Handling Air Pollution in Jakarta: The Role of Coal Power Plants Intervention Towards Early Retirement

Air pollution remains a problem in various regions. Although awareness of air pollution has increased, the urgency to find a solution has yet to become a priority. The impact is significant for everyone, including children as the most vulnerable group.

Co-founder of Nafas, Piotr Jakubowski, explained air pollution is significantly higher in the dry season than in the rainy season. This phenomenon occurs due to the connection between wind direction and pollution sources. According to a study conducted by the Center for Research on Energy and Clean Air (CREA), the seasonal changes exert a substantial  impact on air pollution. Piotr emphasized that air pollution has evolved into a daily challenge in Indonesia, thus prompting people to prioritize their health and contemplate systemic solutions for addressing air pollution issues.

“Currently, there are several categories of sources of pollution, such as coal-fired power plants (CFPPs), industry, transportation, logistics, land burning, and indiscriminate waste. The source of pollution depends on the urban activity itself, and the kind of impact it will have also depends on its geographical location. For example, the city of Bandung, which has cool air. However, due to its geographic basin position,  air pollution in Bandung is quite high. If the wind does not disperse the pollution, it can linger for a long time compared to Jakarta, which has a source of  sea wind,” said Piotr in a Twitter or X Space discussion entitled Tackle Air Pollution with Coal-fired Power Plant Intervention.

The lead analyst of CREA, Lauri Myllyvirta, said that based on a recent study titled “Health Benefits of Just Energy Transition and Coal Phase-out in Indonesia” conducted by CREA and IESR, coal-fired power plants (CFPPs) caused 10,500 deaths in Indonesia in 2022, with this number projected to soar to 180,000 by 2040 if coal plants continue to operate.

“Jakarta is one of the cities in Indonesia most affected by coal-fired power plants due to their proximity. During the dry season, the wind direction shifts from east to south, resulting in CFPPs in Cirebon, Cilacap, and other areas contributing to pollution in Jakarta. The air reaching  Jakarta is already polluted, and the emissions within Jakarta further compound the issues. There are chemical reactions between the pollutants, and this causes air pollution to increase,” said Lauri.

For this reason, according to Lauri, it is advisable to install emission control devices at the CFPP, enabling the Government to control the emissions they emit. Air pollutant emissions from coal-fired power plants are one of the causes of loss of life in Indonesia. In 2022, health costs associated with CFPP operation could reach USD 7.4 billion, equivalent to IDR 111.126 trillion.

Senior analyst of the Institute for Essential Services Reform (IESR), Raditya Yudha Wiranegara, mentioned that the power plants scattered around Jakarta significantly contribute to elevated pollution levels in the city. He pointed out that there are approximately eight CFPP situated in the vicinity of Jakarta, including CFPPs in the east of Jakarta (Suralaya CFPP, Lontar CFPP, Banten CFPP) and in the West (Cirebon 1 and 2 CFPPs, Batang CFPP, Cape Jati CFPP). Based on the CREA and IESR studies, several CFPPs have the most significant impact on health, as measured by the number of deaths caused and health costs.

“The five top coal-fired power plants (CFPPs) indicated the most significant impact on health, including the Central Java Power Plant in Batang,  Lontar CFPP, Cirebon 1 and 2 CFPPs, and Cilacap CFPP. These five CFPPs are integrated to the Java-Bali electricity network, which is currently oversupplied. While their retirement isn’t a problem to air pollution, there’s concern about network instability since most are in the West. It’s necessary to consider accelerating renewable energy, including solar PV construction, if they’re retired,” said Raditya.

Driving Solar Energy Towards Achieving an Energy Mix of 23% in 2025

Jakarta, July 26, 2023 – Solar energy must be accelerated to achieve a renewable energy mix of 23% by 2025 and reach net zero emissions by 2060 or earlier. Unfortunately, renewable energy had only made up approximately 12.3% of the national energy mix by 2022.

Director of Various New Energy and Renewable Energy, Directorate General of EBTKE, Ministry of Energy and Mineral Resources (ESDM) Andriah Feby Misna explained various programs are continuously being encouraged to utilize solar energy. Whether through a large-scale solar power plant (solar PV) program, floating solar PV, or rooftop solar PV. From a regulatory standpoint, said Feby, the revision to Minister of Energy and Mineral Resources Regulation No. 26 of 2021 concerning Rooftop Solar PV Connected to the Electric Power Network Holders of Business Licenses to Provide Electricity for Public Interest (IUPTLU) has been harmonized by the Ministry of Law and Human Rights.

“We have harmonized the revised ESDM Regulation 26/2021 with the Ministry of Law and Human Rights. Hopefully, it can be enacted shortly. Some of the content that has been changed in the revision of the Minister of Energy and Mineral Resources 26/2021 includes the provisions on the capacity that may be installed; in this revision, we do not limit the capacity they can install but must follow the existing quota. So as long as the quota exists, regardless of capacity demand, it must be met according to the existing quota,” said Feby in a panel discussion entitled “Solar regulations, implementation, plans” at the Indonesia Solar Summit event organized by the Ministry of Energy and Mineral Resources together with IESR.

In addition, Feby mentioned, the revision of the ESDM Permen also regulates changes related to exports and imports. Considering that currently, PLN is experiencing a surplus and PLN’s limitations in being able to accept intermittent generators, for this reason, there is no change to this Ministerial Regulation for exports. It remains connected to PLN, but when there are exports, this does not count as a reduction in consumer bills.

“With no export-import recognition in the revised ESDM Permen 26/2021, it is not interesting, but at least the current regulation opens an opportunity for the industry to be interested in installing rooftop PLTS because this is indeed market demand. In the future, the revision of this Ministerial Regulation will be reviewed again and can open up exports and imports again,” said Feby.

Member of the National Energy Council, Herman Darnel Ibrahim, criticized the contents of the revised ESDM Ministerial Regulation 26/2021 which removed the rules for exporting electricity to PLN. According to Herman, this shows Indonesia’s step towards the world where it will not develop a rooftop PLTS, even though the potential is enormous and there is no land lease.

“The projection is that solar energy will be the main one in the electricity sector. Solar energy figures (in the latest national energy policy (KEN)-red) are projected in 2060 to be around 500-600 GW. In the old national energy policy (KEN) in 2050 (solar energy-ed) 120 GW, but the realization is not fast enough,” said Herman.

Norman Ginting, Director of Projects and Operations of Pertamina New & Renewable Energy (Pertamina NRE) explained his party is committed to supporting the government to achieve the net zero emission (NZE) target in 2060 or sooner. One of these efforts is to start building a portfolio in solar energy, including solar cell technology.

“We have completed more than 50 megawatts of PLTS, one of which is the largest internal Pertamina Hulu Rokan with a total planned installed capacity of 25 megawatts. In addition, Pertamina has a great interest in how to run and implement green hydrogen from solar power because we see that green hydrogen is easier in the shifting process,” said Norman.

Furthermore, Norman highlighted that society and industry have been waiting for electricity based on renewable energy. Opportunities for developing solar PV are extensive, both on-grid and off-grid. For this reason, his party needs even more massive support in developing solar energy in Indonesia.

Ashwin Balasubramanian, Associate Partner of McKinsey stated that solar energy’s technical potential is significant, more than 3000 GW. The projection is that more than 400 GW will need to be built in 30-40 years. This is also a great investment opportunity and contributes to the gross domestic product (GDP) by opening up new jobs.

“If we look at Vietnam and Thailand, they have developed 10-15 times. India developed more than 16 GW. It shows it is possible with the right conditions and aspirations,” said Ashwin.

Assessing Solar Market in ASEAN Member State

Jakarta, 25 July 2023 – Southeast Asia has emerged as a focal point for both economic development, and energy growth. The increasing energy demand within the ASEAN region is to be expected to be met through the expansion of renewable energy. Notably, certain ASEAN countries have achieved noteworthy progress in renewable energy development, exemplified by Vietnam’s exponential growth in solar energy over recent years. 

Fabby Tumiwa, the Executive Director of Institute for Essentials Services Reform and the Chairman of The Indonesia Solar Energy Association said that ASEAN must establish strong cooperation in developing solar PV manufacturing capability.

“Southeast Asia countries must ensure affordable access to this technology by establishing a solar PV manufacturing and supply chain that includes silicon ingots, wafers, cells, and other components such as low-tempered iron glass, as well as the balance of system components such as inverters and controllers,” he said.

Fabby added that Southeast Asia has the potential to become a solar PV manufacturing hub, supplying both domestic and global demand. Currently, seven Southeast Asia countries already have manufacturing capacity in various stages, with a total annual capacity of 70 GW of solar module production, with Vietnam supplying half of this capacity. 

Monika Merdekawati, research analyst for sustainable renewable energy development, ASEAN Centre for Energy (ACE) during the ASEAN Solar Summit 2023 explained that while solar energy adoption in ASEAN is on the rise, the pace of progress is insufficient to accelerate the energy transition. Vietnam’s remarkable strides in augmenting its solar capacity have been associated by diversification efforts in its renewable energy development plan in its PDP8 (Vietnam’s energy planning).

“It’s similar to Thailand who started to look for biomass development in its priority program plan,” said Monika.

She further highlighted the necessity for Indonesia to devise innovative strategies to attain its goal of achieving a 23% renewable energy mix in 2025.

Within the context of Indonesia, the state-owned utility company PT PLN heavily relies on the 2021-2030 RUPTL (Electricity Supply Business Plan) famously recognized as “green RUPTL” to expedite its renewable energy endeavors. Warsono, the EVP for electricity System Planning, PT PLN on the same occasion said that PLN aims to incorporate5 GW of renewables by 2030.

“The main challenge to deploy renewables, particularly solar, is the fulfillment of local content requirements of the PV component. It means we need to grow the local industry for solar PV components,” he said. Furthermore, PLN is committed to ensuring equilibrium between energy supply and demand of energy.

Mohammad Nazri bin Mizayauddin, Chief Strategy Officer Sustainable Energy Development Authority, Malaysia shared his view on Malaysia strategy to enhance renewable energy penetration.

“People usually look at the large-scale ground mounted solar PV, but now let’s realize the other potential in the solar rooftop. The rooftop itself is an asset,” he said.

According to Nazri, Malaysia has been facing issues related with the energy subsidy therefore the Government must make sure that the market is mature enough to slowly detach the subsidy.

Eka Satria, Director and CEO of Medco Power Indonesia presented the indispensable correlation between growth of the solar PV component industry and expanding market demand. He stressed the importance of compiling and implementing a comprehensive roster of potential projects to instill investor confidence. 

“To accelerate solar energy deployment, we need a strong PV industry in Indonesia. To grow the PV industry a long list of committed projects to guarantee the investors that their money wouldn’t be lost,” Eka explained.

Eko Agus Nugroho Director of Machinery and Agricultural Machinery Industry, Ministry of Industry agreed that the solar cell technology is advancing rapidly, urging Indonesia to accelerate its pace in keeping up with the advancement.

“There are 21 local producers making solar modules currently and the total capacity is still below 500 WP. The ministry wants to map the capability of the (solar) industries to fulfill the need from the PLN and other developers,” he said. 

Eko also revealed plans for the upcoming announcement of a consortium dedicated to local solar industry manufacture in the ensuing months.

Exploring Potential and Challenges Towards a Sustainable Future of Indonesia

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Renewable Energy Becomes Attraction for Investors

Semarang, 4 July 2023 – Electricity is not only the essential need for households, but also drives economic activity to a large industrial scale. In addition to the need for a reliable electricity supply, large-scale industries are starting to pay attention to the source of the electricity supply. In fact, for export-oriented industries, the production process needs to be carried out with minimal emissions in advance since the implementation of carbon footprint calculations on products exported to certain countries. This means that goods or components of goods produced n from fossil energy generation will receive a higher carbon tax.

Central Java Province, which is currently developing a number of regional industries, pays close attention to the development of alternative energy sources other than fossils. This was said by the Deputy Governor of Central Java, Taj Yasin Maimoen, in his remarks at the Central Java Renewable Energy Investment Forum 2023 which was organized by the Institute for Essential Services Reform (IESR) in collaboration with the Central Java Energy and Mineral Resources Provincial Office, Tuesday 4 July 2023.

“The growth of industrial infrastructure is accompanied by high growth in energy needs. Currently it is not just energy, but energy that comes from new, renewable energy,” said Taj Yasin.

Taj Yasin added that Central Java has abundant potential for renewable energy, but its utilization has not been optimal. To drive the use of renewable energy, the Provincial Government of Central Java is promoting the installation of PV rooftops on government buildings.

“From the installation of rooftop PV in government buildings, it shows that there are 30-40% savings on electricity bills for the institutions that install them,” he said.

Previously, the Executive Director of IESR, Fabby Tumiwa, said that the availability of electricity from clean energy is the main attraction for investors to invest in one country.

“If we want to increase investment competitiveness, we must increase the availability of green energy. The supply of electricity from renewable energy is a new indicator for investors to invest their capital,” said Fabby.

Sakina Rosellasari, Head of the Central Java Investment and One-Stop Service Office (DPMPTSP), stated that Central Java is currently designing 23 projects to be offered to investors. Part of the project is related to the development of renewable energy.

“Investment interest is already approaching pre-pandemic times. We hope this meeting will improve communication and encourage investment realization in Central Java,” she said.

This trend is in line with the Indonesian Low Carbon Development study, that efforts to reduce GHG emissions must be carried out in an integrated manner in development plans to push Indonesia out of the middle-income country trap by ensuring economic growth of 5%.

Fostering Courage to Resolve Dilemmas in Indonesia’s Solar Energy Industry Development

Jakarta, July 26, 2023 – Indonesia’s swift progress in the energy transition hinges upon the nation’s ability to cultivate a robust domestic solar energy industry. This imperative message was conveyed by Fabby Tumiwa, the Executive Director of the Institute for Essential Services Reform (IESR), during a compelling discussion at the Indonesia Solar Summit 2023 (26/07). Tumiwa emphasized that prompt government action is pivotal to address several critical aspects such as obtaining market data for solar PV, ensuring the bankability of the industry to facilitate obtaining business loans, adhering to the 40% local content requirement for domestic solar PV products, and surmounting the constraints within the solar industry’s supply chain. Moreover, the willingness to invest in the solar energy sector will play a pivotal role in shaping the trajectory of Indonesia’s solar industry growth.

Tumiwa accentuated, “Regulators must consolidate dispersed data regarding the emerging solar PV market, thereby providing potential investors in Indonesian solar PV manufacturing an insightful data. Additionally, Indonesia currently lacks tier-1 manufacturers, those compliant with bankability prerequisites. This shortfall impedes the production of highly efficient solar modules. The establishment of tier-1 solar manufacturing facilities within Indonesia would be a monumental stride.”

He further evaluated that once the bankability predicament is alleviated, it will not only invigorate larger-scale solar projects to set foot in Indonesia but also stimulate burgeoning market demand.

Similarly, Rachmat Kaimuddin, the Deputy Minister for Infrastructure and Transport, Coordinating Ministry of Maritime and Investment Affairs, Republic of Indonesia, reiterated the importance of proactively preparing the groundwork for solar energy demand to foster the development of a solar energy industry in Indonesia during the same event. He underscored that governmental intervention in shaping a solar energy market can be effectively achieved through the Just Energy Transition Partnership (JETP).

“The solar industry in Indonesia is still in its pioneering stages, relatively underdeveloped. Meanwhile, our power generation heavily relies on coal. Our objective is to establish a thriving solar industry, necessitating the cultivation of demand. Through JETP, we are intervening by reducing our reliance on fossil fuels and infusing renewable energy sources like solar PV. This demand extends beyond Indonesia’s borders, for instance in Singapore, where there’s interest in sourcing green electricity generated using modules and batteries manufactured in Indonesia,” elaborated Rachmat.

Pramudya, the Deputy Director of Power Plant Planning at the Directorate General of Electricity, Ministry of Energy and Mineral Resources, Republic of Indonesia, anticipates that the renewable energy mix will only constitute 11.3% of the targeted 23% by 2025. He posits that the gap in achieving this target can be addressed by the inclusion of solar power plants..

“Solar PV possesses a promising opportunity due to its potential for rapid development. While aiming to achieve the 23% renewable energy mix target, a substantial 15 GW of solar PV is required. However, the realization of this goal within a 2-year timeframe is subject to challenges, encompassing local content requirement considerations and the essential adaptation of network flexibility,” remarked Pramudya.

Wilson W. Wenas, a Solar Practitioner from ISG Solar, outlined three key strategies to expedite the growth of the solar industry in Indonesia. Firstly, it is imperative to select the appropriate solar energy technology, such as TOPcon, Heterojunction, Advanced Heterojunction and TOPcon, and Perovskite Solar Cell Tandem. Secondly, robust research and development initiatives should be primed to support the chosen technology. Thirdly, the collaboration should extend to machine makers, not solely module makers.

“Making an erroneous technology or machine maker selection could lead to catastrophic consequences,” he emphasized.

Additionally, Daniel Kurniawan, a Solar Energy Specialist at IESR, elucidated that investing in polysilicon technology stands as a strategic imperative for both the cell and panel sectors. He underscored that propelling the growth of Indonesia’s solar energy industry demands the presence of bold stakeholders willing to undertake investment risks.

IESR in KemBali Becik: The Role of Rooftop Solar PV Adoption in Bali’s Tourism Business

Bali, July 21, 2023 – As part of the joint effort and commitment towards a clean Bali, post-pandemic economic recovery, and addressing the challenges of the climate crisis, Purpose Climate Lab presents KemBali Becik as one of the solutions for recovery. The Institute for Essential Services Reform (IESR) is also participating in the KemBali Becik Campaign in 2023, held in Ketewel Village, Sukawati District, Gianyar Regency, Bali on Friday, July 21, 2023. The event carries the theme “Stand out in the market by standing up for sustainability.”

KemBali Becik serves as a collaborative platform involving various sectors in Bali, with the word “Kembali” meaning “return” in Indonesian, and “becik” translating to “good” in Balinese. KemBali Becik aims to engage the Government, businesses, and the Balinese community as drivers of economic decarbonization, particularly by implementing climate solutions in the tourism industry. During this event, an assessment and capacity building session are conducted for tourism businesses registered on KemBali Becik’s green page. The capacity building aims to assist these businesses in implementing concrete actions to ensure their sustainability in terms of food waste, energy, and transportation.

In her opening speech, Michelle Winowatan, Strategy Manager at PCL, emphasizes the importance of embracing sustainability to support the progress of Bali’s business and tourism sector.

“By mobilizing the tourism businesses and raising awareness among tourists to participate in supporting green recovery efforts in the tourism sector, we can build a collective force to decarbonize the economy and realize an environmentally friendly and economically resilient Bali,” says Michelle.

Alvin Putra Sisdwinugraha, Researcher of Power Systems and Renewable Energy at IESR, hopes that the event’s attendees, mostly business stakeholders, will increasingly recognize and understand the significance of sustainable, eco-friendly energy in influencing various aspects of long-term business sustainability.

“Climate solutions are integral to the business sector. Besides being profitable, businesses must also be sustainable to attract ESG-based (environment, social, and government) investments in clean energy. From an energy perspective, adopting rooftop solar PV (PLTS) is one of the long-term solutions, offering benefits in terms of electricity consumption cost savings, as many PLTS providers offer cheaper rates compared to PLN’s electricity prices. Practicing sustainability can also attract investor investments in local Bali businesses,” mentioned Alvin.

On this occasion, IESR introduces the Solar Hub platform for business stakeholders who wish to learn more about rooftop solar PV. Many have tried this platform, and some have expressed interest in installing rooftop solar PV.

“I hope that over time, more people will be interested in adopting rooftop solar PV as one of the measures to reduce emissions and utilize renewable energy in Bali’s business sector,” says Alvin.

Accelerate a Fair and Equitable Sustainable Energy Transition in Indonesia by Termination of CFPP Operations

JETP

Jakarta, June 27, 2023 – Environmental sustainability and overcoming the climate crisis have driven the need for an energy transition toward cleaner and more sustainable energy sources. The early termination of fossil energy generation operations as one of the largest emitters is a fundamental step towards accelerating the energy transition in Indonesia.

Director of Electricity Program Development at the Ministry of Energy and Mineral Resources (ESDM), Wanhar, explained that Indonesia already has regulations regarding the termination of coal fired power plants (CFPP) contained in Presidential Regulation (Perpes) Number 112 of 2022 concerning Acceleration of Renewable Energy Development for the Supply of Electricity which was stipulated and promulgated in September 13, 2022. Furthermore, Wanhar emphasized that in the Perpres, it was stated that new PLTUs were prohibited from being built except those that had been stipulated through the Electricity Supply Business Plan (RUPTL).

“The strategy related to the early retirement of the PLTU based on Presidential Decree No. 112 is currently being discussed in depth in the general energy planning. In addition, Indonesia also needs to accelerate the acceleration of the national electricity general plan (RUKN). We prioritize using renewable energy and tighten licenses for captive PLTUs, except for those from the government,” said Wanhar at the JETP Convening for Exchange and Learning event at Ayana Midplaza.

Wanhar mentioned that the Government of Indonesia and the State Electricity Company (PLN) have a shared vision to encourage renewable energy by considering four factors: the newly built substitution network, guaranteeing a fair transition, affordability, and international financial support. Terminating the PLTU must be accompanied by using renewable energy, for example, solar power.

David Elzinga, Senior Energy Specialist at Asian Development Bank, explained there is concern about the return on investment in ending PLTU operations early. Considering that some financial institutions are still hesitant to fund the coal-fired power plant early retirement program. For that, the Asian Development Bank (ADB) decided to take over this matter.

“There are several challenges in the energy transition, including managing energy reliability and supply. With the existence of a just energy transition partnership (JETP), it is hoped that green job opportunities for people working in coal production will be wide open as well as capacity building (skills) need to be strengthened,” said David.

On the other hand, Vikesh Rajpaul, General Manager of Just Energy Transition at Eskom Holdings SOC Ltd explained, in carrying out JETP implementation, extending the life of the CFPP was not considered for old generators. However, some units may need to remain operational longer than planned to overcome a power crisis.

“There is no energy transition without transmission, and equality is the key to implementing the energy transition, considering that the process will have environmental, economic, and social impacts. We have seen the potential for an energy transition in South Africa, including the abundant solar and wind power potential. For this reason, South Africa can encourage using renewable energy,” said Vikesh.

Jerredine Morris, Senior Manager at Carbon Trust, said that the management of JETP funds in South Africa is carried out by protecting vulnerable groups and workers with early retirement from CFPP. In addition, in implementing JETP, the most important thing is to consider the interests of local residents or what is commonly called a bottom-up approach.

“In implementing the CFPP’s early retirement, we look at the eligibility of retirement from the age of the CFPP, as well as maintenance costs. We also look at the economic feasibility and social impact of these retirements. The main obstacle is the retiring capacity of the coal-fired power plants and how we build renewable energy around it,” said Jerredine.

Pariphan Uawithya, Asia Director for the Global Energy Alliance for People and Planet (GEAPP), stated that there are three essential stakeholders in the early retirement process for coal fired power plants (CFPP) in Indonesia: the government, the private sector, and the community. According to him, the early termination of CFPP operations in Indonesia is critical in reducing greenhouse gas emissions and air pollution. Retiring old power plants will also open up opportunities for investment in alternative energy sources, such as renewable energy, increasing the country’s energy sustainability.

“Along with the energy transition, the government has also issued regulations regarding carbon markets as a form of Indonesia’s commitment to the issue of climate change. However, remember that in the energy transition process, coal is not the only asset; diesel generators can also be replaced by renewable energy,” he said.

The Ford Foundation in Indonesia organizes the Just Energy Transition Partnership (JETP) Covening, the Institute For Essential Services Reform (IESR), and the African Climate Foundation (ACF), with support from the Global Energy Alliance for People and Planet (GEAPP) to facilitate the forum exchange of learning between stakeholders.

Fairness and Inclusivity Should be the Foundation of Indonesia’s JETP Investment Plan

Jakarta, June 27, 2023 – Following the signing of the Just Energy Transition Partnership (JETP), three countries, namely South Africa, Indonesia, and Vietnam, promptly initiated actions to implement the agreement and prepared various strategic steps to achieve the goals of JETP in each country. The JETP Convening for Exchange and Learning Session facilitated communication and discussions among the three countries to share information and lessons learned in achieving equitable energy transition.

Dadan Kusdiana, the Director General of New Renewable Energy and Energy Conservation at MEMR, mentioned that the JETP Secretariat in Indonesia is currently in the process of drafting a roadmap to phase out coal-fired power plants (CFPP).

“We are currently discussing (within the JETP Secretariat-ed) the prioritization of the Pelabuhan Ratu CFPP in the plan for early retirement of its operations. The Ministry of Energy and Mineral Resources is also reviewing the regulations, particularly concerning asset transfers and the establishment of power purchase agreements (PPAs),” said Dadan.

Fabby Tumiwa, the Director of the Institute for Essential Services Reform (IESR), emphasized the importance of conducting the comprehensive investment plan (CIP) preparation process with transparency, clarity, and easy accessibility, while consistently involving public participation.

Furthermore, Fabby also urged the government to reform policies, among other actions, to achieve the goals of JETP and promote the widespread adoption of renewable energy.

“JETP aims to create an enabling environment for renewable energy. While the allocated 20 billion dollars may not be sufficient to achieve the targets of the Paris Agreement, we must utilize it as a catalyst to increase the share of renewable energy and phase out the use of coal-fired power plants,” explained Fabby.

Mpetjane Lekgoro, the South African Ambassador to Indonesia, also stated during the same occasion that his party prioritizes the principles of justice and inclusivity in managing JETP funding.

“South Africa is committed to utilizing the JETP to promote restorative justice in the energy transition. These investments should not only provide financial support but also uphold sustainability and security, ensuring the inclusion of those most affected,” he added.

Similarly, Dipak Patel, Head of Climate Finance & Innovation for the President’s Climate Commission (PCC) in South Africa, emphasized that a detailed discussion on equity in the energy transition is their primary focus.

“South Africa has identified three areas of equity in the energy transition, encompassing restorative justice by considering the most affected communities, procedural justice that involves all communities in decision-making related to energy and climate transition, and distributional justice that guarantees fair and equitable treatment,” Patel explained.

Examining the JETP funding allocated to South Africa, amounting to USD 8.5 million over a period of 3-5 years, Neil Cole from the JETP-IP Project Management Unit in South Africa emphasized the importance of thoroughly and innovatively integrating the JETP funding into projects at both the national and subnational levels.

“It is crucial to synchronize the top-down and bottom-up approaches in order to identify the shared requirements and collaboratively develop an actionable and inclusive implementation plan,” Cole explained.

Le Viet Anh, Director General of the Department of Science, Education, Natural Resources, and Environment at the Ministry of Planning and Investment in Vietnam, highlighted several key actions to expedite the attainment of JETP targets. These actions encompass establishing a robust, collaborative, and supportive environment among the government, international partners, and the private sector. Additionally, accelerating the institutionalization of enabling legal frameworks such as green taxonomy, green incentives, and green financing mechanisms is essential. Furthermore, facilitating the transfer of clean energy technologies, expertise, and technical know-how to enhance Vietnam’s capabilities is crucial.

“The Vietnamese government has demonstrated a strong commitment to promoting green growth through our national strategy. Vietnam has made significant green commitments at COP26, including targets such as achieving net-zero carbon emissions by 2050 and phasing out coal-fired power plants by the 2040s,” he explained.

The Just Energy Transition Partnership (JETP) Convening was jointly organized by the Ford Foundation in Indonesia, the Institute for Essential Services Reform (IESR), and the African Climate Foundation (ACF), with support from the Global Energy Alliance for People and Planet (GEAPP). The primary objective of the event was to provide a platform for stakeholders to engage in a forum for learning and knowledge exchange.