Jakarta, November 14, 2024 – The Indonesian government plans to build 100 Gigawatts (GW) of power plants with 75 percent of capacity from renewable energy until 2040, which requires an investment of USD 235 billion or Rp3,710 trillion (exchange rate of Rp15,790.62/USD). The Head of the Indonesian Delegation presented this plan to the 29th UN Climate Change Conference/Conference of the Parties (COP), Hashim S Djojohadikusumo, in Baku, Azerbaijan (12/11).
The Institute for Essential Services Reform (IESR) welcomes PT PLN’s plan to build 75 GW of renewable energy plants as part of Indonesia’s commitment to achieve its 2060 decarbonization target. However, IESR also cautions that the plan is not fully aligned with the Paris Agreement’s target of keeping global temperature rise below 1.5°C, which demands a more aggressive renewable energy transition.
At the COP-28 event, Indonesia agreed with the COP decision to achieve the target of limiting the rate of temperature rise by tripling up renewable energy capacity and doubling down on energy efficiency efforts by 2030. IESR believes that this agreement should be translated into targets in the National Energy Policy (KEN), the National Electricity General Plan (RUKN), and the Electricity Supply Business Plan (RUPTL).
The Executive Director of IESR, Fabby Tumiwa said Indonesia needs to show a more serious commitment and real action to achieve the Paris Agreement targets. For this reason, according to him, every renewable energy development plan must be accompanied by a strategy to phase-down and phase-out coal power plants by 2045 to align with the target of limiting temperature rise to 1.5 C. IESR assesses that this combination of steps will be crucial in significantly reducing greenhouse gas emissions and decarbonizing the electricity sector in 2050.
“So far, the implementation of renewable energy development plans in Indonesia is not realized. Although big plans are often announced, IESR notes that the implementation is still far from the targets set. This can be seen from Indonesia’s failure to reach the 23 percent renewable energy mix target in 2025,” Fabby said.
Fabby urges the government not only to deliver fantastic targets in international forums but also to ensure implementation and concrete efforts in removing various obstacles and challenges. Thus, the targets set can be achieved and not just a discourse.
Moreover, IESR encourages Indonesia to focus on developing renewable energy with the lowest cost option, optimal supply reliability, and reliable technology. Deon Arinaldo, Program Manager of Energy Transformation System, IESR, revealed that the Indonesian government’s plan to develop nuclear energy must consider institutional readiness, technological readiness and reliability investment, investment costs, social costs, and other risks.
“Based on IESR calculations, with massive electrification and accelerated renewable energy that is faster to build, cheaper, and low risk of delay, Indonesia can build 120 GW of renewable energy by 2030 relying on solar and wind. This capacity could bring the renewable energy mix to more than a third of Indonesia’s electricity mix, peak emissions before 2030, and facilitate achieving zero emissions in the electricity sector with 100 percent renewable energy by 2045,” Deon explained.
IESR encourages the government, especially under the leadership of President President Prabowo Subianto’stors, to develop a more comprehensive energy transition strategy. This strategy should not only deliver big targets but also include policy and institutional reforms to ensure that PLN and related parties can meet the renewable energy targets that have been set.
In terms of funding, the investment of USD 235 billion must be managed well to accelerate a just and sustainable energy transition. IESR also encourages that this funding source be directed to clear renewable energy projects thatclear renewable energy projects thatct in reducing carbon emissions in Indonesia.
