Executive Director of the Institute for Essential Services Reform (IESR), Fabby Tumiwa, explained that there is a possibility that the government will adjust the price of electricity, especially non-subsidized electricity, starting in April 2023. He estimates that the non-subsidized electricity tariff for the April-June 2023 period will likely decrease compared to the previous rate.
Read more on CNBC.
Jakarta, 9 March 2023 – Solar energy has the potential to be developed massively in Indonesia. The Institute for Essential Services Reform in its report entitled “Beyond 207GW” states that the technical potential of solar energy in Indonesia reaches 20,000 GW. Unfortunately, the use of solar energy is still minimal. It is noted that the installed capacity of new solar energy is around 270.3 MW until 2022.
In the talk show “Bincang Energi Surya”, the collaboration of six institutions namely the Institute for Essential Services Reform (IESR), Solar Scholars Indonesia (SSI), the Indonesian Student Association (PPI) Australia, the Korean Indonesian Research Association (APIK), the New Generation Solar Energy Institute (Insygnia) ), and Solarin, Anindita Satria Surya, Vice President of Energy Transition and Climate Change of PT PLN stated that the development of solar energy is very necessary for the development of renewable energy.
“The description of the JETP scenario is first, building a large baseload such as hydropower, second, building a strong transmission network, and third, building supporting plants such as PLTS,” he explained, explaining the big picture of PLN’s plans to build renewable energy generators in the next few years.
In addition to a comprehensive investment plan for implementing the Just Energy Transition Partnership program, the development of renewable energy generators is also guided by the RUPTL. In the 2021-2030 RUPTL, it is planned that Indonesia will have more than 50% of the energy used come from renewable energy sources. Solar energy itself is planned to increase by 4.6 GW until 2030.
Widi Nugroho, Sub-Coordinator of Supervision of Various New and Renewable Energy Businesses, Ministry of Energy and Mineral Resources emphasized that to pursue the target of a renewable energy mix of 23% by 2025, fulfillment will be prioritized with solar energy.
“For the development of NRE generators, priority is given according to the 2021-2030 RUPTL where solar will increase by 4.6 GW in 2030,” he explained.
Based on the government’s plan, solar energy will be the main pillar of Indonesia’s electricity system with a capacity of 461 GW in 2060. As Indonesia receives the Just Energy Transition Partnership (JETP) funding, it opens up various funding opportunities for renewable energy projects and technology research.
On the same occasion, Muhamad Rosyid Jazuli, Policy Researcher, Paramadina Public Policy Institute, stated that currently there is one main challenge from the policy side, namely the accumulation of a number of commitments that are not accompanied by derivative regulations so that progress towards achieving the promised commitments does not run smoothly.
“The high dominance of coal in Indonesia’s electricity system and the price of coal which is considered relatively cheaper is one of the challenges in developing renewable energy, especially solar,” explained Rosyid.
Rosyid also added that in addition to policies, public perceptions need to be developed in relation to renewable energy and low-carbon technologies so that behavior changes can occur. At present, renewable energy or other low-carbon technologies, such as electric vehicles or rooftop PV, have not become the people’s first choice. Limited information related to technology and prices that are still relatively expensive are some of the aggravating factors in society.
Bincang Energy Surya is a series of public dissemination events about solar energy. Solar energy thematic dissemination will be held regularly, every two weeks until June 2023, covering topics; Indonesia’s solar energy landscape, current policies, technology, industry, socio-economic and human resource readiness to support the Just Energy Transition Partnership (JETP) and Net Zero Emission (NZE) targets.
Jakarta, March 6, 2023 – The Clean, Affordable and Secure Energy (CASE) Program of Indonesia alongside the Ministry of Planning and National Development/National Development Planning Agency (Kementerian PPN/Bappenas) launched a series of multi stakeholder discussions ahead of the Indonesian Sustainable Energy Week (ISEW) that will be hold on October 2023. The discussions were kicked off under the theme of “Emerging New Technologies to Support Energy Transition in Indonesia”, where different experts address the Indonesian context of technologies for renewable energy and the challenges faced to implement them.
Devi Laksmi, Coordinator of Conservation Energy Development Working Group of the Ministry of Energy and Mineral Resources (MEMR), stated the renewable energy target of Indonesia which should reach around 23% by 2025 and how the country still has massive gaps to achieve this said target. MEMR is currently developing its strategy to maximize RE potentials.
Moving forward with the discussion, Mentari Pujantoro, Project Manager of Agora Energiewende said the global carbon emission has reached its historical peak in 2022 which is caused by fossil fuels and energy consumption. Renewables, Energy Efficiency and Renewable-based Electrification can contribute to 70% of worldwide emission reduction.
“Indonesia needs to identify the existing technologies and their roles first before moving on to new technologies,” said Mentari.
Badariah Yosiana, Programme Officer the International Renewable Energy Agency (IRENA) explained the opportunities of renewable energy utilization towards Indonesian economic growth. Energy technologies could benefit the industry sector.
“For example green hydrogen could be utilized as a clean energy source and as a producer of Nickel, Indonesia could become a battery producer and exporter which would contribute to the integrated electric vehicle (EV) supply chain and solar PV manufacturing,” stated Badariah.
Beni Suryadi, Manager of ASEAN Centre for Energy stated that although renewable energy such as wind and solar will dominate the energy mix in Indonesia starting from 2031, however not a single country can reach 100% net zero emission just from utilizing both energy.
“In other parts of the world, there have been debates on the possibility of Nuclear as a secure and reliable option to replace coal. However, some still deemed this clean source of energy inflexible due to the safety requirements,” said Beni.
After three panelists presented different technologies and their feasibility, Prof. Dr. Ir. Suwarno, M.T., Lecturer of Bandung Institute of Technology, Professor of School of Electro Engineering and Informatics addressed a critical question of the country’s readiness of these technologies. He raises an issue about human resources, acceptance, awareness and regulations that would contribute heavily to the process of energy transition in Indonesia. As an academic himself, he pointed out that education and research institutes will play massive roles in preparing the skilled human resources needed to succeed.
Mr Zainal Arifin as the Executive Vice President of Engineering and Technology, State Electricity Company (PLN), said the challenges faced by Indonesia: over capacity and the trilemma of energy to ensure affordability, reliability and sustainability. Until now, the only energy source which could cover all three is hydro power according to PLN. He pointed out that in developing strategies for energy technologies, flexibility and adaptability have important roles as it is not a linear process and will be implemented in the long run.
Finally, Mr. Agus Tampubolon as the Program Manager of CASE wrapped up the discussion and presented the timeline of discussions, which will be held four times with different topics.
“These next discussions will focus on one topic at a time for a deeper conversation and all the findings will be presented at Indonesia Sustainable Energy Week (ISEW) in October 2023”, said Agus.
Semarang, 1 March 2023 – The Energy and Mineral Resources of Central Java Province involved the Institute for Essential Services Reform (IESR) as a participant in the Regional Forum for Drafting Strategic Plans Document for 2024-2026. This activity was held at the ESDM Office of Central Java Province, opened with remarks by the Head of the Central Java Energy and Mineral Resources Office, Sujarwanto Dwiatmoko and attended by representatives of Commission D DPRD Central Java Province, Secretary General of the National Energy Council, representatives of Regional Government Organizations (OPD) district/city level of Central Java Province as well as several related stakeholders.
Sujarwanto Dwiatmoko believes that the involvement of various stakeholders in regional forums is very important in the basis of regional policies. In addition, the issuance of a Presidential Decree regarding Regional Strengthening on New and Renewable Energy (NRE) has become the mainstay of development and enthusiasm for Central Java to build an energy transition with the people. The people collectively are expected to be able to realize an independent supply of energy to achieve energy sovereignty.
The meeting discussed four strategic issues and development priorities for the Central Java region for 2024-2026 related to the EMR sector, namely 1) A resilient economy that is competitive and sustainable, 2) Human Resources who are competitive, characterized and adaptive, 3) Resilient Natural Resources and environment, 4) Dynamic governance.
Sujarwanto added, there are several points that need to be emphasized in strategic issues such as a strong economy, Central Java human resources that are competitive, characterized and adaptive.
“The economy is resilient, meaning that in our resilience we do not only have competitiveness, but also have a sustainable orientation. In addition, Central Java human resources must have character, be able to adapt and have a plan in dealing with disruptive changes; full of uncertainty, vulnerability and complexity, on a national and global scale,” he continued.
He also emphasized strategic issues for aspects of natural resources and the environment which included one aspect of energy security
“On the aspect of energy security, especially renewables in Central Java, its development must be accelerated, there must be agreement from all elements and the state must be involved in it. This requires a shift in perception and high mindset regarding NRE from many parties,” he explained again.
He also explained about the four focuses of regional energy security which include 1) Availability of energy sources, 2) Affordability of energy investment costs, 3) Ability to access energy (accessibility), and 4) Public acceptance of energy (acceptability).
Furthermore, Sujarwanto said that the MEMR Office of Central Java Province emphasized that the three-year development would move towards realizing a competitive economy.
“Energy for economy, energy for productivity”. This means that the energy currently available in society is not only enjoyed for lighting, but must also be utilized to increase their productivity. The more people per capita consume electrical energy, the more productive they will be,” he said.
Energy independence at the community level continues to be encouraged through the Desa Mandiri Energi (DME) – Energy Independent Village program initiated by the ESDM Office of Central Java Province. This program utilizes the potential of local energy sources owned by each district/city in Central Java Province to promote energy independence and sovereignty. Data shows that 2,353 villages or 27.48% of 7,809 villages in Central Java already have energy independence initiatives and are included in the Energy Independent Village category. There are around 36 energy assistants who will be placed in districts/cities to strengthen Central Java’s independent energy village and energy sovereignty.
Through the DME program, Central Java is determined to have energy transition with the people and 60% of the energy will be generated from the people who are in the district/city area. There are two things that will be encouraged in this program, namely increasing public awareness and developing renewables in areas and remote areas, such as the construction of biogas, micro hydro, Biogenic Swallow Gas (BSG) and agricultural pumps that are converted using solar equipped with batteries or Solar Water Pumps.
Imam Jauhari, representative of the Bappeda Cilacap, agreed that energy for the people’s capacity is very important. Agreeing with him, Sri Hartini, representative of Commission D DPRD Central Java Province, believes that the solar water pump program will be able to help with community problems.
“Our hope, of course, is that the synergy between OPD will be well established, for example overcoming the problem of flooding in the community means that the Energy and Mineral Resources Office synergizes with PSDA. Then from the provincial, district/city governments must really coordinate to meet the needs of the community” – said Sri Hartini.
Apart from that, Wahyudin Noor Aly, representative of Commission D DPRD Central Java Province also asked
Even though the potential that exists in Central Java must be encouraged and increased to pursue and achieve the target of Central Java’s energy mix. According to him, the rapid development of technology and the high potential of natural resources in Central Java, are still faced with a lack of energy conservation practices.
“We (the region) must allocate a special budget for independent energy, so that this energy can be enjoyed by all residents of Central Java. One village can make their own energy, use it themselves, pay for it themselves, this will be cheaper,” added Wahyudin Noor Aly
According to Wahyudin Noor Aly, the MEMR needs to make a breakthrough and take the lead in opening up opportunities to attract many investors. Problems that exist in the regions and districts/cities need to be based on the Strategic Plan and Long-Term Plan. Thus, the involvement of all stakeholders and district/city offices plays an important role in determining the design of the Strategic and Long-term Plan of the Central Java Province ESDM Office.
On the other hand, IESR will fully support the energy transition program in Central Java Province. In the DME program, IESR will be involved in providing knowledge packages to energy assistants in 35 districts/cities through capacity building activities. Through this capacity building activity, in addition to increasing knowledge, they can also build awareness, mindset and perception of the community to explore opportunities and take advantage of the potential of renewable energy sitting in the area.
The Executive Director of the Institute for Essential Services Reform (IESR), Fabby Tumiwa, said that the average investment for geothermal power plants is US$ 5-7 million per MW.
Read more on Kontan.
Jakarta, February 28, 2023 – Executive Director of the Institute for Essential Services Reform (IESR), Fabby Tumiwa, highlighted the power-wheeling scheme contained in discussions on the New Energy and Renewable Energy Bill (RUU EBET). However, the scheme has been removed from the problem inventory list (DIM) preparation in the New and Renewable Energy Bill (RUU EBET). Power wheeling is a mechanism that allows private companies or independent power producers (IPP) to build power plants and sell electricity to household and industrial customers. Fabby explained power wheeling is needed to align with Indonesia’s efforts to increase renewable energy.
“The Government has set a target of achieving a 23% New Renewable Energy (EBT) mix in 2025, both for electricity and liquid fuels. Then, in 2021, President Jokowi set an NZE target of 2060 or earlier. This target is driving the energy transition to decarbonize the energy sector. As a consequence of this, renewable energy needs to be developed on a large scale,” explain Fabby Tumiwa in the webinar “New Energy and Renewable Energy for the Prosperity of All” organized by the Center of Economic and Law Studies (CELIOS), on Tuesday (28/2/ 2023).
Unfortunately, Fabby mentioned, the growth of renewable energy tends to be slow. This can be seen from the achievement of the new renewable energy (EBT) mix of around 14.11% in 2022. Fabby assesses that it is best when the combination of new and renewable energy in the electricity sector reaches 30%. Achievements in 2022, said Fabby, were only half of the 2025 target that the Government had set.
“Reflecting on these conditions, the gap with the primary renewable energy mix target of 23% in 2025 is widening. Strategic innovation is needed to encourage the implementation of renewable energy. Moreover, Indonesia’s massive renewable energy potential has not been utilized. On the other hand, the cost of generating electricity from renewable energy is very competitive. Eliminating incentives for fossil energy is enough to make renewable energy the cheapest option,” said Fabby.
Along with this, Fabby emphasized that the concept of power wheeling is familiar because previously the Government had regulated it based on the ESDM Ministerial Regulation (Permen) No 1/2015 and ESDM Ministerial Regulation (Permen) No 11/2021. Still, these regulations need to be implemented. Thus, Fabby stated that power wheeling has the potential to create a renewable energy market while maintaining industry/company investment in Indonesia. One of them is the industrial group that joined RE100.
“Power wheeling can encourage renewable energy because it provides incentives from the supply and demand side. However, power wheeling requires further adjustment. Regulatory regulations regulate tariffs for power-wheeling schemes in other countries, at least in their formulation. At the same time, the commercial aspect is taken care of by business-to-business between those who wish to use it and the transmission owner. Not only that, power wheeling needs to be included in the law because the implications of implementing the scheme will involve several ministries/agencies. For that, it’s not enough to get ministerial regulations,” stated Fabby.
Jakarta, February 8, 2023 – The State Electricity Company (PLN) is currently in the midst of a crisis of oversupply of electricity. Several factors cause this, including the pandemic and global recession. In addition, there is a 35 Gigawatt coal power plant megaproject that has been initiated since 2015 and operated at only 47% in 2022. However, there are also several misconceptions about this crisis. In a news program at the CNBC Energy Corner (6/2/2023), Herman Darnel Ibrahim, a member of the National Energy Council, and Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR), discussed some of these misconceptions.
According to Herman, it is common for electricity service providers, including PLN, to set a percentage of reserve margin. Referencing other countries, 40-50% is a normal rate for the reserve margins to anticipate growth and maintenance. In 2022 alone, electricity growth was recorded at 6.15% (including from private power producers) and is expected to continue to increase in the coming years.
“On the island of Java itself, the reserve margin is probably 60%, while in other places there is a shortage of power. So in the next two years, it is estimated that there will be no overcapacity,” explained Herman.
According to Fabby, the growth percentage stated by Fabby does not reflect the actual rate of growth inside PLN, which is less than 5%. He considers that the current oversupply situation is due to a mismatch in demand projections that form the basis for planning and realizing the 35 GW.
“Of the 35 GW that have been planned, 5.4 GW have not been contracted and have not received funding. It would be good if this amount could be canceled or diverted to renewable energy,” explained Fabby.
Herman and Fabby agree that there needs to be an evaluation from PLN in various aspects. First, it must sharpen demand forecasting for electricity use, while taking into account electricity supply from private generators. This can reduce the possibility of excess capacity, which can result in costs to be borne by the government or increased tariffs on customers.
Second, there needs to be an evaluation of electricity purchase and sale contracts with private power producers, especially those using take or pay clauses. 80% of the excess supply of electricity comes from private producers, and each GW costs the state IDR 3 trillion.
Third, it is necessary to evaluate the schedule between projects. The tendency is that project completion is adjusted to government tenure. This does not match the gradual demand growth for electricity, instead there is a sudden increase in power capacity, which causes overcapacity.
“The COD schedule (commercial operation date) should be determined by PLN, not the government’s term of office. Usually, projects are planned year by year so that there is no under capacity or overcapacity,” said Herman.
“The remaining 5.4 GW is important to monitor. The project is mostly funded by China, while since a few years ago, China has not financed coal plant projects anymore, so if it is certain that there will be no funding, it is better to cancel or divert to renewable energy. Evaluation is then important to provide stability of supply and affordable electricity prices,” concluded Fabby.
The energy transition towards renewable energy is roaring in the momentum of the G20 2022. It’s because the Indonesian Government places the energy transition as one of the priority issues under its leadership at the G20. Furthermore, its coverage in the mass media, using the keyword “energy transition” on Brandwatch.com, increased from 346 in 2017 to more than 79.000 in 2022.
The Institute for Essential Services Reform (IESR) continually strives to contribute to popularizing the energy transition with various studies and advocacy activities. One of them published its main report, which encourages and measures the energy transition process in Indonesia, entitled Indonesia Energy Transition Outlook (IETO). Published annually since 2017, IETO 2023 is the 6th volume. Previously, this report was titled Indonesia Clean Energy Outlook in 2017 but changed its name to Indonesia Energy Transition Outlook in 2020.
The launch of the IETO was welcomed by various parties, including journalists in the mass media, who have a significant role to play: collecting and distributing the correct information.
Sugiharto, an ANTARA journalist, said that the IETO is a critical report that is getting better from year to year and has become a reference in journalistic writing because it contains various data and information about Indonesia’s energy transition program.
“With the IETO report with complete data, we as journalists quite often use it as a writing reference, especially regarding the diversity of data outside the government,” explained Sugiharto.
On the other hand, Sugiharto assessed that Indonesia’s energy transition development has been moderate. Even though Indonesia has a lot of renewable energy potential, that is exceptionally qualified to meet domestic energy needs. Regulatory and funding barriers are challenges for developing the energy transition in Indonesia that need to be overcome.
“Based on the low renewable energy mix, the government needs to be aggressive in realizing Indonesia’s energy transition ambitions,” said Sugiharto.
Aditya Putra, a journalist for Kompas Daily, explained the IETO, which outlines the challenges of the energy transition in Indonesia and the strategic steps in the future. Moreover, Aditya stated that these topics are interesting to be known by the public.
“The data presented in the IETO can earn attention on energy transition, including those that journalists may have missed or not disclosed regularly to the public by the Government, for example, regarding the declining mix of renewable energy in primary energy. Getting further away from the target that has been set, “explained Aditya.
In this regard, Aditya hopes that the existence of reports such as IETO 2023 can oversee the commitment and implementation of the Government’s energy transition agenda and plans. In line with Aditya, Vindry Florentin, a journalist for Koran Tempo, stated the integration of comprehensive data discussing the energy transition in the IETO report became a reference for the media. Moreover, said Vindry, the data shared by the Government needed to be completed and integrated.
Efri Ritonga, a senior journalist for Koran Tempo, also said that the development of energy transition in Indonesia continues currently, although it is still slow. Moreover, there are some community initiatives to initiate an energy transition. Such as the use of rooftop solar in residential areas, as well as the development of large-scale renewable energy, are still constrained. In addition, using fossil fuels is still dominant because of price, availability, and affordability. Some people are unfamiliar with the issue of the energy transition.
“There are several reasons the issue of the energy transition is not well known in the broad community. First, there is not much information about energy transition practices that people can start themselves with, for example, by using an electric stove, installing a rooftop PLTS, reducing the use of private vehicles made of fossil fuels, or switching to electric vehicles. Second, in terms of practicality and cost. For example, in the transportation sector, the price of electric cars is still prohibitive, and the availability of charging stations is still minimal,” said Efri and Vindry.
Indonesia’s energy transition journey is entering a critical period considering that the available time is getting shorter. Indonesia’s closest target is to achieve 23% of the renewable energy mix by 2025. Meanwhile, the Just Energy Transition Partnership (JETP) agreement committed at the 2022 G20 Summit targets 34% of renewable energy by 2030.
In this increasingly shorter time span, the progress of the energy transition in Indonesia is unfortunately still stagnant. The Transition Readiness Framework developed by the Institute for Essential Services Reform (IESR) since 2020 records that in 2022 there are no significant developments in various energy transition sectors in Indonesia. Political commitment and energy transition policies, as well as the investment climate for renewable energy plants are in the low category. This can be interpreted as a challenge in the development of renewable energy as well as a factor that needs to be considered so that Indonesia does not fail to achieve its targets.
It is undeniable that there is an increase in the installed capacity of renewable energy every year. However, this additional capacity is not fast enough to meet Indonesia’s renewable energy capacity targets in an effort to limit the increase in the average global temperature below 1.5 degrees Celsius.
Why is it important for Indonesia to achieve its renewable energy targets? Indonesia is included in the top ten largest emitting countries in the world. Thus, Indonesia has a responsibility to reduce its greenhouse gas emissions significantly. Indonesia’s emissions are dominated by two sectors, namely land use change and the energy sector.
From the energy sector, emissions can be reduced drastically by focusing on the electricity sector by increasing the share of renewable energy generation and switching to electric systems (electrification) for vehicles and industry.
The Indonesia Energy Transition Outlook 2023 sees an opportunity to add renewable energy capacity in 2023. The existence of international assistance to reduce emissions, especially from the energy sector, must be a catalyst for accelerating renewable energy capacity as well as a means of creating a portfolio to attract more investment for renewable energy. To achieve net zero emissions status by 2050, Indonesia needs USD 25-30 million annually.
Systematic changes to improve the investment climate are needed. According to renewable energy developers, there are at least three points that need to be improved, namely the need for FiT (Fit in Tariff), fiscal incentives, and soft loans.
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