Request for Proposal (RFP) Strategic Communication and Advocacy Plan in Promoting Low Carbon Solutions Adoption for Indonesia’s Large Industries & Small-Medium Industries

Background

Achieving the national economic development targets in 2045 would drive capacity expansion in several key industries in Indonesia, such as iron and steel, cement, ammonia, pulp and paper, and textile industries. According to the latest IESR study, the five industries are responsible for about one-third of the national industry emissions in 2020 or about 102 MtCO2. This is because many of those industry players use outdated production technologies that work inefficiently and consume fossil fuels either as feedstock or fuel sources. In other cases, the industry plan its capacity expansion utilizing the carbon-intensive technology which could create emission lock-in for decades to come. Also, the currently low adoption of sustainable raw feedstock materials in cement, iron and steel, and papermaking industries drive the emissions to increase its emission by an additional 50 MtCO2 per year by 2050, and collectively with other industry subsectors, will increase the sector emissions to double in the same year.

Other than that, with the industry and commercial sectors’ landscape in Indonesia are dominated by smaller businesses of about 99%, it is also imperative to consider these smaller businesses’ role in Indonesia’s emissions portfolio. From the IESR study, it has been revealed that with the number of MSMEs reaching 65 million businesses in 2021, the least approximation of total estimated energy-related emissions could reach up to 216 MtCO2 per year in 2023, or about half of the industry sector’s emissions, including emissions generated from burning fuel, industry processes, and waste. Such high CO2 emissions are caused largely due to the very low understanding of MSME actors on how to implement energy efficiency measures as well as the lack of financial and technical capacities to tap into renewable fuel and electricity to support their businesses.

Understanding the timely urgency of decarbonizing industries of all sizes, Institute for Essential Services Reform (IESR) intends to formulate a strategic communication and advocacy plan to increase public awareness on the topic and drive the industry’s transformational change and increase the adoption of lower carbon technology and sustainable practices among large industries and SMEs. It is expected that the consultant develops the communication and advocacy plan following the Specific, Measurable, Achievable, Relevant, and Time-Bound (SMART) principle with at least a one-year timeframe. The successful consultant will provide input on methods, content, and implementation strategies. The strategy must include the use of online tools and new media outlets, including IESR’s existing social media accounts and website.

Requirement

  1. Proposal
  2. Mandatory required documents
    • Statement Letter of Compliance with Pre-Qualification Provisions
    • Statement Letter of Not Involvement in Probitied Organizations
    • Statement Letter of Not Claiming Compensation
    • Business Entity Qualification Form
    • Statement Letter Not Under Court Supervision
    • Expression of Interest
    • Statement of Willingness to Deploy Personnel and Equipment
    • Statement of Overall Commitment
    • Field Capability Statement Letter
    • Statement of Authenticity of the Document
    • Integrity Pact

All required documents can be downloaded through this link (s.id/documentsrfpcommsiesr), and expected to be received to IESR until 10:00 p.m. Indonesian Western Standard Time (WIB, GMT+0700) on Friday, 19 April 2024. Any proposals received after this date and time will be regarded as inadmissible. All proposals must be signed by an expert, official agent, or company representative submitting the proposal.

Proposals will be accepted until 10:00 p.m. Indonesian Western Standard Time (WIB, GMT+0700) on Friday, 19 April 2024. Kindly address the Program Manager Energy Transformation IESR at deon@iesr.or.id and the Coordinator of Industrial Decarbonization Project at faricha@iesr.or.id for inquiries. 

For more detail :

RFP-IESR-Strategic-Communication-and-Advocacy-Plan-in-Promoting-Low-Carbon-Solutions-Adoption-for-Indonesias-Large-and-Small-Medium-Industries.docx-1

Download

Carefully Designing Indonesia’s Energy Policy Framework

Jakarta, March 28, 2024 – The National Energy Council (DEN) plans to adjust the renewable energy mix target. Currently in the draft Government Regulation on National Energy Policy (RPP KEN), DEN plans to reduce the national renewable energy mix target to 17-19 percent by 2025. Previously, the renewable energy mix target was 23 percent by 2025.

The Institute for Essential Services Reform (IESR) considers this a step back from the Indonesian government’s commitment to overseeing the energy transition.

Raditya Wiranegara, IESR Research Manager, in a hearing with the National Energy Board expressed his concern behind the setting of the renewable energy mix target.

“IESR has previously conducted modeling that has been published in our annual report, Indonesia Energy Transition Outlook (IETO). Our modeling results show differences with the modeling results that form the basis for the formulation of the KEN RPP. This is especially evident in the final energy growth, where in the modeling for IETO we used Bappenas’ GDP growth assumption for Indonesia Emas 2045,” Radit said.

This was clarified by Retno Gumilang Dewi, ITB’s modeling team, who assisted DEN in the modeling, that the figures currently circulating are adjusted figures.

“The model we produced can be said to be an ideal model. The modeling was then brought for FGD (focused group discussion) and received various inputs, so it was adjusted,” said Retno Gumilang.

Fabby Tumiwa, Executive Director of IESR on the same occasion said that in preparing a country’s energy planning, it is important to ensure the choice of technology that is most relevant and tested with the latest technological developments.

“This step is important and crucial to avoid being locked-in by high-carbon technologies,” Fabby said.

Fabby added that if we are already trapped in the choice of high-carbon technology, it will require even greater investment to get out of the high-carbon technology. IESR also encourages the achievement of renewable energy targets that have been set in the RUPTL and national strategic projects as a driver of the growth of the domestic renewable energy industry.

Encouraging Industrial Decarbonization Starting from Consumer Lifestyle

Jakarta, 22 March 2024 – The increase of the earth’s temperature is an inevitable phenomenon as a result of various natural events and human activities and lifestyles which produce greenhouse gas (GHG) emissions as the cause of the rise in the earth’s temperature.

The invention of the steam engine in 1880 made monumental changes to human life with the beginning of industrialization. The development of industry has been accompanied by increasing greenhouse gas (GHG) emissions.

The Intergovernmental Panel on Climate Change (IPCC) in 2022 recorded an increase in earth temperature of 1.1 degrees Celsius. This is a warning for humanity to immediately take steps to control temperature rise to prevent the temperature increase from reaching no more than 1.5 degrees Celsius.

Faricha Hidayati, Coordinator of the Industrial Decarbonization Project, Institute for Essential Services Reform (IESR) explained that rising earth temperatures could trigger hydrometeorological disasters, one of which will be at an increasingly high frequency.

“Apart from environmental problems, another side impact is health costs which will rise along with the increase in disease, especially those that attack vulnerable groups such as the elderly, children and poor households,” explained Faricha.

Even though it is one of the sectors causing increased GHG emissions, the industrial sector has a significant economic contribution. So strategic steps and efforts are needed to decarbonize the industrial sector.

In 2021, industrial sector emissions will be the second largest emitting sector after electricity generation. If we continue to use the business as usual scheme without any intervention, the value of emissions in the industrial sector will double by 2050.

“The industrial sector contributes to emissions of more than 300 million tons of CO2 in 2021, with the highest source of emissions from the use of fossil fuels as an energy source,” added Faricha.

Even though there are regulations that encourage industry to practice sustainable principles, their implementation is not yet mandatory. Even for industries that independently have the initiative to implement sustainable principles, there is no incentive system for them.

Faricha continued, apart from through policy advocacy to the government, consumers can contribute, one of the ways is by choosing products that are produced with sustainable principles. Consumers can also demand that producers or industries start implementing sustainable principles in their production processes.

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.

Reviewing Indonesia’s Renewable Energy Investment Needs

Investasi energi terbarukan

Jakarta, March 8th, 2024 – Indonesia’s energy transition commitment officially began three years ago when the State Electricity Company (PLN) issued the 2021-2030 Electricity Supply Business Plan (RUPTL) which targets increasing renewable energy capacity as one of the prerequisites for achieving net zero Indonesia’s emissions in 2060, specifically the electricity sector in 2050.

During the Market Review session, Friday 8 March 2024, Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) stated that the development of renewable energy is a necessity. The government, through a number of policies such as RUPTL 2021, and Presidential Decree 112/2022 has announced additional renewable energy capacity as well as a commitment to no longer build new PLTUs except those already in the contract process.

“These commitments must be translated to executable technical and economic plans. Therefore, the RUKN and RUPTL revision process which is currently underway is very important,” said Fabby.

In the 2024 – 2040 RUPTL, PLN plans to increase its renewable energy generation capacity by up to 80 GW. This plan will have the consequence of a significant increase in renewable energy from currently around 9 GW to 70 GW.

Fabby added that this enthusiasm and ambition needs to be monitored by the public considering that the government’s record for increasing renewable energy capacity is always below the target. In pursuing the target of a 23 percent renewable energy mix by 2025, Indonesia has not shown the expected progress. Until 2023, the renewable energy mix will only be 13 percent. This makes the remaining two years a challenge for accelerating renewable energy.

The required cost for building renewable energy plants, which reaches USD 152 billion (equivalent to 2,300 trillion rupiah) by 2040, is in the spotlight. This figure is considered a realistic figure by Fabby, considering that this figure represents investment needs including the need for building renewable energy plants as well as building transmission and distribution networks.

“The figure of USD 152 billion is a realistic figure at this time. We also have to understand that technology continues to develop, it is very possible that in the future this investment need will gradually decrease according to technological developments,” explained Fabby.

Fabby highlighted the government’s intention to involve the private sector more. To invite greater private investment, regulatory improvements are needed, including the National Energy Policy in line with the electricity sector’s net zero emission target in 2050, a review of electricity purchase prices from renewable energy generators, and a review of the current electricity tariffs.

Kompas | Decarbonize Away Grills from Fire

Starting from 2019, the global average temperature has increased by 1.1 degrees Celsius, which is hotter than the pre-industrial period of the 1850s. The increase in temperature on the earth’s surface is an indication of an increase in the concentration of greenhouse gases, including carbon dioxide (CO2), methane (CH4), and nitrogen monoxide (N2O), which is trapped in the atmosphere.

Read more on Kompas.

Strengthening the Government’s Commitment in Mitigating Climate Change

Jakarta, 15 December 2023 – The Indonesian government continues to improve in terms of strengthening its commitment to climate change mitigation. Since starting to aggressively commit to climate mitigation in 2021, the Indonesian Government has continued to carry out follow-up actions through various assessments of funding commitments and creating decarbonization roadmaps in each sector.

Nurcahyanto, Policy Analyst for the Ministry of Energy and Mineral Resources (MEMR), said at the launch of the Indonesia Energy Transition Outlook (IETO) 2024 report organized by the Institute for Essential Services Reform that one of the efforts currently being carried out by the government through the Ministry of Energy and Mineral Resources is to carry out revision of the National Energy Policy (KEN). It is hoped that the results of the revised KEN will be more relevant to Indonesia’s current efforts to carry out comprehensive decarbonization, especially in the electricity sector.

“Target revision (KEN) is only a method based on numbers, but from an implementation perspective it must be supported by regulations and we need to optimize it. For example, in carrying out early retirement for PLTUs, a road map needs to be prepared, as well as consolidation with related ministries/institutions,” he said.

The issuance of Presidential Decree 112/2022 is one of the guiding documents for the decarbonization of Indonesia’s electricity sector, with the main point being to accelerate the cessation of coal-fired power plants.

August Axel Zacharie, Head of Energy Cooperation, Danish Embassy, said that in the global context, Indonesia’s position as a developing country (emerging economy) is an investment attraction in itself, but Indonesia needs to prepare a supportive ecosystem.

“Investment needs for the energy transition, which reach approximately 1 trillion USD until 2050, must be seen as not just building infrastructure, but within these cost requirements there are community aspects, job transition, quality of life, and other non-physical aspects,” added August.

Still related to the high need for investment in renewable energy, and the government’s obligation to guarantee energy security, the Indonesian Government provides energy subsidies. However, this policy is not a sustainable policy.

Evita Herawati Legowo, PYC Senior Fellow, stated that it is necessary to think about a more targeted method for providing energy subsidies.

“There needs to be involvement of all parties in this matter, not just collaboration but a clear division of tasks as to who does what, starting from industry, research, energy, as well as investors,” said Evita.

The Indonesian Government’s commitment to decarbonization is a binding guideline. Delivered by Unggul Priyanto, Main Expert Engineer, BRIN, especially after 2060, all energy sources must come from clean energy sources.

“(The use-ed) LNG, or natural gas, is one option during the transition. But after 2060, like it or not, it has to be replaced with a truly clean (energy source-ed),” he said.