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IESR: Indonesia Needs a New Strategy to Achieve 23% Renewable Energy Mix by 2025

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Jakarta, July 27, 2023 – In facing the challenges of climate change and striving for sustainable national growth, the Institute for Essential Services Reform (IESR) assesses that accelerating renewable energy development has become necessary. Through the National Energy Policy (KEN), the Indonesian government has set a target of increasing the share of primary renewable energy to 23% by 2025 as one of the benchmarks.

Based on data from the Ministry of Energy and Mineral Resources (MEMR), the utilization of national renewable energy in 2022 only reached 12.3% of the target of 23% by 2025. IESR sees the electricity sector as having the most significant potential to support the achievement of renewable energy targets. According to the National General Energy Plan (RUEN), it is necessary to have 45.2 GW of electricity sourced from renewable energy by the year 2025. However, renewable energy development needs to be faster, with a growth rate of around 400-500 MW per year over the past five years. This growth is also far from the government’s target of increasing renewable energy by 2-3 GW per year in the last five years.

Deon Arinaldo, the Manager of the Energy Transformation Program at IESR, revealed that the Indonesian government needs to prepare a new strategy to promptly achieve the 23% renewable energy mix target by 2025 and consistently increase the renewable energy achievement targets. 

“The National Energy Policy (KEN) aspiration is to achieve national energy independence and resilience that supports sustainable development. Therefore, Indonesia must remain optimistic and ambitious in increasing its renewable energy mix. Even while updating the KEN document, the target for the renewable energy mix needs to be maintained or even raised. What is needed is a new strategy that considers technological advancements, current economic growth, and can be implemented quickly, such as how to accelerate rooftop solar PV installations optimally in the next two years,” Deon emphasized during the Road to Indonesia Energy Transition Dialogue (IETD) 2023, Expert Discussion Webinar on Thursday (July 27, 2023).

His Muhammad Bintang, a Researcher in Energy Storage Technology and Battery Materials at IESR, stated that based on IESR’s study in 2023, power plants contribute more than 40% of Indonesia’s total energy sector emissions. To support the achievement of a 23% renewable energy mix and to consider the realization of lower energy demand growth than the RUEN projections, it is required to have at least 24 GW of installed renewable energy generation capacity that needs to be in place by 2025 or an additional 13 GW should increase it within the next two years. This means that the growth of renewable energy generation needs to reach 5-7 GW per year.

“To achieve the net zero emission target (NZE) by 2060 or earlier, several concrete strategies are needed. According to IESR’s study, some of the identified strategies in the electricity sector include increasing the success of Commercial Operation Date (COD) for geothermal power plants by 1.4 GW and hydropower plants by 4.2 GW, increasing the capacity of the de-dieselization program for scattered diesel power plants from 588 MW to 1.2 GWp of solar power plants and batteries, constructing 4.7 GW of solar PV power plants and 0.6 GW of wind power plants. Additionally, the implementation of biomass co-firing in PLN’s coal-fired power plants with an average share of 10% for Java-Bali and 20% for non-Java-Bali power plants, and the early retirement plan for certain coal-fired power plants. Among the various technology options, expanding solar PV power plant capacity can become a viable solution to achieve the 23% renewable energy mix target quickly. Compared to other power generation technologies, solar PV plant development is relatively faster,” Bintang explained.

Bintang explained that accelerating the development of renewable energy requires the readiness and flexibility of the electricity system to increase the penetration of various renewable energies (variable renewable energy, VRE). To meet the NZE target, the role of VRE power plants needs to be enhanced, from the current 0.4% to around 4% by 2025 and increasing to 77% by 2060. Moreover, investments are required for constructing power plants and developing infrastructure to accommodate the penetration of variable renewable energy (VRE).

IESR encourages Indonesia to smoothen and accelerate the energy transition. Through the organization of the Indonesia Energy Transition Dialogue (IETD) 2023, IESR will involve numerous experts to delve deeper into efforts to transform the operation of the electricity system as a strategy for increasing the share of renewable energy. IETD 2023 marks the sixth edition since its first inception in 2018. This year, IETD adopts the theme “Enabling Rapid Power Sector Transformation” and will take place over three days from September 18-20, 2023, held in hybrid form in Jakarta and online. Follow IETD 2023 by visiting the website and take advantage of attractive ticket discounts by registering from July 22 to 28, 2023.

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