Jakarta (18/6/2021), the Ministry of Energy and Mineral Resources has launched the Patriot Energi program as one of the efforts to electrify underdeveloped, outermost, frontier (3T) villages, including transmigration areas. The Patriot Energi program invites 100 young people to receive training and then are assigned to various regions in Indonesia for 5 months – 1 year.
The tasks of these energy patriots include mapping the potential of renewable energy, assisting the PLN (Persero) de-dieselization program, and assisting village electricity independence, including assisting and training local communities to operate and maintain renewable energy installations that will be used to electrify the village.
The Minister of Energy and Mineral Resources of Indonesia, Arifin Tasrif, explained that currently, Indonesia together with all countries in the world are trying to reduce greenhouse gas emissions, one of which is produced by the energy sector. But on the other hand, the government also continues to strive to fulfill its obligations to provide access to electricity for the entire community.
“So we are also trying to achieve energy sovereignty based on green energy,” said Arifin Tasrif in his opening remark.
The government’s efforts to electrify all areas in the village through various efforts deserve to be appreciated. This initiative needs to be followed up by considering aspects of sustainability and the quality of energy access received by the public. The definition of ‘electrification ratio’ currently used by the government is still limited to whether it is connected or unconnected. The quality of the connected electricity such as voltage stability, frequency of power outages, and affordable costs has not been taken into account.
Many areas in Indonesia still receive low-quality electricity, not accessible for 24 hours, and only for the use of basic lighting and electronic equipment with very low power, but are limited for productive economic activities. In fact, to encourage access to sustainable energy and quality productivity is the key.
The government’s next homework is to ensure that every citizen has access to electricity that is not only connected but also of high quality, including improving definitions, providing road maps, as well as allocation of costs and human resources. Ensuring maintenance costs and human resources who will manage renewable energy electricity installations in the area will create a sustainable electrification program. Access to quality energy must be Indonesia’s development paradigm to achieve energy justice.
Nuclear energy has created a dialogue and debate about the benefits and risks it brings. On the one hand, nuclear energy can meet energy needs, and can be used in various fields such as medical and military. But nuclear power also carries the risk of radiation leakage. There are noteworthy nuclear accidents, starting from Three Mile Island (1979), Chernobyl (1986), and Fukushima (2011). From this the question arises, is nuclear still worthy to be developed on a large scale? If so, what aspects must be considered in its development? Presenting three speakers with different backgrounds, FISCO UGM held a webinar on Nuclear Potential and Controversy to try to solve this question.
On the occasion, Fabby Tumiwa, Executive Director of IESR, said that there are several things that must be considered regarding the development of nuclear energy, including three factors of nuclear reactor safety, namely regulations or regulatory bodies, operational security, and security systems.
“The debate about nuclear power plants from the start was not solely about technology. But more about the security risks. The most feared disaster from nuclear power is the leakage of radiation into the outside environment, so the controversy is not solely about technology but rather the environment in which the nuclear power plant is located, “explained Fabby.
To ensure this security aspect, in addition to strict regulatory bodies and security procedures, the economic or cost issues required also need to be re-examined.
“The trend of nuclear power plant investment from year to year is getting more expensive. If the goal of building a nuclear power plant is to meet the growing demand for electricity, then there are other renewable energy alternatives that are more affordable and less dangerous,” continued Fabby.
Environmental factors, including public acceptance, are important and make this nuclear issue dynamic. Derajad S. Widhyharto, Lecturer of Sociology at the Faculty of Social and Political Sciences, UGM, also revealed that the public’s concern about nuclear power, both as nuclear power plants and new energy, lies in management issues.
The management aspect that is a concern for the community is further exacerbated by the dynamics of nuclear regulation which are not interrelated with the findings of surveys or research conducted by various institutions.
Alexander Agung, a lecturer in Nuclear Engineering UGM, complements this discussion with a more technical perspective on nuclear energy. Nuclear power plants were developed to meet the increasing demand for electricity, as well as to support industrialization. Countries such as the United States, Japan, and European countries do meet their electricity needs from nuclear plants.
“The existence of a regulatory body that specifically regulates and oversees the development and construction of the nuclear power plant ensures the safety of this nuclear power plant from the start, during the site selection survey to construction, even up to decommissioning” Alexander concluded.
However, in its development, it is also necessary to ensure that this regulatory body continues to work optimally so that the development of nuclear energy does not endanger the community and the surrounding environment.
Communication is a powerful instrument that can be used to build public awareness of the transition to energy and renewable energy. As for how to use this tool to reach various groups of people, not only for people whose daily life is involved in the energy world is an interesting topic of discussion in the side event of the Asia Clean Energy Forum 2021 entitled Evidence-based Communications to Propel the Energy Transition which was organized by the Clean Affordable and Secure Energy for Southeast Asia (CASE) project team in collaboration with Asian Development Bank.
Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR), explained that communications play a significant role in achieving CASE goals. The goals of CASE include building a constructive dialogue with stakeholders from the non-energy sector and creating broader public discussions supporting the acceleration of the energy transition.
Christiane Rossbach, the Business Director, Multilateral, Sustainability, Agri-Food and Health at Edelman and Co-lead CASE Communication Team, in her presentation, emphasized the essentiality of defining energy transition as a crucial mission to targeted audiences.
“What are the communication roles to propel the energy transition forward by making key stakeholders realize the opportunities, in particular decision-makers, non-energy stakeholder, financial, business entities, influencer consumers; those who are more engaged with society and impact of business. More likely to share their opinion with, and like to attend a public meeting, while they are not decision-makers per se, but more influential in shaping the way of business,” she said.
Moreover, she explained, during the pandemic, the consumption of online content doubled, therefore, it needs to carefully decide which evidence or argument will work best for which audiences. The approach she suggested in delivering the message of the importance of energy transition to raise awareness, drive engagement, and create a conversation is by storytelling.
“Beyond fact and figures, storytelling is powerful. Human brains are hardwired to process and store information in the form of a story. They stimulate our sense emotionally and intellectually; they can put a face on the issue and help us connect with true empathy,” she added.
Talking about the energy transition narrative, Renato Redentor Constantino, Executive Director of the Institute for Climate and Sustainable Cities (ICSC) from the Philippines, shared his views. In his opinion, the narrative that needs to be conveyed by both non-governmental organizations and the government is that the energy transition is underway.
“The landing zone is that clean energy will be dominant, the question is how soon we get there? Can we arrive sooner to bring the benefit of modern and clean, affordable, and secure energy to the table of the inside of the house of a family? Civil Society Organization doesn’t have to monopolize on good intentions here, we need to recognize that governments also share the dream of clean, affordable, and reliable secure energy as their premier objectives,” he said.
In contrast to the Philippines, which has progressed in communicating the narratives, Gandabhaskara Saputra, Outreach, and Engagement Adviser CASE Indonesia revealed that most of the news coverage in Indonesia is still dominated by coal.
“We are still challenging to bring the energy transition conversations towards public engagement and advocacy through the past 5-10 years in a way. While it doesn’t really speak to their daily basis and as long as they have the access to energy,” he stated.
On the other hand, Markus Steigenberger, Deputy Executive Director of Agora Energiewende, sees the need to align research planning with the political agenda.
“The problem that we have been facing many times, once the research is done, and the political agenda has already moved ahead, it’s too late. So whatever you say is interesting to experts but still irrelevant,” he explained.
He said 2 things need to be done, first, strategic anticipation by predicting the political situation in the next two or several years and linking it to relevant research or evidence.
“We have already started thinking about the communication before we actually started the actual research,” he said.
Next, determine an integrated and inclusive methodology by involving stakeholders as early as possible in research.
“We have relevant stakeholders sitting at the table, we share and make data and assumptions transparent, we invite them to share their views and opinions. It helps in terms of creating a sense of belonging,” he explained.
Rana Adib, Executive Secretary of REN21, said that to move a narrative, it is also necessary to look at it from two sides: from renewable energy and also from fossil energy. Citing the latest report released by REN 21, over the past decade, there has been an increase in final energy consumption in renewable energy from only 9 percent to 11 percent. Ironically, the final consumption of fossil energy did not register a significant change, only moving from 80.3 percent to 80.2 percent. This fact asked the strong push from the government and business people to target the use of renewable energy in all sectors immediately.
“We are very far from being on track. RE has shown especially in the power sector that they are able to deliver, technology matured, least-cost options. Today is not enough to say that let’s support renewables, we need to clearly have a message on banning fossil fuels,” she stressed.
Agreed with it, Renato views, communicating a narrative supported by concrete evidence is necessary for the development of renewable energy and the discontinuance of the use of fossil energy.
“The reality that we need to communicate better is that coal is actually intermittent, most of the unreliable, expensive, and insecure fuels,” he concluded.
Denpasar, 9 June 2021 – With the technical potential of 26.4 GWp (IESR, 2021), Bali can rely on solar energy to realize the vision of “Nangun Sat Kerthi Loka Bali” in its energy system, one of which is by encouraging the community involvement in invest in PV mini-grid. This became an interesting discussion at the seminar “Bali Towards a Clean Energy Province” organized by the Institute for Essential Services Reform (IESR), in collaboration with the Indonesian Solar Energy Association (AESI), and the Amoghasiddhi Union, Bali.
Ida Bagus Setiawan, Head of Energy and Mineral Resources, Department of Manpower and Energy and Mineral Resources – Bali Province said that in terms of potential and track record of technology, rooftop solar is the best renewable energy to be developed in Bali. The local government of Bali has issued government regulation no 45 of 2019 concerning Bali Clean Energy, one of which regulates the adoption of rooftop solar power plants on buildings with a certain area, both public and private buildings.
“The target of rooftop solar in 2021 is 0.5 MWp and 7.5 MWp in 2025. This target is realistic and may be higher in accomplishment if more support is available from the central, regional, and community,” he added.
Chrisnawan Anditya, Director of Various New & Renewable Energy, DJBTKE, who came online on the same occasion promised positive support from the Ministry of Energy and Mineral Resources so that the adoption of rooftop solar power plants would be even more massive.
“Currently, the Ministry of Energy and Mineral Resources is finalizing the revision of the MEMR regulation no. 49 of 2018. Some improvements are made in important points, such as greater exporting provisions than 65%, excess accumulation, and extending invoices from the original 3 months, application-based service mechanisms, shorter application times, and expansion to customers in non-PLN business areas (now only 34 out of 53 regions), as well as coaching and supervision. One of the things that we encourage is performance standards and safety aspects regarding the provisions for installing Indonesia National Standard (Standard Nasional Indonesia-SNI) rooftop solar in the Minister of Energy and Mineral Resources No. 2 in 2021,” said Chrisnawan.
Furthermore, Chrisnawan said that until March 2021, as many as 3,472 customers had installed rooftop solar power plants with a capacity of 26.51 MWp. He said that Bali is in the top 10 (ten) with 141 customers with a capacity of 1.07 MW, where customers are dominated by households but the portion from the industrial sector has a larger capacity.
Stressing about community involvement in supporting the development of rooftop PV mini-grid, Fabby Tumiwa, Chairman of the Indonesian Solar Energy Association (AESI), and also the Executive Director of IESR, revealed that the availability of information regarding the procedures and licensing of rooftop PV mini-grid, as well as easy access to this information, will help the public make investment decisions solar rooftop.
“AESI encourages the creation of a good ecosystem for PV mini-grid, by ensuring a credible Engineering-Procurement-Construction or EPC, having good standards, skilled workforce, and clear financing schemes,” explained Fabby.
Fabby said that the market potential for rooftop solar PV in Bali is large, essentially because Balinese people have realized the importance of respecting nature therefore, the use of renewable energy such as solar rooftop will make the spirit of environmental protection even higher.
In particular, IESR has surveyed household perceptions, the commercial sector, and MSMEs in Bali (2020) and found that the highest reason for respondents’ interest in the concept of PV mini-grid, apart from caring for the environment, was the electricity savings of 51.9%.
“The market potential in the household sector reaches 23 percent, or equivalent to 256,000 households. Huge potential also exists in the business sector, around 35,000 businesses and SMEs and even reaching 71,000 SMEs. This amount is also an opportunity for the government to see that the community’s contribution will be very significant to encourage the achievement of emission reductions and Bali’s goal of 100 percent renewable energy,” said Marlistya Citraningrum, IESR Energy Access Program Manager.
Ida Ayu Maharatni, Manager of the Amoghasiddhi Union, admits that the electricity cost savings have been drastically reduced since the cooperative installed rooftop solar panels.
“During the pandemic, electricity demand rose while financial conditions were difficult, but this was greatly helped by the initial solar rooftop’s investment. We spend electricity equal to zero in 6 months,” she said excitedly.
Answering the cost of PV mini-grid investment which is often considered by the community before installing rooftop PV mini-grid, her party provides energy credit at the Amoghasiddhi Union called SvarnaSiddhi. This loan is included in the investment credit scheme, so the interest rate is relatively reduced by 2% and can be repaid at any time.
“With the installment scheme, our cooperative reduces the tenor of rooftop solar to a maximum of 3 years of financing,” explained Ida Ayu Maharatni.
Agung Prianta, Green Building Council Indonesia (GBCI), Bali, added that the results of a survey conducted by GBCI showed, as many as 87% of the people wanted to be given credit with monthly installments below Rp 500,000 thousand.
The expansion of the rooftop solar PV market will create more job opportunities in the rooftop solar PV sector. Anthony Utomo, Deputy Chairperson of the Indonesian Solar Energy Association, explained that one of AESI’s missions is to produce 1,000 Solarpreneurs, also known as reliable energy SMEs. The program will guarantee the standard of solar PV quality and installations.
“The market potential for rooftop solar is around 1.5 million users with a market potential value of more than 67 trillion. The RUEN target of 6.5 GW can absorb 812,500 to 1,500,000 workers. The market is large and easy to replicate. This effort will also create Indonesia as a Solar Power House,” added Anthony.
Jakarta, 28 May 2021 – The Institute for Essential Services Reform (IESR), a think-tank that focuses on renewable energy and environmental issues, launched its latest study entitled, “Deep Decarbonization of Indonesia’s Energy System: a Pathway to Zero-Emission by 2050”. This study is a collaboration between IESR, Germany’s Agora Energiewende, and Finland’s Lappeenranta University of Technology (LUT).
In his remarks, Fabby Tumiwa, Executive Director of IESR, emphasized that this decade is a decisive decade to achieve zero emissions by 2050.
“This report shows that Indonesia is technically possible and economically viable to achieve zero emissions in its energy system by 2050. Thus, Indonesia should be able to meet the Paris target of limiting global temperature rise to below 1.5 degrees and achieving carbon neutrality by 2050. This study is quite different from government modeling which states that Indonesia will only reach carbon neutral in 2070,” said Fabby. This difference in results can be caused by various factors, one of which is the different modeling methods. However, Fabby emphasized that this difference should foster discussion.
“This report is the first comprehensive report that looks at the energy system in Indonesia, covering electricity generation, transportation, and industry,” added Fabby.
Philip Godron, Senior Associate Global Energy Transition emphasized that the trend is obvious, transition to renewable energy is currently happening. The sooner we act, the more space for innovation will open up and also increase global competitiveness.
“For example, the European Union will strictly enforce the carbon footprint standards for goods that can be sold there. So setting a target to become zero emissions will be very useful not only for fulfilling international commitments and dealing with the climate crisis but also maintaining and even increasing competitiveness in the international arena,” said Philip.
The results of this modeling are in line with the latest report by the IEA (International Energy Agency) which states that solar and wind power will dominate the energy mix by 2050, because of the cost of generating renewable energy in Indonesia, especially from solar energy, will be cheaper.
In the long term, there are several advantages of achieving zero emissions in the energy system by 2050, among others, system costs and Levelized Cost of Electricity (LCOE) which are cheaper than if Indonesia continues to do business as usual. This means that people will have cheaper electricity prices. Pamela Simamora, the lead author of this report, added that other benefits of Indonesia achieving zero emissions by 2050, such as millions of jobs that will grow. “There will be 3.2 million new jobs. This figure is still higher than the number of jobs at risk of being lost, which is 1.3 million. So actually we are still gaining, not losing when we become zero emissions in 2050,” said Pamela.
There are four main pillars in Indonesia’s decarbonization process. First, the promotion of renewable energy that relies on solar energy and the integration of the electricity grid for the export and import of inter-island electric power. Second, electrification in the transportation and industrial sectors. Third, reducing the use of fossil energy, especially coal-fired power plants, because will not be economically competitive in the next 10-15 years. Fourth, the development and utilization of clean fuels can be in the form of hydrogen, synthetic fuels, or biofuels for the decarbonization of transportation and industrial systems.
“Solar PV will be the backbone of our energy system, supported by storage systems (batteries), electrification, and clean fuel which are the keys in each sector,” concluded Pamela closing her presentation.
Darmawan Prasodjo, Vice President Director of PLN, welcomed this report positively but did not deny the fact that PLN could not undertake all efforts to decarbonize the electricity sector on its own.
“We appreciate this comprehensive report, and as already explained that Indonesia is capable of decarbonizing and achieving zero emissions by 2050. PLN supports this initiative and we are currently developing a model that includes technical and policy calculations. What is certain is that PLN supports this initiative, the RUPTL that will be issued is the green RUPTL,” he said.
Recognizing that decarbonization brings direct benefits to the community, Yahya Rachmana Hidayat, Director of Energy, Mineral and Mining Resources, National Planning Agencies supports decarbonization efforts.
“There are at least 3 benefits that can be felt by the community from decarbonization, i.e fighting climate change, supporting the use of renewable energy, and ensuring industrial competitiveness. I think everything (decarbonization efforts-ed) is doable and realistic to implement. Actually, the sooner we reach zero-emission, the greater our chances of escaping the middle-income trap,” he said.
On the other hand, Luh Nyoman Puspa Dewi, director of Energy Conservation at the Ministry of Energy and Mineral Resources, stated that the awareness to go towards zero-emission already exists, but according to her, the current condition of Indonesia is still rather difficult if we have to make drastic changes.
“We are aware that we have to start thinking towards net-zero, this has already been done, but we have to be realistic by looking at the conditions in Indonesia,” she said in response to the report.
It is obvious that to decarbonize and achieve zero-emission by 2050, it takes confidence from policymakers, strong political leadership, and concrete actions from the government. Political commitments must be embodied in, including by setting more ambitious NDC targets and issuing policies that support the creation of an enabling ecosystem for renewable energy, to attract more investors. This is important, considering that the efforts to decarbonize the energy system in Indonesia require an investment of around USD 20-25 billion/year in the period 2021-2030 and USD 60 billion/year for the period 2030-2040.
“Solar cells will be the new promising commodity in the future, just like oil now,” said Fabby Tumiwa during his explanation in the REinvest Indonesia – China forum.
The forum aims to bridge the two countries in renewables investment collaboration. Indonesia is actively seeking a way to provide cleaner, cheaper, and more reliable energy sources in order to revitalize its current energy system that heavily relies on fossils. Meanwhile, China faces global force as well to reduce its carbon emission due, and pledge to be carbon neutral by 2060. As the two countries have things in common to reduce carbon emission, dialogue to bridge the needs is set-up.
Fabby Tumiwa, in his capacity as the chairman of Indonesia Solar Association and Executive Director of IESR, said that Indonesia needs to accelerate the renewables deployment to seize the target of RUEN i.e 23% renewables in national energy mix and further to be zero emission in 2050. Even though the government of Indonesia set the target to be net zero emission in 2070.
Solar PV can be the prime mover and key to achieving the decarbonization target. This is in line with the global urgency to have deep decarbonization. Mentioned by IEA in the latest report that solar and wind will dominate the energy system in the future up to 78% of power generation in 2050, in which solar should increase from 160 GW now to 650 GW in 2030. On the same occasion, IEA emphasizes the urgency to scale up renewables in this decade to achieve zero-emission in 2050. In terms of a strategic point of view, solar is a bit more privileged as it is able to be installed modularly. In the future solar energy is a popular commodity just like oil in the present day.
However, the promising future is not coming without any flaws. There are a bunch of situations that hold back the acceleration of the solar PV industry in Indonesia.
PLN’s oversupply condition is one of the most significant barriers to solar deployment. The situation makes it hard for both the government and private sector to penetrate renewables into the electricity system.
Meanwhile, Eka Satria, CEO Medco Power Indonesia, highlighted some points including the preference of the government and Indonesian market to choose short-term low-cost energy sources, the uncertainty of policy and regulation, BPP vs local content requirements, and also land acquisition issue.
As the chairman of the Indonesian Solar Panel Producers Association (APAMSI) Linus Sijabat shares things that should be prepared by the foreign investor in this occasion China, before penetrating the Indonesian market. Supply chain management, especially related to the local content requirement becomes his key point.
“Foreign and domestic cooperation is required for products of more than 60% whose prices are competitive, the quality is internationally certified, and the market is sustainable,”
The willingness of the government must be shown in the regulation such as RUPTL (general planning of electricity compliance) so private investors will be able to see the potential market for renewables in Indonesia. Moreover, in Indonesia PLN stands as the single buyer for electricity. Besides the chance that should be visible in the planning document, another enabling environment for renewables investment must be ensured as well.
A pathway to zero emissions by 2050: Technologically and Economically Feasible, Indonesia Just Needs a Strong Political Will and Bold Plan to Reach Zero Emissions by 2050
The narrow time is running out to overcome the increasingly threatening climate crisis. In contrast, Indonesia’s NDC is lacking ambition in complying with the Paris Agreement to keep the earth’s temperature below 2 degrees, let alone the 1.5 degrees Celsius. It was evident in the 2050 Long-term Strategy on Low Carbon and Climate Resilience (LTS-LCCR) document in mitigating climate change which only targets carbon neutrality in 2070.
Institute for Essential Services Reform (IESR) new report “Deep decarbonization of Indonesia’s energy system: A pathway to zero emissions by 2050” shows that Indonesia’s energy sector is technologically and economically feasible to achieve zero carbon emissions by 2050.
This report is the first comprehensive study in Indonesia to present a path to achieving a zero emission energy sector by 2050. It is an important milestone as the current mitigation action in the energy sector is not ambitious enough. The emissions from the energy sector are predicted to increase to 58% by 2030, as indicated under the BAU scenario in Indonesia’s Nationally Determined Contribution (NDC), mainly driven by the increase in the final energy consumption.
“As one of the largest economies in the world and with its strategic position in Southeast Asia, Indonesia should take a lead in transforming its energy system now. Decarbonization of Indonesia’s energy system could bring significant impacts on the region and inspire other countries to accelerate energy transition. Making this happen will require strong political commitment and leadership by President Jokowi,” said Fabby Tumiwa, Executive Director of IESR.
He added that the first and crucial step of this journey is to reach an emission peak by 2030 at the latest. With strong policy support, renewable energy shall be deployed at large scale, accompanied by declining thermal power capacities.
Using the Energy System Transition Model developed by the Lappeenranta University of Technology (LUT), this report shows that it is achievable to use 100 percent of renewable energy in the power, heat, and transport sectors in Indonesia.
“The model used for the detailed scenario analyses for Indonesia is designed for hourly temporal resolution and interconnected regions, as this is of highest relevance for the energy transition of Indonesia for ensuring a stable energy supply for all hours and all regions,” said Christian Breyer, LUT Solar Economy Professor.
This decade will become a crucial time for decarbonization efforts in Indonesia. To bend the emission curve, Indonesia needs to install around 140 GW of renewable energy by 2030, of which about 80% is solar PV. Sales of electric cars and motorcycles should increase to 2.9 million and 94.5 million by 2030 respectively, a dramatic increase from nearly zero sales today. Meanwhile, electric heating should become the main heat producer in the industrial sector, accompanied by biomass energy. Most importantly, PLN needs to stop building new coal-fired power plants by 2025.
By 2045, renewable energy supplies 100 percent of the electricity in Indonesia. For the first time, the Indonesian power sector becomes carbon free. Solar PV is the largest contributor in power generation with 88% share, followed by hydropower at 6%, geothermal at 5%, and other renewable energy at 1%. To address the intermittency issue, energy storage technology is used, mainly batteries. Meanwhile, synthetic fuels, hydrogen, and electric heating will play a greater role in decarbonizing the transport and industry sectors. The importance of grid integration of Java, Sumatra, Kalimantan, and other islands will increase from 2030 onwards as renewable energy becomes the backbone of Indonesia’s energy system. The IESR model shows that by 2050, an overall transmission capacity of 158 GW is required to connect the archipelago from west to east.
By continuing the decarbonization efforts in the much-harder-to-abate transport and industry sectors to 2050, Indonesia will reach a point where the whole energy sector becomes carbon free through the use of 100% renewable energy. The decarbonized energy system would potentially reduce the annual system cost by 20% compared to a fossil-based energy system.
To reach such an ambitious target, Indonesia will need investment of USD 20-25 billion per year from now until 2030 and will increase to USD 60 billion per year between 2030 and 2040. Considering the big investment needs, the government should attract investment from the private sector and individuals. Improvement of the investment climate is therefore crucial in this endeavor.
“The size of the challenge should not obscure the fact that deep decarbonization will bring enormous benefits and opportunities to Indonesia’s economy,” said Pamela Simamora, Research Coordinator of IESR and author of this report.
Through deep decarbonization, Indonesia will see at least 3.2 millions of new, sustainable and quality jobs, the improvement of public health (which will also imply a substantial reduction in health costs), and the establishment of a modern economy, which enable the country to compete in the growing world market for carbon-neutral products. To get there, a strong political will is required. The Indonesian government also needs to put in place the right policies and regulations today and remove regulations and policies perceived as barriers to clean technology investments.
The report “Deep decarbonization of Indonesia’s energy system: A pathway to zero emissions by 2050” is a study by IESR in collaboration with Agora Energiewende, and Lappeenranta University of Technology (LUT). The launch of the report is held on May 28th, 2021. The report can be downloaded at the following link:
Technologically and Economically Feasible, Indonesia Just Needs a Strong Political Will and Bold Plan to Reach Zero Emissions by 2050
The narrow time is running out to overcome the increasingly threatening climate crisis. In contrast, Indonesia’s NDC is lacking ambition in complying with the Paris Agreement to keep the earth’s temperature below 2 degrees, let alone the 1.5 degrees Celsius. It was evident in the 2050 Long-term Strategy on Low Carbon and Climate Resilience (LTS-LCCR) document in mitigating climate change which only targets carbon neutrality in 2070.
Institute for Essential Services Reform (IESR) new report “Deep decarbonization of Indonesia’s energy system: A pathway to zero emissions by 2050” shows that Indonesia’s energy sector is technologically and economically feasible to achieve zero carbon emissions by 2050.
This report is the first comprehensive study in Indonesia to present a path to achieving a zero emission energy sector by 2050. It is an important milestone as the current mitigation action in the energy sector is not ambitious enough. The emissions from the energy sector are predicted to increase to 58% by 2030, as indicated under the BAU scenario in Indonesia’s Nationally Determined Contribution (NDC), mainly driven by the increase in the final energy consumption.
“As one of the largest economies in the world and with its strategic position in Southeast Asia, Indonesia should take a lead in transforming its energy system now. Decarbonization of Indonesia’s energy system could bring significant impacts on the region and inspire other countries to accelerate energy transition. Making this happen will require strong political commitment and leadership by President Jokowi,” said Fabby Tumiwa, Executive Director of IESR.
He added that the first and crucial step of this journey is to reach an emission peak by 2030 at the latest. With strong policy support, renewable energy shall be deployed at large scale, accompanied by declining thermal power capacities.
Using the Energy System Transition Model developed by the Lappeenranta University of Technology (LUT), this report shows that it is achievable to use 100 percent of renewable energy in the power, heat, and transport sectors in Indonesia.
“The model used for the detailed scenario analyses for Indonesia is designed for hourly temporal resolution and interconnected regions, as this is of highest relevance for the energy transition of Indonesia for ensuring a stable energy supply for all hours and all regions,” said Christian Breyer, LUT Solar Economy Professor.
This decade will become a crucial time for decarbonization efforts in Indonesia. To bend the emission curve, Indonesia needs to install around 140 GW of renewable energy by 2030, of which about 80% is solar PV. Sales of electric cars and motorcycles should increase to 2.9 million and 94.5 million by 2030 respectively, a dramatic increase from nearly zero sales today. Meanwhile, electric heating should become the main heat producer in the industrial sector, accompanied by biomass energy. Most importantly, PLN needs to stop building new coal-fired power plants by 2025.
By 2045, renewable energy supplies 100 percent of the electricity in Indonesia. For the first time, the Indonesian power sector becomes carbon free. Solar PV is the largest contributor in power generation with 88% share, followed by hydropower at 6%, geothermal at 5%, and other renewable energy at 1%. To address the intermittency issue, energy storage technology is used, mainly batteries. Meanwhile, synthetic fuels, hydrogen, and electric heating will play a greater role in decarbonizing the transport and industry sectors. The importance of grid integration of Java, Sumatra, Kalimantan, and other islands will increase from 2030 onwards as renewable energy becomes the backbone of Indonesia’s energy system. The IESR model shows that by 2050, an overall transmission capacity of 158 GW is required to connect the archipelago from west to east.
By continuing the decarbonization efforts in the much-harder-to-abate transport and industry sectors to 2050, Indonesia will reach a point where the whole energy sector becomes carbon free through the use of 100% renewable energy. The decarbonized energy system would potentially reduce the annual system cost by 20% compared to a fossil-based energy system.
To reach such an ambitious target, Indonesia will need investment of USD 20-25 billion per year from now until 2030 and will increase to USD 60 billion per year between 2030 and 2040. Considering the big investment needs, the government should attract investment from the private sector and individuals. Improvement of the investment climate is therefore crucial in this endeavor.
“The size of the challenge should not obscure the fact that deep decarbonization will bring enormous benefits and opportunities to Indonesia’s economy,” said Pamela Simamora, Research Coordinator of IESR and author of this report.
Through deep decarbonization, Indonesia will see at least 3.2 millions of new, sustainable and quality jobs, the improvement of public health (which will also imply a substantial reduction in health costs), and the establishment of a modern economy, which enable the country to compete in the growing world market for carbon-neutral products. To get there, a strong political will is required. The Indonesian government also needs to put in place the right policies and regulations today and remove regulations and policies perceived as barriers to clean technology investments.
The report “Deep decarbonization of Indonesia’s energy system: A pathway to zero emissions by 2050” is a study by IESR in collaboration with Agora Energiewende, and Lappeenranta University of Technology (LUT). The launch of the report is held on May 28th, 2021. The report can be downloaded at the following link:
Jakarta, May 4, 2021– Since the early 2000s, Indonesia’s oil production has continued to decline. To meet domestic oil demand, the Indonesian government has imported oil. Therefore, the government has also sought to find alternative fuels. Biofuel is one of the government’s focuses to be developed and became the mainstream of Indonesia’s energy policy.
“There is a hope that biofuel will become a prime energy supply in Indonesia. However, we need to note several points such as the government planning and strategy for the future of biofuel amid the development of alternative technology and energy transition acceleration,” explain Fabby Tumiwa, the Executive Director of Institute of Essential Services Reform (IESR) at the opening of the report launching on the Critical Review on the Biofuel Development Policy in Indonesia. Moreover, the meeting, which was attended by around 70 people online, also discussed the availability of feedstock and price disparities with current fossil fuels.
The Indonesian government’s strategy in developing biofuels has sparked the discussion. Julius Christian Adiatma, the author of the report, states that the use of liquid fuels in Indonesia is dominated by the transportation sector and the trend continues to increase. Under a business as usual scenario, the increase in liquid fuel consumption will triple. In the technology intervention scenario, the penetration of electric vehicles and the use of fuel cells were chosen as solutions. If not properly planned, the development of biofuels and the acceleration of penetration of electric vehicles will collide in the future. The global trend towards the use of electric vehicles also poses a threat that investment in the biofuel sector has the potential to become a stranded asset.
Djoko Siswanto as Secretary-General of the National Energy Council (DEN) said that based on the National Energy Plan (RUEN), until 2050 Indonesia will use a variety of energy sources to meet national energy needs, “We are using fossil fuels and new and renewable energy. Today, we still import crude oil, LPG, and gasoline. So our focus now is reducing imports, because we believe that if there are fewer imports, our energy security will certainly be better. “
Responding to the conditions of price disparity, he acknowledged that the price difference between biofuel and other fossil fuels is a challenge in itself.
“For example, currently green gasoline costs IDR 19,000. Can people afford to buy it? Or will the state be able to subsidize the price difference if it is sold at a lower price? ” he said.
In line with Djoko Siswanto, Andriah Feby Misna, Director of Bioenergy at the Ministry of Energy and Mineral Resources, also said that one of the goals of developing biofuels, such as biodiesel in Indonesia, is to reduce the number of imports of fuel oil, which is currently still high.
“We are referring to RUEN as a roadmap for biofuel development. In 2020, our target is 8 million kiloliters. This target is achieved as biodiesel usage reaches 8.4 million kiloliters. Even so, in the National Grand Strategy, there is an adjustment, namely a reduction of the biodiesel target by 15% with the consideration of the entry of electric vehicles, “explained Feby. Feby added that the government’s homework is gasoline, 50% of which is still imported.
Chairperson of the Indonesian Bioenergy Expert Association, Tatang Hernas Soerawidjaja highlighted the government’s responsive, not-anticipatory tendency in issuing policies on biodiesel as well. “Government policy tends to be reactive rather than anticipative, it’s not prepared for new technologies to come,”
The feedstock for biodiesel, which currently depends on palm oil, is also in Tatang’s spotlight. He said that the dependence on oil palm in biodiesel development is an indicator of unsustainability.
The dependence on one raw material is also a concern of Ricky Amukti, Engagement Manager of Traction Energy Asia. “Unfortunately, our biodiesel product is a single feedstock from palm oil. We have the potential for other raw materials, such as cellulose from palm oil trunks, which can be processed into gasoline. Another potential that exists is biodiesel from used cooking oil which has an emission of 0.31 – 0.62 Kg CO2 equiv/L, “
According to Ricky, if this potential is realized, there will be six million kiloliters of biodiesel produced and 2.2 million new jobs that will be created.
IESR sees it is important for the government to ensure the availability of energy for the community. In the future, liquid fuel will still be needed considering that the penetration of electric vehicles in various regions in Indonesia will vary in the period. Through the launch of the Critical Review on the Biofuel Development Policy in Indonesia, IESR recommends that the government: 1) develop a long-term strategy for the role of biofuels in the energy transition, in line with the development of alternative technologies. 2) Establish clear and transparent criteria for measuring the economic, social, and environmental benefits of the biofuel program. 3) Diversify biofuel feedstocks. 4) Establish policy support to encourage the production and development of second, third, and next-generation biofuels. 5) Change the incentive scheme to encourage innovation to include sustainability as a requirement.
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