The Role of Media in Indonesia’s Energy Transition Journey

In the course of economic recovery after the Covid 19 pandemic, Indonesia is currently at a crossroads to choose the path of green economic recovery, or the path of economic recovery that produces high emissions. The COVID-19 pandemic has hit the Indonesian economy hard, as can be seen from the negative economic growth we are experiencing. But on the other hand, Covid 19 opens an opportunity to change the direction of economic development to be greener and lower emissions. Based on the report from the Intergovernmental Panel on Climate Change Assessment Report 6 (IPCC AR6), we are running out of time to keep the earth’s temperature rise within safe limits. As one of the countries with the largest economic growth in the world as well as the largest emitter in the world, Indonesia has a responsibility to reduce its emissions, especially from the energy sector. In the post-Covid-19 economic recovery situation, Indonesia must find a way to get out of the economic crisis and at the same time overcome the climate crisis. Making an energy transition is a must if Indonesia is serious about ‘greening’ its economic recovery program.

 

In overseeing the process of Indonesia’s economic recovery, all levels of society need to participate in monitoring and voicing their opinions to ensure that the path taken by the government is the path that will lead Indonesia to a low-emissions economic recovery. It is important for Indonesia as a nation to carry out an economic recovery that takes into account the climate crisis because the crisis is the source of all future crises. The urgency of the climate crisis and low-emissions economic recovery needs to be conveyed to the public, one of which is through the mass media, so that people can ‘demand’ the government when the government does not choose a greener economic recovery path.

 

To help journalists provide comprehensive coverage of energy transition issues, the Clean, Affordable, and Secure Energy (CASE) for Southeast Asia program, IESR organizes training for journalists. This training includes material input on energy and energy transitions, as well as how to write coverage of energy transitions so that they can be better understood by the wider community. This program will take place in ten sessions lasting from September to October 2021, and will be attended by 20 selected journalists from various regions in Indonesia.

 

In his remarks, Fabby Tumiwa, executive director of IESR emphasized the importance of the media’s role in the energy transition process. “The community must be able to support, encourage, and voice their opinions to policy makers. This is where the media plays an important role in building community collective awareness so that Indonesia builds a greener economy,” said Fabby.

 

In the first session which took place on Tuesday, September 7, 2021, participants were introduced to the concept of energy and energy transition guided by three speakers from Agora Energiewende.

 

Tharinya Supasa, Project Lead Energy Policy South East Asia Agora Energiewende, stressed that it is important for all levels of society to understand the importance of the energy transition.

 

“Because energy is very close to us, from cooking, watching TV to working with computers or other electronic devices. So whatever happens in the energy sector will affect everyone’s life,” said Tharinya.

In the course of economic recovery after the Covid 19 pandemic, Indonesia is currently at a crossroads to choose the path of green economic recovery, or the path of economic recovery that produces high emissions. The COVID-19 pandemic has hit the Indonesian economy hard, as can be seen from the negative economic growth we are experiencing. But on the other hand, Covid 19 opens an opportunity to change the direction of economic development to be greener and lower emissions. Based on the report from the Intergovernmental Panel on Climate Change Assessment Report 6 (IPCC AR6), we are running out of time to keep the earth’s temperature rise within safe limits. As one of the countries with the largest economic growth in the world as well as the largest emitter in the world, Indonesia has a responsibility to reduce its emissions, especially from the energy sector. In the post-Covid-19 economic recovery situation, Indonesia must find a way to get out of the economic crisis and at the same time overcome the climate crisis. Making an energy transition is a must if Indonesia is serious about ‘greening’ its economic recovery program.

 

In overseeing the process of Indonesia’s economic recovery, all levels of society need to participate in monitoring and voicing their opinions to ensure that the path taken by the government is the path that will lead Indonesia to a low-emissions economic recovery. It is important for Indonesia as a nation to carry out an economic recovery that takes into account the climate crisis because the crisis is the source of all future crises. The urgency of the climate crisis and low-emissions economic recovery needs to be conveyed to the public, one of which is through the mass media, so that people can ‘demand’ the government when the government does not choose a greener economic recovery path.

 

To help journalists provide comprehensive coverage of energy transition issues, the Clean, Affordable, and Secure Energy (CASE) for Southeast Asia program, IESR organizes training for journalists. This training includes material input on energy and energy transitions, as well as how to write coverage of energy transitions so that they can be better understood by the wider community. This program will take place in ten sessions lasting from September to October 2021, and will be attended by 20 selected journalists from various regions in Indonesia.

 

In his remarks, Fabby Tumiwa, executive director of IESR emphasized the importance of the media’s role in the energy transition process. “The community must be able to support, encourage, and voice their opinions to policy makers. This is where the media plays an important role in building community collective awareness so that Indonesia builds a greener economy,” said Fabby.

 

In the first session which took place on Tuesday, September 7, 2021, participants were introduced to the concept of energy and energy transition guided by three speakers from Agora Energiewende.

 

Tharinya Supasa, Project Lead Energy Policy South East Asia Agora Energiewende, stressed that it is important for all levels of society to understand the importance of the energy transition.

 

“Because energy is very close to us, from cooking, watching TV to working with computers or other electronic devices. So whatever happens in the energy sector will affect everyone’s life,” said Tharinya.

Comprehensive Planning Required for Utility-Scale Solar Energy Development

Given the potential for solar energy that reaches 20.000 GW, the utilization of solar energy on a utility scale is still very small in Indonesia. It is recorded that until 2020, the total installed capacity of solar energy is 186 MW. Especially for utility-scale solar power plants, the number of auctions that have taken place so far are still sporadic and unstructured. In order to accelerate solar energy more massively, a more structured and comprehensive plan is needed to ensure project availability. This policy reform certainly requires commitment and strong political leadership from the current government.

As one of the co-signatories of the Paris Agreement, Indonesia has a target to achieve the renewable energy mix target of 23% by 2025. Unfortunately, until now the achievement of the energy mix has only reached around 12%. In the short term, Indonesia must increase its renewable energy capacity. Dadan Kusdiana, Director General of New and Renewable Energy, and Energy Conservation, Ministry of Energy and Mineral Resources said in a webinar launching the report “Hitting Record-Low Solar Electricity Prices in Indonesia” that it takes at least 4 times the effort to achieve the energy mix target of 23%.

“Currently we are trying to reach the target of 23%. From the electricity sector, we are preparing a new RUPTL that accommodates a larger portion of EBT, the figure is up to 51%,” explained Dadan.

Cita Dewi, Executive Vice President of PT PLN’s New and Renewable Energy Division, continued that the presence and contribution of PV solar is one of the main options for increasing renewable energy in the future in addition to hydro.

“We are very happy to see the current development of PV technology, especially for the declined intermittency side. As a result, they are increasingly competitive and the rates tend to fall. Both the state and PLN can gain benefits from PV,” she said.

The direction of the government’s steady commitment to accelerating renewable energy is a good sign. However, considering the current condition of Indonesia, who must meet the target of installed capacity of renewable energy in a short time, a strategic move is needed to create a mature solar ecosystem. 

Daniel Kurniawan, a photovoltaic specialist researcher as well as the author of this report, explained that the reason why utility scale PV has not developed rapidly in Indonesia is partly because of the less ambitious planning of the electricity system to include solar PV in it.

“So far, we have seen that solar auctions are still sporadic, or buy-out, and do not have a large scale to maximize its economic benefits. In this case, the determination of the target for the auction in the next 5 years, for example, is important. The government can help by making a feasibility study or land acquisition,” he said.

The Local Content Requirement (TKDN) is still an obstacle to the acceleration of the solar industry in Indonesia because the price of domestic panels are more expensive, but the efficiency is lower. Entrepreneurs also find it difficult to get international capital assistance because the quality of these domestically made panels has not been tested for quality. To deal with this issue, the government needs to consider separating TKDN and non-TKDN auctions according to the readiness of local industries.

Melina Gabriella, IESR Energy Transformation Program Officer, who also co-authored this report, added that to achieve affordable solar prices, Indonesia can learn from countries with low solar auction prices, such as Brazil, India, and the United Arab Emirates.

“Some of the lessons that we can take from those countries include the commitment and strong leadership from the government which is revealed in policy products such as qualification standards and PPA, as well as the transparency of auction and clarity of rules. The establishment of a special agency to manage the tender process should also be considered. In addition, the Indonesian government also needs to review supporting regulations such as TKDN and tariff setting policies,” explained Melina.

The integration of solar in the national electricity supply program is the key to the development of solar energy. Therefore, a structured, measurable and comprehensive auction planning needs to be carried out by the government. National targets for solar energy need to be set and a strategic roadmap for achieving them made.

Gigih Udi Atmo, Coordinator of Electricity Business Preparation, Director General of Electricity, MEMR, appreciated this latest report from IESR, and stated that the government is currently focusing on pursuing the 23% renewable energy mix target by 2025.

“We need to see why we need to accelerate solar energy. There are at least two big targets, namely 2025, a 23% NRE mix and net-zero emissions in the long run. So the context is how solar can contribute to achieving the existing targets,” Gigih said.

Salman Baray, Country Director of Indonesia ACWA Power, shared his experience of participating in solar auctions in various places, both Indonesia and abroad.

“Many investors have looked at Indonesia as a place to invest, but in terms of regulations and government support, certain improvements need to be made. For example, assisting in the land auction process, tax incentives, regulations related to local content requirement, as well as making it easy to get local funding,” Salman closed his explanation.

A Pile of Government Homework to Develop Indonesia’s Electric Vehicle Market

Jakarta, August 5, 2021, The electric vehicle market in Indonesia is still not well managed, even though there is good progress from an industrial point of view. The development of the electric vehicle industry in Indonesia is specifically regulated in Presidential Regulation 55/2019 which provides a legal basis for the development of electric vehicles. The ratification of this regulation is a good thing to provide legal certainty as well as to show the government’s commitment to support the development of electric vehicles in Indonesia. Two years since the ratification of Presidential Regulation 55/2019, there have been positive improvements in terms of an increasingly integrated industry starting from the battery industry with the formation of the Indonesia Battery Corporation (IBC), and several car and battery manufacturers who have expressed interest in investing in Indonesia. 

 

The Ministry of Industry aims that by 2030 the penetration of electric vehicles will reach 600 thousand four-wheeler EV and 2.45 million two-wheeler. To achieve this target, it is necessary to build a market by growing interest in adopting electric vehicles in the community. Public interest in owning an electric vehicle is much influenced by the price of the electric vehicle itself. As of now, the price difference between electric vehicles and Internal Combustion Engine (ICE) cars is currently quite significant which makes people interested in adopting electric vehicles.

 

To grow the electric vehicle market, the Institute for Essential Services Reform (IESR) views that the government can take the following steps, such as implementing a number of incentives, for example with tax reduction and the flexibility to use certain routes.

 

Not only that, awareness about technology and the economic benefits of owning an electric vehicle needs to be further promoted. This relatively new technology is still not well known to the public. Even among owners and enthusiasts of electric vehicles, there is a kind of range anxiety, namely the feeling of worrying about not being able to reach the destination with the battery power of the car. The existence of charging facilities that are not evenly distributed from one place to another is another consideration. Ensuring the availability of supporting facilities, such as charging stations, is also important to support the adoption of electric vehicles.

In addition to introducing technology and ensuring the availability of supporting facilities, the public should also be encouraged to compare the total ownership cost between ICE vehicles and electric vehicles.

 

“The significant difference is in maintenance costs and fuel costs per kilometer which are considered more efficient on electric vehicles. But often prospective consumers do not calculate that far before buying a vehicle. This is good for raising public awareness as well as promoting electric vehicles,” said Fabby Tumiwa, Executive Director of IESR.

 

Regarding the incentives that will be given to electric vehicle owners, Fabby emphasized that the government must seriously think about the form of given incentives, considering that electric vehicles are actually classified as luxury goods. Indonesia can refer to several countries such as China and Norway regarding the types of incentives provided for electric vehicles.

 

Massive Utilization of Rooftop Solar Will be Beneficial to the Government and PLN

Jakarta, 28 July 2021- Revision of Ministerial Regulation Number 49 of 2018 concerning the Use of Rooftop Solar Power Generation Systems by Consumers of PT Perusahaan Listrik Negara (PLN), which aligns with the expectations of rooftop solar users will help the government achieve the target of 23% renewable energy mix by 2025 and have major economic, social and environmental impacts. This regulatory improvement can help Indonesia recover from the post-Covid-19 economy and fulfill its commitments to reduce greenhouse gas (GHG) emissions as stated in the Nationally Determined Contribution (NDC).

Until the end of 2020, Indonesia has only reached around 11.5% of the renewable energy mix. To catch up in the next 4 years, the Institute for Essential Services Reform (IESR) calculates that at least Indonesia must build 14-18 GW of renewable energy power plants.

“Observing the draft of the 2021-2030 Electric Power Supply Business Plan (RUPTL), we see that by 2025 the additional development of renewable energy is less than 14 GW. The government should involve the community and actors outside PLN to build renewable energy plants to achieve the 23 percent target,” said Fabby Tumiwa, Executive Director of IESR.

He stated that the communal works to realize the most potential use of renewable energy is by encouraging the adoption of rooftop solar panels on a large scale. Moreover, according to the results of the IESR market survey, there is a market potential of 9%-11% of households or about 7-8 million who are interested in installing solar rooftops. Furthermore, the price of solar PV technology is getting lower and more affordable by the public.

In the process of revising Permen No.49/2018, the government stated that it would improve several provisions, including changing the net-metering electricity export-import tariff to 1:1, extending the reset period from three months to six months, obligating a mechanism application-based services, expanding the licensing of solar rooftop installations to customers in non-PLN business areas, shortening the licensing process and building a Solar Roofing System Complaint Center.

IESR views that there is an effort to improve the economy of solar PV, which is better with the provision of a net-metering rate of 1:1 from the previous 1:0.65. From the market study conducted by IESR, the public’s interest in using rooftop solar PV is high, and they expect policies that will simplify the licensing and installation process as well as adequate economics. With a net-metering rate of 1:1, the payback period for PV mini-grid investments can be decreased from 10 years to less than 8 years.

This provision will affect the revenue of PLN but not significantly compared to the economic, environmental, and social impacts of the development of solar rooftops. The IESR simulation shows that if there is a total installation of 1 GWp of rooftop solar power, PLN’s income will only decrease by 0.58% with a net-metering rate of 1:1 and 0.52% at a rate of 1:0.65. On the other hand, PLN will take the benefit. With the addition of rooftop solar power plants, PLN does not need to invest more in new renewable energy plants to achieve the RUEN target and reduce the operating burden of gas-fired power plants for supply during the day – thereby reducing fuel costs.

The use of electricity from rooftop solar panels for industrial customers will also reduce the weight of government subsidies.

“Currently, PLN spends the basic cost of generating Rp 1,028/kWh. Meanwhile, the subsidized industrial tariff is Rp. 972/kWh. The use of rooftop solar power plants in the industry will substitute for electricity demand from PLN so that the load of subsidizing industrial customers will also be reduced, ” Fabby explained.

Although it has not been officially released, Fabby Tumiwa, who is also the Chairman of the Indonesian Solar Energy Association (AESI), appreciates the improvement and sees it as a breath of fresh air to encourage market development and the development of the PV mini-grid industry in the country.

“So far, the domestic solar PV industry has not developed because the market is still small, around 20-30 MW/year, so it still depends on imports. If Indonesia can reach 1-5 GW/year, it will be able to attract investment in the solar PV component supply chain, meaning that there is a new industry that absorbs workers,” said Fabby.

The cumulative installation of 1 GWp of solar rooftop can absorb direct labor of 20,000 – 30,000 people per year (conservative figure) and reduce GHG emissions to 1.05 million tons per year. The development of this rooftop solar power plant will be useful for the Indonesian government in recovering the economy after Covid-19. Also in 2021, the warranty period for the Energy Saving Solar Lamp (LTSHE) package for the 2018 program year will expire. This pre-electrification program is part of the calculation of the national electrification ratio, so the government needs to immediately continue efforts to provide access to energy, for example by using rooftop solar power plants with a minimum capacity of 0.5 kWp to 1 kWp – which can be used for productive community activities.

“The USAID study for the Ministry of Energy and Mineral Resources also found a large economic impact reaching USD 18 million in each installation of 2,000 rooftop solar panels for an average capacity of 4.5-5 kWp. Nationally, this will move the sluggish economic conditions back. The benefits are far greater for the community than the potential loss of PLN income,” he said.

The Ministry of Energy and Mineral Resources has reportedly also proposed rooftop solar become a National Strategic Project (PSN) with a target of 3.6 GW in 2025. Thus, the revision of Ministerial Regulation No. 49/2018 is crucial to support the achievement of this target.

Women in Energy: Ensuring the Presence of Gender Equity and Equality in Energy Sector

Energy is a basic need for everyone, including women. So it is appropriate to consider the allocation and supply of energy that meets the needs of each gender. Unfortunately, the energy sector is often treated as a gender bias sector because many jobs in the energy sector involve physical work as well as technical calculations. In an effort to mainstream a gender perspective in the energy sector, NZMates invited three persons to share their experiences of being female workers in the energy sector.

Beti Rattekanan, Head of the Sub-Division of Economics and Natural Resources II Bappeda Maluku, agrees that there is still a stigma that energy is a male affair, both in the household and in regulatory agencies. In fact, according to her, at the household level, it is women who do a lot of activities near energy, ranging from cooking to other household appliances.

“Women are even decision makers in the use of more efficient energy in the household,” said Beti.

Program Manager for Sustainable Energy Access, IESR, Marlistya Citraningrum emphasized the importance of inclusiveness in the energy sector. This is due to an increase in basic human needs from just clothing, food, and shelter to clothing, food, shelter, energy, and connectivity. Especially for women, the availability of reliable energy will meet their basic needs, productive needs, and social needs at the same time.

“Energy can give different meanings to women. For example, with electricity, not only do they get lighting, but with this lighting, women can carry out activities that have economic value, such as weaving, fishing, and so on. Having access to energy also helps women to attend community gatherings or village meetings which are generally held at night,” explained Marlistya.

Marlistya added that there is a tendency for real differences in the choice of needs between men and women towards energy.

“On one occasion, we asked the residents of a village what facilities they would need if the village had electricity. Most of the men wanted coffee processing machines (because the majority of them are coffee farmers), while mothers preferred proper lighting for their children so  their children can study comfortably at night

Maryam Karimah, Renewable Energy Technical Specialist at NZMates, stated that the presence of women in the energy sector which is currently still dominated by men will provide a new perspective and added value to the decisions taken.

“Each energy project must meet several aspects of criteria such as technical and economic feasibility, must be socially and politically acceptable, and last but not least, it must be safe for the environment. This multidisciplinary need requires various scientific and social perspectives, so the presence of women in the energy sector is very important,” said Maryam.

Electricity Sector Can Achieve Zero Emissions in 2045

Jakarta, 15 July 2021- In the last two decades, renewable energy has developed very rapidly in terms of technology and economies of scale, therefore, many countries in the world are increasing the use of renewable energy. Between 2000 and 2020, the worldwide renewable power generation capacity increased 3.7 times, from 754 gigawatts (GW) to 2,799 GW. The rapid development in the last decade at the global level was mainly driven by the construction of solar power plants and wind power plants. In the same period, the cost of electricity from utility-scale photovoltaic (PV) fell by 85% (IRENA, 2020)..

Having diverse and abundant renewable energy sources, especially its solar technical potential of up to 20 thousand GWp, based on a recent report entitled “Deep decarbonization of Indonesia’s energy system: A pathway to zero emissions by 2050” by the Institute for Essential Services Reform (IESR) that Indonesia as a whole technically and economically able to achieve zero-emission in the electricity sector in 2045, much faster than the transportation and industrial sectors which will achieve the same condition in 2050.

“Compared to the transportation and industrial sectors, the electricity sector is the low hanging fruit in the effort to decarbonize Indonesia’s energy system. That’s why this one decade is very decisive. Four things need to happen in the next decade: (1) renewable energy acceleration, (2) stop the construction of new coal-fired power plants before 2025, (3) plan to accelerate the termination of steam power plants, especially subcritical types, and (4) modernize the grid,” said Fabby Tumiwa, Executive Director of IESR.

The electrification of the transportation sector (acceleration of the use of electric vehicles/EVs) and industry (electrification of industrial processes) also started along with a deep decarbonization process in the electricity sector. As a result, reducing GHG emissions in the power sector will contribute to significant emission reductions in the transportation and industrial sectors. Using the Best Policy Scenario (BPS), IESR shows that electricity demand from the transportation and industrial sectors will continue to increase towards 2050. Around 50% of electricity will be produced by renewable energy in 2030 from 140 GW of renewable energy power generation, before finally reaching 100% renewable energy in 2045. In this scenario, the Levelized cost of electricity (LCOE) can decrease from 79.52 USD/MWh in 2020 to 40.59 USD/MWh in 2050 so that the cost of electricity generation of renewable energy in Indonesia is becoming increasingly competitive.

By relying on solar energy (photovoltaic), IESR modeling shows that electricity supply is guaranteed even though the variability of solar power generation is quite high. To balance the load requirements and solar power generation, it can be done by charging batteries & utilizing pumped hydro energy storage, utilizing electricity to produce clean fuel, utilizing electricity for transportation (EV charging), utilizing electricity to produce thermal energy, and exporting and importing electricity between regions. Hydroelectric power plants can also be operated flexibly during this period to help balance the system, while geothermal operate as baseload.

Integrating the transportation sector and the industrial sector through electrification, indeed, requires a massive expansion of the electricity network covering all regions in Indonesia. The BPS scenario shows that nearly 760 TWh of electricity is distributed throughout the country by 2050, with Java Island as the main energy consumer in Indonesia consuming 80% of the country’s total energy. To meet its energy needs, Java Island will import 4.6% of electricity in 2030, 45.5% in 2040, and 82.1% in 2050 from the islands of Sumatra and Nusa Tenggara.

IESR recommends to the government to increase the capacity of Indonesia’s electricity grid to support the inter-island power grid interconnection system and optimize renewable energy resources spread across various islands. The Java-Sumatra interconnection is important to supply electricity to Java by up to 50 percent by 2050. In addition, the interconnection between East Java and Bali needs to be expanded to Nusa Tenggara to meet the electricity needs of other small islands. The results of the IESR model even show that by 2050, a transmission capacity of 158 GW needs to be built to connect Indonesia from west to east.

“The government needs to make a decision today because it will affect the speed at which we transition and the costs we will incur. If we continue to develop coal-fired power plants even though there have been many studies that have revealed it will become a stranded asset, it will become an economic burden for Indonesia. Deep decarbonization of the energy system to achieve zero emissions is beneficial for Indonesia,” said Pamela, lead author of the report “Deep decarbonization of Indonesia’s energy system: A pathway to zero emissions by 2050”.

Planning for the construction of inter-island transmission and interconnection networks that can support Indonesia to achieve the zero-emission target in 2050 is very crucial to be carried out as soon as possible. It is because the construction of transmission network projects usually takes a long time. Undoubtedly, it takes a firm commitment from the government, policymakers, regulators, and the State Electricity Company (PLN) as the main operator of transmission and distribution lines.

However, at the Hearing Meeting in the House of Representatives, May 2021, PLN stated that it is currently preparing a strategic plan with the Ministry of Energy and Mineral Resources to achieve carbon neutrality by 2060. However, this is incompatible with the target of the Paris Agreement for net zero emissions by 2050.

“PLN’s plan is still not ambitious enough to achieve the target of the Paris Agreement. The IESR study shows that the electricity sector can achieve zero emissions by 2045 by utilizing renewable energy. The plan will risk causing an increase in the cost of providing electricity, stranded assets & lost opportunities for the use of cheaper renewable energy technologies,” said Fabby Tumiwa.

The report “Deep decarbonization of Indonesia energy system: A pathway to zero-emission by 2050” is a study by IESR in collaboration with Agora Energiewende, and Lappeenranta University of Technology (LUT). The report can be downloaded at the following link:

 

Achieving Net-Zero Emission in the Asia Pacific By Combining Renewables Deployment and Energy Efficiency

Jakarta, 7 July 2021 – Energy transformation is already underway in some countries. The available technologies are getting more affordable and easy to find. The Asia Pacific is accounted for more than 50% of global energy consumption. On the other hand, about 10% of its population still do not have access to basic electricity services. The need to provide reliable energy access and keeping the commitment to move towards a net-zero energy system makes the concerned international organizations feel the urgency to discuss it.

The Asia Pacific Climate Week specifically discussed the issue of how technology and policy should be accelerated to achieve net-zero emission by 2050 without jeopardizing energy demand. Hongpeng Liu, Director of United Nations Economic and Social Commission for Asia and the Pacific, emphasized that the rise of population and economic growth means a rise in energy demand as well. Since the energy sector accounts for 65% of the GHG emissions, a strategic move is certainly needed to make sure that energy demand is met while on the other hand the emission coming from the energy sector is tightened up. 

“We’ve just launched a study titled ‘Theme Report on Energy Transition towards the achievement of SDG 7 and net zero emissions by 2050’. From this study, we have eleven recommendations for all parties including governments, businesses and commercials, and also consumers.”

The recommendations include rapid deployment of renewable energy, and improving energy efficiency. It is believed that the combination of renewables deployment and energy efficiency will bring us to achieve the Paris Agreement target. Energy efficiency is considered as one of the easy ways to decrease emissions by managing the amount of energy we consume. Most electric home appliances manufacturers also produce high-efficiency home appliances such as refrigerators and air conditioners. The hanging question would be ‘how can we scale up the technology we know’

From the customers’ side, the awareness of the climate change issue makes them understand the importance of utilization of renewable energy and to do energy efficiency. These make them tend to choose high-efficiency appliances. 

“The market for high-efficiency home appliances is growing in response to the awareness of climate change. Though in Indonesia, currently, the grid situation is oversupply so the government encourages us to consume more energy instead of saving one,” Fabby Tumiwa, the Executive Director of Institute for Essential Services Reform explained. 

Fabby also added that the awareness of the climate change issue led to the green building development in which some new properties are now favored to be certified as green buildings.

Hafiza Yob, Senior Assistant Director of Energy Commission Malaysia explained that the market transformation is on the pipeline agenda.

“The awareness is going on, now people’s perception about high-efficiency appliances is onboard. But we still need to slash down the perception that high-efficiency equipment must be expensive. So we need to work hard to make sure that high-efficient equipment is available at an affordable price,” she said.

Government commitment to move toward net-zero emission is crucial as it becomes the base of further development plans. This was emphasized by Nguyen Cuc, National Ozone Coordinator and Deputy Head of Department of Climate Change, Ministry of Natural Resources and Environment Vietnam. “We just submitted our updated NDC that highlights several sectors such as energy, industry, and transportation. We see that government cooperation is important to scale up the technology we have right now,” she concluded.

Ministry of Energy and Mineral Resources promises better policies to shift to greener energy system

Jakarta, 1 July 2021. To achieve the target of 23 % of the renewable energy mix, now reaching 11,2%, the Indonesian government is currently reviewing the regulation related to renewable energy, especially solar PV, promising that it will be the progressive policy for solar development in Indonesia.

Mustaba Ari Suryoko, Head of Sub-directorate for Supervision of New, Renewable Energy Infrastructure Development, and Energy Conservation at the Directorate General of New, Renewable Energy, and Energy Conservation, MEMR, during the Asian Solar Summit 2021, explained that in response to accelerating renewable energy deployment, the Indonesian government made some improvement points in the Minister Decree No 49/2018 about the solar rooftop, related to the net meter tariffs.

“Net-metering tariffs will be 1:1, previously it was only 1:0.65 and also better restart period which previously every three months in the upcoming Minister Decree the restart period will be every six months,” added Ari.

Indonesia is a large country blessed with abundant sources of renewables. Institute for Essential Services Reform’s latest study shows that Indonesia has 20,000 GWp of solar PV technical potential. Despite the abundance of renewables, solar becomes the low-hanging fruit to develop as it can be installed modularly, and it is available all across the country. 

Moreover, Ari also shares the progress of presidential regulation on renewable energy regarding the purchase of electricity by PLN, explaining several schemes provided to get the best price.

“PLN as the State-Owned Utility Company is also discussing the new RUPTL that will accommodate a bigger share of renewables up to 48% of power generation. It increases significantly from the previous planning that will only accommodate 30% of renewables,” he added.

Nicolas van den Abeele, Head of Business Development of ENGIE, gladly appreciates the government’s effort to accelerate renewables focusing on solar installation. As the Indonesian market is developing and big potential for the solar market is widely available. The initiative from the government in reviewing and revising several policies is a key to boost solar deployment in Indonesia.

“Despite the big market potential in Indonesia to integrate big-scale solar, especially in the Java – Bali – Sumatra grid, the rule of the game is at times volatile and unclear related to varying power purchase agreement, and different pricing from different companies,” said Nicolas.

Nicolas also raised the obligation to fulfill local content requirements for solar panels as a constraint. “It is understood that the Indonesian government wants to develop the local industries, however this requirement somehow discourages foreign investors, since at this stage, it’s not proven yet that the capacity is enough, nor is it of sufficient quality,” he said.

The Executive Director of IESR, Fabby Tumiwa, highlights the change of attitude of the government and hopes that it’ll become a good start to shift Indonesia’s energy system to a cleaner and sustainable one. Though he also raised that currently Indonesia’s government ‘fails’ to catch the economic benefit of solar, as the cost of PV installations has fallen up to 90% in the last ten years. 

“Previously, solar PV was seen as an expensive technology that cannot compete with fossil fuel, which has changed now. Solar is quite competitive now yet its deployment is still so slow in Indonesia. Hopefully, the government’s commitment seen from the effort to revise some regulations may transform Indonesia into the next hotspot for solar power development,” Fabby said.

There are numerous parties interested in solar development in Indonesia, but the issue right now is whether there is enough project supply. The government target to reach 23% of renewables in 2025 and the higher target in the upcoming RUPTL must be translated into the project pipeline.

The big potential and now supported by government commitment to develop renewables has attracted multilateral and bilateral banks to take part in financing renewables projects in Indonesia. Not only banks but other financial institutions are also eager to invest in financing renewable energy projects.

Completing the discussion, Irman Boyle, Executive Vice President of PT Indonesia Infrastructure Finance, shared his view on the potential and challenges of renewables development in Indonesia,  

“Basically from the equity and debt sides many parties are interested to finance the renewables project but until now, there is not enough project pipeline. Therefore the government (the MEMR and EBTKE) as well as PLN, need to ‘do the homework’ to make sure that there are enough projects available,” said Irman.

Solar PV and Cooperatives Combined to Achieve Energy Democracy

Jakarta, 24 June 2021, IESR survey shows that more people are interested in adopting rooftop solar power plants, especially if an attractive financing scheme is available. It will be a huge opportunity to expand the rooftop solar PV market answering the challenges of the climate crisis on a practical level done individually by transitioning to renewable energy.

The urge to develop renewable energy to protect the earth from rising temperatures above 1.5 degrees C, especially by utilizing solar PV has been started in 2017, through the National Movement of One Million of Solar Rooftops (Solar Archipelago).  IESR together with 13 other institutions initiated this movement. The target of this movement is to achieve 1 GW of rooftop solar PV in Indonesia by 2020, assuming one house installs 1 KWp of rooftop PV. Compared to the potential of solar power in Indonesia, whose official number is 207 GW, but the actual technical potential is way bigger up to 20.000 GW according to IESR, the 1 GW target is a small target.

“This target was made as a benchmark, considering that at that time there was no ministerial regulation, nor a market that looked potential. When we reach 1 GW, it means that there is a combination of supportive regulations, reliable EPC companies, and a mature market. So this target is not only to install 1 GW of solar PV rooftop but also to fight for the supporting ecosystem,” explained Marlistya Citraningrum, IESR’s Sustainable Energy Access Program Manager, in an online workshop entitled “Cooperatives as Agents of Change in Financing Climate Change Mitigation and Adaptation”.

The initiation of Solar Archipelago projects missed their target in achieving 1 GW of rooftop solar in Indonesia’s residential area, however, there has been a rapid increase in terms of the number of rooftop solar PV users.

“When this initiative was launched, there were around 200s new rooftop solar PV customers. Currently, there are around 3000s households of PV mini-grid. It has not reached the target of one million roofs, but there is a significant increase,” said Marlistya

The increase in PV mini-grid customers indicates that the interest and information received by the public about this technology is increasingly widespread. Since 2018 IESR has conducted market studies in the following cities, Greater Jakarta, Surabaya, seven cities in Central Java, and three cities in Bali. The survey shows that there are various potential PV mini-grid markets in each of these cities.

In Jabodetabek 13% of respondents fall into the category of early followers and early adopters. This group is respondents who have knowledge of rooftop PV and are financially able to afford it. This group only needs comprehensive information covering PV mini-grid technology, installation procedures, as well as service providers for rooftop PV installations. This group of early followers and early adopters is quite large in various cities, 19% in Surabaya, 9.6% in Central Java, and 23.3% in Bali.

Another interesting thing about IESR’s market survey is that the issue of price is still the second most frequently asked question by potential consumers. Questions about savings are the most frequently asked questions by potential customers. This phenomenon shows that price is still the main consideration for prospective solar PV customers.

The attractive rooftop solar PV mini-grid scheme is an opportunity for financial institutions, including cooperatives.

“At least, there are 3 opportunities that can be taken by cooperatives to participate in this rooftop solar PV scheme. First, by collaborating with EPC companies and providing financing schemes. Of course, you need to choose a trusted EPC company. The second is by selling solar panels as well as providing a financing scheme. Third, providing a financing scheme as well as after-sales service,” explained Marlistya.

Attractive and affordable financing schemes for PV mini-grid are still difficult to find at this time because currently EPC companies just work with banks. Of course, this should be seen as an opportunity for cooperatives to develop their programs.

Closing the first session of the morning workshop, Fitrian Ardiansyah, chairperson of the Sustainable Trade Initiative Foundation, stated that the financing of rooftop solar power plants would be one of the business niches for cooperatives.

“The green economy is aggregated at the local community level, cooperatives are the right financial institutions to pick up the ball at this opportunity,” he said.