Draft Government Regulation on National Energy Policy Archives

IESR: Indonesia’s Second NDC Needs to Reflect Ambitious Emission Reduction Targets

Jakarta, April 25, 2024 – The Indonesian government, through the Ministry of Environment and Forestry (MoEF), is currently drafting the Second Nationally Determined Contribution (SNDC) document. In contrast to the Enhanced NDC document published in 2022, the emission reduction target in the SNDC document is no longer measured based on emission reductions from the base growth scenario (business as usual). The SNDC will compare greenhouse gas (GHG) emission reductions against the 2019 reference year based on GHG inventories. The government believes that this method of determining emissions is more accurate and will contribute to the global GHG emissions reduction target of 43% by 2030, compared to the 2019 emissions.

The Institute for Essential Services Reform (IESR) believes that updating scenarios that are no longer based on business as usual and instead use scenarios that reference historical emission reductions as a basis for setting targets is a positive development. This approach aligns with the recommendations made by IESR in the previous year.

“The emission reduction target in Indonesia’s SNDC must be aligned with the Paris Agreement target. The findings of the first Global Stocktake at COP 28 revealed that there is still a gap in the global emission reduction target of 20.3-23.9 gigatons of carbon dioxide equivalent. Therefore, it is crucial to consider this to set a more ambitious emission reduction target in 2030,” said Fabby Tumiwa, Executive Director of IESR.

Fabby added that expanding the renewable energy mix is one of the mitigation actions that can increase the emission reduction target in the SNDC. To align with the 1.5 degree Celsius pathway, the renewable energy mix in primary energy needs to reach 55 per cent by 2030. Unfortunately, the Draft Government Regulation (RPP) of the National Energy Policy (KEN), which was drafted by the National Energy Council (DEN), only aims for a renewable energy mix target of 19-21 per cent by 2030. Not only that but in terms of emission reduction targets for the energy sector, the KEN RPP suggests a target level of emissions in the energy sector that is still large, namely 1,074-1,233 million tons of carbon dioxide equivalent in 2030.

Deon Arinaldo, Program Manager of Energy Transformation, IESR, mentioned that if the energy sector emission reduction target in the SNDC refers to the KEN RPP, then it is certain that the target is still not in line with the Paris Agreement. In fact, according to him, the energy sector, particularly the electricity sector, can play a pivotal role in enhancing Indonesia’s emission mitigation ambition with the wide availability of renewable energy options and competitive economics.

“There are less than seven years left until the year 2030, which means that action to mitigate emissions in the energy sector needs to focus on strategies that can be rapidly implemented and accelerated. Renewable energy needs to be massively built in the electricity sector to optimize emission reduction through electrification of the transportation sector through electric vehicles and electric boilers and heat pumps in the industrial sector. All of the above options are commercially available and cost-competitive. The government should not be complacent with other options such as nuclear and CCS that can only be operational after 2030 so that strategies that can reduce emissions are stalled in their implementation,” Deon explained.

Delima Ramadhani, Coordinator of Climate Policy, IESR, said that the latest emission projection by Climate Action Tracker (CAT) reveals that the Enhanced NDC is expected to increase emissions to 1.7-1.8 Giga tons of carbon dioxide equivalent by 2030, which is 70-80% higher than the emissions recorded in 2019. It is important to note that this projection does not include emissions from the forestry and land sectors. To align with the 1.5 degrees Celsius target, Indonesia must reduce emissions between 829-859 million tons of carbon dioxide equivalent by 2030. Alternatively, for a target below 2 degrees Celsius, Indonesia should aim to reduce emissions between 970-1060 million tons of carbon dioxide equivalent, excluding forestry and land sector emissions.

“The government needs to include aspects of fairness and explain why the emission reduction targets listed in the SNDC are considered a fair share of Indonesia’s contribution to global climate mitigation efforts. Thus, it can be seen if the SNDC already reflects the “highest possible ambition” in emission reduction,” Delima added.

On the other hand, IESR highlights that the SNDC document must prioritize justice and good governance. These aspects of fairness and transparency need to be reflected in the SNDC drafting process, which includes promising practices, relevance to national circumstances, involvement of domestic institutions, and public participation.

Kata Data | Civil Society Coalition: 3 Rules Set Back Energy Transition Commitments

Program Manager of Energy Transformation, Institute for Essential Services Reform (IESR), Deon Arinaldo said that the draft KEN RPP makes Indonesia only reach peak emissions in 2035. This is seven to ten years later than the need to limit the global average temperature rise to below 1.5°C according to the Intergovernmental Panel on Climate Change (IPCC) report.

Civil Society Coalition: New Energy Sector Rules Set Back Energy Transition Commitment

Jakarta, March 8, 2024 – The Renewable Energy Movement’s Civil Society Coalition is questioning the government’s commitment to the energy transition. They consider some regulations to be disincentives for switching to renewable energy. These regulations include the Energy and Mineral Resources (ESDM) Ministerial Regulation on solar PV, the Presidential Regulation (Perpres) on carbon capture and storage, and the Draft Government Regulation (RPP) on the National Energy Policy (KEN).

The Ministry of Energy and Mineral Resources (ESDM) has recently issued Regulation No. 2 of 2024, which outlines new rules for Rooftop Solar Power Plants. Unfortunately, these changes may discourage the public from installing rooftop solar power plants, particularly in households and micro, small, and medium enterprises (MSMEs). The first change is that excess rooftop solar power production can no longer be exported to PT PLN. Therefore, it won’t be counted as a bill reduction. The second change is that the development of rooftop solar PV will follow a quota system set by PLN. In addition, there will be only two registration periods per year. The problem is that the export of electricity to the PLN grid is the attraction of rooftop solar PV. With this provision, people can pay more to install batteries. Not only that, the payback period for rooftop solar power plants will also be extended to 9-10 years. In fact, with the 100% excess electricity export provision as in the current regulation, the cost of installing rooftop solar power plants can be recovered in four to five years.

“This regulation is a setback because it will reduce public participation in installing rooftop solar power plants. Not only does it hinder household consumers, but this new regulation also makes it difficult for industries that want to install rooftop solar power plants. This means that the new regulation shows that the government is getting further away from its commitment to energy transition,” said Jeri Asmoro, Digital Campaigner of 350.org Indonesia.

Community enthusiasm for rooftop solar power installation in rural and urban areas is relatively high, according to Reka Maharwati, Coordinator of Enter Nusantara. For instance, the people of Sembalun Village in West Nusa Tenggara and the Al-Muharram Mosque community in Taman Tirto, Yogyakarta, have installed rooftop solar power to achieve their dream of energy independence.

“I’m sure many other communities want to install rooftop solar panels in their homes or even be empowered to work collectively in the community. The government should be able to collaborate with these enthusiasts and create new schemes more beneficial to the community,” said Reka.

Similarly, Hadi Priyanto, a Renewable Energy Campaigner of Greenpeace Indonesia, revealed that an equitable energy transition can only be realized if the community is involved. “Community participation is one of the keys to achieving the energy mix target, but various revisions to existing regulations show the government’s lack of seriousness in energy transition efforts. The principles of fairness and democratization of energy that have been echoed in the JETP program will only be a platitude without real steps to break away from fossil energy dependence,” he added.

Similar to the updated regulations about rooftop solar PV, the draft RPP KEN containing a reduction in the renewable energy mix target from 23% to 17-19% in 2025 also hinders the acceleration of the energy transition. In the National Energy Council (DEN) document on the draft RPP KEN, the renewable energy mix until 2030 is targeted at 19-21% and will only increase in 2040 to 38-41%.

Deon Arinaldo, Program Manager of Energy Transformation, Institute for Essential Services Reform (IESR), explained that the draft KEN RPP only allows Indonesia to reach peak emissions in 2035, which is 7-10 years later than what is needed to limit the increase in global average temperature below 1.5°C, as recommended by the Intergovernmental Panel on Climate Change (IPCC) report. This puts the achievement of the Paris Agreement and carbon-neutral commitments by 2060 or sooner, which the government has aimed for, at risk.

The delayed peak emission in Indonesia means that the country will have to speed up its energy transition in a shorter time frame than previously anticipated, resulting in higher costs and more significant social impacts that will be difficult to mitigate. The draft policy has also affected the perspectives of various actors, including renewable energy investors and developers, regarding the government’s commitment to promoting renewable energy development.

“This also marks the reduction in primary energy mix targets in 2025 and 2030, especially the share of renewable energy such as solar and wind, which can hamper the cooperation of the energy transition. This is because renewable energy that can enable energy democratisation, such as solar energy, has a small portion. Greater support is given to large-scale projects such as fossil plants with carbon capture storage (CCS) or nuclear technology. So the draft KEN RPP does not favour energy transition with the community,” said Deon Arinaldo.

The plan to change KEN also contradicts Indonesia’s JETP Agreement commitment, which targets a renewable energy mix of more than 44% by 2030. It is feared that changes to KEN will impact the revision of the JETP commitment. In addition, as a large umbrella for national energy planning, the draft KEN RPP also has the potential to undermine efforts to transition to renewable energy that have been carried out in the regions.

Red Carpet for False Solutions

Not only does it disincentivize renewable energy development, but government policy encourages false solutions as an energy transition strategy. This step is fatal because it can lock Indonesia into fossil energy dependence, which leads to failure to achieve carbon neutrality.

In the revised KEN, for example, until 2060, the government still plans to operate fossil energy-based power plants and ‘green’ them with carbon capture and storage (CCS) technology. In addition, the government intends to operate nuclear power plants (PLTN) by 2032 and use gas fuel for transportation and households until 2060.

The government’s support for fake solutions is also shown by the issuance of Presidential Regulation No. 14 of 2024 concerning implementing Carbon Capture and Storage Activities. This regulation allows companies to inject and store carbon emissions into underground reservoirs. The IEEFA Report shows that out of 13 CCS projects with a total of 55% of the world’s capacity, seven projects performed poorly, two failed, and one stopped operations. The application of CCS technology is feared to be a greenwashing effort that perpetuates fossil energy-based power plants.

These three regulations raise questions regarding how serious the government is about encouraging renewable energy development. This is because the national renewable energy mix has always been below the target in the last five years.

“Regulations will be a long-term legal basis to ensure that energy transition steps are carried out legally. If the legal basis is made exactly the opposite of the target stated by the government, then where is the commitment to the energy transition? If the regulations are continuously directed to continue utilising fossil energy, investors interested in doing renewable energy business will withdraw because they do not have legal certainty. Our problem is in legal certainty,” said Agung Budiono, Executive Director of the CERAH Indonesia Foundation.

Draft Government Regulation on National Energy Policy Emission energi terbarukan Energy mix Permen PLTS Atap rooftop solar Transisi Energi

Media Indonesia | Review the Discourse on Revising the Renewable Energy Target

The government’s plan to revise the renewable energy target from 23% to 17-19% by 2025 is considered inappropriate. The Civil Society Coalition for Energy urges the government to evaluate the causes of failure to achieve the target.

Draft Government Regulation on National Energy Policy (RPP KEN) Slashes NRE Target to 19 Percent in 2025

Jakarta, January 31, 2024 – The National Energy Council (DEN) is working on updating Government Regulation (PP) Number 79 of 2014 concerning the National Energy Policy with a new draft policy (RPP KEN) that is being discussed with the DPR. DEN schedules the RPP KEN to be completed by June 2024. The new and renewable energy (NRE) targets summarized in the RPP KEN are based on the assumption of an economic growth rate of 4-5 percent to adjust post-COVID and equalize nuclear energy as renewable energy. As a result, the Draft Government Regulation on National Energy Policy (RPP KEN) set the NRE mix target in 2025 down from the previous 23 percent to 17-19 percent. Meanwhile, the NRE target in 2050 increases from 30 percent to 58-61 percent and at 70-72 percent in 2060.

The Institute for Essential Services Reform (IESR) views that the reduction in the renewable energy mix target to 17-19 percent in 2025 and 19-21 percent in 2030 implies a weak commitment to energy transition and a strong interest in maintaining fossil energy. IESR believes that the years 2025 to 2030 should be an important milestone to take off the energy transition in Indonesia with the achievement of renewable energy targets of more than 40 percent and peak energy sector emissions in 2030. Achieving an ambitious renewable energy mix in this decade is important in order to align Indonesia’s GHG emissions with the Paris Agreement target to limit the increase in average global temperature to below 1.5 degrees Celsius.

Meanwhile, delays in boosting the renewable energy mix to 38-40 percent by 2040 will prevent Indonesia from reaping greater benefits from renewable energy development, including cheaper and more competitive electricity prices in the long term, lower electricity emissions on the grid that attract investment, the development of a domestic renewable energy manufacturing industry and supply chain and the creation of greater renewable energy employment opportunities. The low renewable energy mix towards 2030 could also reduce the attractiveness of foreign investment to Indonesia, as industries and multinational companies are now keen to ensure their energy needs are supplied from a low-emission electricity system.

Fabby Tumiwa, the Executive Director of IESR, said that the setting of low renewable energy mix targets in 2025 and 2030 is not in line with the renewable energy mix target in the Just Energy Transition Partnership (JETP) agreement which aims for 44 percent by 2030.

“The JETP has agreed on a renewable energy mix target of above 34 percent in 2030, and this target is in line with the RUKN plan discussed at the same time as the Comprehensive Investment and Policy Plan (CIPP) last year. The renewable energy mix target proposed by DEN has cast doubt on the credibility of Indonesia’s energy transition policy direction by investors and the international community. Instead of lowering the target for realistic reasons, DEN should be more progressive in making the energy transition. As an institution led by the President, DEN can dismantle barriers to coordination, overlapping policies and priorities to make renewable energy and energy efficiency accelerate,” said Fabby Tumiwa.

IESR views that the strategies in the RPP KEN, such as the operation of a 250 MW nuclear power plant in 2032 and the use of CCS/CCUS in power plants still operating in 2060, have not been based on technical and economic feasibility in Indonesia to date. NPP with a small capacity of 300 MWe, small modular reactor, is still not available technology that is proven safe and economical. Indonesia itself still has to build institutional infrastructure (NEPIO), regulatory readiness, safety standards, as well as the availability of proven SMR technology, as well as public approval, before starting to build nuclear power plants.

The application of CCS/CCUS in CFPP is still an expensive and ineffective solution to capture carbon, even though this technology has been developed for decades. Examples of CCS projects at Boundary Dam in Canada and also at Petranova power plant in the US show technical problems to meet the carbon capture target and the economics are not feasible.

Deon Arinaldo, the Program Manager of Energy Transformation, IESR, mentioned that Indonesia will be burdened with the cost of implementing CCS in CFPP which is expensive, operational costs that are prone to volatility and unsustainable. Meanwhile, the construction of nuclear power plants is anticlimactic amidst the decline in the world’s nuclear power plant capacity after the nuclear tragedy in Fukushima.

“In this decade, Indonesia’s GHG emission mitigation strategy in the energy sector should be focused on the development of renewable energy and energy storage technologies that have been proven to provide energy at a cost competitive with coal-fired power plants that can still be subsidized. Solar energy and wind energy in terms of construction time can be done quickly, so the homework that needs to be improved is how to prepare a pipeline of projects that are ready to be invested in and the procurement process at PLN,” Deon explained.

Draft Government Regulation on National Energy Policy JETP National Energy Policy New and Renewable Energy PLN Transisi Energi

Kontan | Draft Government Regulation on National Energy Policy (RPP KEN) Will Equalize the Use of Nuclear Plants with New Renewable Energy

The National Energy Council (DEN) is working on updating Government Regulation (PP) No. 79/2014 on the National Energy Policy (KEN) with a new draft policy that is being discussed with the DPR. DEN schedules the KEN Draft Government Regulation (RPP) to be completed by June 2024.