South Sumatra, 22 November 2024 – South Sumatra Province is one of the five largest coal producing provinces in Indonesia, and continues to record significant production increases, with a target in 2024 to reach 131.28 million tons, up 24% from the previous year. With the urgency of the energy transition, the complexity of transforming energy systems and economies in coal-producing regions is an issue that cannot be ignored – especially with Indonesia’s target to achieve Net Zero Emission (NZE) by 2060.
In the context of the 2024 South Sumatra Governor and Deputy Governor Elections, people need leaders with a strong commitment to sustainable natural resource management and readiness for the energy transition. Although the issue of energy transition is often marginalized by populist narratives, energy transition is a crucial responsibility to ensure economic and environmental sustainability. With the potential of renewable energy and other alternative economic sectors that can become the backbone of economic transformation, the elected leader is expected to realize the vision of sustainable development for the province.
Candidates’ Views on South Sumatra’s Energy Transition
All three gubernatorial candidates see the importance of transitioning from fossil energy to renewable energy as a strategic step for energy and environmental sustainability that involves the readiness of government, society, and the application of renewable technology. Currently, coal still dominates the industrial sector and power generation, but it must be reduced as renewable energy develops. This process requires the readiness of society and the government to adapt, including in the application of clean and renewable energy-based technologies, such as the use of electric vehicles and more efficient electronic devices. The government also needs to issue regulations and incentives that support the acceleration of this transition.
South Sumatra has great potential in renewable energy, such as the utilization of solar energy over lakes, hydropower plants (PLTA), and biomass from palm oil waste, which can meet 50% of the province’s energy needs. Reducing dependence on fossil energy not only reduces the energy deficit, but also reduces dependence on imports. Local governments should be the pioneers to implement an energy transition that can improve welfare, including for palm oil farmers through diversification of agricultural products. This step is important to ensure a sustainable energy system for a better future.
Panelists’ Responses to the Governor Candidates’ Views on Energy Transition
This public discussion presented panelists with various backgrounds, namely Imam Asngari, Lecturer at Sriwijaya University; Rabin Ibnu Zainal, Director of Lembaga Pilar Nusantara (PINUS); and Taufik Wijaya, senior journalist of Mongabay Indonesia.
All three agreed that the shift from fossil energy to renewable energy, such as solar energy and biomass, will have an impact on the economy, especially in areas that depend on mining. In Indonesia, the mining sector accounts for up to 50% of economic value in some regions, so the reduced use of coal and petroleum will affect economic growth and potentially lead to social problems such as poverty and unemployment. However, the energy transition is a necessity to address climate change. To anticipate the socio-economic risks that will occur, the government and other stakeholders need to plan an inclusive economic transformation, including the identification of other leading sectors such as the downstreaming of local commodities and the development of renewable energy technologies as new opportunities that can reduce dependence on fossil energy and provide positive impacts on the environment, economy and health.
The three pairs of candidates for Governor of South Sumatra Province have expressed their visions related to energy, but their understanding is still limited. Therefore, concrete plans and actions are needed, which consider social and economic impacts. In addition to replacing fossil-based energy sources with renewable energy, coal-producing provinces such as South Sumatra need to implement sustainable development based on the green economy, including developing sustainable economic sectors such as agriculture and plantations as alternatives to the coal economic sector. A study by IESR and Sriwijaya University (2024) shows that the decline of the coal industry in Lahat Regency as one of the regencies with high coal potential in South Sumatra has an economic and social impact, especially the reduction of employment and purchasing power. To maintain regional stability, it is necessary to develop alternative sectors such as agriculture, trade and processing industries and include downstreaming of local commodities for economic sustainability.
In addition, the energy transition also requires an inclusive process that considers social impacts and engages communities. Leaders with a long-term vision and a well-thought-out strategy are needed to ensure the sustainability of the energy transition.
Discussion Participant Responses
Energy plays a vital role in supporting the welfare of South Sumatra, and its use must prioritize community welfare and environmental quality improvement, not just exploitation of natural resources. The commitment of elected leaders in utilizing energy for the benefit of the people is crucial, with a focus on a just and sustainable energy transition. However, there are still candidates who emphasize economic security derived from coal mining activities without considering the urgency of energy transition and the risks of its socioeconomic impacts in the long term. In addition, candidates for Governor and Deputy Governor of South Sumatra have included energy in their visions and missions, but there is no clear commitment to energy transition and sustainable development.
Having leaders who have a deep understanding of the urgency of the energy transition will greatly determine the readiness of the region in the energy transition process, given its impact on environmental and economic sustainability. Local governments need to prepare strategies to manage the energy transition in an inclusive manner, with attention to affected workers and sectors and the development of other leading economic sectors. Successful energy transition requires strong leadership and effective implementation to ensure social and economic equity.
Conclusion
The public discussion “Exploring the Commitment of Regional Head Candidates to Energy Transition in South Sumatra” highlighted South Sumatra’s challenges to energy transition, including its impact on the economy and employment. To minimize the impact of the energy transition and ensure that people feel the benefits, strong and visionary leadership and fair and inclusive policies are needed, involving the community, the private sector and other relevant parties.
To that end, IESR presents the following recommendations to regional head candidates to support a sustainable transition:
- As a coal-producing region that benefits economically from activities in the sector, South Sumatra faces socio-economic risks from the energy transition; particularly related to declining regional income, economic turnover in the mining and supporting sectors, and employment. To minimize these socioeconomic risks, regional heads and the government need to shift the development and economic paradigm to sustainable development and green economy and plan a phased strategy of economic transformation for economic sectors and workforces affected by the energy transition.
- Renewable energy development in South Sumatra needs to be accelerated through collaboration between the local government, private sector, academia and civil society. Regional head candidates and other policy makers should integrate a deep understanding of the energy transition into the regional development vision, by formulating policies that are inclusive and equitable. This includes providing incentives such as subsidies or microfinance schemes, as well as easing regulations to encourage the adoption of renewable energy. In addition, participatory approaches in planning, including involving vulnerable groups and women, are important to ensure the sustainability of renewable energy projects such as solar power plants (PLTS) and bioenergy, while increasing community acceptance of these technologies.
- Community empowerment is key to a successful energy transition in South Sumatra. Education, technical training and extension programs need to be developed to empower local communities as users and business actors in the renewable energy value chain. Local governments must also strengthen project governance and monitoring mechanisms, engaging communities to prevent social conflict and ensure local economic benefits. By optimizing the potential of its renewable energy resources, such as solar, bioenergy and hydro, South Sumatra can attract investment and lead the energy transition in Indonesia, creating a sustainable positive impact on the environment and regional economy.
Advanced reference:
- Just Transition in Coal Producing Regions of Indonesia
- Indonesian Government’s Capacity for Just Energy Transition Planning
- Health Benefits of a Just Energy Transition and Coal Phase-out in Indonesia
