Global Renewable Energy Trend Increases, Indonesia Must be Prepared!

3rd Indonesia Energy Transition Dialogue 2020 Day three | #IETD2020 #TransisiEnergi

Jakarta, December 9, 2020 – Energy transition is taking place all around the world. According to BloombergNEF, there are 10 million electric buses in the world and they keep increasing. Head of Research for APAC BloombergNEF, Dr Ali Izadi, said that the data is directly proportional to the increasing trend of renewable energy in the future.

“By 2050, sunlight and wind power as renewables will dominate the world. In the next five years, renewable energy from sunlight and wind power will start to be on track,” said Ali. Therefore, Ali said that in the last six months there had been a rapid change in the worldwide energy market. Countries around the world must make energy transition from now on.

The increasing trend of worldwide interest in renewable energy affected coal demand in Indonesia. Executive Director of the Indonesian Coal Mining Association (Asosiasi Pertambangan Batubara Indonesia), Hendra Sinadia, said that currently, the demand for Indonesian coal exports to Southeast Asia and East Asia is still promising. But in 2019, the demand had reached its peak.

“Eighteen percent of our coal exports go to China and India. Another 30% is exported to Taiwan, Thailand and Japan. We will still sign an export cooperation agreement with China to maintain good relations with them. However, in 2019, the demand for coal has reached its climax, there will be a slow decline in the future, there must be a transition to renewable energy,” said Hendra.

Currently, Indonesia has started its renewable energy transition through PT PLN as a State-Owned Enterprise (BUMN). The first phase of diesel to renewable energy transition took place across 200 locations with a total capacity of 225 MW.

Director of the PLN Mega Project, M. Ikhsan Asaad, said that to support the first phase, PLN would not only carry out decarbonization but also digitalization. “Smart grid, smart meter, smart home. Then we also carried out distributed storage. Pertamina, PLN, Antam also collaborated to develop the battery industry in Indonesia,” said Ikhsan.

Deputy Minister of BUMN, Budi Gunadi Sadikin, stated that presently Indonesia has 3500 MW energy surplus of which people use 1000 MW. “From that, 60% is still coal and 15% is natural gas,” said Budi.

On the other hand, Indonesia still exports cheap coal and subsidized LPG consumption by 40 trillion rupiahs. According to Budi, 10 trillion rupiahs from the government budget could have been used to fund renewable energy research and development.

However, in its implementation, Indonesia cannot completely imitate the renewable energy transition strategy undertaken by other countries. “We can’t just do it since our country is an archipelago. Not only we have to think about how the energy can be distributed, but also connected from one island to another,” said Budi.

Faisal Basri, a member of the Indonesia Clean Energy Forum, said that apart from ensuring its availability, the government should make renewable energy affordable for the community as well. For this reason, the government should give subsidies for renewable energy instead of fossil fuels.

In this case, Faisal assessed that the government is still not in line with BUMN such as Pertamina. Faisal said that amid the pandemic, the government improved the facilities for fossil-based energy. Especially in the Job Creation Draft Bill (RUU Cipta Lapangan Kerja), many articles rather benefit the price mechanism in the coal industry.

“For example, when Pertamina launched the idea to ​​eliminate 88 tons of carbon using pertalite. But this pertalite cost the same as premium. The government didn’t say anything. The government still subsidized premium. Pertamina is more progressive than the government,” said Faisal.

Faisal said that in order to administer renewable energy transition, the government has to support the renewable energy industry through policies encompassing renewable energy infrastructure, subsidy, and pricing mechanisms.

Executive Director of Institute Essential Services Reform (IESR), Fabby Tumiwa, stated that global energy transition has been in progress and inevitable. For energy State-Owned Enterprises in Indonesia, it is important to survive this era of energy transition by transforming business and making innovations.

“In the electricity sector, the government needs to design changes for the structure in electricity industry and set electricity rates that reflect long-term marginal cost,” said Fabby.

PLN needs to integrate a distributed-energy supply system and strengthen its consumers. That way, consumers could become energy producers and help PLN address the need for energy supply investment that—according to the IEA (2020)—requires $25 billion investment per year to accelerate energy transition.

“The challenges for the government is making the energy transition road maps, planning and managing the transition; considering the infrastructure assets of fossil fuel owned by BUMN are very large. There is not much time left—5 years at most to prevent an energy BUMN like PLN from financial losses due to the uncompetitiveness of its PLTU assets with solar generator and storage technology,” said Fabby.

Local Government’s Commitment is The Key to Renewable Energy Transition

Jakarta, December 7, 2020 – Each province in Indonesia has a lot of renewable energy potential that has not been developed optimally. Therefore, aside from devising policies that favor renewable energy, regional leaders act as an important key to cultivating renewable energy potential.

Governor of East Nusa Tenggara (NTT), Viktor Bungtilu Laiskodat, said that NTT has 60,000 MW renewable energy potential from sunlight. However, only 100 MW of it has been utilized optimally by the people. To optimize the use of renewable energy, the NTT Provincial Government hopes to take concrete steps through a collaboration with the central government and PLN.

“There is no other choice, we have to shift to renewable energy because this affects other sectors. For example, when we produce seaweed, it is rejected by European companies because it is not produced using 100% renewable energy. This means that the world’s interest lies in renewable energy, we have no choice but to shift, “said Viktor.

Indonesia also has an extraordinary social culture. Therefore, the Central Java Provincial Government uses community movements in villages to participate in building an Energy-Independent Village (Desa Mandiri Energi). Head of the Central Java Energy and Mineral Resources (ESDM), Sujarwanto Dwiatmoko, said that people in the energy-independent village use sunlight, biomass, water flow, and biodigester to generate electricity.

Deputy Regent of Musi Banyuasin, South Sumatra, Beni Hernedi said that several communities in South Sumatra district start to adopt biomass to fuel power plants. That being said, programs from the local government to optimize the energy mix need support from the central government and PLN as the main supplier of electricity.

Bali also needs the central government’s support for the collaboration between smart grid renewable energy and the old grid. According to IGW Samsi Gunarta, the Head of Bali’s Provincial Transportation Agency, this support is needed to support electric vehicles initiated by the Provincial Government. “Besides, it is impossible for us to continue the production without using (the products). Apart from the production, the usage must also be taken into account,” said Samsi.

Chungnam Province, South Korea serves as an example that the regional leaders’ success is the key to successfully directing the society to the energy transition. Chungnam Governor, Yang Seung Joo, along with 300 community organizations, has committed to eliminating carbon emissions. It is hoped that Indonesia can follow Chungnam’s steps in collaborating with the community.

Watch Governor Yang full speech, addressed on the second day of IETD 2020:

All Parties Collaboration Required! Reducing Carbon Emissions through Renewable Energy Development

Day one of  The 3rd Indonesia Energy Transition Dialogue 2020 #IETD2020 #EnergyTransition

Jakarta, 7 December 2020 – Carbon emissions from Steam Power Plants (PLTU) tended to be low during the Covid-19 pandemic due to decreased consumption of electrical energy. However, the target for reducing carbon emissions is not yet on track to meet the Paris Agreement. For carbon emission reduction to be sustainable, the Indonesian government should be able to take advantage of post-Covid-19 recovery by more massively developing renewable energy potentials.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) in his remarks during the opening of the Indonesia Energy Transition Dialogue 2020 (IETD 2020) highlighted the phenomenon of falling coal prices in the international market and the stronger commitment of coal-importing countries such as China, Korea, and Japan to go carbon neutral in 2050.

“Ten years ago, people might not have imagined that solar panel technology would be one of the energies to power electricity. Or, decades ago, people might not believe that coal would become history since it is no longer economical. However, all of that is happening right now. Solar energy is getting cheaper, and coal is becoming unpopular, ”he said.

Fabby also explained that Indonesia has great renewable energy potential from sunlight, geothermal, biogas, and hydropower. Using these potentials, Indonesia must achieve 23% renewable energy use by 2025.

According to the IESR research, Indonesia’s chance of achieving its energy mix target is quite positive. The energy mix penetration in Indonesia can reach 40%. IESR’s recent study with Finland’s Lappeenranta University of Technology (LUT) and Agora Energiewende said that Indonesia could reach 100% renewable energy demand by 2050 cost-effectively without compromising on energy security. Achieving this requires collaboration from all stakeholders in government and community policy.

Although not as fast as ASEAN countries like Thailand in promoting renewable energy development, the Indonesian government through the Ministry of Finance has made various fiscal policies that support the renewable energy industry. Some of them are tax holiday and tax allowance for the renewable energy industry.

In addition, Suahasil Nazara, Deputy Minister of Finance who attended the Indonesia Energy Transition Dialogue (IETD), emphasized the importance of synergy between institutions to determine the direction of Indonesia’s renewable energy.

“The government is basically very passionate about renewable energy development. Come, every institution, especially the Ministry of Energy and Mineral Resources and related institutions, sit together and have a deep discussion, so that we, from the Ministry of Finance, can provide maximum support in terms of encouraging renewable energy investment in Indonesia,” Suahasil said.

The government also continues to improve Indonesia’s economy through various national economic recovery (PEN) programs, namely a fund allocation of Rp318 trillion rupiahs. Thanks to this program, Indonesia’s economy began to improve as seen from the graph of the national income development that rose from -5.32% to 3.49% in the third quarter.

Unfortunately, the economic stimulus has been flowing more towards fossil energy than renewable energy. Therefore, the government provides various sources of funding for the renewable energy industry. One of them is through the issuance of Sukuk hijau.

This article was developed from the recent discussion within the 3rd Indonesia Energy Transition Dialogue, Monday, December 7th. Join and participate in the dialogue virtually, 7 – 11 December 2020, visit ietd.info.

 The second day of IETD 2020, will bring the discussions among The Governors (local government of Indonesia) and Special guest: Governor of Chungcheongnam-do, South Korea with the topic of Local governments lead the way in energy transition.

ietd.info

IETD 2020: How to use green recovery plan to accelerate the low carbon energy transition?

Covid-19 pandemic has drawn focus on sustainability issues and economic recovery. How to use this recovery plan to accelerate the low carbon energy transition?

Energy transitions are happening around the world, mainly driven by solar energy and wind. In many countries around the world, it is cheaper already today to build a new solar PV or wind plant than building new thermal power plants. And it will not be long until it will even be cheaper building new wind and solar PV than utilizing existing gas and coal-fired power plants, according to Bloomberg New Energy Finance (BNEF). According to the International Energy Agency (IEA), investments in renewable energy sources have been outscoring those for conventional resources for several years in a row.

In India, around 38 GWp solar energy capacity was installed until June 2020 from only 161 MW by 2010, making India one of the frontrunners in developing solar energy in the world (economic times. India, 2020). Meanwhile for wind energy, Denmark, as the early adopter, is still leading in wind energy utilization with approximately 50% of Denmark’s electricity consumption in 2020 to be supplied by wind power (Danish Energy Agency, 2020).

In Indonesia, this concept of energy transition has gained more popularity among the policymakers and the public during these two years.  However, based on IESR’s ICEO 2020, renewables capacity until the end of 2019 only reached slightly over 10 GW with generation shares at around 12.2%. Renewables investment is also stagnant and all renewables targets in RPJMN or RUEN for 2019 have also been missed.

Now, Covid-19 pandemic has hit the global economy badly, and Indonesia is not an exception. So far, through Government Regulation No. 23/2020, the government has allocated Rp 318 trillion as an economic stimulus to create growth. However, this stimulus, unfortunately, is still not directed to rebuild the Indonesian economy towards a low carbon economy.

As we recover from the Covid-19 pandemic, it is essential that we build back better. Having a green economic recovery agenda will help Indonesia build a resilient and sustainable economy while accelerating the energy transition in Indonesia to reach a 23 percent share of renewable energy in the primary energy mix by 2025. Therefore, Indonesia, as one of the emerging economies, needs to structure recovery packages wisely and be innovative in attracting capital from different sources. Indonesia also needs to enhance its investment framework for renewables to attract a higher level of private capital to help support sustainable economic recovery in Indonesia.

Join the dialogue, register at ietd.info

Green Job is a recovery solution for COVID-19 Aftermath

Jakarta, 3 December 2020 – The sturdy economic contraction due to the Covid-19 pandemic has prompted many countries, including the G20, to channel stimulus to protect their economies. Although it is not as big as the support for the fossil energy sector, 17 of G20 member countries (apart from Mexico, Russia, and Saudi Arabia) provide some support for the green industry, with a primary focus on increasing the capacity of renewable energy and low emission transportation. 

Green recovery is also a recommendation in the Climate Transparency Report 2020 to sustain the CO2 emission reduction.

The Climate Transparency Report (previously known as Brown to Green Report) is the world’s most comprehensive annual review of G20 countries’ climate action and their transition to a net-zero emissions economy. Climate Transparency is a global partnership of 14 think tanks and NGOs that brings together experts from the majority of G20 countries supported by the Federal Ministry of Environment, Nature Conservation and Nuclear Security, the German Embassy to Indonesia, or the German BMU.

“The time to act is now to transform into a low-carbon economy. Indonesia has the opportunity to align its economic response with a long-term decarbonization strategy, ” said Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR), at the launch of the 2020 Climate Transparency Report.

According to Fabby, rather than supporting the fossil fuel industry, an economic stimulus package, if properly directed, could provide funds to initiate an energy transition.

“Green recovery provides good opportunities globally to generate jobs that are compatible with green initiatives, for example, on solar power compared to fossil energy. The younger generation must start to consider and take opportunities in environmentally friendly jobs (green jobs),” he explained.

Andhyta Firselly Utami, Environmental Economist and co-founder of the Think Policy Society, on the same occasion, said that natural resources management tends to create more jobs. Andhyta, or who is familiarly called Afu, explains the concept of green jobs according to the ILO definition.

“Green job means producing outcomes that help reduce emissions, improve process efficiency in general, and are low in emissions and decent works in terms of working hours and working environmental conditions,” she explained.

Agreeing with Afu, Gita Syahrani, Head of the Secretariat of Lingkar Temu Kabupaten Lestari, said that whatever the profession, it can contribute to the green recovery.

“Synergize the existing professions to meet climate change targets. For instance, as a building expert, you can make energy-efficient buildings,” she explained.

Seeing the world trend that is starting to open up great opportunities for green jobs, Gita expressed the need to increase the capacity of local human resources.

“Without competitive local human resources, our dream (in participating in green work) will be challenging to come true. We need research and development that is strong enough to manage natural resources,” Gita explained.

She gave an example, as the district community’s efforts are to protect mangrove areas from burning by planting pineapples, they have to be equipped with the ability to manage their pineapples.

“For example, face masks from pineapple processing products will be much more expensive,” he explained.

In terms of creating green jobs, according to Sean Nino L, founder & CEO of Eco-Mantra, Indonesia has great potential.

“Indonesia has many islands with sunlight to generate electricity through solar power,” he said. 

He also shared his experience in developing solar power plans in hotels in Bali. He managed to keep energy by half, thus saving operational costs.

According to him, the biggest challenge in developing green jobs is that policies change frequently.

“In only 2016, the regulations on solar power could change up to 4 times,” he said.

Another difficulty addressed by Gita is the division of authority between the central government and the regions.

“It is difficult if there is no national legal protection even though the region is already enthusiastic. We recommend using a juridical approach so that national policies can be translated more specifically in the regions and more contextually,” she explained.

Furthermore, according to Gita, the government often prepares development and spatial planning plans but neglects to formulate investment plans. It is essential to synchronize with the low carbon development vision. 

Director of Manpower, National Development Planning Agency (Bappenas), Mahatmi Parwitasari Saronto, said the other challenge in realizing green recovery is the preparation of human resources for the implementation of green jobs.

“The current trend for green jobs has numerous potential. We cannot deny it, because other countries have run for green jobs. We are already left behind, “said Mahatmi, who is familiarly called Ami. 

The problem is that currently, her party does not have a green work framework, such as how much demand is needed to encourage a green economy in Indonesia.

Ami proposes strategies to accelerate green recovery such as increasing public awareness of green jobs, encouraging stimulus for green economy development, preparing appropriate regulations, encouraging vocational institutions to adopt sustainability principles, and encouraging companies to participate in job creation in green jobs.

“Bappenas is ready and guided by the low carbon development policies adopted by the government. Today, the green economy is included in the government’s vocational policy strategy that we are currently drafting, “she concluded. (US/Gb)

Accelerate Economic Growth with Green Recovery, COVID-19 Aftermath

Jakarta, 3 December 2020 – “All countries, globally, including the G20 countries, are facing a health emergency and economic crisis due to the Covid-19 pandemic. But the world also has to focus on fighting an enemy with a huger destructive force, namely climate change, “said Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR), in his opening remarks opening the online launch of the Climate Transparency Report 2020.

The Climate Transparency Report (previously known as Brown to Green Report) is the world’s most comprehensive annual review of G20 countries’ climate action and their transition to a net-zero emissions economy. Climate Transparency is a global partnership of 14 think tanks and NGOs that brings together experts from the majority of G20 countries supported by the Federal Ministry of Environment, Nature Conservation and Nuclear Security, the German Embassy to Indonesia, or the German BMU.

This year’s report analyzes the performance of the G20 countries across 100 indicators of climate adaptation, mitigation, and the financial sector. This year, the Climate Transparency Report also includes the G20 government’s response to the Covid-19 crisis as well as the latest emission data and projections for 2020.

Furthermore, Fabby said the G20 countries, which represent 75% of global greenhouse gas emissions, must immediately make the right decisions in overcoming the pandemic and climate change. It is to fulfill the Paris Agreement commitment, therefore the global temperatures stay below 1.5-20C, which results in natural disasters, hunger, poverty, and a surge of unemployment.

To sharpen climate mitigation ambitions, by 2020, all countries that signed the Paris Agreement are required to update their Nationally Determined Contributions (NDC) climate targets. However, Indonesia has stated that it will not update or increase its NDC target because it still has to focus on handling Covid-19 and the impact of the economic recession on the Indonesian economy.

The Indonesian economy has indeed experienced a significant contraction. As can be seen from the economic growth has been negative twice in a row in the second quarter (- 5.32%) and the third quarter (- 3.49%). The government has made efforts to revive from the abyss of recession, including by providing social protection stimulus and stimulus for micro, small and medium enterprises (MSMEs) to recover Indonesia’s economic sector, which is mainly supported by the MSME industry.

Besides, In April 2020, Indonesia adjusted the state budget to address the COVID-19 pandemic risks to the economy. Substantial funds have been allocated to fossil fuel companies and not for green investment. Almost IDR 100tn (out of more than IDR 327tn) will support state-owned companies, Pertamina (oil) and PLN (electricity). By mid-July 2020, the government had committed USD 6.49bn to support fossil fuel energy, compared to just USD 237.17m for clean energy through new or amended policies since the beginning of 2020.

 “The right step to recover from the health crisis and economic recession caused by Covid-19 is to invest more heavily in renewable energy and implement green recovery,” said Lisa Wijayani, Green Economy Program Manager, IESR, in her explanation regarding the findings of the Climate Transparency Report. 

Indonesia’s NDC Status is Highly Inadequate 

The 2020 Climate Transparency Report recommends five Principles of Green Economy Recovery, specifically, 1) G20 member governments can direct investment towards sustainable infrastructure. 2) Investment based on nature and the environment. 3) Investing in education, training, and development (R&D) of environmentally friendly industries. 4) Disbursing conditional bailouts that are in line with long-term climate commitments. 5) G20 member countries can strengthen policies, regulations, and incentives to support sustainable transitions. 

“Green recovery can improve public health and welfare. Also able to create jobs and foster local economic value, able to increase biodiversity and the environment, and provide financial security and fiscal benefits. Another advantage is increasing energy access and security, ”explained Lisa. 

Based on the analysis of the Climate Transparency Report, Lisa regrets that Indonesia’s NDC target is still highly insufficient to reduce 26 percent of greenhouse gases in 2025 and 29 percent in 2030.

“The highest emitters come from the industrial sector (37%), followed by the transportation sector (27%) and the energy sector (27%). So far, there are several positive things that the government has done. The Ministry of Energy and Mineral Resources has issued Permen No. 4 of 2020 to strengthen the competitiveness of renewable energy. Meanwhile, currently, the Presidential Decree on renewable energy is waiting for the President’s approval which includes regulation on the fit in tariff for renewable energy with a capacity of below 5 MW, “explained Lisa.

However, the Climate Transparency report still encourages the Indonesian government to immediately take steps to break away from the fossil industry by phasing out the use of coal, limiting public costs for fossil fuels, increasing renewable energy targets, establishing policies to strengthen and improve existing building structures, carbon pricing, and financial sector greening. 

Indonesia Becomes a “Hotspot” for Green Industry Workers 

Responding to the presentation of the results of the Climate Transparency Report, Kuki Soejachmoen, the Founder of the Indonesian Decarbonization Research Institute, realized that this 2020’s carbon emission reduction was mostly due to activity restrictions and mobilization to prevent Covid-19 transmission. However, Kuki emphasized that the problem of climate change is not an unpredictable phenomenon. 

“Efforts to limit global temperature have been going on for about 20 years. We should be better prepared to face it, “she said. 

She hopes that climate change is actualized in the financial system in Indonesia. 

Noor Syaifudin, the Associate Expert Policy Analyst, Center for Climate Change Financing and Multilateral Policy, Fiscal Policy Agency, said that his party has issued policies related to incentives for corporate taxpayers’ income tax leave (PPh) or tax holidays as well as tax allowance for companies, including those engaged in renewable energy. 

“We also continue to encourage the private sector to be involved in funding related to climate change. Now we are discussing policies related to carbon prices and drafting a climate change fiscal framework that includes strategies for meeting the NDC and SDG targets, “he added.

Moreover, Cristina Martinez, International Labor Organization (ILO), Regional Office for Asia and the Pacific, Bangkok, encouraged the Indonesian government to coordinate cross-ministerial policies and provide stimulus support.

“Especially to reform the education system to be more competitive with the development of renewable energy,” said Martinez.

“The ILO projects that in 2030 the Asia Pacific region will be the hottest spot for jobs in the renewable energy sector in the world. Especially China, India, and Indonesia, “she said.

“Job opportunities in environmentally friendly industries or green industries will be very wide open,” continued Dessi Yuliana, Green Investment Specialist at the Global Green Growth Institute (GGGI).

Dessi explained that based on the results of the study she learned from the green industry, there would be 2 to 5 times more jobs than the fossil industry.

“To achieve the target of 23 percent of the renewable energy mix, Indonesia can create 7 million jobs in 2030. Compared with the fossil industry, which is only able to create 3.9 million jobs,” she said.

Indeed, the beneficial impact apart from providing income for workers also addresses environmental problems such as water shortages with peat restoration and mangrove reforestation.

Lucia Karina, Director of Public Affairs, Communications & Sustainability, Coca-Cola Amatil Indonesia, said that investment in environmentally friendly research is also prominent. In the process of distributing the product, the company has also innovated a cooling system, which is two times more energy-efficient. 

Coca Cola Amatil, which employs more than 9500 employees, is targeting the use of 60 percent renewable energy in operating its business with solar power plants. Unfortunately, there are many challenges that companies have to face in the construction of these solar power plants.

“It is a bit complicated to get through the licensing process, long bureaucracy, and a fairly expensive investment. 

“The government should immediately fix this so that the industry will not hesitate in implementing renewable energy as other countries in the world have done,” she said.

In general, the Indonesian government agrees that Indonesia’s economic and social recovery must be placed right within the framework of sustainable development goals with an emphasis that nothing should be left behind (no one left behind). It was conveyed by Agustaviano Sofjan, Director of Development, Economy and Environment, Ministry of Foreign Affairs of the Republic of Indonesia, on the same occasion. 

“At the G20 Summit under the leadership of Saudi Arabia, President Jokowi emphasized that post-pandemic Indonesia aspires to build a more inclusive, sustainable, and resilient economy. The President also highlighted that Indonesia will have to carry out a major transformation with a commitment to a greener and more sustainable economy, ”he said. 

Agustaviano added that in the next few years, Indonesia will play a strategic role in the international arena. It will support inclusive and sustainable national social and economic recovery. 

 “Indonesia’s presidency for the G20 has been accelerated from 2023 to 2022. Starting in 2021, we will also become members of the UN Economic and Social Council. In 2023, Indonesia will be chairman of ASEAN, “said Agustaviano. 

The government hopes that there will be good cooperation between parliament, government, academics, civil society, such as the IESR, and also the media to encourage Indonesia’s economic recovery.

A total of 205 participants joined the online meeting application. This event was divided into two discussion sessions. The first session was themed Just Transition to a Low Carbon Economy: Accelerating Indonesia’s Recovery and Green Economic Growth. Meanwhile, the second session featured Transition to a Green Economy: Opportunities in Deploying Sustainable Jobs. After the discussion, the participants watched the videos created by the Climate Innovation Hack video competition participants. Nine (9)popular online media in Indonesia covered this CT Report launch event.

If Government Ignores to Issue Policy for a Just Energy Transition, It Will Cause Series of Social Economy Problems for Coal Producer District

 

Energy transition, a shift from fossil-based energy to renewable energy, is a global phenomenon. The threat of climate change, pollution from fossil-based energy, and the more affordable technology for renewable energy become the reasons many countries around the globe start the energy transition. Obviously, during the process, some pros and cons should be understood and anticipated for countries that are in progress of doing energy transition, including Indonesia.

Institute for Essential Services Reform (IESR) launched the fourth report of the Indonesia Energy Transition Roadmap titled “Ensuring a Just Energy Transition in Indonesia: Lessons Learned from Country Case Studies”. The paper brought by Melina Gabriella and Pamela Simamora talked about the energy transition process done by German, Australia, Canada, and South Africa. It noted lessons learned used as a recommendation for the Indonesia Government to prepare energy transitions in Indonesia.

Attending the online report launching was the IESR’s executive director, Fabby Tumiwa. The Head of Regional Planning Agencies of East Kalimantan H.M. Aswin, Aidy Halimanjaya, of the Dala Institute for Environment and Society, and Maria Emeninta of the Confederation of Indonesian Prosperous Trade Unions (KSBSI) presented as responders.

In his opening speech, Fabby Tumiwa explained that the energy transition issue is relevant to Indonesia, considering its position as a coal producer. Energy transition will impact the coal industry. As we might be aware that coal has become an export commodity, and it contributes significantly to national and regional income. Moreover, as the cost of renewable energy technology is getting competitive, coal-based power plants will no longer be economical to be continuously operated for the future decade. It will cause lower coal consumption domestically. Currently, power plants use 90% of national coal consumption.

The energy transition is basically about people. People who make the policy, and those who will be impacted by the policy. Since the Paris Agreement 2015, Indonesia ratified the document in Law No. 16 of 2016. By doing it, Indonesia declares its commitment to lower greenhouse gas emissions. One of the ways to lower GHG emissions from the energy sector is by implementing the energy transition.

The commitment to leave fossil-based energy from the countries that used to be the customer of Indonesia’s coal will transform the future of the Indonesian coal industry. Lower coal demand will directly affect the Gross Regional Domestic Product (GRDP), the balance of trade, jobs, and business opportunity. Therefore, the just energy transition approach is needed to ensure impacted labor and community are carefully considered, and no one is left behind.

Melina Gabriella explains the definition of just energy transition as an energy transition process that ensures that all parties are well accommodated, no one is abandoned and harmed. It also ensures that the cost and benefit brought by energy transition will be distributed evenly.

The four countries have experienced struggles in the energy transition. Ruhr, the biggest coal producer in German, takes 60 years to do energy transition. Germany’s first step was granting a significant amount of subsidy to secure the coal industry, which at that time was experiencing lower demand due to price liberalization.

“Its step increased the transition cost, and made economic diversification longer than it should,” added Pamela Simamora.

In Indonesia, the energy transition process seems to attract less attention to the Government. Energy transition may bring negative side effects such as the lowering of GRDP in coal producer areas, the deficit in the balance of trade, an increased number of unemployed who lost their job in the coal industry. However, if the implementation of the just energy transition process is successful there will be a series of benefits and opportunities for Indonesia such as lower cost of the electrical system, economic diversification, the birth of green jobs, better air, soil, and water quality, and lower public health costs.

According to the lesson learned of the four countries, IESR urges government to prepare strategy and policy to ensure the process of just energy transition, with the following consideration; implementation of good governance in planning energy transition pathways, enabling condition for investments in renewable energy, public consultancy, and dialogue, establishing policies related to social protection and skill development, economic diversification, and establishing funding mechanism to support just energy transition.

Responding to the IESR Study report, M. Aswin admitted that since 2007 coal has become the most prominent contributor for East Kalimantan GRDP. Yet, he explained that the local government plans to transform into a sustainable economy by lowering the contribution of the oil and gas sector from 45.49% to only 17% in 2050.

“We plan for no longer exporting raw coal. If we want to export (coal), it should be down streamed. Unfortunately, the provincial government has limited authorization regarding this matter. The authority is mostly handled by the central government. We only arrange the plan, but they (central government) determine it.”

Aidy Halimanjaya assumes that the lack of discussion about the direction of policies on the use of resources in the regions happens due to weak political communication at the national level and the knowledge gap of each government institution.

“Generally, government institutions do not see policy to its impact. It stops at the output level. We know that output level doesn’t need much coordination,” Aidy said.

Next, Maria Emeninta highlights one of the challenges to promote just energy transition is the inconsistent policy from the government. More than that, she believes that each government institution should coordinate well to reach the expected implementation of just energy transition.

“It feels that just energy transitions seemingly silent because it has not become the responsibility of the Ministry of Environment and Forestry. The Ministry of Environment and Forestry does not coordinate with the Ministry of Labour, so this issue has become abandoned,” she explained.

IESR realizes that even though energy transition is a global issue and phenomenon, it is still considered new in Indonesia. However, IESR believes that Indonesia’s energy transition planning is important concerning reaching the target to lower the earth’s temperature as it is agreed in the Paris Agreement.

Thus, the launching of the Energy Transition Roadmap Study became one of the ways to urge policymakers to understand this issue and seriously discuss it. Later on, it is needed to unify the understanding of the policymakers and other parties so that we can draw tangible urgency and concrete action plans to deal with the impact of the energy transition.

“The just energy transition process does not impact the energy system only. It will also transform the economic and Indonesian development system. Therefore, this study recommends a consultation process with various policymakers to integrate energy transition issues into national and regional development plans,” said Fabby in his closing remark.

Advancing the Rooftop Solar to Achieve Renewable Energy Targets in North Sumatra

The International Renewable Energy Agency (IRENA) reports that renewable energy (RE) has made up the majority of capacity additions for the last eight years. Its progress is in line with the development of innovation and competition in RE technology, which makes the price of RE cheaper than fossil energy in 85% of countries in the world. Moreover, in the UN Climate Action Pathway for Energy, IRENA maps that in 2025 all coal mining in the world will experience a drastic decline because it is no longer economical compared to RE.

The massive movement of the transition of fossil energy to RE or known as this energy transition was also recognized by Harris Yahya, Director of Various New and Renewable Energy. He explained the development of RE, especially solar energy, in the online event Opening the Solar Roof Market in North Sumatra. This event was organized by the Institute for Essential Services Reform (IESR) in collaboration with the Indonesian Solar Energy Association (Asosiasi Energi Surya Indonesia-AESI) and the Indonesian Employers’ Association (Asosiasi Pengusaha Indonesia-APINDO) North Sumatra in continuing the campaign for the National Movement of One Million Roofs (Gerakan Nasional Sejuta Surya Atap – GNSSA) which turned three years in last September. Following Central Java, which has committed itself as a solar province, AESI is now encouraging North Sumatra to utilize the potential of RE to meet its energy needs.

Harris explained that Indonesia is working on achieving the 23% RE mix target by 2025, while the accomplishment has been only 10.9%.

“One possible way to reach up with the RE energy mix is ​​by implementing solar power plants. Thus, the domestic industry can sustain with the RE industry, especially solar power, and it can open up green job opportunities and reduce CO2 emissions, “he said.

Harris believes that after the president signed the draft of the Presidential Decree regarding RE, the solar power plant will expand extensively. The provision of solar power plants is not only for PLN as a utility-scale but also for replacing diesel generators.

“We plan to use RE to substitute diesel power plants of up to 2,600 MW, either with solar or biomass energy,” Harris explained.

Irwansyah Putra, General Manager of the North Sumatra Regional Main Unit PLN, who was also in the discussion, said that his party fully supports government policies that encourage the development of solar power plants in North Sumatra. 

“PLN supports the use of solar power plants in North Sumatra, both roof solar and communal solar power plants, both on-grid and off-grid. Both non-PLN customers, such as villages that have no electricity or existing PLN customers by referring to regulations that have been set by the government. ” 

Irwansyah said that the North Sumatra PLN also plans to evaluate the decentralization program for archipelagic areas (electrified villages) to use rooftop solar soon. 

On the same occasion, Fabby Tumiwa, Executive Director of IESR, underlined the immense potential of solar energy in Indonesia based on the results of the IESR study. 

“Looking at the existing land capacity, the potential for installing solar power plants by utilizing ground mounting (open land) could reach 9,000 GWp with the potential to generate up to 13,000 TWh/year. With this huge potential, Indonesia can meet 100% of its energy needs from solar energy. The potential for rooftop solar in house buildings alone reaches 655 GWp, “he said. 

He also described the technical potential of rooftop solar in North Sumatra, specifically 10.2-34.6 GWp for house building. Meanwhile,  referring to the National Energy General Plan (RUEN), which encourages rooftop solar applications in government offices, regents, and mayors, North Sumatra has the potential to reach 9 MWp. 

The North Sumatra Energy and Mineral Resources (ESDM) Office, represented by Karlo Purba, Head of the Electricity Sector, explained that his party has begun to implement a strategy for using rooftop solar as stated in the draft RUED-P (Provincial Regional Energy General Plan) by setting the regulation to utilize solar cells at a minimum of 30% of government buildings, and 25% for luxury housing complexes, and apartments. He hopes to increase the interest of the public and commercial and industrial groups as well. 

Meanwhile, in the same discussion, three rooftop solar developers, namely SUN Energy, PT Engie Indonesia, and PT ATW Solar Indonesia, offered various attractive payment models for installing solar panels. 

“The most favorite payment method is the performance-based rating scheme. Customers do not need to spend money on the initial investment in rooftop solar. The rooftop solar system will become fully owned by the customer after the contract ends, ”explained I Made Aditya Suryawidya, SUN Energy’s Head of Business Solutions. 

As of October 2020, there are 2,556 PLN customers using rooftop solar with a total installed capacity of 18.2 MW.

Watch the discussion again here:

 

Great Opportunity in Developing Renewable Energy Startups

Financing Sustainable Energy Startup to Promote Climate Justice

Jakarta, 11 November 2020-In the midst of the COVID-19 pandemic that is beating the world’s economies, the International Energy Agency (IEA) reports that renewable energy (RE), especially in the electricity sector, continues to grow compared to other fossil energies. The IEA is optimistic that by 2025, renewable energy will become the largest source of electricity generation in the world by supplying one-third of the world’s electricity.

This promising development of renewable energy is in line with the spirit of the world in fulfilling the Paris Agreement to prevent the earth’s temperature from rising by more than 2oC. Seeing the trend of many countries in the world that have already made energy transitions from fossil energy to renewable energy, of course, this is increasingly opening up to start businesses in the RE sector.

The Institute for Essential Services Reform (IESR), in collaboration with Friedrich Naumann-Stiftung for Freedom (FNF), held a discussion entitled Financing Sustainable Energy Start-up to Promote Climate Justice to build networks for young people who are interested in developing RE businesses. 

Present as speakers were Khoiria Oktaviani, Communication Manager, Ministry of Energy and Mineral Resources, Aditya Mulya Pratama, Program Manager, New Energy Nexus, Yulia Safitri, Founder Pendulum, and Dodiet Prasetyo, CEO of Bumdesma Banyumas with Athariq Dias Muyasar, Vice President, Society of Renewable Energy (SRE) ITS as moderator of the discussion.

Khoiria Oktaviani revealed that Indonesia is committed to reducing greenhouse gases by 29% from business as usual (BAU) by 2030 and 41% with international support. Indonesia has an RE mix target of 23% in 2025. However, until today, it has only reached 9%.

She highlighted that the opportunity to develop a business in the RE field is numerous because Indonesia has majestic potential in RE. 

“Indonesia has the potential for RE up to 400 GW, but only 10 GW (2.5%) has been utilized,” she said. 

Khoiria invited the Indonesian youth generation to be involved in developing RE startups. She explained that since 2018, the Ministry of Energy and Mineral Resources has taken an active role as a hub for various stakeholders to encourage the application of RE.

“We provide access to ideas, innovations, pilot and semi-commercial projects, and connect startups with governments, associations, or funders or capacity building in the energy sector,” she explained.

She stated that currently, it is easier to gain business financing in the RE sector. If only, as Khoiria reminded, the startups ensure their products are not only innovative but also applicable to society. It will make the product stay sustainable fot it answers the issues in the community. Besides, she urged RE business pioneers to recognize the market and develop their products.

“Therefore, we do not stop at just one product. We should follow the pattern of community consumption. If it changes, then we must adapt as well. It is also important to promote our products and collaborate with various parties, ”Khoiria explained.

Dodiet experienced the importance of the collaboration to develop RE in his assisted village. As a provider of consolidation services for 25 Bumdes (village-owned enterprises)  in Banyumas, he felt that the networking in RE helped them to map the potential of river water by conducting a feasibility study for the development of RE electricity in the village.

Although Dodiet finds challenges in developing RE in the village, for example, such as laborious village contours or uneven sources of RE, he believes that rural communities can compete and innovate to be energy independent villages.

On the other hand, Aditya found that from his mentoring to RE startups, many startup projects are still ideas. Through New Energy Nexus, he assists them in moving forward by channeling startup groups with mentors, increasing their capacity in the fields of finance, promotion, or website development.

One of the assisted startups in New Energy Nexus, Yulia from Pendulum, shares her story when she built her business that focuses on wave power. It took her three years to make her idea into reality.

Yulia as an ITS graduate tries to solve the problem of bagan fishermen (light fishing)  in meeting their fuel needs while fishing on the sea. Bagan fishermen are fishermen who use nets and lights as a fishing instrument composed of bamboo, which is stuck into the seabed, while the upper container is equipped with a generator and gas to turn on the lights. The lamp is for drawing the fish into the net. These bagan fishermen need at least 4.5 kg of gas to keep the lights on. Besides the high price, they also have to queue to get the fuel. Moreover, they struggled to maintain electrical systems in the middle of the sea. 

The development of ocean wave energy will overcome their energy needs because it can be directly produced from the ocean waves. 

Yulia feels that nowadays, the opportunity is opening bigger for young people to start a startup because the ecosystem that supports the development of RE has been formed. The panelists agreed that to keep startups sustainable, it requires a binding agreement for everyone involved in building a startup as well as building a network with diversified expertise and policy support that benefits RE from the government.

Watch again the discussion here:

Presentation materials

201111 Bahan Paparan IESR_Climate Justice

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NEW ENERGY NEXUS - Explainer

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Webinar_IESR_Bumdesma Banyumas.pptx

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