low-carbon industry. It should be included in the National Medium-Term Development Plan (RPJMN) and the National Industrial Development Master Plan (RIPIN). For example, the battery industry, the electric vehicle industry, and the clean fuel industry.

“Industrial development needs to be aligned with the domestic technology research and development plan. Moreover, we need to commercialize and scale up domestic technology projects to increase the demand for technology. And it needs to be prioritized to maximize the potential of sustainable natural resources,” explained Fabby.

“The low-carbon technology industries are solar panel manufacturing, battery manufacturing, and hydrogen production. Moreover, training and preparation of workers are needed to support the development of the industry from year to year,” added Fabby.

Tenth, the government needs to prepare local workers for future low-carbon industries by supporting domestic industries and maximize the positive socio-economic impact of the potential development of low-carbon technology industries in Indonesia.

The IETD 2021 event lasts for 5 days which includes 13 main sessions and several additional sessions. IETD 2021 involved more than 80 speakers and panelists international and national leading, as well as the participation of more than 1500 users from all over the world.

De-risking Instruments for Renewable Energy Funding

Jakarta, September 24, 2021 – The world is moving in accelerating the energy transition to clean energy to pursue the Paris Agreement target of preventing the earth’s average temperature from rising above 1.5 degrees Celsius. Renewable energy financing in Indonesia is increasingly wide open as the commitment of developed countries to assist the transition of renewable energy in developing countries. This funding requires the support of government policies to minimize the funding risks and increase investment interest in renewable energy.

It was said by Deni Gumilang as advisor to Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) in the fifth day of the Indonesia Energy Transition Dialogue (IETD) 2021, Friday (24/09/2021).

Deni said that currently there are various kinds of de-risking instruments in funding renewable energy for Indonesia, including the provision of guarantees, green bonds, and concessional debt. However, in his opinion, the de-risking instruments need to be supported by policies and regulations to reduce the risk of renewable energy investment, such as by setting clear renewable energy targets.

“So far, there are still many differences in emission reduction targets within the government. If there is consistency in the target, the collaboration between all stakeholders will be easier to be implemented, ” added Deni.

Moreover, Deni explained that Indonesia needs to consider the technical support for integrated renewable energy development, create a licensing climate that supports small-scale projects, and increase the credibility of renewable energy projects to be bankable in obtaining funding.

In response to this, the President Director of PT SMI, Edwin Syahruzad, said that PT SMI has provided a de-risking project by providing technical support. This makes it easier for developers to access technology and funding a renewable energy project.

Member of the Indonesia Clean Energy Forum (ICEF), Faisal Basri said that renewable energy is needed to encourage Indonesia’s economic development. Because, if decarbonization is not immediately implemented, Indonesia is predicted to have a large energy deficit.

“If we don’t immediately decarbonize, then by 2040 we will have an energy deficit of USD 80 billion. Because we will import more energy than export. It happens because our needs (on energy) will grow higher. Therefore, we need a long-term plan of macroeconomics by more accelerated decarbonization,” said Faisal.

However, he thought that, in reality, the government’s policies have not supported renewable energy. As it is reflected in Indonesia’s State Budget, which still provides hundreds of trillions of subsidies for fossil energy.

Faisal believes that the government needs to put forward the right policies to support the research of renewable energy and ensure the development of the renewable energy industry, to ensure that Indonesia will be a player too, rather than just a consumer.

Supporting the statement of Faisal, Lisa Wijayani, Manager of the Green Economy Program, IESR revealed that the synergy of economic growth with energy transition is essential to provide positive benefits for human life.

“There are several opportunities that can be developed, such as through the development of electric vehicles, implementing energy efficiency, creating a green industry so it can generate many green jobs,” said Lisa.

Arunabha Ghosh, Founder, and CEO of the Council on Energy, Environment, and Water (CEEW) added the importance of aligning human resource development to meet with green jobs that will be created forward with the energy and economic transformation of the country.

“In India, we have a skill council for green jobs which is set up to improve manpower in renewable energy. Within the skills council, there are various programs to train tens of thousands of people from various backgrounds, they graduate from well-known universities, not have from top universities” he explained.