Towards COP 26, Community Leaders Demand Climate Emergency Declaration

Jakarta, 19 October 2021– Indonesia has updated its climate commitments through its Nationally Determined Contribution (NDC) to achieve carbon neutrality by 2060 or sooner. Indonesia’s commitment which is ten years behind the target of the Paris Agreement implies the government’s unambitious efforts in responding to the climate crisis that threatens the lives of the Indonesian people.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) said that the problem of reducing greenhouse gas (GHG) should not be seen as a burden but as an opportunity to transform into a low carbon economy.

“Based on our study entitled Deep decarbonization of Indonesia’s energy system, deep decarbonization of the energy system in 2050 will bring greater economic benefits,” said Fabby in the webinar “Towards COP 26: Climate change and the role of the society to preserve the earth” held by IESR (19/10/2021).

Fabby added that the community will feel the economic benefits by the creation of new industrial opportunities that can absorb a larger workforce. Moreover, Indonesia’s energy prices will be more affordable by using cheaper renewable energy technologies and cleaner air. He said that the compatible climate ambitions with the Paris Agreement will lessen the threat of hydrometeorological disasters as a consequence of increasing the earth’s temperature exceeding 1.5 degrees Celsius.

Highlighting policies and the level of public literacy on the climate crisis, community leaders in the event stated that unintegrated climate-related policies and the lack of access to climate change information make the climate change mitigation efforts in Indonesia keep decelerating.

The absence of a climate emergency declaration by the government, according to Melissa Kowara, Activist, Extinction Rebellion Indonesia, indicates the government’s low level of seriousness in dealing with the climate crisis.

“There has not been a firm stance from the highest levels of the country to say that we are in a crisis. (There is no declaration that says-ed) that we will do everything by the private sector, civil society, and government to overcome problems that affect the lives and survival of all of us,” said Melissa. She said this is also the cause of low public literacy regarding climate change.

Muhammad Ali Yusuf, Chairman of the Nahdlatul Ulama Disaster Management and Climate Change Institute (LPBI NU), Nahdlatul Ulama (NU), also revealed that religious discourse in Indonesia itself is still far from ecological issues or climate change.

“Even if there is (climate discourse-ed), yet it is not the top priority issue. Therefore, climate change literacy is also necessary for religious leaders because religious life is impossible to prevail in the climate crisis,” he explained.

Furthermore, Jimmy Sormin, Executive Secretary for Witness and Integrity of Creation, Communion of Churches in Indonesia (PGI), encouraged religious leaders to play their role in increasing people’s understanding of climate issues by discussing them according to the local context.

“In the regions, the impacts of climate change, such as the emergence of new pests, crop failure, are experienced by the community, but they do not understand it. It is necessary to ‘rationalize’ it according to their perspective (the local community-ed),” said Jimmy.

Looking at the issue of climate change from a woman’s perspective, Mike Verawati Tangka, Secretary-General, Indonesian Women’s Coalition (KPI) believes that the climate change effect has a close impact on women’s lives. However, Mike regrets that environmental issues and change tend to be considered as masculine issues that override the role of women in caring for nature and advocating for climate issues.

“The impact of climate change is perceived the most laborious by women because our policies and systems are not prepared inclusively. Positive initiatives taken by women by advocating for climate change must also be recognized by the state,” said Mike

IESR: Renewable Energy Portion in “Green” RUPTL Could Be Bigger

Jakarta, 14 October 2021– Institute for Essential Services Reform (IESR) The Institute for Essential Services Reform (IESR) appreciates the government’s commitment to making an energy transition towards decarbonization in 2060 or earlier by issuing the PLN 2021-2030 Electricity Supply Business Plan  (RUPTL), which has a larger portion of renewable energy generation. The government claims that this RUPTL is the greenest because it contains a portion of new and renewable energy generation capacity (EBT) of 51.6% or 20.923 MW in 2030. However, the 2021-2030 RUPTL still indicates the dependence of fossil energy on the energy system in Indonesia.

Pamela Simamora, IESR Research Coordinator who is also the main author of the Deep decarbonization of Indonesia’s energy system study, believes that the 2021-2030 RUPTL still shows a small renewable energy electricity mix, which is only 24.8% in 2030. This means that from 2025 to 2030, the increase in the renewable energy mix was only 1.8%. This number is much lower than the target mix increase from 2021 to 2025 which is 8% (from 15% today to 23% in 2025).

“The renewable energy mix should be higher in 2030 considering that the price of renewable energy in that year is predicted to be more competitive than fossil energy,” she says.

Indonesia itself has declared to achieve decarbonization by 2060 or earlier. IESR Executive Director, Fabby Tumiwa said that the target will be realized if, by 2030, around 70% of power generation capacity or around 80-85 GW comes from renewable energy so that energy sector emissions can reach their peak in 2030.

“To achieve this mix, it is necessary to reduce fossil energy generating capacity to open up more space for renewable energy plants to be included in the electricity system. The reduction in thermal generating capacity must be followed by the development of renewable energy. With this need, renewable energy in 2022-2025 should ideally reach 25-30 GW and accelerate to 45-50 GW from 2025 to 2030, in line with the plan for early retirement of PLTU, “he explains.

Responding to the government’s plan in the 2030 RUPTL to retire 1.1 GW of subcritical steam power plants in Muara Karang, Tanjung Priok, Tambak Lorok, and Gresik by 2030, the Transformation Energy Program Manager, Deon Arinaldo assessed that this step is still following the business as a usual plan because the PLTU is entering retirement age.

Moreover, the government’s intention to maintain fossil fuels by co-firing biomass at PLTU will set a greater risk of stranded assets and the environment when compared to focusing on developing renewable energy such as solar energy. PLN has even identified challenges such as the sustainability of the required biomass supply of 8-14 million tons per year, the impact on the efficiency of the power plant, and the increase in the basic cost of electricity supply.

On the other hand, RUPTL 2030 has also planned the development of electricity interconnection within islands and between islands to improve electricity reliability and distribute new renewable energy whose sources are far from load centers. The government targets that by 2024 the interconnection within the islands of Kalimantan and Sulawesi has been accomplished in the super grid system to overcome the oversupply in a large system. The government is also reviewing the development of the interconnection network between Sumatra-Java and Bali-Lombok. Referring to the study of Deep decarbonization of Indonesia’s energy system, this within-island, and inter-island interconnection network plan is a good thing and should be monitored for its development.

Furthermore, the development of varied renewable energy (VRE), especially solar energy, is focused on three strategies: solar PV for rural electricity, de-dieselization, and network connection (both PLN and IPP). However, de-dieselization by converting diesel power plants to solar PV equipped with a battery with a total capacity of 1.2 GWp is only intended for isolated systems that are not possible to be connected to PLN transmission.

“If it is intended to encourage a more aggressive penetration of renewable energy, the use of local renewable energy, either solar or other renewable energy sources, should be the main strategy for providing energy access, not a substitute, and must concentrate on to aspects of sustainability and reliability,” said Marlistya Citraningrum, Manager Sustainable Energy Access Program, IESR

Besides, the target of 4.7 GW of PV mini-grid by 2030 listed in the latest RUPTL does not reflect the much larger potential and pipeline project of PV mini-grid. The Scaling Up Solar in Indonesia report even shows that it requires at least 18 GW until 2025 to realize the target of 23% of the renewable energy mix. Meanwhile, according to the IESR Deep decarbonization of Indonesia’s energy system study to pursue emission-free Indonesia in 2050, 107 GW of solar PV is needed in 2030 with a storage system.

Using Solar PV, Commercial and Industrial Sector Play a Strategic Role Reaching Target of 23% Renewable Energy

Semarang, 6 October 2021– With the technical potential of solar energy reaching 193–670 gigawatt peak (GWp), and the potential for generation from solar power plants of around 285–959 terawatt-hours (TWh) per year, the Central Java Provincial Government is earnestly encouraging the use of solar PV. Increasing consumer awareness of environmentally friendly products, the availability of regulations, and a supportive ecosystem, as well as the benefits of using PV mini-grid is gravity for the commercial and industrial sectors to install PV mini-grid. The more industrial sectors involved in the utilization of solar PV will be the catalyst for the fulfillment of Central Java Solar Province and the achievement of the national renewable energy mix target of 23% in 2025. 

 

Chrisnawan Anditya, Director of Various New Energy and Renewable Energy, Directorate General of New, Renewable Energy and Energy Conservation, Ministry of Energy and Mineral Resources said that until August 2021, there were 4,133 rooftop solar PV users in various sectors in Indonesia with a total capacity of 36.74 MWp. Based on these data, the number of solar PV rooftop users in Central Java and DIY is the third-largest in Indonesia (5.88 MW). The Indonesian government through the Ministry of Energy and Mineral Resources itself has tried to accommodate the needs of the industrial and commercial sectors in installing rooftop solar panels with several strategies, including a clause on reducing parallel capacity costs for industrial customers from 40 hours to 5 hours per month which has been in effect since 2019.

 

Chrisnawan added that the role of various parties, including the commercial and industrial sectors, is crucial for the achievement of Indonesia’s climate targets, while encouraging the competitiveness of green operations and products.

 

“The commercial and industrial sectors will face global challenges in the future, especially if the European Union implements a carbon border tax in 2026. In the future, the economy will grow towards a green economy supported by a green industry. RUPTL currently contains 51% of the power plants to be built are new and renewable plants. In its transition period, the industry is encouraged to balance it with the use of rooftop solar power plants,” he explained in a webinar organized by IESR with the Central Java Government entitled “Roof Solar Energy for the Commercial and Industrial Sector in Central Java” (6/10/2021).

 

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) revealed that the potential for rooftop solar PV in the industrial sector in Central Java and Yogyakarta reaches 3.5 GWp or 10 percent of the PV mini-grid market potential from industrial sector customers throughout Indonesia.

 

“The IESR market survey shows that there is a potential of 9.8% or 16 thousand businesses in Central Java to utilize rooftop solar power. To succeed the decarbonization efforts and climate control efforts, the industrial and commercial sectors can identify the needs and strategies for implementing the energy transition by having an energy transition roadmap, including the use of rooftop solar power plants and encouraging collaboration and synergy of various parties to create a supply chain to produce competitive green products,” explained Fabby.

 

Central Java itself, since declaring Central Java Solar Province in 2019, until mid-September 2021 recorded 48% (4.3 MWp of 8.8 MWp) of the total installed solar PV capacity coming from the commercial and industrial sectors. Supporting policy and regulatory packages have also been prepared, including the Regional Energy General Plan, the Central Java Provincial Energy, and Mineral Resources Strategic Plan, and the Governor’s Circular Letter for the use of rooftop solar power plants in government, public, commercial, and industrial buildings. However, in his opinion, the most important thing besides policies and regulations is market demand.

 

“Market demand (market-driven) due to global demands to reduce house gas emissions is effective in encouraging the industrial sector towards a green industry that uses renewable energy sources,” said Head of the Central Java Province Energy and Mineral Resources and Minerals Agency (ESDM), Sujarwanto Dwiatmoko.

 

“Several industries in Central Java have independently implemented green and sustainable industrial practices, including the use of renewable energy in the form of solar energy. The Central Java Provincial Government will continue to provide training support, certification facilitation, and green industry awards,” continued M. Arif Sambodo, Head of the Industry and Trade Office of Central Java Province.

 

At the same event, M. Irwansyah Putra, General Manager of PLN Central Java and DIY Distribution Main Unit, revealed that there are 20 businesses and industries that have installed rooftop solar power plants. The five highest rankings in terms of capacity, respectively, are PT Tirta Investama (2.3 MWp), CV Jaya Setia Plastik (0.48 MWp), PT Djarum (0.26 MWp), PT. Busana Rejeki Agung (0.17 MWp) , PT Busana Remaja Agracipta (0.15 MWp), and PT Prambanan Dwipaka (0.04 MWp).

 

“PLN certainly supports solar PV optimization by providing various facilities, such as easy access to information, billing systems, providing sufficient reserve margin, running a fair business scheme for consumers as well as PLN, preparing solar PV rooftop Total Solution service products,” said Irwansyah.

 

Experienced the direct benefits of using rooftop PV in his industry, Syaiful, Manager at CV Jaya Setia Plastik targets to increase the PLTS capacity from 0.48 MWp to 1.3 MWp to reduce electricity costs, especially during the day.

 

“Moreover, with the on-grid system, excess electricity can be exported to PLN, the cost of maintaining solar PV is also low, and this is proof of the use of environmentally friendly energy,” he said.

 

With investment costs still considered expensive, several solar energy developers in Indonesia have offered to install rooftop solar power plants with financing schemes other than direct purchases. With a performance-based rental scheme, for instance, the company does not need to invest upfront but has a long-term contract (15-25 years) with the developer for the production of electricity generated from the installation of rooftop solar power plants. Some developers offer leasing or installments over 5 years.

Preventing Energy Crisis, Indonesia Needs to Accelerate Renewable Energy Development

Jakarta, 11 October 2021– The energy crisis in Europe is a lesson for many countries, especially Indonesia to maintain their energy security by reducing dependence on the fossil energy market, preparing prudently for the energy transition, and diversifying energy, especially for renewable energy. 

William Derbyshire, Director, Economic Consulting Associates (ECA) UK explained that the UK’s dependence on fossil energy is reflected in its power generation mix which places a share of gas as much as 42%, while for renewable energy it is only dominated by Wind Power Plants (PLTB) with a share of 16 %.

“If high fossil fuel prices are the problem, the answer is to reduce dependency on coal and gas, rather than to add more fossil fuel,” explained William in the online webinar “Energy Crisis in UK and Europe: Lesson learned for Indonesia Energy’s Transition” ( 11/10/2021) organized by Clean, Affordable and Secure Energy for Southeast Asia (CASE).

 

So far, wind power has become the UK’s backbone for generating electricity from renewable energy plants. However, this wind power has high variability even though it can be projected from historical records of wind patterns and speeds at a certain point. But according to Gareth Davies, Managing Director, Aquatera, this variability can be overcome if we can identify new areas with high wind speeds and build new plants there.

“By spreading (wind power) production across the wide geographical area we can help to increase resilience and reduce the dependency and reliance on other sources. So this effectively becomes a balancing mechanism for our energy supply,” said Gareth.

The Executive Director of the Institute for Essential Services Reform (IESR), Fabby Tumiwa, emphasized that the volatility in primary energy prices, such as fossil energy, is a common thread of the widespread fossil energy crisis.

“It should be remembered that the current energy crisis is a fossil energy crisis. The volatility of fossil energy prices is very high. The increase in the price of each fossil energy affects each other,” said Fabby.***

 

The event of  Energy Crisis in UK and Europe: Lesson learned for Indonesia Energy’s Transition could be accessed on YouTube IESR  https://youtu.be/YnRd_GIy0eE.

Emissions are rising across the G20, again – warns a report

Emissions are rising across the G20, again – warns a report

Despite net zero commitments and updated NDCs, the G20’s climate action is leaving the world far from meeting the 1.5°C global warming limit

Jakarta, 15 Oktober 2021-After a short period of decline, due to the COVID-19 pandemic, greenhouse gas emissions (GHG) are rebounding across the G20, with Argentina, China, India and Indonesia projected to exceed their 2019 emissions levels. This is one of the key findings of the Climate Transparency Report – the world’s most comprehensive annual stocktake and comparison of G20 climate action.

 

In 2020, energy-related CO2 emissions plunged by 6% across the G20. In 2021, however, they are projected to rebound by 4%. “Rebounding emissions across the G20, the group responsible for 75% of global GHG emissions, shows that deep and fast cuts in emissions are now urgently needed to achieve net zero announcements,” says Gahee Han from the South Korean organisation Solutions For Our Climate, one of the lead authors of the report.

 

The report also notes some positive developments, such as the growth of solar and wind power among G20 members, with new records of installed capacities in 2020. The share of renewables in energy supply is projected to grow from 10% in 2020 to 12% in 2021. And in the power sector (energy used to make electricity and heat), renewables increased by 20% between 2015 and 2020, and are projected to become nearly 30% of the G20’s power mix in 2021. At the same time, though, experts note that apart from the UK, G20 members have neither short- nor long-term strategies in place for achieving 100% renewables in the power sector by 2050.

 

In spite of these positive changes, dependence on fossil fuels is not going down. On the contrary, the consumption of coal is projected to rise by nearly 5% in 2021, while the consumption of gas has increased by 12% across the G20 from 2015-2020. The report finds that the growth in coal is mainly concentrated in China – the largest global producer and consumer of coal – followed by the US and India.

 

At the same time, recent announcements signal that most G20 governments are aware of the need for a transition to low-carbon economies. Net zero targets should be reached by latest 2050 to limit global warming to 1.5°C, something that according to the Climate Transparency Report, has been acknowledged by the majority of G20 governments. By August 2021, 14 G20 members had already committed to net zero targets covering almost 61% of global GHG emissions.

 

As stated in the Paris Agreement, each Party is expected to submit a Nationally Determined Contribution – a climate plan that lays out targets, policies and measures that each government aims to implement. By September 2021, 13 G20 members (including France, Germany and Italy under the EU’s NDC) had officially submitted NDC updates, with six setting more ambitious 2030 targets. Yet, even if fully implemented, current targets assessed by April 2021 would still lead to warming of 2.4°C by the end of the century, experts caution. “G20 governments need to come to the table with more ambitious national emission reductions targets. The numbers in this report confirm we can’t move the dial without them – they know it, we know it – the ball is firmly in their court ahead of COP26,” says Kim Coetzee from Climate Analytics, who coordinated the overall analysis.

 

Key selected figures from the report:

 

    • Due to governments’ responses to the COVID-19 pandemic, energy-related CO2 emissions declined by 6% in 2020. However, in 2021, CO2 emissions are projected to rebound by 4% across the G20, with Argentina, China, India and Indonesia projected to exceed their 2019 emissions levels.
    • The G20’s share of renewables increased from 9% in 2019 to 10% in 2020 in Total Primary Energy Supply (TPES), and this trend is projected to continue, rising to 12% in 2021.
    • Between 2015 and 2020, the share of renewables in the G20’s power mix increased by 20%, reaching 28.6% of the G20’s power generation in 2020 and is projected to reach 29.5% in 2021.
  • From 2015 to 2020, the carbon intensity of the energy sector has decreased by 4%

across the G20.

  • Coal consumption is projected to rise by almost 5% in 2021, with this growth driven by China (accounting for 61% of the growth), the USA (18%) and India (17%).
  • The USA (4.9 tCO2/capita) and Australia (4.1 tCO2/capita) have the highest building emissions per capita in the G20 (average is 1.4 tCO2/capita), reflecting the high share of fossil fuels, especially natural gas and oil, used for heat generation.
  • Between 1999 and 2018 there have been nearly 500,000 fatalities and close to USD 3.5 trillion of economic costs due to climate impacts worldwide, with China, India, Japan, Germany, and the USA being hit particularly hard in 2018.
  • Across the G20, the current average market share of electric vehicles (EVs) in new car sales remains low at 3.2% (excluding the EU), with Germany, France, and the UK having the highest shares of EVs.
  • Between 2018 and 2019, G20 members provided USD 50.7 billion/year of public finance for fossil fuels. The highest providers of public finance were Japan (USD 10.3 billion/year), China (just over USD 8 billion/year), and South Korea (just under USD 8 billion/year).

 

Most G20 members also missed opportunities related to leverage COVID-19 recovery packages to promote climate mitigation goals. Only USD 300 billion of the total USD 1.8 trillion in recovery spending went to the much-heralded “green” recovery whilst fossil fuels continue to be subsidised. “It is extremely disappointing that a decade has passed since the commitment to rationalise and phase out inefficient fossil fuel subsidies was made, but G20 members are still pumping billions of US dollars into dirty fuels, which are causing climate change,” says Enrique Maurtua Konstantinidis from Fundación Ambiente y Recursos Naturales (FARN) in Argentina. In 2019, G20 members, excluding Saudi Arabia, provided at least USD 152 billion in subsidies for the production and consumption of coal, oil, and gas.

 

Effective carbon pricing schemes could encourage the transition to a low-carbon economy, according to the authors of the report. However, only 13 G20 members have in place some form of explicit national carbon pricing scheme. Brazil, Indonesia, Russia and Turkey are currently considering introducing such a scheme.

 

The Climate Transparency Report was developed by 16 research organisations and NGOs from 14 G20 members and compares the adaptation, mitigation, and finance related efforts of the G20; analyses recent policy developments; and identifies climate opportunities that G20 governments can seize. This is the 7th edition of the annual review of G20 climate action.

 

About Climate Transparency:

Climate Transparency is a global partnership of 16 think tanks and NGOs that brings together experts from the majority of G20 countries. Our mission is to encourage ambitious climate action in the G20 countries: we inform policy makers and stimulate national debate.

10 IETD 2021’s Recommendations to Achieve Indonesia’s Decarbonization Target

Jakarta, 24 September 2021 – Boosting the efforts to achieve energy system decarbonization targets in Indonesia, the Institute for Essential Services Reform (IESR) and the Indonesia Clean Energy Forum (ICEF) summarized 10 recommendations to the government and stakeholders referring to the dynamics of discussions during the five days of Indonesia Energy Transition Dialogue (IETD) 2021.

First, establishing a bold policy in the manifest of Indonesia’s political support to encourage decarbonization and the development of low-carbon technologies.

“As we observe today that, several policies that are correlated with decarbonization efforts are not sufficient yet. If we observe at KEN and RUEN in 2050, the portion of fossil energy is still quite large, and renewable energy is low, therefore this target needs to be changed,” said Fabby Tumiwa, the Executive Director in stating the 10 recommendations at the IETD 2021.

Fabby said the energy decarbonization process would take at least the next three decades. Hence, decarbonization needs to be supported by long-term policy certainty which is consistent and unflinching.

Second, determining the policy that creates a level playing field between renewable energy and fossil. Because the economy of renewable energy can compete with fossil energy.

“Solar and wind energy can knock out fossil energy. However, there are still existing policies that shape fossil energy as cost-cheap, therefore we need the policy to eliminate the fossil energy subsidies,” said Fabby.

By removing subsidies on fossil energy or defining the right carbon price in boosting the renewable energy economy, it will accelerate the development of renewable energy.

Third, developing a national energy plan based on reducing carbon emissions and considering the potential for expanding existing low-carbon technologies. Fabby said there have been several plans for technology utilization. But the plan needs to consider the speed of innovation in each of the world’s low-carbon technologies.

“Moreover it is also necessary to consider how the price of this low-carbon technology will be until 2050. Therefore, energy policies, particularly those related to costs, must be considered in the long term. What is affordable today, due to market distortion, could be expensive in the future,” said Fabby.

Fourth, determining the optimal plan to retire coal-fired power plants (CFPP) based on data analysis on each CFPP unit. This analysis can be used to define several strategies and the suitable implementation time for each CFPP unit.

“Then we also have to think about how much capacity remains and we must supply it (with renewable energy) when the power plant retires,” said Fabby.

Strategies to overcome the issues are such as refinancing to accelerate the retirement period of the CFPP, retrofitting the power plant, and diverting funding and investment from thermal energy to renewable energy.

Fifth, increasing the bankability of renewable energy projects by improving the project scale and comprehensive regulatory support. The development of renewable energy on a large scale has been proven to drive highly competitive renewable energy prices.

Sixth, increasing the adoption of electric vehicles by establishing the electric vehicle ecosystem. Fabby continued that it needs combinations of several policies to accelerate the penetration of electric vehicles. For instance, stipulating disincentive usage of fossil fuels such as the prohibition of using fossil vehicles and the establishment of standards for fossil fuel efficiency.

Seventh, determining the role of clean fuels towards 2050 in the deep decarbonization of the transportation system. Electric vehicles will have been dominant in the sector of passenger vehicles.

“Yet the role of clean fuels also needs to be prepared to support the decarbonization of the transportation sector which is difficult to be replaced by electric vehicles,” said Fabby.

Eighth, Indonesia needs to provide integrated policy support from multiple parties. Furthermore, Indonesia needs collaboration from various parties to attract investment in renewable energy.

“In the short term, until 2025, efforts need to be made to improve the investment climate and encourage the deployment of renewable energy. Currently, there are many national and international funding sources ready to support it. However, Indonesia is now only waiting for the government’s commitment to renewable energy targets through government policies,” said Fabby.

Ninth, the government needs to develop a low-carbon industry as a national priority industry. Indonesia has identified its potential low-carbon industry. It should be included in the National Medium-Term Development Plan (RPJMN) and the National Industrial Development Master Plan (RIPIN). For example, the battery industry, the electric vehicle industry, and the clean fuel industry.

“Industrial development needs to be aligned with the domestic technology research and development plan. Moreover, we need to commercialize and scale up domestic technology projects to increase the demand for technology. And it needs to be prioritized to maximize the potential of sustainable natural resources,” explained Fabby.

“The low-carbon technology industries are solar panel manufacturing, battery manufacturing, and hydrogen production. Moreover, training and preparation of workers are needed to support the development of the industry from year to year,” added Fabby.

Tenth, the government needs to prepare local workers for future low-carbon industries by supporting domestic industries and maximize the positive socio-economic impact of the potential development of low-carbon technology industries in Indonesia.

The IETD 2021 event lasts for 5 days which includes 13 main sessions and several additional sessions. IETD 2021 involved more than 80 speakers and panelists international and national leading, as well as the participation of more than 1500 users from all over the world.

De-risking Instruments for Renewable Energy Funding

Jakarta, September 24, 2021 – The world is moving in accelerating the energy transition to clean energy to pursue the Paris Agreement target of preventing the earth’s average temperature from rising above 1.5 degrees Celsius. Renewable energy financing in Indonesia is increasingly wide open as the commitment of developed countries to assist the transition of renewable energy in developing countries. This funding requires the support of government policies to minimize the funding risks and increase investment interest in renewable energy.

It was said by Deni Gumilang as advisor to Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) in the fifth day of the Indonesia Energy Transition Dialogue (IETD) 2021, Friday (24/09/2021).

Deni said that currently there are various kinds of de-risking instruments in funding renewable energy for Indonesia, including the provision of guarantees, green bonds, and concessional debt. However, in his opinion, the de-risking instruments need to be supported by policies and regulations to reduce the risk of renewable energy investment, such as by setting clear renewable energy targets.

“So far, there are still many differences in emission reduction targets within the government. If there is consistency in the target, the collaboration between all stakeholders will be easier to be implemented, ” added Deni.

Moreover, Deni explained that Indonesia needs to consider the technical support for integrated renewable energy development, create a licensing climate that supports small-scale projects, and increase the credibility of renewable energy projects to be bankable in obtaining funding.

In response to this, the President Director of PT SMI, Edwin Syahruzad, said that PT SMI has provided a de-risking project by providing technical support. This makes it easier for developers to access technology and funding a renewable energy project.

Member of the Indonesia Clean Energy Forum (ICEF), Faisal Basri said that renewable energy is needed to encourage Indonesia’s economic development. Because, if decarbonization is not immediately implemented, Indonesia is predicted to have a large energy deficit.

“If we don’t immediately decarbonize, then by 2040 we will have an energy deficit of USD 80 billion. Because we will import more energy than export. It happens because our needs (on energy) will grow higher. Therefore, we need a long-term plan of macroeconomics by more accelerated decarbonization,” said Faisal.

However, he thought that, in reality, the government’s policies have not supported renewable energy. As it is reflected in Indonesia’s State Budget, which still provides hundreds of trillions of subsidies for fossil energy.

Faisal believes that the government needs to put forward the right policies to support the research of renewable energy and ensure the development of the renewable energy industry, to ensure that Indonesia will be a player too, rather than just a consumer.

Supporting the statement of Faisal, Lisa Wijayani, Manager of the Green Economy Program, IESR revealed that the synergy of economic growth with energy transition is essential to provide positive benefits for human life.

“There are several opportunities that can be developed, such as through the development of electric vehicles, implementing energy efficiency, creating a green industry so it can generate many green jobs,” said Lisa.

Arunabha Ghosh, Founder, and CEO of the Council on Energy, Environment, and Water (CEEW) added the importance of aligning human resource development to meet with green jobs that will be created forward with the energy and economic transformation of the country.

“In India, we have a skill council for green jobs which is set up to improve manpower in renewable energy. Within the skills council, there are various programs to train tens of thousands of people from various backgrounds, they graduate from well-known universities, not have from top universities” he explained.

Electric Vehicles is Effective Option in Providing Low Carbon Transportation

Jakarta, 23 September 2021 – The Institute for Essential Services Reform (IESR) studies entitled Deep decarbonization of Indonesia’s energy system shows that biofuels and hydrogen have a role in achieving deep decarbonization of the transportation sector. The dominance of electric vehicles using electricity sourced from renewable energy will be settled in 2050 especially for passenger vehicles, while biofuel and hydrogen will be potential in the heavy ground transportation

Julius Adiatma, Clean Fuel Specialist, IESR explained that in the short term, hydrogen has the potential to be used in the industrial sector by observing the economic development of hydrogen.

“For the land transportation sector, battery-based electric vehicles are the most suitable option because their efficiency is higher than other options. The price continues to decline, as the technology also keeps improving and it’s getting faster (to achieve the target by 2050),” he said on the fourth day of Indonesia. Energy Transition Dialogue (IETD) 2021 held by the Indonesia Clean Energy Forum (ICEF) and the Institute for Essential Services Reform (IESR), Thursday (23/09/2021).

Economically, he believes that biofuels, particularly biodiesel will have a significant role in Indonesia. He considers the availability of organic sources to produce biofuels.

“Unfortunately, currently biofuels are focused on palm oil. Meanwhile, the available land is getting fewer for developing palm oil. So we have to find other ways to produce biofuels other than palm oil, for example from waste or other plants,” he explained.

Referring to the National Research and Innovation Agency (BRIN) Outlook Energy 2021, Eniya Listiani Dewi, a BRIN researcher said the development of electric vehicles by using renewable energy will effectively reduce carbon emissions.

“We ask PLN (State Electric Company) to increase the penetration of new and renewable energy. If the electric vehicle has a limited range, we will extend it by using hydrogen fuel,” said Eniya.

In her opinion, the technology for developing green hydrogen fuel with the concept of electrolysis from a combination of Solar PV or wind turbines can make it energy carries.

“Currently, an electrolysis study of the Cirata Floating Solar PV is being carried out. Next, the excess energy from the Solar PV will be recommended for processing of electrolysis of water and producing hydrogen gas, “she said.

Alloysius Joko Purwanto, Energy Economist, Economic Research Institute for ASEAN and East Asia (ERIA) explained a scenario to support the development of hydrogen in the transportation sector, one of which is the use of hydrogen produced from gas (grey hydrogen) to create markets and build infrastructure that needed and subsequently switch to green hydrogen which is produced using renewable energy.

As part of the principle development of green hydrogen in Indonesia, he explained that it is also necessary to look closely at the market niche for hydrogen-fueled transportation.

“Hydrogen may be suitable for long-range vehicles or heavy equipment vehicles, such as commercial vehicles or busses. Then it must be adjusted to the area where renewable energy for electricity is sufficient,” concluded Joko.

Preparing the Ecosystem to Support Electric Vehicle Penetration

Jakarta, 23 September 2021 – As the second-highest emitter in the energy sector after the power generation sector, electrification of the transportation sector based on renewable energy will be one of the significant pillars to reduce carbon emissions and prevent global temperature rise exceeding 1.5 degrees Celsius. There are at least three main drivers of accelerating the adoption of electric vehicles, such as the availability of supporting regulations, adequate infrastructure, and affordability of prices.

These main driving factors were presented by Rahul Gupta, Senior Expert at McKinsey & Company, on the fourth day of the Indonesia Energy Transition Dialogue (IETD) 2021. In his opinion, there is a big economic opportunity for Indonesia if it can create an electric vehicle ecosystem because Indonesia has the potential to become the largest market after China and India.

“We project two-wheeled vehicles to be the main driver in terms of significantly higher penetration (electric vehicles),” he explained.

Comparing the electric vehicle ecosystem in Indonesia, Zainal Arifin, Vice President of Technology Development and Standardization, PT Perusahaan Listrik Negara (State Electric Company), admits that electric vehicle infrastructure in Indonesia is still limited.

“We have built 32 electric vehicle charging stations in 14 cities. Based on the roadmap, we will have more than 2400 units for electric vehicle charging stations throughout Indonesia in the next 5 years,” he said.

Zainal added that to meet the needs of electric vehicle infrastructure, the construction of charging stations will be fulfilled by 40 percent by State Electric Company (PLN) while the remaining will be built by private companies. Furthermore, Zainal also said that the disparity in price with conventional vehicles made the demand for electric vehicles less attractive.

The price issue was also highlighted by Sony Sulaksono, Director of Maritime Industry, Transportation and Defense Equipment, Ministry of Industry. He stated that the Indonesian government has set a target of 1.6 million two-wheelers and 400 thousand four-wheel electric vehicles by 2025. However, the adoption of electric vehicles in Indonesia is currently under 2000 units.

In his opinion, the government has tried to reduce the price by issuing Government Regulation (PP) NO. 74, which regulates incentives and disincentives for electric vehicles and conventional vehicles.

“For instance (the government) is giving a 0% luxury tax for electric vehicles,” he said.

Furthermore, Sony highlighted that the higher price of electric vehicles is also influenced by the cost of batteries which cover 40-50% of the total cost of electric vehicles.

Sony said that the battery swap stations area is the solution as the research and development of electric vehicle batteries is still being developed in order to reduce costs. He explained that using this approach, transportation companies will be able to rent out electric batteries to the public. The fees are charged based on kilometers traveled by electric vehicles.

On another occasion, Idoan Marciano, a Researcher and Specialist in Energy and Electric Vehicles, IESR, said that to bridge the the price gap of electric vehicles is increasing the tax incentives from the government, the usage of more affordable electric vehicles models and meet with the preferences of the Indonesian community, as well as parallely accelerate the development of the domestic battery industry.

“The development of the domestic battery industry is important to support efforts to achieve deep decarbonization targets. Its existence will support the penetration of electric vehicles and is necessary for the electricity grids simultaneously with the increase in the renewable energy mix,” explained Idoan.

Toto Nugroho Pranatyasto, President Director of the Indonesian Battery Company (IBC) said that IBC is in progress to produce and develop electric batteries. IBC is also developing battery recycling to anticipate battery waste.

“This development is not something that can be done quickly, we need a large amount of investment. To develop 140 GWh of battery capacity, we need an investment of around USD 15.3 billion for three to four years,” Toto said at the IETD 2021.

Toto added that besides the electric battery development process, IBC also involved various partners to design the supply chain and technology. It is to prepare the electric vehicle ecosystem chain.

“The government needs to encourage electric vehicles into the middle-cost segment. The range price of two-wheeled vehicles also needs to be affordable, “said Toto.