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The comparison of the number of electrified household customers with the total number of households, known as the electrification ratio, especially in the Association of Southeast Asian Nations (ASEAN), has experienced a significant increase in recent years.

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Indonesia Needs to Synergize Policy and Strategies to Accelerate Energy Transition

press release

Bali, August 29, 2023 –  Institute for Essential Services Reform (IESR) alongside the Energy Transition Policy Development Forum (ETP) hosted a discussion to bridge the gap between policy and practices in accelerating energy transition in Indonesia. This discussion was a side event at the ASEAN Energy Business Forum 2023, held on Friday (25/08).

Business representatives were from Quantum Power Asia, Suncable, PT TML Energy and the Indonesian Biofuel Producers Association. The policymakers included the Ministry of Investment/BKPM, Vice Ministry of Finance, Coordinating Minister of Maritime Affairs and Investments; The Regional Government of Bali  and Perusahaan Listrik Negara. 

Both businesses and policymakers representatives shared their challenges, expectations, plans, and collaborative strategies to make energy transition work in Indonesia. An underlying challenge faced with both stakeholders is financing. On one side, businesses face a lack of incentives while generating renewable energy projects and subsidies make it harder for renewables to compete with conventional energy sources. On the contrary, policymakers need investment to be able to generate projects. 

In its report titled “Indonesia Sustainable Finance Outlook (ISFO) 2023”, IESR observed that there are significant investment risks associated with renewable energy due to unattractive tariffs. The tariffs contribute to lower private investor confidence in renewable energy projects. Furthermore, the lack of transparency in the procurement process for renewable energy projects highlights the necessity for improving the investment environment and the bankability of renewable energy projects. This improvement would lead to increased confidence among private investors and greater trust from international funders.

Businesses are keen to support the development of renewable energy in Indonesia. However,regulations need to be settled first to shorten the negotiations process between government and private sectors. Furthermore, aligning the energy transition agenda between government bodies, harmonizing regional and national policies, and interconnectivity are the key points of the discussion between the two stakeholders.

Fabby Tumiwa, the Executive Director of Institute for Essential Services Reform, encourages the Indonesian government to learn from policies and best practices from other countries to accelerate energy transition. Although these said policies and strategies need to be adapted as “Indonesian-style” (the solutions should be based on national wisdom and situation) policies and practices to accommodate the complexity of the Indonesian energy sector.

“Indonesia needs an energy ecosystem to enable investment and partnerships. We need to be perceptive, we need innovations and a different approach from Perusahaan Listrik Negara (PLN) to boost energy transition. PLN needs to prepare for the ecosystem and it has to be supported by policies from the Ministry of Energy and Mineral Resources to foster public and private financing. Although there are different expectations from businesses and policymakers, we have to keep moving forward, despite our limitations,” stated Fabby. 

Assessing Solar Market in ASEAN Member State

Jakarta, 25 July 2023 – Southeast Asia has emerged as a focal point for both economic development, and energy growth. The increasing energy demand within the ASEAN region is to be expected to be met through the expansion of renewable energy. Notably, certain ASEAN countries have achieved noteworthy progress in renewable energy development, exemplified by Vietnam’s exponential growth in solar energy over recent years. 

Fabby Tumiwa, the Executive Director of Institute for Essentials Services Reform and the Chairman of The Indonesia Solar Energy Association said that ASEAN must establish strong cooperation in developing solar PV manufacturing capability.

“Southeast Asia countries must ensure affordable access to this technology by establishing a solar PV manufacturing and supply chain that includes silicon ingots, wafers, cells, and other components such as low-tempered iron glass, as well as the balance of system components such as inverters and controllers,” he said.

Fabby added that Southeast Asia has the potential to become a solar PV manufacturing hub, supplying both domestic and global demand. Currently, seven Southeast Asia countries already have manufacturing capacity in various stages, with a total annual capacity of 70 GW of solar module production, with Vietnam supplying half of this capacity. 

Monika Merdekawati, research analyst for sustainable renewable energy development, ASEAN Centre for Energy (ACE) during the ASEAN Solar Summit 2023 explained that while solar energy adoption in ASEAN is on the rise, the pace of progress is insufficient to accelerate the energy transition. Vietnam’s remarkable strides in augmenting its solar capacity have been associated by diversification efforts in its renewable energy development plan in its PDP8 (Vietnam’s energy planning).

“It’s similar to Thailand who started to look for biomass development in its priority program plan,” said Monika.

She further highlighted the necessity for Indonesia to devise innovative strategies to attain its goal of achieving a 23% renewable energy mix in 2025.

Within the context of Indonesia, the state-owned utility company PT PLN heavily relies on the 2021-2030 RUPTL (Electricity Supply Business Plan) famously recognized as “green RUPTL” to expedite its renewable energy endeavors. Warsono, the EVP for electricity System Planning, PT PLN on the same occasion said that PLN aims to incorporate5 GW of renewables by 2030.

“The main challenge to deploy renewables, particularly solar, is the fulfillment of local content requirements of the PV component. It means we need to grow the local industry for solar PV components,” he said. Furthermore, PLN is committed to ensuring equilibrium between energy supply and demand of energy.

Mohammad Nazri bin Mizayauddin, Chief Strategy Officer Sustainable Energy Development Authority, Malaysia shared his view on Malaysia strategy to enhance renewable energy penetration.

“People usually look at the large-scale ground mounted solar PV, but now let’s realize the other potential in the solar rooftop. The rooftop itself is an asset,” he said.

According to Nazri, Malaysia has been facing issues related with the energy subsidy therefore the Government must make sure that the market is mature enough to slowly detach the subsidy.

Eka Satria, Director and CEO of Medco Power Indonesia presented the indispensable correlation between growth of the solar PV component industry and expanding market demand. He stressed the importance of compiling and implementing a comprehensive roster of potential projects to instill investor confidence. 

“To accelerate solar energy deployment, we need a strong PV industry in Indonesia. To grow the PV industry a long list of committed projects to guarantee the investors that their money wouldn’t be lost,” Eka explained.

Eko Agus Nugroho Director of Machinery and Agricultural Machinery Industry, Ministry of Industry agreed that the solar cell technology is advancing rapidly, urging Indonesia to accelerate its pace in keeping up with the advancement.

“There are 21 local producers making solar modules currently and the total capacity is still below 500 WP. The ministry wants to map the capability of the (solar) industries to fulfill the need from the PLN and other developers,” he said. 

Eko also revealed plans for the upcoming announcement of a consortium dedicated to local solar industry manufacture in the ensuing months.

ASEAN Solar Summit 2023 Calls for ASEAN Leadership for Acceleration of Solar Energy in the Southeast Asia

Jakarta, July 25, 2023 – Indonesia, as the current chair of the Association of Southeast Asia Nations (ASEAN) has taken a significant stride towards a sustainable and greener future with the successful inauguration of the ASEAN Solar Summit 2023. This momentous event, organized by the Ministry of Energy and Mineral Resources, in collaboration with the Indonesian Solar Energy Association (AESI) and the Institute for Essential Services Reform (IESR), convened esteemed leaders, experts, and stakeholders from across the globe to promote solar energy as a key driver in the region’s energy transition. 

Held in Jakarta, the ASEAN Solar Summit 2023 aimed to enhance and accelerate energy transition in ASEAN member states with solar energy, cultivates active solar-focused partnerships within the region and globally, boosts clean energy investment, and showcases successful solar stories for knowledge exchange. This monumental gathering was attended by high-level policy makers in ASEAN and partner countries, business players, financial institutions, and non-governmental organizations, that addressed vital aspects of solar energy deployment, including policy frameworks, technological innovations and sustainable investment strategies. 

In the remarks of Minister of Industry, Republic of Indonesia, which was delivered by Taufiek Bawazier, Director-General of Metal, Machinery, Transportation Equipment, and Electronics Industries at the Ministry of Industry of the Republic of Indonesia, he stated that the Ministry of Industry encourages the domestic solar energy industry. 

“However, the current domestic market with the scale of the economy has not been fully met yet. Coordinating and collaborating in the planning of solar power development is essential, involving small and medium enterprises (SMEs), relevant ministries, local governments, and the private sector. This way, the development of solar PV products can align with the specifications required for solar panel construction,” Bawazir said.

 He also added that currently, the domestic solar panel industry has made progress. Until now, the total production capacity of the industry has reached the equivalent of 1,600 MW. 

“Nevertheless, the specifications of domestically-produced solar modules must continue to improve to meet the demand of the current solar panel development plans, especially for modules with a capacity above 550 watts-peak. Moreover, it is necessary to explore upstream needs to meet national demands,” Bawazir continued.


Director General of NREEC, Ministry of Energy and Mineral Resources, Republic of Indonesia, Dr. Dadan Kusdiana highlighted that ASEAN possesses advantages in terms of solar supply chain, including abundance of critical minerals and key ingredients for solar components. It is important to bring insights from this summit to the ASEAN energy ministerial meeting next month to sound the call to action for a consolidated effort in increasing the implementation of solar energy in the region, and developing the solar industry’s supply chain within our country.   

“It should be carried out through strong cooperation and collaboration among ASEAN countries to massively increase the use of renewable energy, particularly solar energy,” Kusdiana said.

Fabby Tumiwa, the Executive Director of the Institute for Essential Services Reform (IESR), stated that meeting the Paris Agreement’s target to limit global temperature increase of 1.5 degrees and combat the climate crisis offers several new economic opportunities.

“It can be achieved, if we collectively act boldly and ambitiously to transition our energy system from fossil fuel to clean energy. This is where solar energy plays a crucial role. Southeast Asia must ensure affordable access to solar technology by establishing a solar PV manufacturing and supply chain that includes polysilicon, ingot, and other components,” Tuwima highlighted.

He urged ASEAN to pursue strong cooperation in developing solar PV manufacturing capabilities and investing in the solar PV supply chain, with the growing domestic demand serving as an anchor market. 

“We request both the industry and energy ministries, in the upcoming ministerial meeting, to investigate the possibility of establishing an ASEAN solar PV manufacturing and supply chain. This initiative would strengthen our mutual economic interests and promote prosperity within the region,” Tumiwa said.

Andhika Prastawa, Chairman of the Advisory Board AESI, highlighted some challenges faced in developing solar energy in the country, including the competitiveness of solar, energy storage, and the high dependency on fossil fuels due to their reliable and continuous power at a relatively lower cost.

“Despite these challenges, we must remain optimistic and work towards breakthroughs in renewable energy, particularly solar energy. It not only provides us with clean energy but also promotes sustainability. The size of the domestic potential market is also attractive for the development of the manufacturing industry for solar PV and its components. However, significant efforts, research, and innovation are essential to support the industry and discover new approaches to harness solar energy efficiency,” Prastawa said.

ASEAN’s commitment to sustainable development extends beyond national borders, and the region actively collaborates on energy-related initiatives. The ASEAN Solar Summit 2023, hosted by Indonesia during its chairmanship for 2023, serves as a platform for fostering regional cooperation, knowledge exchange and partnerships in the solar energy sector. Through collaborative efforts, ASEAN member states can share best practices, pool resources, and collectively address common challenges in implementing solar energy projects and to attract collaborations as well as investments from its global partners. Such synergy will amplify the impact of solar energy development and accelerate the region’s transition towards a cleaner and more sustainable energy landscape.