Quality Aspects of Energy Access for Public Should be Taken into Account

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. 

Beyond 207 Gigawatts : Accelerating solar development in Indonesia

Seeing the need for an update for solar power technical potential in Indonesia, the Institute for Essential Services Reform (IESR) with technical support from the Global Environmental Institute (GEI) conducted a nationwide geographic information system-based (GIS-based) solar photovoltaic (PV) technical potential assessment in the country.

Technical potential estimates represent the achievable electricity generation potential (terawatt-hours), including its capacity potential (gigawatt-peak) and suitable land area (square kilometers), given the topographical (geographical) and land-use constraints as well as PV system performance. The technical potential is different from economic or market potential, as it does not consider projected costs and policy and regulatory limits (other than those related to land-use), and thus, do not represent the level of the generation that might actually be deployed, but rather an upper-boundary estimate of development potential. Using publicly available GIS data, this report covers both national- and provincial-level results of Indonesia’s spatial analysis and focuses on large-scale (utility-scale) ground-mounted solar PV applications.

The analysis of this report is the first step of a series of activities to assess potential solar PV projects in Indonesia and provides an overview of national solar power potential before zooming in to the potential regions. The estimation of the technical potential starts with first assessing the suitable areas and terrain for solar PV development. Then, by considering the solar resource potential in the areas and taking some technology-specific assumptions, the technical potential can be calculated. Several constraints to determine the suitable areas include certain terrain features (e.g., ground slope), protected areas, land-use restrictions, water bodies, and others.

Our findings show that Indonesia’s solar PV technical potential ranges between 16 to 95x larger compared to the current national estimates by the Ministry of Energy and Mineral Resources (MEMR), which is 207 GW (see Table 4).

As the assessment goes into provincial and cities/regencies level, the findings can be used to inform policymakers, PLN, business players, and other relevant stakeholders to accelerate solar development in Indonesia, starting by updating Indonesia’s solar potential figure and identifying potential solar projects across the country.

Here are some of the key recommendations that policymakers and PLN could do:

  1. The government could update their nationwide solar technical potential figure, to reflect the more detailed potential for solar energy development in Indonesia. The current assessment shows Indonesia’s solar potential is higher (16 to 96x) than the current official figure (207 GW) and it has the potential to supply Indonesia’s future energy demand.
  2. The municipal government and its respective PLN’s regional office could work together on identifying prospective locations in their jurisdictions. Case studies such as for Bali and Sumba could be entry points to more detailed planning. Assessment should include current and projection of electricity supply and demand in the area, grid study, financing needs, as well as related policies and incentives.
  3. Further technical assessments can be conducted, particularly to zoom in on specific locations at the cities/regencies level and even smaller, not only for utility/large-scale solar but also for floating solar and rooftop solar.

Coal as Stranded Assets: Potential Climate-related Transition Risk and Its Financial Impacts to Indonesia Banking Sector

An important issue to be discussed at the G20 Summit

Based on the Task Force on Climate-related Financial Disclosures (TCFD), transition risk is one of the financial risks that can arise from the process of adjusting to a low-carbon economy, both from policy/legal, technology, market, and reputation risks. One of the financial impacts of these risks is stranded assets, in which assets suffered devaluations and even became unusable. As a coal-producing country, this study can serve as a reminder for Indonesia which has the potential to lose if it does not consider the potential value of stranded assets in the future. Therefore, all parties, especially investors and financial institutions, must pay attention to this risk and be cautious in making investment decisions.

Coal contribution in the national energy mix is still high. With the power sector still being the largest domestic coal consumer, the government is reluctant to move away from coal-fired power plants (CFPPs). CFPPs are likely to become stranded assets due to more competitive investment costs from renewable energy power generation technology. With the existence of a merit order, the utilization of the CFPPs in the power system will decrease.

The government also looked at coal downstream industries as an attractive opportunity to increase the added value of coal. This industry is likely to engender stranded asset risks in the future since the economic viability of these projects is still in doubt with the need for various incentives from the government. The coal upstream/mining industry also has the potential to become stranded assets where the proven reserves must remain below the surface of the earth.

Stranded assets from the coal industries will directly have a negative impact on the financial sector which is involved in financing these projects. The global trend of moving away from coal financing projects is expected to increase the demand for domestic financing sources, including from the banking sector. This can further increase risks and impacts on the domestic financial system. Furthermore, if this risk is not properly managed, it could have a wider impact on financial stability through various transmission mechanisms.

In response to the emergence of climate-related risks, the Indonesian government has developed policies and regulations to foster sustainable finance. However, the implementation is still focused on efforts to take advantage of opportunities that arise. Meanwhile, efforts to mitigate risks are still low. Indonesia should begin to explore the lessons learned from the responses that have been made at the global level so as to improve the utilization of sustainable finance towards climate mitigation.

This study encourages recommendations for various actors to avoid the risk of coal project-stranded assets. The government should present clear signals in implementing climate policies so that economic actors can anticipate. The central bank and financial regulator should undertake thorough research such as assessment of climate-related financial risks, and disclose it by following the TCFD recommendations. Meanwhile, financial institutions/investors should manage investments and portfolios that are exposed to climate-related risks, as well as disclose this risk information to the public. This information is important to avoid incorrectly price or value assets, which are leading to a misallocation of capital.

The transition risks are not a single country issue, so it needs also to be mainstreamed through various means including through the international discussion forum. The momentum of the Indonesian presidency at the G20 Summit in 2022 and Indonesia’s Minister of Finance as co-chair of the Coalition of Finance Ministers for Climate Action in 2021-2023 can be used as a medium for discussion and raise the awareness of global countries towards this issue.

Not Renewable energy but Communicate that Coal is Intermittent and Expensive

ACEF side event

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.

Musrembang Paser: Transitioning towards green economy development

Jakarta, April 1, 2021, the Institute for Essential Services Reform (IESR)  presented on the Transition towards Green Economic Development in Paser Regency, East Kalimantan in Musrenbang (Musyawarah Rencana Pembangunan Daerah), and Public Consultation of the RPJMD (the regional mid-plan development) 2021-2026 Paser Regency (1/4). This opportunity was a follow-up to the IESR meeting with Bappeda East Kalimantan and Paser Regency in 2020.

In front of the Regent of Paser and his staffs, IESR encouraged the Paser government to no longer rely on coal in both the energy and economic sectors but began to diversify the economy to increase Paser’s economy such as industrial development, including the agricultural industry (rice, maize, shallots), the tourism industry, and the renewable energy industry.

Energy Transition is Happening, Coal Economic Contribution Will Fall

To date, Paser has depended on the Gross Regional Domestic Product (GRDP) on coal. It makes Paser vulnerable to economic turmoil due to decreasing demand for export coal. It is because many coal importing countries have adopted energy transitions. Particularly, since 80% of Paser’s coal production is exported so that Paser’s economic growth is strongly influenced by Reference Coal Prices (Harga Batubara Acuan, HBA).

“Coal export destination countries such as China, India, Korea, and Japan are very ambitious in making an energy transition. Furthermore, many countries to overcome the threat of the climate crisis are moving from fossil energy to renewable energy. It is estimated that in 2050 world coal demand will fall by 40-90%. Of course, this decline in demand will occur gradually soon. It warns the regions that have been the largest coal producer, such as East Kalimantan, “said Fabby Tumiwa, Executive Director of IESR.

This situation was also acknowledged by HM Aswin, Head of Bappeda East Kalimantan, “Although the structure of East Kalimantan’s GRDP is still dominated by the mining and quarrying sector, the declining coal price and low demand for coal from export destination countries still make the economic growth of the coal sector minus 4.58 in East Kalimantan.”

The contribution of the coal sector to the GRDP of Paser is very large, more than 70%, but the GRDP per capita of Paser Regency has been relatively stagnant in the last decade. This indicates that the mining industry has very limited leverage to support economic growth. For this reason, the government is required to develop a new economic sector.

“Coal production is relatively stagnant, but 95% of this production activity is carried out by one company only. So that in 2016 there was a decline in the production of the mining sector, especially coal, causing negative economic growth in Paser Regency 2016 (Diskominfo Paser, 2019), “added Fabby.

A similar opinion was conveyed by the Chairperson of the Paser Regency DPRD, Hendra Wahyudi, on the same occasion when he conveyed the main thoughts of the DPRD in the context of the preparation of the Paser Regency Work Plans 2022 and the Regional Medium Term Development Plan Public Consultation of 2021-2026. He emphasized that the economic contraction during COVID-19 was significantly impacted Paser, with economic growth of minus 2.77 in 2020.

“We suggest taking strategic steps by maximizing the non-mining economic sector such as the agricultural, processing, and trade industries so that they do not depend too much on the mining and quarrying industry,” he said.

The IESR analysis shows that the agriculture, fisheries, and hunting sectors absorb more labour than mining, which only ranks fourth. Moreover, the agricultural industries have experienced less significant economic fluctuations when compared to the mining sector.

Paser’s Agricultural Industry Included in the Focus of Green Development

The direction of the East Kalimantan Bappeda (Agency for Regional Development) as placing Paser as the center of agriculture and food for the New Capital City of Indonesia (IKN), especially for rice, onion, and chilli commodities, will encourage Paser to improve infrastructure that supports the agricultural industry and protects Sustainable Food Agricultural Land (LP2B).

Increasing the productivity of rice fields can also increase employment in the agricultural sector. The calculation of the increase in land productivity to 7 tons/ha and assuming a fixed amount of land, then Paser Regency can absorb around 9,479 workers. This figure is equivalent to the number of workers in the mining sector. It means that it can absorb the workforce affected by the decline in mining activities.

Furthermore, through the IESR calculations, Paser also has enormous renewable energy potential, with the successively technical production of Rooftop Solar of nearly 81000 GWh/year, water energy of 721 GWh/year, and pumped hydro storage (PHS), 3,5 thousand GWh/year. The development of the electricity sector based on renewable energy will be able to supply electricity for IKN and other areas around Paser.

IESR also revealed that maximizing the potential of the tourism sector in Paser will encourage economic growth. The Paser government could increase the tourism sector budget to attract more tourists. By taking into account infrastructure development and road access will be essential to support the development of the tourism sector.

“Paser Regency has Corporate Social Responsibility (CSR) funds of 58 billion in 2020. This fund can be used for the development of MSMEs and human resources more optimally,” said Fabby.

He suggested that the process of economic transformation requires careful planning. The Paser government must plan a more comprehensive study; the impact of the energy transition on the coal industry, local economy, environment, and health so that Paser can make a road map for Paser’s economic transformation. Another thing that needs to be prepared and deepened is the diversification of the economy, its supporting considerations, and policies.

Regent Paser in his speech also said that his party would prioritize the agricultural sector.

“I hope the agriculture department can compile a work plan to improve the agricultural program in Paser. We have large tracts of land in 139 villages. Activating this land with modern agricultural technology will open up job opportunities for youth. Agriculture will be our focus, ”promised the Regent of Paser, Fahmi Fadli.

‘Kampung Surya’ Initiatives (The Sun Village) Invites Residents to Work in the Solar Energy Sector

pelatihan anak muda memasang plts atap di jakarta

As the name implies, the colourful walls in the houses immediately greet the eyes when entering Kampung Warna Warni at RW 3, Kebon Pala Village, Cililitan, East Jakarta. Gathering at the Citizens’ Hall (Balai Warga), about 10 (ten) people who were dominated by young people, wearing masks to meet Covid-19 protocols, wanted to get technical training on the installation of rooftop solar held by IESR in collaboration with one of the solar PV development companies, ATW Solar, to residents who are members of FAKTA (Forum Warga Kota Jakarta), or Jakarta City Citizens Forum.

The declining cost of solar and wind in the past decade has made the use of renewable energy even more massive. Currently, with an investment of IDR 15-20 million, people can enjoy environmentally-friendly electricity from the solar rooftop for up to 25-30 years. In the labor sector, various groups of people, without higher education requirements, can take part in carrying out solar panel installation by following short practical training and are applicable. 

However, if we look deeply at the lifetime of solar rooftops and the calculation of the payback period, the investment value is competitive. According to the IESR calculation, the return on investment period ranges from 7 – 10 years. After this period, it can be said that solar rooftop users enjoy cheap, clean, and environmentally friendly electricity.

For 2 (two) days (25-26 / 3), all participants enthusiastically engaged in the training facilitated by trainers from ATW Solar. On the first day, participants received a basic understanding of roof-top PV technology, various installation networks, components, and safety induction during installation. Meanwhile, on the second day, despite the intense heat, the participants, who were dominated by teenagers, remain enthusiastic to practice the installation of solar panels at the Citizens’ Hall (Balai Warga). ATW Solar also opens opportunities for participants who have the potential and interest in rooftop solar power plants to become freelance workers for ATW Solar so that they can handle projects in the nearby area. This was confirmed by Chairiman, VP Retail, and Residential ATW Solar. He revealed that in terms of job opportunities, installers will be needed in the future. According to him, the Indonesian government has set a target of one million solar rooftops. However, until now only about 3000 PLN customers have used rooftop solar.

“Currently, only 3,000 PLN customers are using the rooftop solar PV, whereas the target is one million users, so there are still around 997 thousand houses that will install rooftop PV. If for one installation we need 4-5 people, meaning that we need more personnel to work on it,” said Chairiman.

The Executive Director of IESR, Fabby Tumiwa, in his remarks, stated that the Kampung Warna Warni is now called as Kampung Surya initiative must belong to the local community. So that the program will sustain.

“This first batch was trained by ATW and continued for on-the-job training and we hope that some can become freelancers for the rooftop PV installers. Later on, those who participated in this training can train other people in this village or even in the next village” said Fabby.

A similar sentiment was conveyed by the chairman of the Jakarta City Citizens Forum (FAKTA), Azas Tigor Nainggolan, “Rooftop PV is a technology that will be widely used in the future, so we must be prepared to take the offered opportunity, not only become spectators.”

Bagas Septiansah, Head of the Regional Youth Organization (Karang Taruna) RT01 RW 03, Kelurahan Kebon Pala, who was one of the participants admitted that he could understand the installation process training easily.

“Previously, I only saw solar panels in large buildings in Jakarta without me knowing what it was. However, after this training, I got a better understanding of the use of solar panels and the process of using solar energy into electrical energy for daily activities,” he said.

Bagas is committed to sharing the knowledge he has gained with the youth group he leads as well as maintaining of the solar panels that have been installed at Balai Warga. 

One of the participants, Iskandar, apparently has been installing off-grid solar panels for a long time, only he felt that his knowledge had increased after attending the training, especially about hybrid and on-grid PV rooftop.

“At home, after installing an off-grid solar panel, I felt that there was a reduction in electricity payments because I use solar cells and PLN electricity alternately. With the 40 Wp power solar PV, my electricity bill payments can go down by 20 percent,” he added.

This Kampung Surya initiative is the first in Jakarta, where it’s not only installing Solar PV but also empowers residents as skilled personnel for installers. With this initiative, it is hoped that clean energy will be increasingly enjoyed by all people because clean and high-quality energy is the right of every citizen. Through the training scheme and the installation of PV mini-grid for public facilities, the community can see and enjoy the benefits of installing a rooftop PV mini-grid, such as the emergence of jobs, getting clean electricity, and also being environmentally friendly. 

Ridwan Kamil Invites IESR to Share Insights on the Draft Bill on Renewable Energy

Bandung, 26 March 2021 — Elected as the General Chairperson of the Regional Association for Producing Oil and Gas and Renewable Energy (ADPMET) for the term of 2020-2025, the Governor of West Java, Ridwan Kamil, clearly stated in his inauguration that ADPMET would focus on developing renewable energy or waste-based biofuel, animal and plant excrement.

The seriousness of ADPMET regarding renewable energy development and energy transition was shown by Ridwan Kamil’s initiative to invite parties who consistently utter these two issues to discuss the Draft Bill on New and Renewable Energy (RUU EBT) at the West Java Governor’s office (26/3). Invited, the Institute for Essential Services Reform (IESR) provided views and exposures related to renewable energy and the RUU EBT.

Fabby Tumiwa, Executive Director of IESR, explained that, although the energy transition movement has globalized significantly and many countries in the world such as the European Union, India, China, Chile are developing renewable energy massively, Indonesia still records very low achievements in terms of energy mix targets renewable. Of the 23 percent in 2025, Indonesia was only at 11.5 percent at the end of 2020.

“In 2020, there will only be an additional 187.5 MW of installed renewable energy generating capacity. It means that it barely grows about 1.8 percent annually. Very slow, “he explained.

Meanwhile, based on the results of the latest IESR study on the technical potential of PLTS entitled “Beyond 207 Gigawatts: Unleashing Indonesia’s Solar Potential”, Indonesia has the potential for solar energy that far exceeds the official figures released by the Indonesian government.

“Indonesia has the potential for solar PV (photovoltaic) to reach 3,000 – 20,000 GWp. This potential is 16 to 95 times higher than the official estimated potential data released by the Ministry of Energy and Mineral Resources, which was 207 GWp (ESDM, 2016). If this technical potential is utilized, it can produce electricity of 27,000 TWh per year, almost 100 times the current electricity demand, “he said.

In his explanation, Fabby also explained the technical potential that West Java province possesses, based on IESR calculations using geospatial data by identifying suitable land for solar PV. Mapping results show that with a maximum area of ​​16,746 km2, West Java has a maximum technical potential for solar power of 687 GWp.

Such an immense potential of renewable energy should be a luminary in the RUU EBT. As it is also clearly written as a basis for consideration of the drafting of the RUU EBT, energy transition needs to be accelerated towards a sustainable national energy system. However, the RUU EBT, which is still being discussed in the DPR, includes elements of new energy. It means that this bill does not focus on supporting renewable energy only. The definition of new energy is energy produced by new technology with non-renewable or renewable energy sources (PP 79/2014) such as nuclear, fossil energy processing such as coal gasification, and also liquefied coal. It implied that the RUU EBT is still dominated by non-renewable energy, therefore, it is against the principles of the sustainable energy system itself. 

IESR views that Indonesia needs a law that focuses on supporting renewable energy. Indonesia can refer to India or China, which already has a Renewable Energy Law so that their renewable energy development is growing rapidly.

“The existence of the Renewable Energy Bill will show the seriousness of the government in developing renewable energy so that it will give a positive signal to stakeholders, especially investors. Currently, regulations regarding renewable energy are at the level of weaker regulations, such as Presidential Regulations, Ministerial Regulations so they are vulnerable to changes and preferences of sectoral ministers, “added Fabby.

Furthermore, in his explanation, Fabby encouraged the EBT Bill to specifically state policies that support renewable energy. Firmness in this policy will be beneficial in creating a market/demand for renewable energy, setting a viable renewable energy price, providing incentives/support for renewable energy exploitation, providing renewable energy development funds, establishing renewable energy governance and institutional arrangements, and increasing community participation in renewable energy development.

Responding to IESR’s explanation, Ridwan Kamil expressed his gratitude and immediately appointed the West Java ESDM Office to explore the technical potential of renewable energy in West Java for better development.

 

Indonesia Needs Specific Strategy to Develop Hydrogen For Decarbonization

Several countries and large companies today have committed to becoming carbon neutral (net-zero emission) by 2050. The declining cost of solar and wind, the two sectors predicted to become the backbone for decarbonization, opens the opportunity for the realization of this commitment. Moreover, the electrification of the transportation system and hydrogen development, also become important tools to achieve carbon neutrality.

On the first day of the Berlin Energy Transition Dialogue 2021, which was held virtual on (18/3), several international think-tanks gave their views and opinions on decarbonization efforts towards net-zero emissions 2050 and specifically on hydrogen development strategies. Compared to other renewable energy sources such as solar and wind, hydrogen is more recently developed. Representing Indonesia in the forum, the Executive Director of the Institute for Essential Services Reform (IESR ), Fabby Tumiwa, explained the status of Indonesia’s decarbonization development and the role of hydrogen in it.

“Indonesia still does not have a long-term strategy towards net-zero by 2050 yet. Even in 2050, it is projected that fossil energy will still dominate the national energy mix by 70%. Indonesia’s current energy fulfilment strategy has not yet reflected an energy transition approach,” said Fabby.

Fabby also added that hydrogen development in Indonesia is still very far away because energy policymakers are still not familiar with this new technology.

Challenges in the widespread use of hydrogen in Indonesia, namely in developing significant storage or battery technology. IESR has conducted a study, and it showed that in an optimal decarbonization scenario where hydrogen will receive a larger portion of Indonesia’s energy system, the demand for power storage will increase significantly, which means that the supporting infrastructure must also be prepared. A full version of this study will be launched by IESR soon.

Facing this energy transition era, the Indonesian government as the policymaker must understand the role of green hydrogen in the decarbonization process. Furthermore, an integrated strategy must be created and implemented for the development of hydrogen from both the research and policy development point of view.

Globally, hydrogen is targeted to enter several sectors, i.e: industry, electricity, transportation, buildings, and exports. The stability of hydrogen power during the storage period can be a solution for generating power in remote areas.

Also attending the discussion were Pil Seok Kwon, director of the Green Energy Strategy Institute of South Korea, Yuko Nishida, Senior Manager of Renewable Energy Institute Japan, and Bruce Raw Chief Strategy Officer of Green Cape, South Africa. Each of them conveyed the status of hydrogen development in their country and submitted input for future development. All parties agreed that a specific international strategy is needed for hydrogen development globally.

IESR: The Importance of Reliable and Green Energy for the Operations of Indonesia’s Data Center

Currently, Indonesia is one of the countries with high economic growth in the Southeast Asia region. This economic growth has also been accompanied by the growth of massive internet users, with around 65% of Indonesia’s population being active internet users. The growth of internet users demands the availability of reliable data centers in Indonesia.

One of the characteristics of the data center is 24 hours of operation, and the energy required is relatively large. Globally, energy use for data centers is 200 Terawatt Hour, so there need to be anticipative steps to get around this large amount of energy demand. Looking at the global trend towards being carbon neutral, it is believed that using renewable energy to meet energy demands in data centers is the right thing to do.

Fabby Tumiwa, executive director of the Institute of Essential Services Reform (IESR) in the Sustainability in Digital Age Webinar, explained that there will be at least two direct benefits when using renewable energy as a power supply in the data center.

(1) Increased energy efficiency

The need for energy supply for 24 hours non-stop makes the data center must look for reliable resources to ensure its prime performance. Seeing the trend of renewable energy becoming more affordable, developing renewable energy is not only a reliable and clean power supply but also financial efficiency in the long term.

(2) Increasing Use of Renewable Energy

In the national scope, currently, Indonesia still has to comply with the Paris Agreement target of achieving 23% of renewable energy. Currently, Indonesia is only at around 11.5%. According to IESR calculations, a mix of 23% will only be achieved if 70% of the electricity generation is from renewable energy. By encouraging industrial sectors such as data centers to use renewable energy it will contribute to the fulfillment of the energy mix target.

In addition, the use of renewable energy on-site will be very relevant for the company’s pursuit of becoming RE100. That big tech companies like Google, Microsoft, or Amazon have joined the RE100 alliance which means they are committed to go zero carbon in a few years.

Fabby said that in order to support the acceleration of renewable energy, especially for rooftop PV, it is necessary to have policy reforms such as improving net-metering rates, revising procedures for changing rooftop PV, as well as disseminated comprehensive information.

“Any changes in terms of regulations and policies will be a positive signal for investors,” he said.

I Made Aditya Suryawidya, Head of Business Solution for SUN Energy, added that the use of renewable energy in the data center will have a positive impact in 3 sectors, i.e: business, costs, and the environment.

From a business perspective, using renewable energy, data center companies will gain relatively fixed rates for the long term, thus helping companies to predict operational costs that must be incurred. Meanwhile, from cost savings, renewable energy will be subject to electricity costs of up to 30%. No less important from an environmental perspective, renewable energy will be able to track the company’s carbon footprint, support the Sustainable Development Goals (SDG) and government programs to increase the use of renewable energy and as a bonus, companies will get a spotlight related to clean energy.