The Long Way to Change Indonesia’s Energy Policy

(Jakarta, 20 December 2022) – The development of renewable energy in Indonesia is still very slow. Solar energy for example, data from the Ministry of Energy and Mineral Resources notes that the potential for solar energy in Indonesia reaches 3300 GW. However, its utilization is still less than 1% of the existing potential.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) and Chairman of the Indonesian Solar Energy Association (AESI) at the Inspirational Talks: Renewable Energy, Our Future organized by RESD and the Mentari Program (20/12) said there were a number of factors which currently hampers the development of renewable energy in Indonesia.

“Reducing the shares of fossil energy is not easy because there is a perception that fossil energy is more reliable and renewable energy such as solar and wind is not always available (intermittent). This makes renewable energy as the second choice when planning,” said Fabby.

One of the consequences of this policy is that financial institutions are less interested in financing renewable energy projects. Thus, the development of renewable energy is also very slow at the moment.

What needs to be done is to amend planning documents and energy policies based on credible evidence or studies (evidence based). IESR through its evidence-based studies then provides recommendations to policy makers to make or change policies to transition towards a cleaner energy system.

Even though studies and research have proven that a cleaner energy system will bring more benefits to the government and society, the process of policy change often takes a long time. For this reason, qualified advocacy and communication skills are needed to oversee and urge cleaner energy policies.

Fabby said that it is important to ensure equitable, quality and clean access to energy in the community because by having access to electricity, people or communities will be more prosperous. When people have access to quality electricity, they tend to have a better standard of living because they have more ability to carry out productive activities.

In his closing remark, Fabby emphasized that renewable energy is the future of Indonesia’s and even the world’s energy system. So, it is important to prepare a workforce that is suitable for future needs, especially for prospective workforce who are currently still in school or college.

The Potential Role of the Industry and Community Sectors in Accelerating a Just Energy Transition

Semarang, 10 November 2022 – The energy transition has become the focus of many parties lately. It’s not only the government that has the responsibility to provide clean and affordable energy for the entire community, the industrial sector is also starting to switch to clean energy through various efforts. For companies, today’s global product competitiveness is also determined by how the manufacturing process is carried out efficiently and by using sustainable energy sources. The collaborative action of various sectors in the use of renewable energy will support the acceleration of the energy transition on a national level.

To take a closer look at various initiatives from the industry and community sectors, the Central Java Provincial Energy and Mineral Resources Office in collaboration with the Institute for Essential Services Reform organized the “Jelajah Energi Terbarukan” activity on November 10-11 2022. This activity visits several destinations focused on industries and villages that utilize renewable energy potential. This is the second activity, after last June a similar activity was carried out with a focus on different destinations.

The journey started by visiting CV Jaya Setia Plastik, in Demak, to see how the children’s toy industry saves electricity by installing a 470 kWp on-grid rooftop solar PV.

PLTS Atap di CV Jaya Setia Plastik
PLTS Atap di CV Jaya Setia Plastik

“Currently, what is actually installed on our roof is 1,300 kWp, but we have not used the other 470 kWp connected to PLN because we are currently constrained by regulations that limit the installation of rooftop PLTS to a maximum of 15% of the total installed power,” Wahyu representative of CV Jaya Setia Plastik explained. 

Djarum Kretek Oasis, which is located in Kudus, Central Java, also experienced similar challenges. Having several types of green industry initiatives such as the use of biomass boilers, rooftop PLTS, water storage ponds equipped with wastewater treatment facilities, Djarum is still determined to continue to increase its renewable energy capacity.

“Our roof area can still accommodate more solar PV, but due to regulatory limitations we have not been able to add capacity,” said Suwarno, Deputy General Manager Engineering at PT Djarum.

The limitation of rooftop PV capacity has become a concern of various parties because it has become one of the obstacles for consumers, especially the industrial sector, to install or increase the capacity of their rooftop solar. Currently, the Ministry of Energy and Mineral Resources and PLN are in the process of revising the Minister of Energy and Mineral Resources’ decree no. 26/2021 which regulates the installation of rooftop PV for PLN consumers.

Apart from utilizing solar rooftop, Djarum Oasis has also designed a sustainability scheme for its factory comprehensively covering various aspects, one of which is by utilizing the pruning trees of ‘trembesi’ (Samanea saman) planted on a number of toll roads as part of its CSR, as wood chips for biomass boiler fuel.

The first day’s journey continues towards the waste-to-energy plant Putri Cempo, which is in the Surakarta area. This plant has signed a Power Purchase Agreement (PPA) with PLN and will be on COD at the end of 2022. Elan Suherlan, Director of PT SCMP (Solo Metro Citra Plasma) explained, Putri Cempo waste-to-energy plant exists to overcome the waste problem in Surakarta city which can no longer be accommodated by the Waste Processing Site. PT SMCP, which won the tender for the plant construction, started its construction in 2021.

“Later Putri Cempo waste-to-energy plant will produce 5 MW of electricity and will be distributed to PLN,” said Elan.

What needs to be observed is a clear calculation of the greenhouse gas emissions resulting from this waste-to-energy plant.

The first day of “Jelajah Energi” was closed by visiting Krendowahono Village, which has utilized biogenic shallow gas for 30 households. Biogenic gas is produced from organic compounds such as plants and grasses that decompose with the help of bacteria. Because it comes from residues of organic compounds, biogenic gasses are generally found in shallow soil layers. Since its amount is relatively small and dispersed, biogenic gas must be compressed (increased pressure) so that it is easy to flow and use.

Several villages in Central Java have quite a lot of potential for biogenic gas, including Gabus Village, in Ngrampal District, Sragen, Rajek Village, in Grobogan, Bantar, and Pegundungan Villages in Banjarnegara, which can be used as an alternative energy source for cooking. The biogenic gas utilization installation is also relatively low and can be used communally.

Solihin, head of RT 6, Krendowahono Village, explained that the discovery of swamp gas started with residents who were going to make a well for a water source but when water was found at a certain depth, the water could actually catch fire.

“After we reported it and a team came to check it, turned out that this gas can be used for households,” he said.

Mrs. Uni, one of the beneficiaries of the swamp gas, admitted that by using the swamp gas she could save on cooking fuel quite significantly.

“Usually in a month I can use 4 of 3 kg of LPG gas, now it’s only 1,” she said while showing her kitchen. Uni admits that she still uses LPG gas as a fuel reserve for cooking because the stove from swamp gas only has 1 burner.

Currently the local communities are designing an operational system for the swamp gas network, starting from the operating hours of the machine, the amount of contributions, and maintenance costs.

ISEO 2023 Launch: Indonesia Needs Clear Targets and Effective Implementation to Develop Solar Energy

Jakarta, 27 October 2022 – The Institute for Essential Services Reform (IESR) launched the Indonesia Solar Energy Outlook 2023 report. This report was originally part of the Indonesia Energy Transition Outlook (IETO) which has been routinely published every year since 2018. Starting this year, the solar energy section is made in a separate report to provide a more in-depth report on the development of solar energy in Indonesia and the supporting ecosystems that solar energy needs to grow in Indonesia.

Fabby Tumiwa, Executive Director of IESR, in his remarks at the Shine Bright: Advancing G20 Solar Leadership event organized by IESR with the support of Bloomberg Philanthropies, and in collaboration with the International Solar Alliance, and the Indonesian Solar Energy Association, stated that solar energy prices remain competitive despite the existence of increase in the price of raw materials for the manufacture of solar panels. Fabby also emphasized the importance of developing the solar industry for both Indonesia and all G20 countries which are in the spotlight in efforts to reduce global emissions.

“Developing cooperation in solar manufacturing among G20 countries will secure the supply of solar module and cell production, balance systems to meet future demand, and reduce product monopolies.”

On the same occasion, the Minister of Energy and Mineral Resources, Arifin Tasrif, emphasized the need for support from the industry and local solar module manufacturers to meet the requirements for the Local Content Requirement (LCR) considering that Indonesia has mineral materials to make solar modules and batteries.

“Easy access to financing, incentives, and other financing facilities is very important to provide the cost of a feasibility study and increase investment in renewable energy, one of which is solar,” said Arifin.

Ajay Mathur, Director General of the International Solar Alliance, said that to make solar energy the energy of choice, three things that must be taken as strategic steps. First, providing the latest information, analysis, advocacy, and establishing relationships with various parties. Second, providing adequate resources so that solar energy investments ‘flow’ is important because investors will assess and weigh various situations that can affect the return on their investment capital.

“ISA approved the creation of a solar energy financing facility that provides risk capital guarantees,” explained Ajay.

Ajay added, the third step, it is important to build the capacity and capability of various parties who handle the development of solar energy such as policymakers, operators, and regulators.

Daniel Kurniawan, the lead author of the Indonesia Solar Energy Outlook 2023 report, presented some findings from this report. One of them is that although solar energy is getting more and more attention until Q3 2022 only 0.2 GWp of solar has been built.

“Based on the 2021-2030 RUPTL, PLN plans to add 3.9 GW of solar energy in 2025, of which 2.45 GW will be procured under the IPP scheme and 1.45 GW will be auctioned directly by PLN. However, until Q3 2022 there are only eight IPP projects with a capacity of 585 MWp,” explained Daniel.

Presidential Decree number 112/2022 which was issued in September 2022 is expected to provide fresh air for the energy transition in Indonesia, at least with regulations on renewable energy prices and instructions to accelerate the termination of coal-fired power plants.

To encourage the acceleration of the use of solar energy, the ISEO 2023 report recommends some steps, including PLN which can arrange a schedule for renewable energy auctions, especially solar for 2023. Previously, the government had to set ambitious and binding targets for renewable energy in certain years, for example 30% in 2025-2030, 90% in 2040, and 100% in 2050. With a target like this PLN must make room for solar energy in the PLN network.

“The IEA analysis shows that the Java-Bali and Sumatra systems can accommodate 10% of solar energy from their total capacity with flexible PLTU operations,” explained Daniel.

Although the system is technically capable of handling solar energy variability, the main challenge in realizing greater solar penetration is contractual inflexibility (particularly due to the take-or-pay clause in the coal plants power purchase agreement with the IPP as well as the primary energy supply contract for gas).

Daniel also added, considering the readiness of the domestic solar manufacturing industry, the percentage of Local Content Requirement (LCR) needs to be adjusted for a limited time, for example until 2025. While preparing the domestic manufacturing industry for decarbonization.

Finally, ISEO 2023 also recommends that PLN review the policy on limiting the installation of rooftop solar PV.

Henriette Faergemann, Environment, Climate Action EU Delegates to Indonesia and Brunei Darussalam, stated that it is important to create an ambitious and consistent energy transition policy to provide a strong signal to investors and financial institutions so that they are interested in participating in financing the energy transition.

“There is good progress for Indonesia in formulating its policies, but there are still many things that need to be done and improved if Indonesia wants this (energy transition) to happen quickly,” Henriette explained.

Joshua Wyclife, Chief of Operations International Solar Alliance, agrees that structural change is needed and this change starts with policy. Joshua also stated that this ISEO report is one way to increase awareness for various parties about the current situation of solar energy development in Indonesia.

“One way to maximize solar potential in Indonesia is to increase the level from awareness to advocacy, by various parties through various ways such as workshops, facilitating training programs with existing resources,” said Joshua.

Meanwhile, Rahmat Mardiana, Director of Electricity, Telecommunications, and Information at the National Planning Agency (Bappenas), stated that this report would be studied further considering that Bappenas is currently preparing national development planning documents such as the RPJP and RPJM, one of which is about the energy transition strategy.

“With our commitment to achieve the RUEN, Paris Agreement, and NZE targets, of course we must provide reliable electricity at affordable prices, and gradually fossil power plants will be replaced by renewable energy,” explained Rahmat.

Dewanto, Vice President of Various Energy PLN, said that PLN continues to support the development of renewable energy.

“The Business Plan (RUPTL) is a tangible manifestation of PLN’s support for new and renewable energy. According to the RUPTL, until early 2023 PLN will auction almost 1 GW of renewable projects,” Dewanto said.

Having Slow Solar PV Development in 2022, Indonesia Needs to Push the Implementation of Supporting Policies

press release

Fabby Tumiwa delivered his speech at the Shine Bright: Advancing G20 Solar Leadership event

 

Jakarta, 27 October 2022 – To achieve the target of a 23% renewable energy mix by 2025 and the energy system’s decarbonization by 2060 or earlier, Indonesia needs to seriously improve and implement policies that encourage the development of renewable energy, especially solar energy. The utilization of solar energy is believed to be fast and strategic to achieve these targets. Presenting the complete review of the development of solar energy throughout 2022 and providing a projection in 2023, the Institute for Essential Services Reform (IESR) published the flagship report, Indonesia Solar Energy Outlook (ISEO) 2023.

Arifin Tasrif, Minister of Energy and Mineral Resources of Indonesia on the event of Shine Bright: Advancing G20 Solar Leadership organized by IESR, said that based on IRENA data, the cost of electricity (Levelized cost of electricity/LCOE) has decreased significantly by 88% between 2010 and 2021, from USD 41.7/kWh to USD 4.7/kWh.

“But based on current practice in the industrial sector, we get offers of up to USD 3/kWh, including USD 4/kWh battery costs,” said Arifin at the Shine Bright: Advancing G20 Solar Leadership event organized by IESR with support from Bloomberg Philanthropies, and in collaboration with the International Solar Alliance, and the Indonesian Solar Energy Association.

Furthermore, he explained that based on the energy transition roadmap in Indonesia, solar energy plays an important role in electricity in Indonesia with 421 GW of 700 GW coming from solar.

“We need support from local producers and industries to fulfil local requirement content (LCR), considering that Indonesia has mineral potential and critical material for solar PV, battery, and electricity network, Besides, the aspect the easy access to cheap financing, incentive, and other financing facilities is very important to provide a financial feasibility study and increase renewable energy investment such as solar energy, “explained Arifin.

Fabby Tumiwa, Executive Director of IESR, said that in general, Indonesia made some progress since 2018, although it is relatively slow in encouraging the development of solar energy. According to him, some reforms are needed in regulations and their implementation, especially before the deadline for realizing the target, which is only three years left.

“Rooftop solar power plants that have the potential of 655 GW for building only, can be built quickly and involve community investment, without overburdening the government. Moreover, to expect additional renewable energy generation capacity from the implementation of PLN’s Business Plan (RUPTL) 2021-2030, rooftop solar power plants can meet a renewable energy mix target of 3 to 4 GW in 2025,” said Fabby.

Fabby added that the government and PLN need to allow permits for rooftop solar power plant installation.

“Availability of soft loan funds from financial institutions can support the adoption of household-scale PV mini-grid. Also, encouraging the adoption of solar PV in industrial areas, and non-PLN business areas needs to be done,” suggested Fabby.

ISEO 2023 stated that the progress of Indonesia’s solar energy can be seen from the decline in the price of solar electricity obtained through a power purchase agreement (PPA) made by PT PLN (Persero) with Independent Power Producers (IPP). Between 2015 and 2022, solar PPA prices declined by 78%, from $0.25/kWh to $0.056/kWh. 

Furthermore, in terms of the project pipeline, there are currently eight projects that have been tendered totalling 585 MWp in capacity. 

“In terms of utility-scale solar power plants, Indonesia has the potential for floating solar power plants. Its future development can make Indonesia a leader, and at the same time realize Indonesia’s leadership in terms of energy transition and use of solar energy in the G20 and ASEAN,” said Fabby.

Dr Ajay Mathur, Director General, of International Solar Alliance said solar energy is a potential energy source to be developed considering the increasingly competitive price of the technology.

“The International Solar Alliance (ISA) is proud to associate with the Institute for Essential Services Reform (IESR) to drive forward our common goal of making solar electricity the energy source of choice across the world. Solar Energy is the world’s most abundant and clean energy source, but also the global energy imperative to drive international climate action due to its fast-decreasing cost,” said Mathur.

At the same time, IESR and ISA signed a memorandum of understanding to accelerate the adoption of solar energy in Indonesia. ISA is an international institution that has various experiences and members from many countries. It has carried out innovations and facilitation to support solar energy development globally. The scope of the collaboration between ISA and IESR includes mapping the domestic solar industry, capacity building, and identifying financing schemes.

ISEO 2023 considers that the establishment of the ceiling price-based pricing in Presidential Regulation No. 112/2022 is expected to provide more space for developers to submit their bids. This regulation has been drafted since 2019 and initially considered feed-in-tariff instruments to encourage the development of renewable energy, especially small scale. 

To encourage the effective implementation of PR 112/2022, a clear and transparent auction mechanism is needed, as a regular and planned auction schedule, as well as providing regulatory certainty and ease of licensing.

ISEO 2023 notes that local content requirements (LCR) are still one of the main obstacles in the auction of solar power plants in Indonesia. Based on Minister of Industry Regulation No. 5/2017, the minimum LCR value of goods for solar module components must reach at least 60% since 1 January 2019. However, the realization of the LCR of solar modules currently only reaches 47.5%. Moreover, the efficiency and price of domestic solar panels still do not meet the requirements of international financing bankability standards. 

“The government needs to review the solar module LCR value provision policy based on industry readiness while preparing a long-term solar module industry policy to decarbonise Indonesia’s energy system,” said Daniel Kurniawan, Researcher, Photovoltaic Technology & Materials Specialist at IESR and Lead Author of ISEO 2023.

On the adoption of solar PV, although the Ministry of Energy and Mineral Resources has issued Ministerial Regulation No. 26/2021, some of its provisions have failed to be implemented, resulting in the slow growth of solar power plants. PLN’s oversupply of electricity is suspected to be the cause of the limitation of rooftop solar power plant (PVP) utilization to 10 to 15 per cent of capacity by PLN in early 2022. If it continues, it will be difficult to realize the solar targets that the government has set, such as the government’s 3.6 GW rooftop solar PSN target by 2025, and the 2.3 GWp solar project pipeline of 31 declarators at the Indonesia Solar Summit 2022.

“The government, in this case, the Ministry of Energy and Mineral Resources and PLN, needs to immediately provide a solution to this issue. Not to hinder adoption at a very early stage of adoption but to nurture the growth of rooftop solar until it reaches self-sufficiency. This can be achieved by providing a stable policy environment for market growth and development of the solar industry,” said Daniel.

The Indonesia Solar Energy Outlook (ISEO) 2023 report was first launched this year. Initially, the progress of solar energy development within the framework of the energy transition was integrated into the Indonesia Energy Transition Outlook (IETO) report.

Energi untuk Memasak Selama #dirumahaja: Tetap Nyaman dengan Energi Bersih Terbarukan 

PT Pertamina baru – baru ini merilis catatan adanya peningkatan konsumsi LPG nonsubsidi rumah tangga di wilayah DKI Jakarta, Jawa Barat, dan Banten secara signifikan (MOR III) dengan adanya penerapan kebijakan dan imbauan physical distancing oleh pemerintah demi mencegah penyebaran dan penularan #Covid19 lebih luas. Aktivitas di rumah, termasuk memasak, meningkat karena anjuran tersebut. Menurut catatan Pertamina, terjadi peningkatan rata-rata konsumsi hingga 23% untuk produk LPG non subsidi Bright Gas 5,5 kg, dan 12 kg di wilayah Cirebon, Indramayu, Majalengka dan Kuningan. Menyikapi hal ini, pemerintah dalam berbagai kesempatan menyatakan bahwa pasokan LPG dipastikan tetap terjaga untuk mengantisipasi kenaikan permintaan dari masyarakat. 

Selain LPG, adakah sumber energi lain yang bisa kita gunakan untuk keperluan memasak di rumah?

Ada alternatif bahan bakar #cleancooking yang selain bersih, juga bisa memanfaatkan sumber energi terbarukan di sekitar kita, yaitu:

Biogas

Biogas bisa didapatkan dengan memanfaatkan limbah dari kotoran ternak dan sampah/limbah organik yang kemudian difermentasi dan menghasilkan gas untuk menyalakan api pada kompor gas maupun kebutuhan penerangan. 

Mama Seni dari Sumba menggunakan biogas dari kotoran ternak dan bertani dengan slurry (produk sampingan dari biogas), beliau kini telah menjadi petani dan pengusaha perempuan yang sukses di desanya. Di Semarang, Ibu Suwanti menggunakan limbah tahu untuk usaha makanan rumahannya, yang selain menghemat biaya bahan bakar, juga membuat tetangganya senang karena tak lagi mencium bau limbah tahu yang kurang sedap. Dengan menggunakan biogas, kedua perempuan ini mampu menjadi pengusaha yang sukses dan menjadi panutan untuk masyarakat 

Jika ingin mengembangkan biogas mini rumahan yang cocok untuk Anda yang ingin punya biogas tapi tidak memiliki ternak, Yayasan Rumah Energi memberikan contoh penggunaan biogas rumah dalam skala kecil.

Tungku Sehat Hemat Energi (TSHE)

TSHE merupakan teknologi tungku bersih yang menyasar 40% rumah tangga di Indonesia yang masih menggunakan biomassa tradisional untuk memasak (misalnya kayu). Dengan menggunakan kayu cacah, pelet kayu, atau pelet serbuk gergaji; TSHE didesain untuk menghasilkan asap dan partikulat yang lebih sedikit, sehingga polusi dalam ruangan dapat berkurang. Kondisi memasak yang lebih bersih berdampak positif pada perempuan dan anggota keluarga lain, yang selama ini banyak mengalami gangguan kesehatan terkait pernapasan. TSHE juga memanfaatkan bahan organik buangan dari sekitar rumah, misalnya tempurung kelapa, sehingga dapat menghemat biaya energi rumah tangga. 

Sejak 2019, mitra IESR yang tergabung dalam Strategic Partnership Green and Inclusive Energy, yaitu Yayasan Lembaga Konsumen Indonesia, juga telah melakukan program peningkatan kesadaran masyarakat tentang energi bersih di Jawa Tengah, termasuk salah satunya melatih dan memberdayakan rumah tangga lokal untuk memproduksi TSHE.  

Kompor Surya (Solar Cooker)

Solar cooker merupakan inovasi #cleancooking yang dikembangkan terutama untuk masyarakat di perdesaan yang kesulitan mengakses gas atau listrik, juga untuk mengurangi deforestasi atau penggunaan kayu bakar secara berlebihan. Dengan desain kompor yg memusatkan panas dari matahari, pengguna dapat memasak atau menghangatkan makanan di dalamnya. 

Kompor Listrik dan Kompor Induksi

Kedua jenis kompor ini juga merupakan salah satu pilihan #cleancooking, keduanya menggunakan listrik sebagai sumber energi. Yang perlu diperhatikan adalah daya dan kualitas listrik yang kita miliki, juga keamanan jaringan listrik di rumah; karena daya yang diperlukan kompor ini cukup besar (~1000 Watt).

Nah, lebih bagus lagi jika sumber energi listrik rumah kita berasal dari PLTS atap, agar sumber listrik untuk memasaknya juga bersih dan sekaligus hemat! Baca-baca dulu soal PLTS atap di sini ya:

Jaringan Gas Rumah Tangga (Jargas)

Jargas merupakan jaringan pipa yang dibangun dan dioperasikan untuk penyediaan dan pendistribusian gas bumi bagi rumah tangga. Jargas disalurkan ke rumah tangga dari sumber gas terdekat, sehingga meminimalkan distribusi. Selain itu, penggunaan jargas juga dapat mengurangi impor gas untuk LPG. Memang tidak setiap daerah dapat menjadi sasaran jargas. Informasi lebih lanjut bisa merujuk ke akun media sosial PT Pertamina dan PGN, yang mengoperasikan jargas di Indonesia.

Jangan lupa tetap berhemat energi di rumah ya! 

 

Salam hangat,

Institute for Essential Services Reform