Significant Roles of Subnational Governments to Lead the Decentralization of Energy Transition

press release

Bali, 30 August 2022The post-pandemic economic recovery by staying focused on making ambitious climate mitigation efforts through low-carbon development is a step that needs to be taken by local governments. The success of low-carbon development is also inseparable from planning for a just energy transition. The commitment of various parties, including local governments and communities to promoting the energy transition, is crucial considering that decentralization of the energy transition will have multiple impacts.

The Governor of Central Java, Ganjar Pranowo, said that through the Central Java Energy and Mineral Resources Office, he was actively pushing for energy transition efforts in his region. Energy transition policy instruments such as governor’s circular letters, regional secretaries, and various initiatives such as the declaration of Central Java to become a solar province in 2019, are ways to attract the private sector and the public to utilize renewable energy through the adoption of rooftop solar. Until Q2 2022, the total installed PLTS capacity in Central Java Province reached 22 MWp. The Central Java Provincial Government also supports the use of other renewable energy that is abundantly available, such as livestock manure biogas and micro hydro power plant(MHP), with government programs or encouraging community collaboration.

“Asymmetric decentralization by inclusion with (treatment-red) specifically in every location. With collective awareness, the potential for renewable energy in the area is checked and stimulated,” said Ganjar. This, according to Ganjar, will encourage a faster transformation.

Central Java’s climate commitment is also shown by starting to use electric vehicles as provincial government official vehicles.

Togap Simangunsong, Expert Staff of the Minister of Home Affairs for Social Affairs and Inter-Institutional Relations, Ministry of Home Affairs appreciated the good practices carried out by the Central Java Provincial government. He said that his party and the Ministry of Energy and Mineral Resources are currently drafting a Presidential Regulation that strengthens the authority of regional/provincial governments in the administration of government affairs in the field of energy, mineral resources, and sub-sector of new and renewable energy.

“Through this, it is hoped that local governments can provide support in efforts to achieve the target of the new renewable energy mix as an effort to reduce greenhouse gas emissions so that local government commitments are made to accelerate energy justice following their authority,” said Togap representing the Minister of Home Affairs, Tito Karnavian in a webinar entitled “Energy Transitional Decentralization: Increasing the role of communities and local government” organized by the Institute for Essential Services Reform (IESR) and the Central Java Provincial Government.

In addition, Chrisnawan Anditya, Head of the Planning Bureau, Ministry of Energy and Mineral Resources said that the utilization of renewable energy potential will open up opportunities in building a green national economy and as an effort to recover the economy after the pandemic under the G20 Presidency’s theme, “Recover Together, Recover Stronger”.

“Each region has a special new renewable energy potential that can be used to improve the welfare of local communities. The difference in the potential for new and renewable energy between regions is a technical challenge, as well as a great opportunity for our energy system. This condition allows the sharing of energy based on new and renewable energy when the area experiences energy abundance or scarcity. For this to happen, an integrated electric power system (smart grid and super grid) is needed,” explained Chrisnawan on the same occasion.

Furthermore, strong leadership at the regional level will be able to mobilize the community to make the cooperation of energy transition. This was stated by Fabby Tumiwa, Executive Director of IESR. He said the initiative and leadership of the local government will be able to answer the problem of access and security of energy supply by utilizing the abundant renewable energy potential in the area.

“Indonesia’s energy transition requires the construction of hundreds or even thousands of gigawatts, renewable energy generation, transmission and distribution infrastructure and energy storage systems. But by starting to divide it into small units, the big problems can be more easily solved and carried out by more parties,” said Fabby.

He added, based on the IESR study, that the decarbonization of the energy system in Indonesia will cost USD 1.3 trillion by 2050, with an average investment requirement of USD 30-50 billion per year. This amount is 150%-200% of the current total investment in the entire energy sector.

“This investment need is costly and cannot be borne solely by the government and SOEs. But this large investment can be met if we take into account the potential of the contribution and innovation power of the community as well as the capabilities of local governments. Citizens’ contributions and innovations can mobilize funding from the government, local government and village governments, as well as funding from the private sector and non-governmental institutions,” he added.

Bali is the first province in Indonesia to have a special governor regulation for clean energy and electric vehicles. In the Governor’s Regulation on Bali Clean Energy, the Governor of Bali encourages the use of renewable energy for various sectors, especially rooftop solar power plants. This effort is carried out to realize the vision of low carbon development in Bali and concrete steps for sustainable tourism.

“Due to the pandemic, Bali’s tourism has stumbled, after the pandemic, Bali has started to rise. Several tips have been implemented, such as the governor’s regulations and circulars regarding the adoption of rooftop solar power plants. Actually, the main target is tourism, but first, do a pilot in the government,” said Ida Ayu, Expert Staff to the Governor of Bali.

The plans and steps for achieving renewable energy targets in the Regional Energy General Plan (RUED) are also carried out by the Jambi Provincial government. The Governor of Jambi, Al Haris, through the Deputy Governor of Jambi, Abdullah Sani, emphasized his commitment to work together with the central and private parties to develop regional energy transitions because the resources they have are very sufficient, only to use and transform natural resources into energy that can be enjoyed by the Jambi community in particular.

The Jambi Provincial Government through the Department of Energy and Mineral Resources has also collaborated with IESR for the implementation of RUED and energy conservation efforts within the local government. Currently, the Governor of Jambi is in the process of issuing a governor regulation for the use of PV mini-grid as a substitute for energy subsidies.

Energy Transition: From, By, and For the Society

Denpasar, August 11th, 2022 – The involvement of the wider community has a very important role in realizing the energy transition agenda. One of the initial steps is to provide a forum for sharing knowledge and discussion. In contrast to formal discussions targeting stakeholders, discussions with an informal, light, and entertaining format for the community are believed to be more effective. This is expected to be a comfortable space for the public to express their opinions openly.

Based on this understanding, the Clean, Affordable, and Secure Energy for Southeast Asia (CASE) project in Indonesia held an activity entitled “The Role of Public Participation in Energy Transition” which was carried out in Denpasar with representatives of civil society organizations, youth groups, and students in Bali. In this activity, CASE seeks to provide a forum for discussion as well as exchanging ideas and knowledge related to the topic of energy transition in Indonesia, especially in the context of Bali.

To facilitate the Balinese people in understanding the context of the energy transition, CASE Indonesia also presented various local expert speakers who explained various aspects of the energy transition and its relation to the people in Bali. For example, how renewable energy can be utilized, accessed, and have a positive impact on various levels of society in Bali.

Various policies to realize the energy transition has been issued in Indonesia. Especially in Bali, the Provincial Government of Bali has shown a positive response and supports the energy transition with clean energy policies which are expected to support the economic development of the Balinese people. However, these various policies will not be of much use if the community does not take part in the success of the plan.

“All the involvement of various community groups in Bali is important so that the energy transition becomes doable and not only in the form of policies on paper,” said Ida Ayu Dwi Giriantari from the Center of Excellence Community Based Renewable Energy – Udayana University.

People in Bali depend on the tourism sector for their livelihoods to support their economy. CASE seeks to introduce real examples of tourism business units owned by indigenous Balinese people who have utilized renewable energy so that people can witness the impact of renewable energy in a business at the community level.

Present on this occasion, Putu Swantara Putra, often called Bli Klick, an architect and entrepreneur in the hospitality sector in Bali, tells his experience using renewable energy.

“There is nothing to lose in utilizing renewable energy (rooftop solar panels), with the various financing schemes that exist now, for us entrepreneurs, it feels the same as paying for PLN electricity. Imagine, the difference is that I have made a difference and are more environmentally friendly, even more so in a few years the tools are mine and I can use them for free.”

Similar to Bli Klick’s statement, Dayu Maharatni from the Amoghassiddhi Cooperative said that the potential for financing rooftop solar power plants is interesting to observe. The Amoghassiddhi Cooperative is a community-based cooperative financing institution that provides a financing scheme for installing solar panels for its members.

“There is already a regulation that regulates us, the cooperatives, to provide an interest rate of no more than 1%. With this, we hope that more of our cooperative members are interested in developing their businesses with renewable energy. In our cooperatives, energy credit financing is only 2.4% compared to other types of financing. This means that there is still a lot of development potential (for renewable energy financing) for our members.”

Dayu invites the public to understand that currently the potential for developing renewable energy is still very wide and has many benefits for the people in Bali. Furthermore, not only from the point of view of climate change mitigation but the development of renewable energy is also considered to have potential as a career choice (green jobs) and the community’s economy in the future.

“Later on, the human resources needed in the development of renewable energy will be needed in every business process, for example, researchers, planners, operators, evaluators, and so on. Based on this data, if it is developed according to the development map, the Government estimates that by 2050, at least thousands of workers will be absorbed in this renewable energy sector,” said I Gusti Ngurah Agung Dwijaya Saputra from the Bali State Polytechnic closing the presentation session.