Comprehensive Action for Indonesia’s Energy Transition

Jakarta, 12 December 2023 – The energy transition journey in Indonesia in 2023 is entering a consolidation phase, which means that a number of policies that emerged in the 2020-2023 period need to be synchronized so that their implementation can accelerate steps towards one big goal, namely limiting the increase in earth’s temperature to level 1 .5 degrees Celsius aligned with the Paris Agreement pathway.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR), in an online media briefing (12/12) held by IESR, stated that there are a number of enabling conditions that determine the success of the energy transition.

“There are 4 enabling conditions for a successful energy transition, namely, policy & regulatory framework, funding & investment support, technology application, as well as social impact & community support,” said Fabby.

Fabby also added that there have been a number of energy transition initiatives since 2020, such as RUPTL 2021, the Energy Transition Mechanism (ETM) agreement, and the Just Energy Transition Partnership (JETP). The existence of these various agreements is good considering that until 2020, there were no regulations regarding the energy transition, but the most important thing is the implementation of these various policies.

Pintoko Aji, IESR renewable energy analyst, said that the energy transition (in Indonesia) must be carried out comprehensively in all sectors, not limited to the power sector alone.

“The ultimate goal of this energy transition is to reduce emissions, so energy transition efforts must be comprehensive, not limited to the power sector alone. Industry and transportation, for example, also need to start working on it because currently there are not many concrete (actionable) policies in that sector,” said Pintoko.

Yunus Saefulhak, Head of the Energy Policy and Conference Facilitation Bureau, National Energy Council (DEN), in the same forum also explained that currently DEN is working on a revision of the National Energy Policy (Kebijakan Energi Nasional, KEN) to align various national targets with developments in international energy transition commitments and the strategy.

“This revision is urgent to carry out because energy policy needs to be in line with climate change policy, and a grand national energy strategy has also been prepared as input for KEN & RUEN updates,” said Yunus.

One of the KEN renewal points is that the new renewable energy mix in 2025 will reach 17 – 19 percent, and in 2060 it will reach 70-72 percent.

Various policy developments and adjusted targets need to be continuously monitored and guarded. The Institute for Essential Services Reform has monitored various developments in the Indonesian energy sector since 2017 and outlined them in a main report entitled Indonesia Energy Transition Outlook. In 2023, IESR will return and launch the Indonesia Energy Transition Outlook 2024 report, on December 15 2023. Follow the launch either in person (limited capacity) or online by registering at s.id/IETO2024

Towards an Energy Transition in South Sumatra

Podcast Ruang Redaksi RMOL Sumsel

Palembang, December 6, 2023 – South Sumatra, also known as Sumsel, is a province in Indonesia that has immense economic potential. To promote sustainable economic growth, shifting towards renewable energy sources is crucial. This transition not only benefits the environment but also positively impacts the financial sector in South Sumatra.

Marlistya Citraningrum, Sustainable Energy Access Program Manager, Institute for Essential Services Reform (IESR), explained that Indonesia should prepare for the energy transition to ensure its people’s and economy’s well-being. Marlistya has observed that the perspectives on energy transition differ globally, nationally, and locally. For example, while some countries have already started adopting renewable energy and secured financing, Indonesia has only recently begun the energy transition process in the last ten years, which may take longer due to the presence of coal-producing areas that require long-term planning. To ensure a successful transformation, it is crucial to consider the opinions of various stakeholders, including entrepreneurs, workers, and communities living in the vicinity.

“The energy transition has the advantage of promoting an energy “democracy” in the economic system, where various parties can pursue renewable energy. For example, individuals can aim for renewable energy by installing solar panels in their homes. This creates opportunities for many parties to enter the renewable energy industry.,” said Marlistya Citraningrum in the RMOL South Sumatra Editorial Room Podcast on Wednesday (6/12).

Furthermore, Marlistya stated that exploring alternative economic sectors in coal-producing areas is essential during the energy transition process. Marlistya emphasized that South Sumatra is not just an energy granary but also a food granary. This means that certain agricultural commodities and plantations can contribute to the economy and improve the quality of life, access to financing, and capital.

“Diversifying the economy in the energy transition requires preparation, not only in terms of regulations but also the readiness of the business world and how the community will deal with it. Business diversification is one of the strategies for the business world, especially those engaged in fossil energy. However, we need to emphasize social justice for those affected should be a priority. For instance, providing certification or training for working in the green economy may be necessary,” Marlistya explained. 

Brilliant Faisal, Functional Planner Associate Expert, Regional Development Planning Agency (Bappeda) of South Sumatra (Sumsel), mentioned that his party plans to create new training programs for the community to prepare for the energy transition process. Faisal also said that they will prepare regional regulations related to economic transformation to ensure an equitable energy transition.

“We have planned eight main strategies to be implemented from 2024 to 2026. These strategies aim to achieve economic transformation, enhance the regional economy’s conduciveness, promote equitable development, and improve the workforce’s quality and competitiveness. This is necessary because South Sumatra heavily relies on its primary sectors, such as coal,” said Faisal.

Hermansyah Mastari, Chairman of the Regional Executive Board (BPD) of the Indonesian Young Entrepreneurs Association (HIPMI) of South Sumatra Province, explained that his party always synergizes with companies that will invest in South Sumatra. However, it is crucial to have the support of the local government, particularly in guiding major companies operating in the fossil fuel industry to prepare themselves and the local community for the shift towards renewable energy.

“In the past, there was a phenomenon where job seekers invaded one factory since dawn, and they were willing to queue since dawn. Such occurrences should not happen. Therefore, it is essential for big corporations to not only fulfill their corporate social responsibility but also take initiatives to train residents in skills that can help them earn a livelihood and contribute to the economy’s growth,” said Hermansyah.

Playing Backdoor in Emission Reduction Solutions

Fabby Tumiwa dalam Konferensi Pers Climate Action Tracker

Jakarta, December 6, 2023 – The Climate Action Tracker (CAT) has released its latest report on the climate ambition and action of 42 countries, including the European Union. CAT’s assessment shows that there has been no significant change in global temperature reduction efforts since last year.

CAT modeled four temperature increase scenarios based on current policies and actions, 2030 emission reduction targets, net zero emission (NZE) targets and optimistic scenarios. All four scenarios lead to an increase in global temperature of between 1.8℃ and 2.7℃ by 2100.

Bill Hare, CEO of Climate Analytics said that even based on the global stocktake, the world is already off track to limit global warming to below 1.5℃.

“The emissions should be decreasing now and they should be decreasing quickly, but they’re continuing to increase. The central issue for this COP and the global stocktake is to reach a conclusion about the phasing out of fossil fuels. Unless we do that, I doubt whether we’re going to see an improvement in the temperature outcome,” said Bill Hare at the CAT press conference in Dubai (5/12).

Similarly, Claire Stockwell, Senior Climate Policy Analyst, Climate Analytics argues that countries’ emissions reduction targets for 2030 are very weak

“We assess the 2030 targets for countries that have very weak targets. So for countries that we already are projecting now can very easily meet those targets with current policies, including Indonesia,” Claire said.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) revealed that Indonesia’s downgrade to critically insufficient in terms of climate policy and action was due to an increase in emissions of over 21% compared to last year. Fabby explained that this increase was a result of constructing new coal power plants and resuming operations of previously paused power plants due to Covid-19.

“The Indonesia government actually has made a number of policies, for instance, last year the president issued regulations prohibiting additional new coal plants for utilities but allowing captive coal under specific conditions. We believe these regulations will have an impact, though not immediately, but perhaps in the near future,” Fabby said.

Niklas Höhne, an expert at the New Climate Institute, said that this insignificant emission reduction effort occurs because many countries are proposing backdoors to continue the use of fossil energy. He gave examples of several terms that reflect back door solutions, such as unabated fossil energy, shifting the focus to fossil fuel ‘emissions’, and phasing down fossil energy. Meanwhile, according to him, based on the Paris Agreement, countries have agreed to balance emissions and sources, and this can only happen if all fossil energy operations phase out.

“If we now decide on something more vague, like unabated fossil fuels, phasing out of emissions or something, that will be a step backwards,” he added.

He also highlighted technological solutions aiming to extend the life of fossil energy, like green hydrogen for use in gas boilers or producing ammonia using renewable energy and using it in coal-fired power plants. He considers these technological choices to be incorrect, inefficient, and costly.

Three Principles of Equity in Indonesia’s Energy Transformation

Marlistya Citraningrum, Manajer Program Akses Energi Berkelanjutan dalam Sustainability Media Academy pada Kamis (30/11).

Jakarta, November 30, 2023 – Indonesia, like many other countries, faces a critical turning point amid the global climate crisis. As a nation with abundant energy resources, the transition towards renewable energy is urgently necessary. However, this shift must prioritize fairness and equality for all. The energy transition must not solely focus on technical aspects but also consider the social, economic, and moral impacts on the affected communities. In Indonesia, this transition is not just a technical step, but also a moral obligation to ensure that every individual has equal rights in this change.

“We must examine three principles to achieve justice in the energy transition. The first principle is justice at the local level, where we need to take a closer look at which parties directly benefit from and are affected by the energy transition at the local level. For example, we need to assess whether the community around the mine is reaping any benefits from the energy transition,” said Marlistya Citraningrum,  Program Manager of Sustainable Energy Access, at the Sustainability Media Academy on Thursday (30/11).

Furthermore, Marlistya Citraningrum mentioned another principle from the authority perspective. This means that the community needs to see how the local government authority manages the transition. This includes the policies and regulations implemented to ensure fairness for all parties involved. Long-term justice must also be considered, which consists of the community’s participation in managing the future once the mining industry ends. During this time, the community’s welfare must be considered while ensuring the continuity of the economy.

During the energy transition process, it’s crucial to consider the availability of affordable, sustainable, and reliable energy. The instability in energy supply can hinder the achievement of sustainable development goals. Hence, it’s essential to establish a dependable energy system by investing in energy storage technologies, reliable distribution networks, and diversification of energy resources.

“To achieve a successful energy transition, it is crucial for the government, private sector, and communities to work together collaboratively. Education and community engagement programs can enhance people’s understanding of the significance of affordable, sustainable, and dependable energy. By enabling communities to participate in this transformation actively, positive outcomes can be experienced locally,” Marlistya said. 

Marlistya also emphasized that the government must involve more stakeholders, including indigenous peoples, women, youth, and other marginalized groups, in the planning and decision-making processes. This will ensure that all groups are treated equally and included in the opportunities created by the just transition. Social inclusion is also important to ensure that vulnerable groups have fair access to these opportunities.

“In addition to evidence-based policies, equitable energy principles should be applied through the GEDSI approach that emphasizes empathy and involvement in decision-making,” said Marlistya.

Indonesia’s Effort in Greening the Chemical Industry

Jakarta, 21 November 2023 – Chemical industry is considered as one that is heavy on emission. In Indonesia, various industries, including iron & steel, pulp & paper, cement, and textile interconnect with the chemical industry. The integration of the Indonesian chemical industry, especially ammonia, into the fertilizers industry, contributes to Indonesia’s position as the fifth largest ammonia producer in the world. Indonesia’s proactive measures to green its ammonia industry significantly impact the global ammonia landscape.

Faricha Hidayati, the project coordinator for industry decarbonization at the Institute for Essential Services Reform (IESR) during the webinar titled “Greening the Chemical Industry: International Perspective and Insights” highlights the amount of emission released for every ton of ammonia produced. 

“For every ton of ammonia produced, its average direct emissions are 2.4 tons of CO2. It is two times higher than crude steel and four times that of cement,” Faricha said. 

Given that huge number of emissions, the ammonia industry accounts for 2% of global energy usage. Therefore, decarbonizing the industry is evidently crucial. Faricha further explained that IESR is currently proposing four pillars to decarbonize the ammonia industry in Indonesia: material efficiency, energy efficiency, green ammonia, and the utilization of CCS during the process. 

Faricha added that there is an opportunity to propel the ammonia industry in Indonesia as they are already aware of their emission and have the willingness to figure out a way to limit the emission.

“Another opportunity is Indonesia’s vast potential for green hydrogen projects, coupled with variable renewable energy up to 3,686 GW,” she said.

After assessing the current status quo, IESR urges the government to set a clear emission reduction target for the industrial sector. Though currently Indonesia already has a grand vision on achieving net zero emissions in 2060 or sooner, there is still no clear target and roadmap for the industry sector in contributing to the NZE goal.

Implementing the energy efficiency measures in the ammonia industry is considered as the low- hanging fruit to decarbonize the industry sector. This approach requires least initial investment and technology adoption, while advocating for the long-term strategies.

The full version of the webinar “Greening the Chemical Industry: International Perspective and Insights” can be watched here.

The ‘Just’ Principle in Financing Just Transition in Indonesia

Johor Bahru, Malaysia, 16 November 2023 – Leading up to COP28 in the United Arab Emirates, there is a growing focus on climate financing efforts. Climate financing has become a critical focus to support a fair transition towards a sustainable, low-carbon economy.

The transformation towards a low-carbon economy and financing for a just transition requires government leadership. Governments can seize opportunities in funding energy transition by ensuring the fair execution and accountability of energy transition. For instance, the funding from the Just Energy Transition Partnership (JETP) supported by developed countries aims to expedite the energy transition. The ‘just’ aspect must take precedence in every energy transition funding agreement.

Wira Agung Swadana, the Green Economy Program Manager at the Institute for Essential Services Reform (IESR), stated that the energy transition is not solely about closing coal-fired power plants and shifting towards renewable energy plants. Instead, a broader perspective is needed to understand the impacts that will arise from the energy transition.

“The funding for the energy transition is not solely confined to infrastructure development; rather, every aspect of a just transition should also be taken into consideration. Just transition itself is not only about the affected workforce but also involves the broader community surrounding coal mining areas,” Wira expressed during the Asia-Pacific Climate Week 2023.

Furthermore, Wira also assesses that the funding for JETP is still very limited and insufficient to meet the set targets. This funding source is still predominantly dominated by loan-based financing.

“IESR is part of the technical working group with the JETP Secretariat. JETP funding still heavily relies on loans, and some of these are not new commitments from donor countries. Only about 1.62% of what we receive comes in the form of grants for a fair transition. There’s still a shortfall in funds, which I find quite ironic. Grants need to be increased rather than relying solely on loans,” he emphasized.

The funding for energy transition should encompass a comprehensive approach, including the early retirement of coal-fired power plants, addressing coal-producing regions, increasing the use of renewable energy, and managing transitions in mining locations. Wira believes that JETP still lacks a comprehensive and holistic approach.

“The funding for energy transition should ideally serve as the starting point. Currently, Indonesia is in the process of implementing the National Medium-Term Development Plan (RPJMN), utilizing domestic commitments and striving to align it with JETP and the Energy Transition Mechanism (ETM). The Indonesian government needs to address various challenges at the domestic, national, and international levels,” added Wira.

Tiza Mafira, Director of the Climate Policy Initiative (CPI), revealed that there are debates within some financial institutions regarding financing for a just transition.

“The issue lies in debates within financial institutions about whether financing for a just transition is part of financing for energy transition. When we discuss the ‘just’ aspect, we’re talking about several critical projects within the energy transition. It’s not just a few projects but an overall significant change in the economy. If not managed properly, this will have a significant impact on a large scale,” explained Tiza.

Telling Energy Stories Through Comedy

Jakarta, 16 November 2023 – Effective communication is important to change the paradigm and spread the energy transition narrative. Quite complex and cross-sectoral issues make energy transition communication challenging. For this reason, it is necessary to look for alternative forms of communication to pave the way for spreading the energy transition narrative.

The Clean, Affordable, and Secure Energy (CASE) for Southeast Asia program carries out standup comedy performances to promote the energy transition narrative in a less formal way wrapped in comedy. The event, entitled “Talking about Energy Using Comedy”, featured five stand-up comedians from various backgrounds.

During the program introduction session, CASE Project Manager, Agus Tampubolon explained that this initiative was inspired by science slams such as in Germany.

“The goal is for science to be dissected in language that is easy to understand and linked to everyday topics,” said Agus.

This is in line with the view of Rahmat Mardiana, Director of Electricity, Telecommunications and Information, Ministry of National Development Planning/Bappenas, namely that special efforts are needed to encourage communication on energy transition issues in Indonesia.

“This (energy) transition is quite complex, in which we need to reduce dependence on fossil energy. It is complex because it is closely related to human and mineral resources as well as financial availability, so communicative activities are needed so that this understanding becomes more widespread,” said Rahmat.

Deputy for Facilities and Infrastructure, Ministry of National Development Planning/Bappenas, Ervan Maksum, added that the narrative of the energy transition and the urgency to maintain the global temperature no more than 1.5 degrees Celsius may already be an understanding for some people. However, for certain groups, real examples and language that are easier to comprehend are needed.

“The public and perhaps even local governments need more concrete relevant topics such as the duration and increasingly chaotic patterns of seasons to understand the climate crisis and energy transition. So this activity is very good because even though the comics may not be presenting energy transition material per se or not be funny when performing, at least during the preparation they (comics-ed) will definitely read or learn about energy transitions so that the learning process continues,” he said.

This event featured Byan Yukadar (1st Runner Up Porseni Stand-Up Comedy Bappenas), Muhammad Fadhil (2nd Runner Up Porseni Stand-Up Comedy Bappenas), Irvan S. Kartawiria, (Vice Chancellor for Academic Affairs, Swiss German University (SGU) 2018 Period -2022), Hery Sutanto (Dean of the Faculty of Engineering and Life Sciences, Swiss German University (SGU) and Pandji Pragiwaksono (CEO of COMIKA & Stand-up Comedian Indonesia).

Stocktaking the Climate Action in Southeast Asia

Johor Bahru, 15 November 2023 – In achieving the agenda of global energy transition, the Southeast Asia region is taking measures to climate action including its non-state actors. Meaningful participation from non-state actors is crucial in observing the currently running policies and providing input for future improvements.

Stocktaking becomes a crucial activity to track the current progress of climate mitigation and action. The results of the assessment then can be utilized to design robust policy recommendations. Non-state actors can enrich the nuance of the global stocktake  by convening and aligning climate action with the interest of the global community. 

Wira Agung Swadana, the green economy program manager at the Institute for Essentials Services Reform (IESR) highlighted the key takeaways from the first global stocktake during the Asia Pacific Climate Week 2023 in the session “Integrating the role of NSAs focused on the thematic areas–Adaptation, Finance, and Mitigation”. The imbalance in growth of global emissions compared to the climate mitigation plan leads to issues such as the urgency to have systemic transformation.

“We need more ambition in action and support during the implementation of the mitigative action in the region,” he said.

Wira added that achieving net-zero emissions requires systemic transformation across all sectors, and we need to tap into every opportunity to achieve higher output. The business and commercial sector is an important factor in accelerating energy transition as they consume massive amounts of energy. Besides, some of the industries (especially those involved in multinational-scale supply chains), have the obligation to green their business process.

“What the government can do for business (to decarbonize their operations) is to provide an enabling environment if they want to shift to more sustainable business process. For instance, the government can give incentive and disincentive based on the choice of energy resource used to power the businesses,” Wira concluded.

Jingjing Gao, from the UNEP Copenhagen Climate Centre, added that the private sector-led initiative is worth noting. Yet, there is still a gap in data incorporation from the private sector.

Awaiting Regulatory Certainty for Solar Energy Adoption

Fabby Tumiwa dalam konferensi pers Smart Transportation and Energy di Indonesia pada Kamis (9/11/2023)

Jakarta, November 9, 2023 – Solar power has the potential to accelerate renewable energy in Indonesia’s primary energy mix. However, developing the country’s solar power plants has proved challenging. The Executive Director of the Institute for Essential Services Reform (IESR), Fabby Tumiwa, explained that Indonesia has the highest potential in solar energy. An IESR study shows that solar power in Indonesia could reach a technical potential and land suitability of 3,000-20,000 GWp. Despite this potential, there are regulatory challenges to developing solar energy in the country, particularly regarding solar PV. In 2022, the realized installed capacity of solar PV was only 271.6 MW, which was far below the planned capacity of 893.3 MW, based on data from the Directorate General of EBTKE of the Ministry of Energy and Mineral Resources.

“Solar PV utilization is currently limited to around 10-15% of its capacity, which makes the economics of solar PV low and unattractive. In 2021-2022, the growth of rooftop solar PV has stagnated. However, since the beginning of this year, there have been efforts to revise the regulations to prevent uncertainty. The revision process is long and has even been discussed at the Ministry of Law and Human Rights (Kemenkumham). Unfortunately, the process has not been completed yet and still requires further coordination between Ministries and Institutions,” said Fabby Tumiwa at Thursday’s Smart Transportation and Energy in Indonesia press conference (9/11/2023).

 

Fabby Tumiwa mentioned the uncertainty must be resolved immediately with strong leadership from President Joko Widodo (Jokowi). Additionally, on Thursday (9/11/2023), Indonesia unveiled the Cirata Floating Solar Power Plant, which has a capacity of 192 MWp, making it the biggest floating solar power plant in Southeast Asia.

“The inauguration of the Cirata Floating Solar Power Plant signifies the Indonesian Government’s commitment to developing solar energy. This project could not have been completed without the use of advanced technology and innovation from China, the world’s largest producer of solar energy technology. Considering Indonesia’s plan to increase the usage of renewable energy, we anticipate a significant demand for solar power plants in the coming years,” explained Fabby Tumiwa.