Renewable Energy Must Reign Supreme in Southeast Asia

Jakarta, March 27, 2024-Southeast Asia is a world’s fifth-largest economy region in 2022. However, this economic growth comes with a concerning projection: greenhouse gas (GHG) emissions in the region are expected to soar by 60 percent by 2050. Curbing these emissions is pivotal for global efforts to combat climate change. Unfortunately, current endeavors to promote renewable energy in Southeast Asia fall short of aligning with the Paris Agreement, which aims to limit global warming to below 1.5 degrees Celsius.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR), stated at the Revision 2024 International Conference in Tokyo (14/3) that ASEAN countries have set a target to achieve a renewable energy mix of 23 percent by 2025. However, he emphasized that this target doesn’t align with the Paris Agreement’s objectives.

“To align with the Paris Agreement, the renewable energy mix needs to account for 55 percent, with variable renewable energy (VRE) contributing 42 percent. Except for Vietnam, Cambodia, and the Philippines, others have yet to reach 5 percent VRE penetration. The good news is that in 2023, ASEAN countries will have over 28 GW of operating utility solar and wind capacity, a 20 percent increase in operating capacity since last year. Currently, they make up 9 percent of ASEAN countries’ total electricity capacity. But in order for ASEAN countries to meet the goal, they need to install more renewable energy,” Fabby remarked.

Fabby further highlighted the relatively abundant renewable energy resources in Southeast Asia, which are estimated to be 40-50 times greater than the region’s current energy needs. He suggested that utilizing floating solar power plants could be a strategic move towards decarbonizing the energy system. He elaborated on the technical potential, with reservoirs boasting 134 to 278 GW and natural water surfaces such as rivers, lakes, and seas holding 343 to 768 GW. However, he stressed the importance of conducting detailed calculations of the technical, market, and economic potential, as well as site-specific assessments to develop floating solar power plants.

Additionally, he highlighted the need for Southeast Asian countries to adopt more ambitious policies, provide robust budget support and incentives, and enact policies that attract investment. The average annual investment in renewable energy capacity should be increased by five times to USD 73 billion per year.

Fabby emphasized that Southeast Asian countries must elevate their ambitions to meet the Paris Agreement targets. As an immediate step, ASEAN should aim for a 23 percent renewable energy mix by 2025 and 40 percent by 2030.

“Various studies have shown that decarbonizing the energy system with renewable energy in Southeast Asia is feasible; however, current policies and actions are insufficient to achieve significant decarbonization by 2050. While renewable energy resources are abundant and ample, substantial investment is needed. Each country must reform policies and manage risks associated with renewable energy projects to attract and mobilize investors further,” Fabby added.

He also cautioned against perpetuating a narrative that prioritizes fossil energy as a baseload generator under the guise of maintaining energy security, while sidelining renewable energy. Such a narrative, he argued, is counterproductive and contradicts the spirit of the Paris Agreement.

The Increase of Emission Reduction Targets in Indonesia’s NDC is Still a Long Way to Mitigating a Climate Crisis

Jakarta, 6 December 2022- Indonesia has submitted Enhanced Nationally Determined Contributions (ENDCs) documents by increasing the target of reducing greenhouse gas (GHG) emissions by only around 2%. The Institute for Essential Services Reform (IESR), which is a member of the Climate Action Tracker (CAT), a consortium of three think tanks that conducts monitoring and assessment of climate change policies in 39 countries and the European Union, found that the slight increase in Indonesia’s NDC target was still insufficient to prevent a global temperature rise of 1.5°C.

In Enhanced NDC, the target of reducing emissions by own efforts (unconditional) increases from 29% in the Updated NDC document to 31.89% in 2030, and with international assistance (conditional) increases from 41% to 43.2%. IESR and CAT view that Indonesia should be able to set even more ambitious targets, especially after the issuance of Presidential Regulation (Perpres) No 112 of 2022 concerning the Acceleration of Renewable Energy Development for the Provision of Electricity.

“Indonesia is still hesitant to set ambitious emission reduction targets and play in the safe zone. The reduction target set in the Enhanced NDC (E-NDC) is too easy to achieve because the reference is the business-as-usual emission increase projection in 2030. The emission reduction target should be based on the absolute emission level based on a certain year. To be in line with the 1.5°C ambition, emissions from the energy sector in 2030 must be equivalent to the level of emissions from the energy sector in 2010,” said Fabby Tumiwa, Executive Director of IESR, at the launch of the results of the CAT assessment of Indonesia’s climate action and policies.

To achieve significant emission reductions, Indonesia needs to carry out more ambitious mitigation in the sectors with dominant emitters, such as the energy sector, and the forest and land sector. Having abundant renewable energy potential, even up to more than 7 TW, Indonesia can utilize it as a source of energy with minimal emissions.

However, until 2021, the renewable energy mix in the energy system in Indonesia is still 11.5%. IESR views that with several developments in international support and the government’s commitment to early retirement coal power plants will provide free space for the development of renewable energy so that it can achieve the target of 23% renewable energy in 2025, even reaching 40% in 2030. In the Deep Decarbonization of Indonesia Energy System study (2021), IESR concludes that by 2050, 100% utilization of renewable energy in Indonesia’s energy system is technically and economically feasible.

“Indonesia’s climate action status can be enhanced by ensuring that climate policies in this decade are implemented to fulfil a fair contribution based on global efforts (fair share). The NDC target with international assistance must also be consistent, at least with the optimal path with the lowest cost for the ambition of 1.5°C (global least cost pathways),” explained Delima Ramadhani, Coordinator of Climate Action Tracker, IESR.

According to her, the dominance of coal-fired power plants, which are currently around 61% of Indonesia’s energy system, needs to be significantly reduced to only 10% of coal-fired power plants that do not use carbon capture and storage technology (unabated coal-fired power plan) in 2030 and terminate their operations gradually until stop completely by 2040. For that, Indonesia must increase its climate commitments, and international assistance plays a major role in the implementation of the coal phase-out per the Paris Agreement.

Several funding mechanisms for ending coal operations have also been discussed and agreed upon by Indonesia, such as the Energy Transition Mechanism scheme and the Just Energy Transition Partnerships (JETP). IESR considers that, although it is still not aligned with the 1.5°C targets, the JETP agreement is a step forward in the energy transition in Indonesia. The funding commitment of USD 20 billion is not enough to achieve decarbonization of the energy sector which requires at least a total investment of USD 135 billion by 2030.

“The portion of grants in JETP funding needs to be enlarged, which can be used to accelerate the strengthening of the energy transition ecosystem and project preparation. In addition, the next step after JETP has been agreed upon is the preparation of an investment plan that is carried out transparently and mainstreams the principles of justice in the energy transition by involving the participation of the community, local government and affected groups,” concluded Fabby.

Climate Action Tracker is an independent scientific analysis initiative that tracks countries’ climate actions and measures them against the globally agreed Paris Agreement goal of holding warming well below 2°C and pursuing efforts to limit warming to 1.5°C. CAT has provided an independent analysis of around 40 countries since 2009. CAT members include Climate Analytics, the New Climate Institute, and the Institute for Essential Services Reform (IESR), which joined as partners in 2022.


Accelerate Decarbonization for a Sustainable Future

Makassar, 22 March 2022 – Accelerating the use of clean energy is a fundamental point in ensuring the future of the economy and other sectors is maintained in the context of sustainability. This was raised in the Sustainability Forum held by PT Vale Indonesia Tbk on Tuesday (22/03). The activity raised the theme “Decarbonization for a Sustainable Future.”

In this activity, the Executive Director of the Institute for Essential Services Reform (IESR), Fabby Tumiwa, said that the transition to fossil-based energy is necessary for the ambition of net-zero emission (NZE) can become a necessity, with an estimated realization in 2050. He emphasized that the step, which is often called decarbonization, must be in line with the target of the Paris Agreement, which is to limit the increase in the earth’s temperature to 1.5 degrees Celsius. If there is no planned decarbonization effort, it is projected that the energy sector will become the largest emitter in Indonesia by 2030 and make it difficult to achieve the Paris Agreement targets.

“In 2022, the government and all stakeholders must strive to increase the use of renewable energy and promote energy efficiency in buildings and industry. By 2025, the government must achieve the target of 23% of the renewable energy mix, and after that, it must pursue the energy sector’s emissions to reach their peak before 2030. So indeed, there must be an acceleration of the transition to clean energy with decarbonization. In the long term, this will have a multiplier effect on the competitiveness of our economy so that it is more optimal,” he said.

Fabby views South Sulawesi as one of the regions in the country that is already in an energy transition system with a significant mix of renewable energy. This is indicated by constructing renewable energy-based plants such as wind, water, and solar power. As a result, the clean energy mix is already at around 30% of the installed capacity in South Sulawesi. This achievement is considered inseparable from the collaboration of all elements, which have begun to be relatively aggressive in implementing decarbonization steps in the production process, including PT Vale Indonesia Tbk.

“I think this is excellent. PT Vale itself already has a 33 percent decarbonization roadmap for 2030 and targets net-zero in 2050. But for the 2050 stage, there is still a need for further assessments,” said Fabby.

On the same occasion, the Director-General of New Renewable Energy and Energy Conversion (EBTKE) of the Ministry of Energy and Mineral Resources, Dadan Kusdiana, said that the government had prepared a roadmap for the energy transition to carbon-neutral, which is projected to reach the optimal point in 2060.

“We are targeting energy decarbonization towards Net Zero Emission 2060 or even faster. This is because the new renewable energy mix (EBT) was already fully achieved, reducing 1,562 million tons of CO2 emissions,” he said.

To achieve the target of the EBT mix, Dadan explained, there are several acceleration efforts carried out by the government, starting from the completion of the Draft Presidential Regulation on EBT Prices, the application of the ESDM Regulation of PLTS Roof No. 26 of 2021, then mandatory biofuels to the provision of fiscal and non-fiscal incentives for NRE.

“Then, of course, the ease of licensing for the EBT segment to encourage demand for electrical energy in several primary activities even on a personal scale in the community,” said Dadan.

Meanwhile, President Director of PT Vale Indonesia, Febriany Eddy, explained the company, which operates in the mining sector, has also developed a road map to reduce carbon emissions for scopes 1 and 2 to a third in 2030 and net zero in 2050.

“For the plan for a new smelter in Central Sulawesi, we, with partners from China, have committed to using LNG instead of coal for power generation there,” he said.

The Governor of South Sulawesi, Andi Sudirman, through the Governor’s Expert Staff for Government Affairs, Andi Mappatoba, conveyed that the existence of PT Vale consistently practices sustainability and efforts to reduce the greenhouse effect through decarbonization steps helped the government in realizing low-carbon development.

“PT Vale has tried to contribute to the environmental, social, and economic sustainability of South Sulawesi with all its sustainability measures. In the future, hopefully, we will always be partners with the provincial government in developing the economy and carbon-neutral targets as announced by the government.”

IESR: Indonesia Capable of Achieving Zero Emissions by 2050, Government Must Fully Commit to Realizing Energy Transition

Jakarta, 28 May 2021 – The Institute for Essential Services Reform (IESR), a think-tank that focuses on renewable energy and environmental issues, launched its latest study entitled, “Deep Decarbonization of Indonesia’s Energy System: a Pathway to Zero-Emission by 2050”. This study is a collaboration between IESR, Germany’s Agora Energiewende, and Finland’s Lappeenranta University of Technology (LUT). 

In his remarks, Fabby Tumiwa, Executive Director of IESR, emphasized that this decade is a decisive decade to achieve zero emissions by 2050.

“This report shows that Indonesia is technically possible and economically viable to achieve zero emissions in its energy system by 2050. Thus, Indonesia should be able to meet the Paris target of limiting global temperature rise to below 1.5 degrees and achieving carbon neutrality by 2050. This study is quite different from government modeling which states that Indonesia will only reach carbon neutral in 2070,” said Fabby. This difference in results can be caused by various factors, one of which is the different modeling methods. However, Fabby emphasized that this difference should foster discussion. 

“This report is the first comprehensive report that looks at the energy system in Indonesia, covering electricity generation, transportation, and industry,” added Fabby.

Philip Godron, Senior Associate Global Energy Transition emphasized that the trend is obvious, transition to renewable energy is currently happening. The sooner we act, the more space for innovation will open up and also increase global competitiveness.


“For example, the European Union will strictly enforce the carbon footprint standards for goods that can be sold there. So setting a target to become zero emissions will be very useful not only for fulfilling international commitments and dealing with the climate crisis but also maintaining and even increasing competitiveness in the international arena,” said Philip.

The results of this modeling are in line with the latest report by the IEA (International Energy Agency) which states that solar and wind power will dominate the energy mix by 2050, because of the cost of generating renewable energy in Indonesia, especially from solar energy, will be cheaper.

In the long term, there are several advantages of achieving zero emissions in the energy system by 2050, among others, system costs and Levelized Cost of Electricity (LCOE) which are cheaper than if Indonesia continues to do business as usual. This means that people will have cheaper electricity prices. Pamela Simamora, the lead author of this report, added that other benefits of Indonesia achieving zero emissions by 2050, such as millions of jobs that will grow. “There will be 3.2 million new jobs. This figure is still higher than the number of jobs at risk of being lost, which is 1.3 million. So actually we are still gaining, not losing when we become zero emissions in 2050,” said Pamela.

There are four main pillars in Indonesia’s decarbonization process. First, the promotion of renewable energy that relies on solar energy and the integration of the electricity grid for the export and import of inter-island electric power. Second, electrification in the transportation and industrial sectors. Third, reducing the use of fossil energy, especially coal-fired power plants, because will not be economically competitive in the next 10-15 years. Fourth, the development and utilization of clean fuels can be in the form of hydrogen, synthetic fuels, or biofuels for the decarbonization of transportation and industrial systems.

“Solar PV will be the backbone of our energy system, supported by storage systems (batteries), electrification, and clean fuel which are the keys in each sector,” concluded Pamela closing her presentation.

Darmawan Prasodjo, Vice President Director of PLN, welcomed this report positively but did not deny the fact that PLN could not undertake all efforts to decarbonize the electricity sector on its own.

“We appreciate this comprehensive report, and as already explained that Indonesia is capable of decarbonizing and achieving zero emissions by 2050. PLN supports this initiative and we are currently developing a model that includes technical and policy calculations. What is certain is that PLN supports this initiative, the RUPTL that will be issued is the green RUPTL,” he said.

Recognizing that decarbonization brings direct benefits to the community, Yahya Rachmana Hidayat, Director of Energy, Mineral and Mining Resources, National Planning Agencies supports decarbonization efforts.

“There are at least 3 benefits that can be felt by the community from decarbonization, i.e fighting climate change, supporting the use of renewable energy, and ensuring industrial competitiveness. I think everything (decarbonization efforts-ed) is doable and realistic to implement. Actually, the sooner we reach zero-emission, the greater our chances of escaping the middle-income trap,” he said.

On the other hand, Luh Nyoman Puspa Dewi, director of Energy Conservation at the Ministry of Energy and Mineral Resources, stated that the awareness to go towards zero-emission already exists, but according to her, the current condition of Indonesia is still rather difficult if we have to make drastic changes.

“We are aware that we have to start thinking towards net-zero, this has already been done, but we have to be realistic by looking at the conditions in Indonesia,” she said in response to the report.

It is obvious that to decarbonize and achieve zero-emission by 2050, it takes confidence from policymakers, strong political leadership, and concrete actions from the government. Political commitments must be embodied in, including by setting more ambitious NDC targets and issuing policies that support the creation of an enabling ecosystem for renewable energy, to attract more investors. This is important, considering that the efforts to decarbonize the energy system in Indonesia require an investment of around USD 20-25 billion/year in the period 2021-2030 and USD 60 billion/year for the period 2030-2040.