Just Energy Transition: Corporate Responsibility for Post Mining Environment and Economic Recovery

Jakarta,  24 January 2024 – Energy has become our primary need. Therefore, transitioning from fossil to renewables will impact the livelihood of every community. Institute for Essential Services Reform (IESR) believes in an inclusive and just energy transition for Indonesia, that will involve every single community in the process. 

Coal and mining industry had been the biggest economic contributor for coal producing regions. However, many have predicted the energy trends for coal will soon decrease and will also impact coal demands from Indonesia. 

“Coal and mining sectors do contribute to regional economic growth, especially through the revenue shared fund. Nevertheless, this sector also contributes to the negative impacts, not only to our environment, but also to the people. Coal corporations should be involved in a just transition, both in coal producing regions and other regions,” said Wira in his opening remarks in The Just Transition Dialogue: Identifying the private sector role within social and economic development, Jakarta (24/01).

According to Wira, corporations should play their role to reduce the negative impacts through reclamation, post mining activities and community development to ensure the continuity of economic activities after the coal mines have been closed. 

Sulistiyohadi, Associate Mining Inspector/Coordinator of Civil Servant Investigator Mineral and Coal presented reclamation activities that took place since the exploration and production phase. In addion to that, post mining activities have been submitted since the production phase. He further explained several reclamation techniques, including land utilization, revegetation and land maintenance.  

“There are several activities to rehabilitate voids from mining activities, including slope stabilzation, mine void security, rehabilitation of water quality, water management and the maintenance of mine void,” said Sulistiyo.

Thriving to be one of the post mining activities case study, Yulfaizon, the General Manager of PT Bukit Asam Ombilin Mining Unit shared their experience to ensure the mining region can be useful for the environment and communities. Ombilin mine was the oldest mine in Indonesia, operating since 1892 during the Dutch Colonization and was retired in 2016.

Yulfaizon shared several post mining activities that were conducted by PT Bukit Asam, including: development of Sawahlunto Zoo, Establishing a research site of underground coal mining, and Lobang Mbah Soero Museum.

Exchanging Insights on Local Solar Manufacturer in Indonesia and Viet Nam

Ha Noi, 14 December 2023 – The Ministry of Science and Technology of Viet Nam hosted its annual event: Technology and Energy Forum 2023, in collaboration with the Ministry of Industry and Trade and Project Clean, Affordable and Secure Energy for Southeast Asia in Viet Nam.In recent years, Viet Nam has witnessed remarkable development in the trends of energy transition, particularly in wind and solar power. By the end of 2022, the total capacity from wind and solar power had reached 20,165 MW, constituting 25.4% of the overall power capacity within the system.

However, despite this progress, 90% of equipment for renewable energy projects in Viet Nam is imported from countries like China, Germany, India, and the US. This reliance is due to the country’s limited ability to perform specific tasks during project assessment and development phases and its high dependence on imported technologies. Factors contributing to this situation include inadequate local technology capacity, production levels falling short of requirements, and a lack of support from industrial policies and mechanisms to encourage renewable electricity.

Consequently, Vietnamese enterprises and local supply chains have seen limited participation. Similarly, Indonesia faces comparable challenges in its procurement of renewable energy, particularly in solar power. Despite both countries boasting immense potential in solar power, their domestic markets are not yet equipped for solar manufacturing. This deficiency stems from uncertainties in local demands and the lack of competitiveness in the local supply chain.

Fabby started with an explanation about local content regulation that could minimize dependence on imported products. 

“Indonesia is currently facing domestic market issues; these local products encounter difficulties entering the market. The lack of a credible development pipeline limits financial viability for new solar modules manufacturing facilities. When it comes to Rooftop PV, PLN limits the installation capacity to 15%. This regulation further restricts the market for domestic solar modules,” state Fabby.

Fabby went on to highlight several lessons learned from implementing Local Content Regulations (LCR) in Indonesia, which could potentially accelerate the development of Viet Nam’s solar energy local content. First, despite the projected growth in solar power, there’s insufficient market signal to stimulate the growth of the solar module industry without a reliable pipeline. Second, inconsistencies in policies across government bodies might discourage investment in the solar power market due to increased uncertainty. Third, support for the domestic solar modules industry should encompass downstream raw material industries to reduce import dependency and enhance the competitiveness of end products. Lastly, governments should offer incentives, both fiscal and non-fiscal, to encourage the development of solar module manufacturing facilities. Fabby emphasized that LCR, without a conducive investment climate for the industry, might impede rather than foster the development of solar power.

Indonesia Needs to Synergize Policy and Strategies to Accelerate Energy Transition

press release

Bali, August 29, 2023 –  Institute for Essential Services Reform (IESR) alongside the Energy Transition Policy Development Forum (ETP) hosted a discussion to bridge the gap between policy and practices in accelerating energy transition in Indonesia. This discussion was a side event at the ASEAN Energy Business Forum 2023, held on Friday (25/08).

Business representatives were from Quantum Power Asia, Suncable, PT TML Energy and the Indonesian Biofuel Producers Association. The policymakers included the Ministry of Investment/BKPM, Vice Ministry of Finance, Coordinating Minister of Maritime Affairs and Investments; The Regional Government of Bali  and Perusahaan Listrik Negara. 

Both businesses and policymakers representatives shared their challenges, expectations, plans, and collaborative strategies to make energy transition work in Indonesia. An underlying challenge faced with both stakeholders is financing. On one side, businesses face a lack of incentives while generating renewable energy projects and subsidies make it harder for renewables to compete with conventional energy sources. On the contrary, policymakers need investment to be able to generate projects. 

In its report titled “Indonesia Sustainable Finance Outlook (ISFO) 2023”, IESR observed that there are significant investment risks associated with renewable energy due to unattractive tariffs. The tariffs contribute to lower private investor confidence in renewable energy projects. Furthermore, the lack of transparency in the procurement process for renewable energy projects highlights the necessity for improving the investment environment and the bankability of renewable energy projects. This improvement would lead to increased confidence among private investors and greater trust from international funders.

Businesses are keen to support the development of renewable energy in Indonesia. However,regulations need to be settled first to shorten the negotiations process between government and private sectors. Furthermore, aligning the energy transition agenda between government bodies, harmonizing regional and national policies, and interconnectivity are the key points of the discussion between the two stakeholders.

Fabby Tumiwa, the Executive Director of Institute for Essential Services Reform, encourages the Indonesian government to learn from policies and best practices from other countries to accelerate energy transition. Although these said policies and strategies need to be adapted as “Indonesian-style” (the solutions should be based on national wisdom and situation) policies and practices to accommodate the complexity of the Indonesian energy sector.

“Indonesia needs an energy ecosystem to enable investment and partnerships. We need to be perceptive, we need innovations and a different approach from Perusahaan Listrik Negara (PLN) to boost energy transition. PLN needs to prepare for the ecosystem and it has to be supported by policies from the Ministry of Energy and Mineral Resources to foster public and private financing. Although there are different expectations from businesses and policymakers, we have to keep moving forward, despite our limitations,” stated Fabby. 

Exploring Potential and Challenges Towards a Sustainable Future of Indonesia

Jakarta, July 27, 2023 – The Institute for Essential Services Reform (IESR) and the International Clean Energy Forum (ICEF) hosted an expert discussion webinar to discuss the strategies to achieve 23% renewable energy in 2025. The online discussion is part of the Road to Indonesia Energy Transition Dialogue (IETD) which will be held on 18-20 September 2023 in Jakarta.

Deon Arinaldo, Manager of Energy Transformation in IESR, explains a little about IETD. IETD is an annual event that consistently supports a dialogue for policy recommendations to reform energy transition in Indonesia. Furthermore, Deon emphasizes the importance of strategy refinement to reach 23% of renewables in 2025. 

“Indonesia already had a strategy to reach its renewables target; one of them is to develop renewables generators in the electricity supply sector and increase biofuel generation to replace biodiesel. However, the available generations are utilizing more hydro and geothermal, and to develop both generations in 2 years would be impossible. Therefore, we need other strategies,” stated Deon. 

His Muhammad Bintang, a Researcher of IESR, mentions the current condition of renewables development in Indonesia. Although the country has its target, Indonesia has yet to utilize its renewable potential effectively since 2018, and none of the targets have been achieved.

“Since 2018, renewables development in Indonesia has not achieved a single target, yet each year the target increases. One of the causes is the low utilization of renewables. Solar and wind power has only been utilized up to 0,02% if we compare them to their potentials and up to 0,03% if bioenergy is included in the renewable energy generations,” said Bintang. 

Herman Daniel Ibrahim, the representative of the National Energy Council (DEN), stated that the 23% renewables target had been calculated by the DEN and the Ministry of Energy and Mineral Resources (MEMR), and it could be achieved with the assumption of Indonesia utilizing bioenergy and bioethanol. Unfortunately, the utilization of bioethanol is never realized. 

“If the 23% target is only for the electricity sectors, Indonesia has reached up to 15-20%. Alas, the target is for primary energy generation, while electricity is the only sector that can be accelerated. The most viable technology to reach 23% is through Solar PV,” said Herman. 

Mustafa Ari Suryoko, Coordinator of VRE Program Preparation from MEMR, presented that in the last half-decade, the development of renewables generation has been hindered by the action of fossil fuels generation. Although it is increasing, it is unseen. To reach 23% in 2025, Indonesia will need the proper renewable generation and can rapidly develop, like Solar PV.

“From the government’s side, we can reach the target through stakeholder collaboration. Furthermore, we have to ensure the implementation of solar PV and harmonize policy,” said Mustafa. 

In recent years, renewable energy development in Indonesia is still hindered by the 35000 GW generation project and is currently adapted with RUPTL. Zainal Arifin, EVP of VRE from the National Electricity Corporation (PLN), mentioned that PLN adjusts the generation target with the Indonesian Nationally Determined Contribution (NDC). Because of the delay, PLN will extend the target until 2030 to generate 20,9 GW of renewable energy.

“RUPTL is trying to adapt the renewable energy target caused by the 35000 GW projects of RUEN, and we can see the end goal in 2030. Renewables generation currently in construction is 5,3 GW, and we will add another 1,3 GW. The generation within the process of COD an extension from 2021-2022 is around 835 MW, and we can achieve around 7-8 GW by 2025,” state Arifin.

From the civil society perspective, Aris Prasetyo, the Deputy of Economy and Business Desk, Harian Kompas, highlighted how energy transitions are considered exclusive, as the language and phrases used within are difficult to understand.

“If we use difficult terminology or are too technical, it will make our messages about energy transition hard to receive by the public. This is homework for every stakeholder, including the media, to make energy transition narratives easier to understand. For example, climate change is still difficult to understand, although the impacts are real. Then how can we take action if the public did not receive our messages?” said Aris Prasetyo.

Dr. Raden Raditya Yudha, Senior Researcher of IESR, agreed with Aris that the terms used while presenting energy transition are technical and challenging to understand to the public. Raditya expresses the need for storytelling through relevant analogies to make people understand more about energy transition narratives, as this topic is essential to overcome climate change.

“In energy transition, the main importance is to generate more renewables and retire coal-fired power plants. However, it is equally important to consider the supply chain infrastructure and capacity building for the workers,” said Raditya. 

Inspiring the Youth: CASE Indonesia Teaches the Importance of Energy Transition in Sekolah Bogor Raya

Bogor, 4 April 2023Project Clean, Affordable and Secure Energy for Southeast Asia (CASE) together with Sekolah Bogor Raya kicked off the long-awaited Teaching for the Future (T4F) Program which focuses on the importance of energy transition as a subject in formal education.

CASE Teaching for the Future Program visited Sekolah Bogor Raya as we launched the T4F program, after our great and inspiring experience Sekolah Santa Ursula BSD in 2022. This year, T4F has a completely different agenda, as the students from grades 7, 8 and 11, totaling 150 participants, were involved in active learning, with 15 mentors facilitating, to increase the understanding and challenge them to find solutions towards problems faced by Indonesia in transitioning to clean energy. 

There were 5 different topics facilitated by the mentors, including sustainable energy access, energy efficiency, just energy transition, sustainable transportation and sustainable agriculture. By the end of the session, all students were given a task to create a campaign/project proposal on each specific topic. These ideas/proposals will be presented by the students on 14th April 2023 during Sekolah Bogor Raya Earth Day’s Exhibition.

Dominic, one of the participants of the program mentioned, “One thing that I learned from the session is about the drought in Danau Toba. I critically think of how the drought impacted the communities, especially in acquiring clean water. Education like this is very important for us, to raise awareness and improve our understanding about sustainable energy.”

Agus Tampubolon, CASE Indonesia Project Manager, emphasized the importance of energy transition as a subject in formal education. 

“Education about climate change and clean energy should be informed to the younger generations, as they are the ones who will make energy transition in Indonesia succeed in the future,” said Agus.

Aditya Rao, the Curriculum Coordinator of Sekolah Bogor Raya, told us that most subjects taught in SBR are integrated with the principles of Sustainable Development Goals (SDGs), and since elementary school, the students have already learned about climate change and energy transition. He further mentioned that through this project, SBR hopes its students will be able to understand the theoretical cases of energy transition and climate change in Indonesia in a more practical way and could be inspired to find solutions. 

Note: CASE for Southeast Asia is a collaboration project between the Institute of Essential Services Reform (IESR), GIZ Indonesia and the Ministry of Development Planning (Bappenas) with a mandate of shifting the narrative of energy transition in Indonesia that focuses on decarbonization on the power sector, upscaling renewable energy and energy efficiency, achieving just energy transition and sustainable finance. 

Multi Stakeholders Partnerships in Emerging Technologies to Accelerate Energy Transition in Indonesia

Kolaborasi Multisektoral

Jakarta, March 6, 2023 – The Clean, Affordable and Secure Energy (CASE) Program of Indonesia alongside the Ministry of Planning and National Development/National Development Planning Agency (Kementerian PPN/Bappenas) launched a series of multi stakeholder discussions ahead of the Indonesian Sustainable Energy Week (ISEW) that will be hold on October 2023. The discussions were kicked off under the theme of “Emerging New Technologies to Support Energy Transition in Indonesia”, where different experts address the Indonesian context of technologies for renewable energy and the challenges faced to implement them. 

Devi Laksmi, Coordinator of Conservation Energy Development Working Group of the Ministry of Energy and Mineral Resources (MEMR), stated the renewable energy target of Indonesia which should reach around 23% by 2025 and how the country still has massive gaps to achieve this said target. MEMR is currently developing its strategy to maximize RE potentials. 

Moving forward with the discussion, Mentari Pujantoro, Project Manager of Agora Energiewende said the global carbon emission has reached its historical peak in 2022 which is caused by fossil fuels and energy consumption. Renewables, Energy Efficiency and Renewable-based Electrification can contribute to 70% of worldwide emission reduction.

Indonesia needs to identify the existing technologies and their roles first before moving on to new technologies,” said Mentari.

Badariah Yosiana, Programme Officer the International Renewable Energy Agency (IRENA) explained the opportunities of renewable energy utilization towards Indonesian economic growth. Energy technologies could benefit the industry sector.

“For example green hydrogen could be utilized as a clean energy source and as a producer of Nickel, Indonesia could become a battery producer and exporter which would contribute to the integrated electric vehicle (EV) supply chain and solar PV manufacturing,” stated Badariah. 

Beni Suryadi, Manager of ASEAN Centre for Energy stated that although renewable energy such as wind and solar will dominate the energy mix in Indonesia starting from 2031, however not a single country can reach 100% net zero emission just from utilizing both energy.

“In other parts of the world, there have been debates on the possibility of Nuclear as a secure and reliable option to replace coal. However, some still deemed this clean source of energy inflexible due to the safety requirements,” said Beni. 

After three panelists presented different technologies and their feasibility, Prof. Dr. Ir. Suwarno, M.T., Lecturer of Bandung Institute of Technology, Professor of School of Electro Engineering and Informatics addressed a critical question of the country’s readiness of these technologies. He raises an issue about human resources, acceptance, awareness and regulations that would contribute heavily to the process of energy transition in Indonesia. As an academic himself, he pointed out that education and research institutes will play massive roles in preparing the skilled human resources needed to succeed. 

Mr Zainal Arifin as the Executive Vice President of Engineering and Technology, State Electricity Company (PLN), said the challenges faced by Indonesia: over capacity and the trilemma of energy to ensure affordability, reliability and sustainability. Until now, the only energy source which could cover all three is hydro power according to PLN. He pointed out that in developing strategies for energy technologies, flexibility and adaptability have important roles as it is not a linear process and will be implemented in the long run. 

Finally, Mr. Agus Tampubolon as the Program Manager of CASE wrapped up the discussion and presented the timeline of discussions, which will be held four times with different topics. 

“These next discussions will focus on one topic at a time for a deeper conversation and all the findings will be presented at Indonesia Sustainable Energy Week (ISEW) in October 2023”, said Agus.