Welcoming the Gigawatt Order of Solar Energy with Readiness of Qualified Human Resources

Jakarta, 20 April 2022One of the essential things in building a solar PV ecosystem in Indonesia is the readiness of its human resources. Measuring Indonesia’s readiness to enter the gigawatt order, the Institute for Essential Services Reform (IESR) in collaboration with the Ministry of Energy and Mineral Resources (ESDM) held a webinar entitled “Solar Energy Gigawatt Order, Is Indonesia Ready?” in the Indonesia Solar Summit 2022.

The General National Energy Plan (RUEN) targets a solar PV capacity of 6.5 GW in 2025. It opens up opportunities for high solar PV demand. RUEN also mandates the use of solar cells at a minimum of 30 percent of the roof area of ​​all government buildings, and 25 percent of the roof area of ​​luxury houses.

Anthony Utomo, Deputy Chairperson of the Indonesian Solar Energy Association (AESI), views that this opportunity needs to be met with the availability of local workers to provide, install, maintain and maintain solar PV. 

“AESI in the solarpreneur program collaborates with universities so that training (related to rooftop solar PV) is available to the community, the installation can be served properly, and in the end it can create new jobs,” explained Anthony.

Ratna Muntiowati, Marketing Director, TotalEnergies Renewables DG emphasized that seeing the development of solar PV getting more and more widespread in Southeast Asia, therefore, in the near future, the solar PV market will not only be in Indonesia. Moreover, she stated that the curriculum of renewable energy should be applied in all science majors.

“Tantangan yang kita hadapi dalam instalasi di atas bangunan ialah struktur bangunan tidak terlalu kuat. Hal ini bisa juga dimasukkan ke dalam kurikulum pendidikan.Bahkan saat ini, Standar Nasional Indonesia (SNI) untuk civil construction, sudah memasukkan ketentuan untuk instalasi solar panel. Ini yang bisa diimplementasikan oleh lembaga pendidikan. Sehingga saat ada instalasi atau desain pabrik baru (untuk PLTS atap), sudah diperhitungkan sesuai SNI,”ujarnya.

Daniel Pianka, Universitas Kristen Immanuel (UNKRIM), Yogyakarta sepakat bahwa pelatihan dan edukasi energi terbarukan memainkan peran penting dalam membangun SDM yang berkualitas. Berdasarkan pembelajaran dari pemasangan 10 kWp panel surya di universitasnya, Daniel mengungkapkan bahwa kemampuan SDM yang mumpuni dalam melakukan instalasi panel surya turut menentukan keawetan sistem panel surya yang digunakan.

“Instalasi yang belum baik misalnya menyambungkan kabel hanya dengan isolasi (perekat) akan membuat kabel mudah terbakar jika ada daya yang tinggi. Instalasi yang berkualitas akan membuat sistem surya panel bisa digunakan lebih lama,” tuturnya.

Lebih lanjut, Daniel menjelaskan UKRIM telah membangun program energi. Program ini bertujuan untuk melatih mahasiswa, yang dominan berasal dari daerah 3T (Terdepan, Terpencil dan Tertinggal) untuk menjadi teknisi, melakukan instalasi yang rumit dan merawat PLTS.

“Program ini diharapkan mampu menghasilkan SDM yang terlatih dan termotivasi untuk terjun dalam sektor energi terbarukan, menciptakan banyak proyek energi berkelanjutan, gaya hidup yang lebih baik dan emisi karbon yang rendah,” tukasnya.

Di sisi lain, Eng Purnomo Sejati, Kepala SMK Ora et Labora, BSD menuturkan pihaknya senantiasa beradaptasi terhadap dinamika sektor energi di Indonesia. Semula, sekolahnya dirancang untuk memenuhi kebutuhan SDM pembangunan PLTU 35 GW. Namun, penyesuaian target baru terkait energi terbarukan maupun rencana moratorium PLTU, mendorong lembaga pendidikan yang ia pimpin bertransformasi menuju energi terbarukan.

“Sejak tahun lalu, kami bermanuver untuk membuka area lain seperti energi terbarukan dan surya. Kami sudah melakukan penetrasi dan bermitra dengan perusahaan terkait. Kami juga ingin mengembangkan kendaraan listrik, industrial internet of things (IIOT), dan perawatan gedung dan fasilitas. Bidang ini kami lihat yang akan sustain ke depan,” papar Purnomo.***

“The challenge we often face is the improper rooftop structure that is weak for solar PV installation. This issue can also be included in the education curriculum. Now, the Indonesian National Standard (SNI) for civil construction has included provisions for the installation of solar panels. Educational institutions can take this opportunity to implement. So when there is an installation or a new factory design (for rooftop solar PV), it has been calculated according to SNI,” she said.

Daniel Pianka, Immanuel Christian University (UNKRIM), Yogyakarta agreed that training and education on renewable energy play a significant role in shaping the quality of human resources. Based on lessons learned from the installation of 10 kWp solar panels at his university, Daniel revealed that the ability of qualified human resources to install solar panels also determines the durability of the solar panel system used.

“Improper installation, for example connecting cables only with adhesive tape will lead to burning cable, as comes the high power. A quality installation will make the solar panel system last longer, “he said.

Furthermore, Daniel explained that UKRIM had built an energy program. This program aims to train students, who predominantly come from 3T areas (frontier, remote, and left behind area) to become technicians, perform complex installations and maintain solar PV.

“This program is expected to produce trained and motivated human resources to engage in the renewable energy sector, creating many sustainable energy projects, better lifestyles, and low carbon emissions,” he said.

On the other hand, Eng Purnomo Sejati, Principal of Ora et Labora Vocational School, BSD said that his party always adapts to the dynamics of the energy sector in Indonesia. Initially, the school was designed to meet the human resource needs of the 35 GW coal-fired power plants construction. However, the adjustment of new targets related to renewable energy, as well as, the plan for a PLTU moratorium, has encouraged the educational institutions he leads to transform into renewable energy.

“Since last year, we have maneuvered to open up other areas such as renewable energy and solar. We have penetrated and partnered with related companies. We also want to develop electric vehicles, industrial internet of things (IIOT), and maintenance of buildings and facilities. We look at this field that will be sustainable in the future, “said Purnomo.

The Russia-Ukraine Conflict and Its Impact on Indonesia’s Energy Sector

Jakarta, April 14, 2022 – The military conflict involving Russia and Ukraine is still ongoing. A number of direct and indirect impacts have begun to be felt by a number of countries, especially European countries because Russia is one of the main suppliers of gas and oil for a number of European countries.

Russia’s political attitude which continues to carry out military action has put the ‘customers’ of Russian oil and gas in a dilemma. If they continue to buy oil and gas from Russia, they are indirectly contributing to the financing of the war. If they don’t buy the oil and gas, their energy security is threatened. Gas and oil currently available have also increased in price, which means higher costs.

Will the Russia-Ukraine war situation have an impact on Indonesia? The Clean, Affordable, and Secure Energy for Southeast Asia (CASE) project held a public discussion entitled “The Geopolitics of Energy Transition” to examine the impact of the Russia-Ukraine war on the global energy system and lessons learned for Indonesia’s energy transition.

Fabian Hein, analyst of energy statistics and scenarios, Agora Energiewende explained that currently European Union countries such as Germany, are trying to reduce dependency on fossil energy, especially gas.

“There are two approaches to dealing with this crisis. The first is a short-term approach by replacing gas with coal and oil. Second is a long-term strategic plan by increasing the capacity of renewable energy in the energy system,” Fabian explained.

Dependence on fossil energy does not only occur in Germany, or the European Union countries. Indonesia also has a large dependence on fossil energy for both electricity generation and fuel for the transportation sector.

Widhyawan Prawiraatmadja, a lecturer at SBM ITB, warned Indonesia to be careful in viewing and responding to this geopolitical issue.

“The issue of the current energy crisis is not only an imbalance between supply-demand, but there are other factors, namely war, so that energy commodity prices fluctuate and in the Indonesian context the government is in a difficult choice between providing more subsidies or increasing energy prices such as fuel,” Widhyawan explained. .

The choice of the Indonesian government to maintain the share of fossil energy and even provide subsidies through various policies is increasingly irrelevant in these times. The Executive Director of the Institute for Essential Services Reform, Fabby Tumiwa, stated that the lesson that can be drawn from the impact of the Russia-Ukraine conflict mainly on European countries is that dependence on one commodity is a threat to the energy security of a region.

“The IEA also criticized that European countries failed to implement the first principle of energy security, namely supply variation. Apart from depending on one type of commodity, Europe is also very dependent on one country as a supplier, this is vulnerable to the security of energy supply there,” he said.

Fabby continued, that the Russia-Ukraine conflict had a significant global impact on energy development. Renewable energy is more resilient in terms of price and supply due to its local nature. So developing renewable energy in Indonesia is increasingly becoming a necessity in the future to ensure energy security.

Solar Power Plants Technology is Increasingly Advanced and Competitive to Drive Indonesia’s Use of Solar Energy

Jakarta, 21 April 2022 – The Indonesian government has set a national strategic project to install 3.6 GW of rooftop solar power plants by 2025 to achieve the renewable energy mix target of 23%. The availability of solar power plants or pembangkit listrik tenaga surya (PLTS) technology, affordable solar power plant financing mechanisms, and the development of rooftop solar power plants, floating solar power plants, and large-scale solar power plants will support the achievement of these targets.

The average selling price of solar modules has decreased significantly from around US$ 4.12/W in 2008 to US$ 0.17/W in 2020. The International Energy Agency reports that solar power plants are currently the cheapest source of electricity in most countries. Even in Indonesia, the results of solar power plants auctions in For example, in Indonesia, the last solar power plants auction results resulted in electricity costs of USD 0.04/kWh, lower than the average coal power plant, which costs USD 0.05-0.07/kWh.

IESR, in collaboration with CASE, GIZ, and the Ministry of National Development Planning/Bappenas, held a Solar Energy Technologies workshop attended by several experts, namely Professor Martin Green, Scientia Professor at the University of New South Wales, Sydney, and Director of the Australian Center for Advanced Photovoltaics; Noor Titan Putri Hartono, Postdoctoral Researcher at Helmholtz-Zentrum Berlin Department of Active Materials and Stable Perovskite Solar; Beny Adi Purwanto Representative from the Directorate General of Metal, Machinery, Transportation Equipment and Electronics Industry, Ministry of Industry of the Republic of Indonesia; and Jen Tan, CEO of Sembcorp Energy for Indonesia.

Accelerating climate crisis mitigation actions is very important for sustainable energy development. Prof. Martin-Green explained that the choice of renewable energy technology, especially solar energy, is available to be developed to achieve Indonesia’s decarbonization.

“Solar cell technology is developing very rapidly. So if we want to start building solar power plant component factories, there are recommendations for solar cell technology according to the industry in Indonesia. However, the main challenge is choosing where the solar power plants will be installed, which requires high radiation to be absorbed by the solar panels,” said Martin.

In addition to silicon as one of the main materials for solar cells, Perovskite Solar Cells (PSC) is a promising choice for PV mini-grid technology. Noor Titana revealed that as the second-largest tin producer, Indonesia has the opportunity to develop Perovskite Solar Cells (PSC). PSCs have high energy absorption efficiency above 20%, for example, Perovskite, CIGS, and CdTe. Interest in using PSCs continues to grow due to their more competitive nature and costs. Techno-economic analysis in 2017 showed that PSC is cheaper, assuming the same degradation rate as crystalline silicon with a lifespan of up to 20-25 years.

Noor said some of the challenges faced in the development of PSCs.

“Some of the challenges to realizing PSCs are that perovskite is unstable and has a short lifespan compared to silicon. In addition, high-performance PSCs contain toxic and water-soluble wastes. However, as the 2nd largest tin producer, Indonesia still has the opportunity to develop PSC in the future,” Noor added.

In addition to technology, affordable PV mini-grid financing mechanisms are also developing. However, limited financing options often hinder public interest in installing rooftop solar power plants. Various parties are trying to provide access to communal solar power plant funding to overcome this.

“The trend in solar modules is also the most widely used domestically with a capacity below 450 Wp. On the other hand, solar power plants require solar modules above 500 Wp with higher efficiency solar cells (M6 type solar cells). The production of solar modules with capacities above 500 Wp requires the most up-to-date equipment, so incentives and market guarantees are needed for investment. In the short term, solar module capacity below 450 Wp will be maximized for small-scale solar power plants projects (de-dieselization) and rooftop solar power plants,” said Beny Adi Purwanto, Representative from the Indonesian Ministry of Industry.

In addition to rooftop PV mini-grid, Indonesia needs the development of large-scale PV mini-grid or floating PV mini-grid to achieve the renewable energy mix target by 2025. Furthermore, solar energy investment opportunities at various scales need to encourage more competitive PV mini-grid and improvements in financing quality. Technological innovations also continue to enable PV mini-grid to produce higher energy efficiency. Jen Tan stated this.

“For future sustainability, several important factors need to be considered when installing large-scale solar power plants. One of them is that we must care about the environment because solar power plants could be placed in solar fields or local water catchment areas filled with flora and fauna. In managing large-scale PV mini-grid, tools are also needed for the monitoring process, one of which is related to data acquisition. An incumbent metering service is required through an application programming interface (API) that includes map navigation, global asset display, alarm aggregation, and sustainability statistics,” said Jen Tan.***

Showing Leadership in G20, Indonesia Needs to Increase Solar PV Development

JAKARTA, 20 April 2022 – Carrying the energy transition as the main topic of Indonesia’s presidency at the G20, Indonesia needs to show its leadership in pursuing a more massive renewable energy capacity, especially solar energy. Indonesia can also learn from the experiences of the G20 countries in encouraging the growth of solar energy and accelerating the spread of solar energy.

The Ministry of Energy and Mineral Resources of the Republic of Indonesia and the Institute of Essential Services Reform (IESR), in collaboration with BloombergNEF and the International Solar Alliance (ISA), held a workshop to take lessons from G20 countries in encouraging the application of solar power relevant to developing countries. The workshops were also not limited to policy frameworks, fiscal and financial instruments, market readiness, and human resource development.

Ali Izadi – Najafabadi, Head of Research APAC, BloombergNEF, expressed his optimism that Indonesia has the potential to accelerate the energy transition.

“Some analysts say Indonesia lags behind other G20 countries in renewable energy, especially solar power, but I believe Indonesia can catch up. Indonesia has many opportunities to reform policies or special regulatory measures focusing on improving the energy economy and the environment,” said Ali.

In line with Ali, Rohit Garde, Senior Associate for Solar Energy Financing at BloombergNEF, said that BloombergNEF measures state policies in the electricity sector and carbon policies. For example, Germany and England have 84% and 83%, respectively, which indicates that both countries have good procedures for PV mini-grid. Meanwhile, the Levelized Cost of Electricity (LCOE) of PV mini-grid in India, China, UAE, and Chile is the lowest due to high levels of solar radiation and large-scale PV mini-grid development. Meanwhile, the LCOE of PV mini-grid in Indonesia is the highest due to its small scale and high cost of capital.

“Indonesia must increase its ambitions by revising regulations and removing development barriers,” added Rohit Garde.

One of the important issues in Indonesia’s leadership in the G20 is the energy transition. Yudo Dwinanda Priadi, Expert Staff to the Minister for Strategic Planning at the Ministry of Energy and Mineral Resources, said that the power plant plan already has an Electric Power Supply Business Plan Electricity Supply Business Plan (RUPTL) 2021-2030. A greener RUPTL is a cornerstone of achieving zero carbon by 2060.

“Solar Power Plants (PLTS) have the largest optimization in Indonesia and will reach 4,680 MW by 2030. Therefore, solar energy has the most abundant potential. In addition, the cost continues to decline, and the rapid development of PV mini-grid technology has made solar power generation a priority. The development of rooftop PV mini-grid also includes better implementation and incentives for people who want to install rooftop PV mini-grid. The government has issued the Minister of Energy and Mineral Resources No.26/2021, and the rooftop PV roadmap is in the process as a National Strategic Program (PSN),” said Yudo.

On the other hand, Fabby Tumiwa, Executive Director of IESR and General Chair of the Indonesian Solar Energy Association (AESI), said solar energy development in Indonesia is relatively slow with several obstacles.

“In 2021, only 0.001 percent of its technical potential will be implemented. However, rooftop solar power generation has continued to increase in the last three years, and that is due to the support from government regulations. RUPTL 2021 is a signal to increase five times to 4.7 MW, and there are also other projects such as exports to Singapore, Riau Islands, and Batam. Therefore, this project has the potential for massive solar energy development,” said Fabby Tumiwa.

Fabby also added several reasons for the obstacles to the energy transition in Indonesia, such as the Domestic Component Level (TKDN).

“Problems in project development such as land and regulations on the Domestic Component Level (TKDN); existing projects require solar module devices from 40% to 60%, and this has not been met by industry in Indonesia and has not received financial assistance from the state; negotiations are quite long while other countries tend to be faster. The Vietnamese government has strong political will and commitment, regulation, implementation, and incentives for tariff policies related to net metering. What is also important is the policy certainty and transmission of the State Electricity Company (PLN),” said Fabby.

Kanaka Arifcandang Winoto, the Senior Business Developer from Mainstream Renewable Power, explained how Indonesia needs to accelerate to meet the renewable energy mix target of 23% in 2025.

“Indonesia is the largest energy consumer in ASEAN, accounting for almost 40 percent of ASEAN’s total energy use. With the significant potential of solar, geothermal, wind and hydropower resources, Indonesia is well-positioned to develop in a low-carbon energy system,” he said.

According to Kanaka, Indonesia is a key player in achieving 1.5℃, so cooperation with all stakeholders is needed to identify a national roadmap for realizing economic growth and climate security.

Dyah Roro Esti, Member of the DPR, Commission VII, explained that his party is open to public input, especially on renewable energy policies that are being discussed in the DPR RI.

 “Data from DEN, Indonesia must optimize 2.5 GW, and each area has potential, both solar and wind. Therefore, it is necessary to have the motivation and political will to cooperate with local governments in optimizing and realizing this potential. The House of Representatives (DPR) is working on the New Renewable Energy (EBT) Bill and will be open to suggestions. However, the EBT Bill (RUU) is still under discussion,” explained Dyah Roro.

On the other hand, regarding policies at the regional level, Ngurah Pasek, Head of the Sub-Division of Environment and Regional Development, Bappedalitbang Bali Province, added that Bali has implemented Perda 29 of 2020 concerning the General Plan of Regional Energy (RUED) whose derivative is Pergub 45 of 2019 about Bali Clean Energy.

“Installation to regencies and cities in Bali Province, which currently has reached 8.5 MW. The target of the Bali Provincial Government regarding budget refocusing is how the installation of solar rooftop solar panels in offices or companies can run well,” he said.

The development of rooftop solar power plants is also happening in Central Java. Nathan Setyawan, Sub-Coordinator of Natural Resources and Environment, Central Java Regional Development Planning Agency, explained some progress in supporting renewable energy in his area.

“Central Java is the only province that has developed and integrated economic recovery and the use of renewable energy. In 2021, we will encourage not only provincial governments but also regents and mayors and the private sector to implement rooftop solar power plants.”

He emphasized that increasing public awareness and support from the Ministry of Energy and Mineral Resources would encourage the use of communal solar power plants in remote areas. In addition, Nathan hopes that the availability of affordable clean energy supporting technology will help develop the local renewable energy industry.

“Hopefully, there will be a mini silicon valley to develop new renewable energy-oriented industries,” he added.***

Looking for Funding Schemes and Readiness of Solar PV Project Development

Workshop Financing Solar Energy - Indonesia Solar Summit

Jakarta, 20 April 2022– The issue of financing is still one of the big obstacles in developing renewable energy such as rooftop solar power plants in Indonesia. There is a large gap between the government’s agenda to accelerate solar penetration and access to funding for both developer and household projects. Difficult access to funding can also be a challenge for the development of solar energy in Indonesia.

Enthusiasm to develop solar energy is growing rapidly in Indonesia. At the Indonesia Solar Summit 2022, at least 31 parties are committed to installing solar PV with a capacity of up to 2,300 MW. The availability of cheap financing mechanisms can support the achievement of these commitments.

Elvi Nasution, Director of Solutions Initiatives, explained that there is one financing scheme that is not widely available, namely project financing. Project financing is limited financing of a new project that will be carried out through the establishment of a new company (separate from the existing company). The project finance provider can be a bank or a special financial institution (special mission vehicle).

“Compared to Malaysia, Thailand and the Philippines, project financing in Indonesia is relatively expensive. The contributing factors include government guarantees, the amount of debt, and the structure of the electricity business which is currently monopolized by PLN, so developers often encounter difficulties because there is only one offtaker in Indonesia,” explained Elvi.

Jagjeet Shareen, Assistant Director of General International Solar Alliance, in the same forum saw the importance of the role of financial institutions such as banks to participate in accelerating solar penetration.

“Providing training to bank employees is important to make them understand the character of solar business and calculate the financing risk for it. The cost of installing solar PV  may still be relatively expensive, but it’s actually not that expensive because the cost of solar continues to decline,” he said.

Jagjeet shared India’s experience in providing massive training to bank employees which had a significant impact because the bank then became more familiar with PV rooftop projects, their risks and development opportunities.

Both Elvi and Jagjeet agreed that in order to accelerate the penetration of PV rooftop, synergies from various parties, such as financial institutions, need to study the financing structure based on the conditions and potential in each location.

PLN as the single offtaker in Indonesia also needs to transform its business model so that it is relevant to the current situation and in the future where renewable energy will have a larger portion. Especially for solar development, PLN needs to make regular auction plans and finalize the development plan (pipeline). Good and clear project planning will increase the confidence of investors and financial institutions to fund a PV rooftop project for instance.

Prospective users of rooftop solar power plants are more or less aware of the situation of developing solar energy in Indonesia, which still needs a lot of improvement. Erwin Kasim, one of the participants of the Financing Solar Energy Indonesia Solar Summit 2022 workshop, asked about the minimum subsidy for initial installation costs for households who want to install rooftop PV and what schemes can be considered to relieve potential PV rooftop customers.

The bank, as the party that is expected to provide a solution to this initial cost problem, emphasizes the government’s role in making policies that are friendly to all parties in the development of this rooftop solar power plant.

“The use of solar requires government intervention to create financing schemes, protect banks from repayment failures, and incentives for customers,” said a representative of Bank Rakyat Indonesia (BRI) who attended the same forum.

The government’s role in issuing a customer-friendly rooftop PV  financing policy is highly expected. Because at this time, financing through the bank occurs because of a business-to-business agreement between the developer and the bank without any special policy from the government that regulates the financing of rooftop solar power plants by the bank.

Central Java Provincial Government Boosts Utilization of Rooftop PLTS in Local Government Environments

JAKARTA – Located in the Equator area with the sun shining almost all year round, the utilization of solar energy in Indonesia is not very encouraging. Having solar energy potential of up to 3 – 20 GW, Indonesia has only utilized about 400 MW of solar energy based on land suitability. At the same time, the Government of Indonesia is racing against time to increase its renewable energy mix to achieve the target of 23% renewable energy in the national energy mix by 2025.

Several steps to fulfill the renewable energy mix target of 23% by 2025 have been carried out, such as Regulation No. 26 of 2021 concerning Rooftop Solar Power Plants (PLTS) issued by the Ministry of Energy and Mineral Resources (ESDM). This regulation emphasizes that rooftop solar power plants can be a strategy for increasing the national energy mix. Local governments have a strategic role in accelerating renewable energy by making strategic policies to develop renewable energy in their regions. As the first solar province in Indonesia, Central Java recorded a renewable energy mix of 13.38% in 2021. The Central Java provincial government also encourages the expansion of rooftop solar power plants (PLTS) within the local government as a commitment from the Central Java Solar Province initiative, cooperation between the Department of Energy and Mineral Resources Central Java and IESR.

In his remarks by the Director-General of Bina Bangda, Ministry of Home Affairs, Teguh Setyabudi, delivered by the Director of SUPD I, Ministry of Home Affairs, Edison Siagian, said regional development is part of national development. Specifically, regional energy transition policies are also the authority of local governments in setting standards and achievements targets. However, until now, the provincial government’s authority is still very limited, and the steps in developing renewable energy are also limited.

“The Central Java Provincial Government’s steps in continuing to develop programs and activities should be appreciated. Especially in the limited authority possessed by the provincial government, Central Java has involved elements of the regional secretary who have the function of coordinating, overseeing the implementation, and reducing the role of energy conservation across various OPDs to continue to innovate,” he said in the ‘Implementation of Rooftop Solar Power Plants in Local Government Environments’ on April 13, 2022, which was organized by the Ministry of Energy and Mineral Resources (ESDM) in collaboration with the Institute for Essential Services Reform (IESR).

Various resource persons were also presented to see how local government learning can participate in the implementation of renewable energy. Ir. Tedjo Prabowo, a representative of the Bappeda of the Central Java Provincial Government, revealed that the provincial government’s commitment had been stated in the 2018 to 2050 Regional Regulation RUED with a target of a new renewable energy mix 2025 is expected to reach 21.32%. “The challenge in achieving the EBT target is still the same, namely easier access to fossil energy. And as stated by the Ministry of Home Affairs, the regional authority in the administration of government affairs in the energy and mineral resources sector is still limited. However, the commitment to realizing energy sovereignty will continue to be supported by all sectors, including the Environment, Private and Community Services,” he said.

Marlistya Citraningrum, Manager of Access to Sustainable Energy at IESR, also said that through the RUED, a circular letter from the governor of Central Java and a circular letter from the regional secretary was issued to implement independently in the Regent’s office or DPRD for the development of PLTS in the social and productive sectors for green economic recovery. “Although there are challenges in the limited government budget, innovation is needed using various financing schemes such as leasing, ESCO, and third party financing (installment schemes). In line with this, the priority of development in their respective regions and the understanding of policymakers within the local government regarding rooftop solar power plants must be improved, “said Citra.

 

The use of solar energy mentioned by Citra regarding its application to rooftop PV mini-grid was also mentioned by Hevearita Rahayu, Deputy Mayor of Semarang. He has also started the first step as a commitment to new and renewable energy in the city of Semarang. “In 2019, through Bappeda, the Semarang City Government has conducted a study on the potential for RE development and became Perda No. 6 of 2022, which later became the vision of the RPJMD for 2021-2026. In 2020 there will also be a grant process from the Ministry of Energy and Mineral Resources, at which time we will also construct a new parking building to place 75kWp Solar PV. The result is savings in electricity bills of up to nearly 60 percent. The submission of grants by MEMR will also continue in 2021 to implement the RPJMN 2021-2026 priority program instructions. In the 2022 RPJMD, Semarang is currently compiling a feasibility study for solar panels to be built at city halls, offices, and schools. The target for 2023-2026 will be to carry out physical development in stages in all Semarang government offices,” he said.

 

The Head of the Central Java ESDM Office, Sujarwanto, also gave his opinion on energy policy and a joint commitment. “There needs to be enthusiasm to reduce the rate of CO2 emissions or build without excess carbon emissions. Central Java has had a commitment to the Regional Action Plan for Greenhouse Gas Control since five years ago. Therefore, government institutions must be examples of low carbon development. Together with a stronger commitment to the global, Indonesia is committed to the energy sector. Many districts/cities have budgeted for this program. This year there will be a budget refocusing. It is hoped that the regional budget will prioritize solar energy this year because the control of Covid-19 has improved. The Department of Energy and Mineral Resources is ready to provide assistance starting from choosing technology, managing energy in the office, and a consultation room with IESR,” he said.

Support for the application of rooftop solar power plants must continue as well as information on policies and implementation in Central Java Province will always be echoed. So that if all parties can collaborate well, then the implementation of the energy transition, which is the national development mandate, will be able to be implemented and benefit the people of Central Java. Furthermore, Central Java has contributed significantly to achieving the national renewable energy target.

Accelerate Decarbonization for a Sustainable Future

Makassar, 22 March 2022 – Accelerating the use of clean energy is a fundamental point in ensuring the future of the economy and other sectors is maintained in the context of sustainability. This was raised in the Sustainability Forum held by PT Vale Indonesia Tbk on Tuesday (22/03). The activity raised the theme “Decarbonization for a Sustainable Future.”

In this activity, the Executive Director of the Institute for Essential Services Reform (IESR), Fabby Tumiwa, said that the transition to fossil-based energy is necessary for the ambition of net-zero emission (NZE) can become a necessity, with an estimated realization in 2050. He emphasized that the step, which is often called decarbonization, must be in line with the target of the Paris Agreement, which is to limit the increase in the earth’s temperature to 1.5 degrees Celsius. If there is no planned decarbonization effort, it is projected that the energy sector will become the largest emitter in Indonesia by 2030 and make it difficult to achieve the Paris Agreement targets.

“In 2022, the government and all stakeholders must strive to increase the use of renewable energy and promote energy efficiency in buildings and industry. By 2025, the government must achieve the target of 23% of the renewable energy mix, and after that, it must pursue the energy sector’s emissions to reach their peak before 2030. So indeed, there must be an acceleration of the transition to clean energy with decarbonization. In the long term, this will have a multiplier effect on the competitiveness of our economy so that it is more optimal,” he said.

Fabby views South Sulawesi as one of the regions in the country that is already in an energy transition system with a significant mix of renewable energy. This is indicated by constructing renewable energy-based plants such as wind, water, and solar power. As a result, the clean energy mix is already at around 30% of the installed capacity in South Sulawesi. This achievement is considered inseparable from the collaboration of all elements, which have begun to be relatively aggressive in implementing decarbonization steps in the production process, including PT Vale Indonesia Tbk.

“I think this is excellent. PT Vale itself already has a 33 percent decarbonization roadmap for 2030 and targets net-zero in 2050. But for the 2050 stage, there is still a need for further assessments,” said Fabby.

On the same occasion, the Director-General of New Renewable Energy and Energy Conversion (EBTKE) of the Ministry of Energy and Mineral Resources, Dadan Kusdiana, said that the government had prepared a roadmap for the energy transition to carbon-neutral, which is projected to reach the optimal point in 2060.

“We are targeting energy decarbonization towards Net Zero Emission 2060 or even faster. This is because the new renewable energy mix (EBT) was already fully achieved, reducing 1,562 million tons of CO2 emissions,” he said.

To achieve the target of the EBT mix, Dadan explained, there are several acceleration efforts carried out by the government, starting from the completion of the Draft Presidential Regulation on EBT Prices, the application of the ESDM Regulation of PLTS Roof No. 26 of 2021, then mandatory biofuels to the provision of fiscal and non-fiscal incentives for NRE.

“Then, of course, the ease of licensing for the EBT segment to encourage demand for electrical energy in several primary activities even on a personal scale in the community,” said Dadan.

Meanwhile, President Director of PT Vale Indonesia, Febriany Eddy, explained the company, which operates in the mining sector, has also developed a road map to reduce carbon emissions for scopes 1 and 2 to a third in 2030 and net zero in 2050.

“For the plan for a new smelter in Central Sulawesi, we, with partners from China, have committed to using LNG instead of coal for power generation there,” he said.

The Governor of South Sulawesi, Andi Sudirman, through the Governor’s Expert Staff for Government Affairs, Andi Mappatoba, conveyed that the existence of PT Vale consistently practices sustainability and efforts to reduce the greenhouse effect through decarbonization steps helped the government in realizing low-carbon development.

“PT Vale has tried to contribute to the environmental, social, and economic sustainability of South Sulawesi with all its sustainability measures. In the future, hopefully, we will always be partners with the provincial government in developing the economy and carbon-neutral targets as announced by the government.”

Financier’s Club: Financing Solar Energy in Indonesia – Discusses Solar Energy Financing Issues in Energy Transition

Jakarta, 18 March 2022– The financing of energy transition in Indonesia, especially in the Solar PV Power Plant, needs to be mobilized immediately. The technical potential of solar energy in Indonesia is enormous. Based on a study from the Institute for Essential Services Reform (IESR), the potential of solar energy in Indonesia is up to 20,000 GWp waiting to be harvested so that it can achieve a carbon-neutral target in 2060 or sooner, according to the government’s commitment. Financial institutions can capture various Solar PV Power Plant financing opportunities by identifying investments and risks. Identification of investments and stakes in Solar PV Power Plant financing, the obstacles financial institutions face in providing Solar PV Power Plant financing schemes, and innovative financing practices are discussed in the Financier’s Club: Financing Solar Energy in Indonesia. This activity was held in collaboration with the Ministry of Energy and Mineral Resources with IESR as a pre-event for the Indonesia Solar Summit (ISS) held in Jakarta.  

Opening the discussion, Sahid Djunaidi, Secretary-General of the Directorate General of Renewable Energy and Energy Conservation (DG EBTKE), emphasized that the emission reduction target can only be achieved if the country makes an energy transition as a fundamental step. The vast potential and short construction period make solar energy a mainstay in providing renewable energy in Indonesia. Several banks have provided financing schemes for rooftop solar power plants, but financing innovation is still needed to encourage more massive rooftop solar power plants. Currently, the Ministry of Energy and Mineral Resources (MEMR), in collaboration with UNDP, is conducting an incentive grant program for rooftop solar PV to support the development of rooftop solar PV in Indonesia.

“The challenge in developing solar power plants is in the financial sector because of the high risk, not many markets, and the lack of financing guarantees,” he said.

Coordination in policymaking and cooperation between parties is essential to achieving sustainable finance and climate targets. This was stated by Agus Edy Siregar, Deputy Commissioner for Financial System Stability of the Financial Services Authority (OJK). 

“The climate change mitigation agenda requires large funds and cannot be met only from the state budget, but also requires financing from the financial sector,” he added.

Edy said that OJK had compiled several documents on investment in several sustainable sectors, including a green taxonomy, carbon market preparation, and banking reporting related to the financed sector. It is hoped that there will be incentives and disincentive mechanisms in the finance and financing sector.

In addition, Enrico Hariantoro, Head of the OJK Integrated Financial Services Sector Policy Group, said that OJK has been supporting banking instrumentation for a long time to support sustainability financing (POJK 51/2017 POJK 60/2017). According to him, there are several risk aspects that banks are very concerned about, including technical understanding, how to guard the ecosystem, and the payback period. Furthermore, he argues that financing schemes for Solar PV Power Plant could be more varied and innovative, for example, combining elements from facilities, philanthropy, technical, and becoming one with KPR so that it is included in customers’ comfort level bankability of financial providers. OJK always encourages the acceleration of Solar PV Power Plant financing through regulation, of course, by considering the feasibility study (FS).

On the other hand, Adi Budiarso, Head of the Financial Sector Policy Center (PKSK) Fiscal Policy Agency (BKF), said that there is an Energy Transition Mechanism (ETM) to answer the challenges of the energy transition with the primary goal of shortening the economic life of the PLTU Clean Energy Facility (CEF), get additional greenhouse gas emission reductions by building a renewable energy Carbon Recycling Fund (CRF) to achieve Nationally Determined Contribution (NDC), and gain access to cheaper funding. 

BKF has implemented tax incentives for investments such as tax holidays, tax allowances, PPh DTP, VAT exemptions, import duty exemptions, tax and customs facilities, and exemptions from collecting PPh 22. According to Adi, the Indonesian financial system is ready to implement sustainable finance, supported by green taxonomy. In addition, BKF has conducted mapping with nine universities, associations, and stakeholders. Adi said that Regional Banks had the opportunity to help accelerate the Solar PV Power Plant development. Renewable energy has the potential to create electricity supply independently. The existence of BPR, the regional company, can be one of the doors for the entry of Solar PV Power Plant financing.

Edwin Syahruzad, President Director of PT Sarana Multi Infrastruktur (SMI), who was present on the same occasion, informed the participants that PT SMI has taken strategic steps in financing Solar PV Power Plant. In addition, PT SMI has provided financing for all types of renewable energy, such as hydroelectric power, geothermal power plants, wind power plants, solar PV power plant, and biomass. However, he said that PT SMI’s commitment to the Solar PV Power Plant project depends on the pipeline project. 

“The Solar PV Power Plant pipeline is more derived from rooftop Solar PV, and I think this is a potential that must be worked on. However, the approach is slightly different from on-grid  Solar PV Power Plants because rooftop  Solar PV comes from contracts with building owners where Solar PV Power Plants are installed. The building owners can come from outside of the electricity sector. The revenue model is also quite different. It is the domain of banks with building owner customers who can expand their business opportunities using rooftop solar PV,” said Edwin.

IPP Track: Support Private Sector Usage of Solar Power Plants to Achieve Paris Agreement Targets

Jakarta, 15 March 2022 – Indonesia has potential natural resources that can be allocated to develop solar power plants. Besides, solar power plants as renewable energy are feasible to create and reasonably competitive in price; hence solar might support the achievement of Indonesia’s renewable energy mix and emission reduction targets.   

Ahead of the Indonesia Solar Summit (2022), the Institute for Essential Services Reform (IESR), together with the Ministry of Energy and Mineral Resources (KESDM), held four pre-events, one of them was IPP Track, which was held on 15 March.

Executive Director of IESR Fabby Tumiwa said ISS was aimed to discuss more the contribution of renewable energy acceleration, especially solar, for green jobs and the means to achieve the 20-gigawatt target through pipeline projects that will have a positive impact on green economic recovery post-pandemic.

Ida Nuryatin Finahari, Directorate of Electricity Business Development KESDM, said that the government would commit to the Paris Agreement targets. One of the strategies to implement is by enacting the National Electricity Supply Business Plan (RUPTL) 2021-2030.

“The inclination toward lower price and faster duration of its establishment, solar power plant target in RUPTL were added approximately 4,7 gigawatt,” said Ida.

Furthermore, Ida said the target of 51,6% renewable energy plant capacity in 2030 in RUPTL is higher than the National Electricity General Plan (RUKN).

In parallel, the Ministry of Maritime and Investment Affairs representative, Ridha Yasser, said that the renewable energy transition would be a global trend in the next few years. The government has prepared an Energy Transition Mechanism (ETM) to encourage a green technology-based economy and established green industry areas in North Kalimantan. These are the government’s response to market demand to exert sustainable energy in all productions.

“However, amid the trend of high demand for solar panels, solar panel fabrication in Indonesia is still experiencing problems. On the one hand, it must also compete with solar manufacturers abroad,” he said.

The IPP Track event also invited several independent electricity developers (IPP), holders of Business Licenses for Electric Power Providers for the Public Interest (IUPTLU), as well as industrial estate managers, both private and State-Owned Enterprises (BUMN), to the discussion, such as PT PLN, Akuo Energy, PT Cikarang Listrindo, PT Tunas Energi, PT Energi Prima Nusantara, PT Bitung Inti Cemerlang, etc.

In general, the privates stated that they had supported the use of renewable energy for their operationalization. However, the private sector still finds obstacles such as licensing, unpreparedness to use rooftop solar PV, the possibility of waste problems due to the usage of battery storage energy systems, and the unaffordable price of solar power plants in frontier, outermost, and least developed regions (3T).

“Things that need to be emphasized are the consistency of existing regulations and procurement…from the implementation side; there needs to be transparency. For the TKDN itself, we as a private group support it, but TKDN also needs to fact-check the field’s condition so that its requirement will not cause obstacles to the development solar power plants in Indonesia. Once the market is established, the domestic industry will emerge by itself,” said Komang from Akuo Energy.

As a group that will use a lot of energy in its operationalization, the industries need support from the government, especially in using renewable energy, from upstream to downstream. This also required achieving renewable energy targets as the government had planned.