Jakarta, April 22, 2025 – A decentralized energy system is a model for energy provision that is considered to have a more participatory approach because it takes into account the involvement of local communities and utilizes energy sources available locally.

Lessons learned from the development of energy decentralization projects on a global scale were one of the discussion topics of the Regional Dialogue: Promoting Decentralized Energy Access in Southeast Asia organized by the Institute for Essential Services Reform (IESR).

In Europe, REscoop, a cooperative that manages community-based renewable energy development continues to push for a decentralized energy system throughout Europe.

Dirk Vanstijan, President of REscoop EU stated that Europe is facing the threat of an energy crisis, especially during the Russia-Ukraine conflict. Several EU countries have experienced a number of disruptions and even an energy supply crisis due to the loss of gas supplies to the blue continent.

“We need to push our energy and economic systems to the limits that the earth can reach, so that each region can meet its energy needs based on locally available energy sources,” he said.

Taidong Zhou, Vice President, Center for International Knowledge on Development, China, shared the experience of the Karot hydro power plant, one of the Belt and Road Initiatives Green Council (BRIGC) projects located outside China. The 720 MW hydro power plant is located in Lake Jhelum, Pakistan.

“One thing to note from this project is related to the selection of a qualified partner, namely the Chinese Three Gorges (CTG), which has a good portfolio and understands international standards. CTG also pays attention to the local social situation with a cultural approach to ensure that the local community can accept the project well,” he said.

Zhou added that there are four things that are learned from the implementation of this project. First, always follow international standards for technical indicators. Second, continue to improve the compliance system. Third, improve management capabilities through a top-down approach while listening to the aspirations of the actors (bottom-up awareness). Fourth, always understand the local cultural and social context where the project is located.

In addition to referring to international standards, Refi Kunaefi, Country Manager of Akuo Energy Indonesia, explained the importance of the ability to project the growth of the electricity load from the project location. This is important in order to get an accurate estimate of the electricity load. Neither under nor overestimation of the required generating capacity. As happened with one of Akuo Energy’s projects in East Kalimantan.

“When we designed this project, the electricity growth projection was around 7% per year, but after operating for more than seven years, the growth in energy demand was far below the estimate. As a result, the installed capacity exceeds the current population’s needs. However, it is certain that for the next few years, no additional investment is needed to increase the capacity of the power plant,” said Refi.

In addition to the load growth projection, the load profile also needs to be considered. In the case of Akuo Energy, the energy demand during the day is relatively stable and will increase at 6-9 pm. This relatively stable pattern allows for effective battery system management by regulating the energy charging and discharging cycle.

Ziwei Liao, Senior Investment Officer, Asian Infrastructure Investment Bank (AIIB) explained that in order to attract funding institutions for renewable energy projects, it is important to integrate energy access into something broader than just providing energy access to the community. Procurement of added value from economic activities with access to electricity and additional employment can be used as a basis for designing a project.

“This sector requires huge capital investment. Public funding alone will not be enough, so private funding must be attracted to this sector. Therefore, the project design must be made attractive to private investors without leaving the main purpose of the project,” Ziwei said.