Inspiring the Youth: CASE Indonesia Teaches the Importance of Energy Transition in Sekolah Bogor Raya

Bogor, 4 April 2023Project Clean, Affordable and Secure Energy for Southeast Asia (CASE) together with Sekolah Bogor Raya kicked off the long-awaited Teaching for the Future (T4F) Program which focuses on the importance of energy transition as a subject in formal education.

CASE Teaching for the Future Program visited Sekolah Bogor Raya as we launched the T4F program, after our great and inspiring experience Sekolah Santa Ursula BSD in 2022. This year, T4F has a completely different agenda, as the students from grades 7, 8 and 11, totaling 150 participants, were involved in active learning, with 15 mentors facilitating, to increase the understanding and challenge them to find solutions towards problems faced by Indonesia in transitioning to clean energy. 

There were 5 different topics facilitated by the mentors, including sustainable energy access, energy efficiency, just energy transition, sustainable transportation and sustainable agriculture. By the end of the session, all students were given a task to create a campaign/project proposal on each specific topic. These ideas/proposals will be presented by the students on 14th April 2023 during Sekolah Bogor Raya Earth Day’s Exhibition.

Dominic, one of the participants of the program mentioned, “One thing that I learned from the session is about the drought in Danau Toba. I critically think of how the drought impacted the communities, especially in acquiring clean water. Education like this is very important for us, to raise awareness and improve our understanding about sustainable energy.”

Agus Tampubolon, CASE Indonesia Project Manager, emphasized the importance of energy transition as a subject in formal education. 

“Education about climate change and clean energy should be informed to the younger generations, as they are the ones who will make energy transition in Indonesia succeed in the future,” said Agus.

Aditya Rao, the Curriculum Coordinator of Sekolah Bogor Raya, told us that most subjects taught in SBR are integrated with the principles of Sustainable Development Goals (SDGs), and since elementary school, the students have already learned about climate change and energy transition. He further mentioned that through this project, SBR hopes its students will be able to understand the theoretical cases of energy transition and climate change in Indonesia in a more practical way and could be inspired to find solutions. 

Note: CASE for Southeast Asia is a collaboration project between the Institute of Essential Services Reform (IESR), GIZ Indonesia and the Ministry of Development Planning (Bappenas) with a mandate of shifting the narrative of energy transition in Indonesia that focuses on decarbonization on the power sector, upscaling renewable energy and energy efficiency, achieving just energy transition and sustainable finance. 

China’s Belt and Road Initiative Opportunities in Accelerating the Energy Transition in Indonesia

FT

Beijing, March 27, 2023 – The Executive Director of the Institute for Essential Services Reform (IESR), Fabby Tumiwa, highlighted that the Belt and Road Initiative (BRI) allowed China to play a role in accelerating the energy transition in Indonesia. He mentioned this as a guest speaker promoting green and low carbon transition in BRI participating countries and  CCICED particular policy study on green BRI workshop on Monday (27/3/2023).

“Indonesia must increase its ambition to make emission reductions compatible with the Paris Agreement. Under the current plan, Indonesia will achieve the energy sector’s net zero emission (NZE) after 2060, but the electricity sector will reach zero in 2050. For this reason, we need more efforts to decarbonize the transportation and industrial sectors,” explained Fabby.

He also underlined that Indonesia needs a cumulative investment of around USD 1.3 trillion spread across various technologies in the push for decarbonization. Under these conditions, Fabby said, China could play a role in supporting the energy transition in Indonesia through technology, manufacturing, and investment cooperation, considering that there is market potential in increasing demand for renewable energy in Indonesia.

“Solar power will play an important role in Indonesia’s energy transition. Based on the 2021-2030 Electricity Supply Business Plan (RUPTL), PLN plans to add 3.9 GW of solar energy in 2025. For this reason, BRI’s investment in 2023 needs to be focused on financially feasible projects, such as scalable solar and wind power plants, said Fabby Tumiwa.

On the other hand, the existence of BRI can enable investment in the renewable energy component industry. This can be done by considering the complexity of the supply chain. Fabby emphasized that industrialization in Southeast Asia accompanied the push for the energy transition, such as energy storage, electric vehicles, and solar panels.

“Currently, Indonesia has started to develop the battery and electric vehicle industry because of its great nickel content. Low production costs and availability of resources are several opportunities to develop the local solar module industry in Indonesia,” said Fabby.

On the same occasion, Deon Arinaldo, Energy Transformation Program Manager, Institute for Essential Services Reform (IESR), explained various power system plans and projections expected to accelerate the spread of renewable energy in Indonesia. For example, the latest power system energy planning stipulates around 20.9 GW of renewables to be built in 2030. This number will increase by at least 5-6 GW if Indonesia considers the Just Energy Transition Partnership (JETP) target of 34% renewable energy mix in 2030.

Deon Arinaldo, Manajer Program Transformasi Energi, Institute for Essential Services Reform (IESR)
Deon Arinaldo, Energy Transformation Program Manager

“To achieve the national policy target in 2025, the IEA projects an additional solar energy capacity of 17.7 GW above that planned in the RUPTL. Meanwhile, based on the IESR scenario, the power generation capacity based on renewable energy must be boosted to 140 GW to limit global warming to 1.5°C,” Deon explained.

However, said Deon, historically, the installed capacity of renewable energy has only grown around 500 MW per year. This happened because there were several main challenges, including excess capacity at the Java-Bali power plant. Moreover, the domination of coal power plant capacity with a take-or-pay mechanism needs to make room for the integration of renewable energy. Another challenge is the renewable energy procurement process and the requirements for using local content, which places unnecessary risks in developing renewable energy.

Don’t Hinder People’s Willingness to Use Clean Energy

Jakarta, 21 March 2023 – As one of the countries that participated in ratifying the Paris agreement in 2015, Indonesia is committed to reducing its greenhouse gas emissions. In 2022, ahead of the G20 Summit, Indonesia will renew its emission reduction commitment in the Enhanced NDC which targets Indonesia’s own emission reduction of 31.89% in 2030 and a renewable energy mix target of 23% in 2030.

On various occasions, solar energy has been said to be the backbone of Indonesia’s electricity system in calling for renewable energy mix targets and reducing emissions. Given its abundant technical potential, the speed of installation, and the flexibility of sizes that can be easily expanded, solar is the right choice for Indonesia’s current condition, which must increase its renewable energy mix in a short time.

Unfortunately, in the last year’s development, the support for the PV rooftop has been lacking from the electricity offtaker (PT PLN). Since 2022, PT PLN has renewed the capacity to install rooftop PV, which is only 10% -15% of the installed capacity. This limitation has an impact on the economic value of rooftop PV which becomes less attractive, both for consumers and rooftop PV entrepreneurs.

In a press conference held by the Indonesian Solar Energy Association (AESI), Association of Indonesian Rooftop PV Installers (PERPLATSI), Rooftop PV Association (APSA), Rooftop Solar Electricity Users Association (PPLSA) and Association of Indonesian Solar Module Manufacturers (APAMSI), Fabby Tumiwa , the Chairman of AESI stated that various challenges were still hindering efforts to increase solar energy in Indonesia.

“Planning large-scale solar PV in Indonesia is difficult to develop because there is no long term in the electricity system before the 2021-2030 RUPTL, the auction process is less consistent and less competitive, economies of scale are difficult to achieve because the auction is launched and on a scale of less than 20 MW, until the regulations of local content requirement (TKDN) which is not supported by the readiness of the domestic industry,” said Fabby.

The Ministry of Energy and Mineral Resources, starting in January 2023, revised the Minister of Energy and Mineral Resources Regulation No. 26/2021 concerning PLN customers installing PV rooftop. The revision of Permen ESDM 26/2021 has pros and cons, one of which was conveyed by Muhammad Firmansyah, General Treasurer of PERPLATSI, who stated that revision points such as eliminating the export-import of electricity from PV users will reduce the interest of potential customers to switch to renewable energy. Planning for a quota system per power grid system is also considered to hinder the development of rooftop PV.

“By imposing a quota for rooftop PV, it is like waiting for death to come. Because if the quota in one system is full already, customers can no longer install rooftop PV that are connected to that network,” said Firmansyah.

Yohanes Sumaryo, General Chairperson of PPLSA, stated that there is a change in the behavior of PV users. “Some of us are starting to change the rooftop PV system at home so that it is not connected to the PLN (off-grid) network, especially to avoid licensing problems and other burdensome requirements. Generally potential users are also confused by the new rules regarding settlement and new conditions such as load profiles.”

According to Yohanes, many users in cities with relatively high-power rates have started installing batteries so that they can make maximum use of rooftop PV. However, the Minister of Energy and Mineral Resources No. 26/2021 needs to be fought for to properly protect PV users.

The ESDM Ministerial Regulation No. 26/2021 has an impact on various supporting sectors for PLTS, such as the solar panel industry, which is becoming difficult to develop. Linus Sijabat, Chairperson of APAMSI, said on the same occasion that regulations related to TKDN are still a challenge for the development of the domestic solar panel industry.

“The TKDN issue in domestic industrial panels requires consistent regulation and serious implementation accompanied by financial support from the government, banks and financial institutions to improve the quality of domestic solar panels and make their quality competitive with imported solar panels,” he said.

Since 2013, APAMSI has attempted to invest in large amounts to advance the domestic solar module industry but has not been successful because the captive market and demand for solar energy in Indonesia are not yet clear.

The impact of completing the installation of the rooftop PV is also being felt by the people of Bali. Several cases stated that the community had installed the PV system according to Permen 26/2021 but could not fully use it.

“In Bali itself there are many obstacles, for example the rooftop PV installation that has been installed but not fully approved by PLN so that the installed rooftop PV system cannot be used in part, even though the community installed it according to Permen ESDM 26/2021, which is 100% of the installed power of the building,” explained Erlangga Bayu representing APSA Bali.

There are also many people who have even paid a DP (down payment) to install a rooftop PV but in the end canceled it because of the capacity limitation. Even though the community installs PV at their own expense and awareness with the motivation to save electricity costs and preserve the environment. Limiting the capacity of rooftop PV seems to be blocking the real contribution of community cooperation to achieving renewable energy targets and reducing greenhouse gas emissions.

Grasp the Knowledge of Regulations for Using Solar Rooftops for Renewable Energy Needs

Marlistya Citraningrum

Jakarta, March 21, 2023 – Currently, the use of rooftop solar power plants is being encouraged because it is believed to be able to meet future energy needs. As a mainstay of pursuing a 23% renewable energy mix in 2025, rooftop solar PVis targeted to be installed up to 3.6 Giga Watt (GW). To support this, the government continues to intensively promote the installation of rooftop solar PVin both households and industry. Marlistya Citraningrum, Program Manager for Sustainable Energy Access, Institute for Essential Services Reform (IESR) explained there had been a long journey for solar energy in Indonesia. This started before the 1980s when development and research on solar energy began. Until then, the use of rooftop solar PVhas developed until nowadays.

“Before the 2018s, there was a PT PLN board of directors regulation regarding the use of photovoltaic electricity by PLN customers. The law contains that the installation of rooftop solar PVis allowed to operate in parallel with the PLN network, the export of excess electricity is permitted with a net-metering scheme, a 1: 1 rate,” said Marlistya in the EBT Zone event on Tuesday (21/3/2023).

Furthermore, Marlistya mentioned, afterwards, there was Minister of Energy and Mineral Resources Regulation No. 49 of 2018 concerning the use of the rooftop solar PV system by consumers of PT PLN. The regulation stipulates that the installation of rooftop solar PV connected to a network is permitted, the maximum capacity of rooftop solar PV is 100 of the installed power, measured from the ability of the inverter, the export of excess electricity is allowed with a net-metering scheme, a rate of 1: 0.65. In addition, there is an offset calculation at the end of the month, and excess deposits are allowed for up to three months. Technical and licensing procedures are explained, and a parallel fee is imposed for industrial customers.

“The Minister of Energy and Mineral Resources Regulation can be referred to as the “original” rooftop solar PV regulation. However, there was a change in 2019, where installing a rooftop solar PV requires an operating permit. Referring to the Minister of Energy and Mineral Resources No 12/2019, installations <500 kVA do not require an operating permit. Then, parallel industrial fees for industrial customers were reduced to 5 hours/month from 40 hours/month, and emergency costs were eliminated,” stated Marlistya.

Marlistya Citraningrum
Marlistya Citraningrum, Program Manager for Sustainable Energy Access, Institute for Essential Services Reform (IESR), on Zona EBT, Tuesday (21/3/2023)

With these various regulations, said Marlistya, there has been significant growth in rooftop solar power in the 2018-2020 range. Different factories install rooftop solar PV. With this growth, a new regulation emerged:MEMR regulation No. 26 of 2021. This regulation regulates that network-connected rooftop PLTS are allowed in all areas where public interest business licence (IUPTLU) holders are permitted. Net-metering scheme, 1:1 rate, offset calculation is done at the end of the month, and excess deposits are allowed up to six months.

“Unfortunately, this regulation will only be announced in 2022. When MEMR regulation No. 26 of 2021 was issued, there was an installation capacity limit of 10-15% or lower in all regions of Indonesia, as well as a fixed electricity export tariff of 0.65 according to the old MEMR Regulation. This limitation can be found when a consumer applies for a permit to install a rooftop solar PVat his home, then there is a reply letter from PLN containing these restrictions,” said Marlistya.

This capacity limitation, said Marlistya, occurs universally in Indonesia until consumer complaints arise regarding this matter through association institutions. Given these conditions, 2022 will be the first year in which the development of rooftop solar PVhas decreased compared to the previous year. Citing data from the Ministry of Energy and Mineral Resources for 2023, mentioned Marlistya, the growth of rooftop solar PV customers in 2018 reached 609, 1,064 in 2019, 1,334 in 2020, 1,787 in 2021, and 1,667 in 2022.

CNBC | Electricity Costs Should Lower in April, Says Expert

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.

Racing Against Time, Driving Deep Decarbonization of Indonesia’s Energy System

Deon Arinaldo

Jakarta, March 14, 2023 – The Government of Indonesia (GoI)  needs to set more ambitious targets to accelerate the transition to clean energy with decarbonization so that the increase in the earth’s temperature does not exceed 1.5°C. As a country that ratified the Paris Agreement, Indonesia is legally bound to integrate its policies to achieve carbon neutrality by 2050. Deon Arinaldo, Program Manager for Energy Transformation, Institute for Essential Services Reform (IESR), explained that to support the global target of 1.5°C, emissions of Indonesia’s energy system must peak before 2030 and reach zero by 2050.

“For this reason, the transition to the energy system needs to be planned and started from the beginning. The electricity sector is most ready to transition because renewable energy generators are available with abundant potential and are competitive with fossil energy,” said Deon at the Implementation of a Just Energy Transition in Indonesia event organized by the International Institute for Sustainable Development on Tuesday (14/3/2023). 

Quoting the IESR study entitled Deep Decarbonization of Indonesia Energy System, said Deon, the energy system transition in Indonesia needs to achieve three milestones, including 100 GW of solar panels, no new PLTU except for 11 GW included in the development plan, and 2 GW of prosumer solar panels in the first stage in the 2018-2030 period, then in the second stage, namely 100% renewable energy, utility-scale battery storage, starting to install a 2 GW electrolyzer and CO2 storage and direct air carbon capture (DAC) in the 2030-2045 period, then in the third stage, i.e., continuing to use 100% renewable energy after 2045.

“To achieve a transition to the energy system, renewable energy, especially solar, has a major role to play in Indonesia’s electricity generation in a carbon-neutral scenario,” said Deon.

In addition, Deon emphasized that the energy transition at least requires a transformative approach to all aspects, from policy, economic, and social to technical. For example, in the policy aspect, it is necessary to consider more apparent steps, not just BaU (business as usual). As a developing country, Indonesia can also take a role in the energy transition. Still, on the other hand, there is pressure for developed countries to provide technology, funds, and assistance.

“To support the 1.5°C target, we need to change our perspective, work, and energy system. For this reason, a stronger message is needed in energy planning and policy,” explained Deon.

On the same occasion, Satya Widya Yudha, a National Energy Council (DEN) member, emphasized the need for climate finance as the main driving force for achieving carbon neutrality. For this reason, Indonesia needs help from other countries to achieve carbon neutrality by 2060 or sooner. To achieve this target, said Satya, Indonesia also has a strategy for decarbonization in electricity generation.

“We still try to use fossil energy still but with clean energy technology. However, we also continue accelerating the use of renewable energy, such as electric vehicles and hydrogen development. Until renewable energy can be used entirely, “explained Satya.