The new regulation on rooftop solar power plants (PLTS) that has just been issued by the Minister of Energy and Mineral Resources (ESDM) is considered to hamper the growth of household sector customers.
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Explore South Sumatra Energy: Promoting Renewable Energy in the Land of Sriwijaya
Palembang, February 26, 2024 – South Sumatra, also nicknamed “Bumi Sriwijaya”, is one of the provinces that achieved a regional renewable energy mix target greater than the national target. In 2022, the renewable energy mix in South Sumatra reached 23.85 percent, higher than the national energy mix target of 23 percent by 2025. To encourage greater renewable energy utilization and promote renewable energy at the regional level, the Institute for Essential Services Reform (IESR) through the Energy Transition Academy in collaboration with the Energy and Mineral Resources (ESDM) Office of South Sumatra Province held Jelajah Energi South Sumatra on February 26 – March 2, 2024.
Based on data from the Department of Energy and Mineral Resources, South Sumatra Province, the potential for renewable energy in this area is around 21,032 MW, consisting of solar energy of 17,233 MWp, hydro of 448 MW, wind of 301 MW, bioenergy of 2,132 MW and geothermal of around 918 MW. However, currently only around 4.70% of this potential has been utilized, with an installed capacity of renewable energy of around 989.12 MW.
Secretary of the Energy and Mineral Resources Agency (ESDM) of South Sumatra Province, Ahmad Gufran said, to encourage the utilization of renewable energy, his party carried out several implementations of regional energy management strategies in South Sumatra. For example, conducting a study of renewable energy potential in South Sumatra. Then, the South Sumatra Provincial Government supports the acceleration of the battery-based electric motor vehicle program for road transportation with the issuance of South Sumatra Governor Regulation Number 26 of 2021 concerning the Use of Battery-Based Electric Motor Vehicles, and encourages the private sector to participate in developing renewable energy both to meet company needs and for corporate social responsibility.
“In order to implement the energy transition, we will continue to contribute to the development of the renewable energy sector to obtain clean energy that is environmentally friendly. In the future, we hope that the utilization of clean energy can be more developed to all levels of society,” said Ahmad Gufan.
Sub-National Coordinator, Sustainable Energy Access Program, IESR, Rizqi M Prasetyo mentioned that South Sumatra is known as an energy granary, particularly renewable energy such as solar energy. According to him, South Sumatra has the largest solar potential among other technical renewable energy potentials. However, its utilization is actually small, only 7.75 MWp in the 2012-2022 period. For this reason, IESR believes that South Sumatra can encourage the use of ground-mounted solar power and rooftop solar power by preparing supporting regulations and policies, conducting socialization about solar power in the community, and encouraging community participation to be involved in the adoption of rooftop solar power accompanied by attractive incentives. Rizqi views that the collaboration between the government, the private sector and the community is the determining factor for the success of the utilization of environmentally friendly energy.
“Based on the practice of utilizing renewable energy in South Sumatra from the private sector at the Solar Power Plant (Solar PV) in Tanjung Raja Village, Muara Enim, South Sumatra, it has been useful for irrigation of agricultural land for farmers in the village. The solar power plant has a capacity of about 16.5 Kilowatt peak (kWp), with about 525 farmers benefiting from the irrigation solar power plant and enabling harvests more than 3 times a year. The government needs to encourage initiatives from various sectors to gain benefits from the huge potential of renewable energy such as solar energy, so that more and more people can feel the impact both environmentally and economically,” said Rizqi.
Rizqi explained that IESR realizes that access to knowledge about renewable energy and its benefits tends to be limited. Meanwhile, proper understanding is needed to mobilize support for renewable energy development in the regions. Addressing the knowledge gap on renewable energy, IESR has provided an energy transition learning platform called the Energy Transition Academy that can be openly accessed by the public.
“IESR, through the academy.transisienergi.id platform, has provided various energy transition classes that are organized in an interesting and easy-to-understand manner. Not only learning about energy transition, IESR also has a special channel for everyone who wants to know about rooftop solar PV adoption by visiting solarhub.id,” Rizqi explained.
In Jelajah Energi South Sumatra, participants will be invited to see firsthand various renewable energy projects that are already running in various locations in the province, including PT Pupuk Sriwidjaja Palembang’s PLTS, Tanjung Raja Village Irrigation PLTS, and PT Green Lahat’s PLTMH. In addition, there were discussion forums and meetings with relevant stakeholders, to discuss strategic steps in accelerating the implementation of renewable energy in South Sumatra.
About Institute for Essential Services Reform
The Institute for Essential Service Reform (IESR) is a think tank organization that actively promotes and strives for the fulfillment of Indonesia’s energy needs, upholding the principles of justice in natural resource utilization and ecological sustainability. IESR engages in activities such as conducting analysis and research, advocating for public policies, launching campaigns on specific topics, and collaborating with diverse organizations and institutions.
Liputan6 | AJI Palembang Collaborates with IESR and SIEJ to Form South Sumatra Energy Transition Journalist Network
The Alliance of Independent Journalists (AJI) Palembang together with the Institute for Essential Services Reform (IESR) and the Society of Indonesian Environmental Journalists (SIEJ) took the initiative to form the South Sumatra Energy Transition Journalist Network (JTE).
Read more on Liputan6.com.
Kompas | Bali Net Zero Emission 2045 Commitment Begins in Nusa Penida
The strategy to pursue Bali’s target of net zero emissions or NZE 2045 starts from Nusa Penida in Klungkung Regency. Nusa Penida is planned to become an island based on new renewable energy or EBT.
Read more on Kompas.
MEMR Regulation No. 2/2024 Limits Public Participation to Support Energy Transition through Rooftop Solar PV
Jakarta, February 23, 2024 – The Indonesian government has officially issued Minister of Energy and Mineral Resources (MEMR) Regulation No. 2 of 2024 concerning Rooftop Solar Power Plants Connected to the Electricity Network of Holders of Electricity Supply Business License for Public Interest, which is a revision of MEMR Regulation No. 26 of 2021.
In this new regulation, the net-metering scheme is abolished so that excess electrical energy or export of electrical power from users to State Electricity Company (PT PLN Persero) cannot be calculated as part of the reduction in electricity bills. The regulation also stipulates a quota mechanism for rooftop solar power systems in the electricity system of owners of Electricity Supply Business License for Public Interest (IUPTLU) for five years. In addition, this regulation stipulates the registration period twice a year and the compensation provided by the state to PLN if the cost of electricity supply is affected due to the penetration of rooftop solar PV.
The Institute for Essential Services Reform (IESR) considers that the elimination of the net-metering scheme will make it difficult to achieve the National Strategic Project (PSN) target of 3.6 GW of rooftop solar PV by 2025 and the 23% renewable energy target in the same year. The impact of the elimination of this scheme is a decrease in the economic level of rooftop solar power plants, especially in the household segment, which generally experiences peak loads at night.
Fabby Tumiwa, Executive Director of IESR said that household or small business customers will tend to delay the adoption of rooftop solar PV because their peak electricity demand occurs at night, while solar PV generates peak energy during the day. Without net-metering, rooftop solar PV investment becomes more expensive, particularly when users have to spend additional funds for battery energy storage.
“Net-metering is actually an incentive for household customers to use rooftop solar systems. With PLN’s controlled electricity tariffs, net-metering helps improve the economic viability of rooftop solar systems installed at a minimum capacity of 2 – 3 kWp for R1 category consumers. Without net-metering and the relatively high cost of batteries, this minimum capacity cannot be met, resulting in higher investment costs per kilowatt-peak unit. This will reduce the economics of rooftop solar systems,” said Fabby Tumiwa.
For rooftop solar PV with a capacity greater than 3 MW (three megawatts), this regulation requires users to provide weather forecast database settings that are integrated with the Supervisory Control and Data Acquisition (SCADA) system or distribution smart grid owned by the Holder of Electricity Supply Business License for Public Interest (IUPTLU).
“The regulation removes the obligation to pay parallel generation charges, i.e. capacity charges and emergency service charges previously applied to industry – equivalent to 5 hours per month. The elimination of this parallel charge adds to the attractiveness for industrial customers, but the obligation to provide weather forecasting for systems of more than 3 MW will also add to the installation cost component,” said Marlistya Citraningrum, Program Manager of Sustainable Energy Access, IESR.
Marlistya also highlighted the regulation of the term for submission of applications by prospective customers, which is carried out twice per year, namely every January and July.
“This arrangement and the determination of quotas per network system raise questions regarding the transparency of quota determination and approval, especially for industrial customers who want to install rooftop PLTS on a large scale, while the IUPTLU mechanism to add quotas when the system quota has run out is not clearly regulated in this regulation,” he continued.
This regulation guarantees that customers who have utilized rooftop solar power systems before this regulation is enacted, remain bound by the previous regulation, for the next 10 years. This includes still benefiting from the rooftop solar power export system.
“As an on-grid rooftop PV user, I actually have questions about this transitional rule – considering that during installation, rooftop PV exports are still calculated as equivalent to 0.65 of the electricity tariff based on Permen ESDM No. 49/2018, not 1:1 like Permen ESDM No. 26/2021. This transitional rule needs to be clearly informed to current rooftop solar power users,” said Marlistya.
IESR regrets that this regulation is too favorable to the interests of PLN, which can have an impact on hindering the participation of electricity consumers in supporting the government’s goal of accelerating Indonesia’s energy transition, efforts to reduce GHG emissions at low cost and not burdening the state because renewable energy investments are made by electricity consumers without the need for state subsidies.
Fabby Tumiwa hopes that this new regulation can be implemented by paying attention to the benefits obtained by the state if rooftop solar PV is allowed to grow rapidly, namely increasing renewable energy investment, growing the solar PV industry, creating jobs, and reducing GHG emissions. For this reason, IESR urges an evaluation after a year of the Ministerial Regulation’s implementation to determine its effectiveness in encouraging the utilization of renewable energy in Indonesia. The government needs to openly revise it in 2025 as the threat of electricity overcapacity faced by PLN in Java-Bali decreases.
Steps to Achieve Bali’s Net Zero Emission by 2045 and Attain 100 Percent Renewable Energy in Nusa Penida by 2030
Denpasar, February 21, 2024 – Following its declaration in August 2023, the Bali Provincial Government has formulated and executed strategies to pursue Bali’s target of achieving net-zero emissions (NZE) by 2045 and to actualize Nusa Penida as a location powered entirely by renewable energy by 2030. Collaborating with non-governmental partners in the Bali Net Zero Emission Coalition (comprising the Institute for Essential Services Reform, WRI Indonesia, New Energy Nexus Indonesia, and CAST Foundation), a series of initiatives supporting Bali’s NZE 2045 goal have been underway, including the formulation of the Bali NZE 2045 roadmap and the Sustainable Energy Bali public campaign conducted last November 2023.
In the development of the Bali NZE 2045 roadmap, the Institute for Essential Services Reform (IESR) conducted an analysis focusing on Nusa Penida’s transition to 100% renewable energy by 2030, effectively transforming it into a renewable energy-based island.
Nusa Penida was selected for this initiative due to three primary factors: its abundant renewable energy potential, its geographical separation from mainland Bali, and the economic opportunities presented by the development of green tourism. Fabby Tumiwa, Executive Director of IESR, highlighted the significant potential for Nusa Penida to serve as a pilot island for renewable energy and even to supply energy to the rest of Bali. Furthermore, the adoption of renewable energy is expected to enhance Nusa Penida’s appeal to tourists, consequently bolstering the local economy.
“In the IESR study conducted for Nusa Penida, an increase in renewable energy generation would result in lower electricity production costs compared to diesel-powered plants. Presently, the production cost using Diesel Power Plants (PLTD) alone can reach Rp 4.5 thousand/kWh. With 100 percent renewable energy, the production cost can decrease by 30-40 percent,” stated Fabby during the Media Gathering event “100 Percent Renewable Energy in Nusa Penida,” organized by IESR.
Additionally, Fabby disclosed that the initial study for Nusa Penida’s transition to 100 percent renewable energy by 2030 is underway and is scheduled for launch on March 6, 2024. This marks the first step in testing the concept and conducting electricity system planning. Achieving Nusa Penida’s 100 percent renewable energy target by 2030 necessitates support from various stakeholders, including governmental bodies at both central and regional levels, development and non-governmental partners, the private sector, and the community.
According to analyses conducted by IESR and Udayana’s Center of Excellence for Community-Based Renewable Energy (CORE), Nusa Penida boasts a renewable energy potential exceeding 3,219 MW, comprising 3,200 MW of ground-mounted solar photovoltaic (PLTS), 11 MW of rooftop solar PV, and 8 MW of biomass, excluding wind energy, ocean currents, and biodiesel potentials. Moreover, to address the variability of renewable energy availability influenced by weather conditions, Nusa Penida exhibits potential for pumped hydroelectric storage (PHES) of up to 22.7 MW. The analysis also underscores the necessity of energy storage systems such as battery energy storage systems (BESS).
IESR’s modeling results indicate that achieving 100 percent renewable energy in Nusa Penida by 2030 primarily relies on solar photovoltaic systems due to their cost-effectiveness and abundance. Alvin Putra Sisdwinugraha, IESR’s Analyst for Electricity Systems and Renewable Energy, asserted the technical feasibility of a 100 percent renewable energy electricity system for Nusa Penida, capable of generating electricity at lower costs compared to diesel plants. Currently, the roadmap is undergoing finalization following input from various stakeholders.
“The initial phase towards achieving 100 percent renewable energy by 2030 involves transitioning to a diesel daytime-off system, maximizing the utilization of solar and BESS systems during daylight hours,” explained Alvin. “Simultaneously, further studies on alternative energy sources such as biomass production, biodiesel, ocean currents, and wind are necessary. This will enable the harnessing of these potentials to phase out diesel usage by 2030,” Alvin concluded.
Between Low Renewable Energy Target and High Economic Growth Ambitions
Jakarta, 20 February 2024 – Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) assesses the steps taken by the National Energy Council (DEN) to adjust the renewable energy mix target in the Draft of Government Regulation on National Energy Policy (RPP KEN) from the original 23 percent to 17-19 percent 2030 is a backward step because it is not in line with the stated goal of reducing emissions and achieving Indonesia’s net-zero emissions target by 2060 or sooner.
Fabby also highlighted the energy transition agenda carried by each pair of presidential candidates in the 2024 election, which includes a number of renewable energy mix targets until 2030 in an interview with the Squawk Box program.
According to him, each candidate has an energy transition agenda, one of which is the desire to pursue the same renewable energy mix target as the current National Energy Policy, ranging from 27-30 percent by 2030. Apart from that, each candidate also has a commitment to limit the operation of coal power plants.
“For candidate number 02, what is clearly visible is the increase in the use of biofuel to replace or reduce fuel subsidies as stated during the campaign,” said Fabby. They (presidential and vice-presidential candidates’ number two) are targeting a biofuel blend percentage of 50 percent by 2029, as well as ethanol utilization of 10-20 percent.
Furthermore, Fabby emphasized that for the electricity sector, the aim of ending coal plant operations early must be accompanied by adding a larger portion of renewable energy. Apart from replacing the electrical power that was initially supplied by coal-fired power plants, renewable energy generation must also meet the projected electricity growth needs in the future. Moreover, Indonesia has the ambition to pursue economic growth of up to, for example, 6-7 percent, so electricity demand is projected to grow even greater.
“Based on IESR’s calculations, to achieve these various targets, the renewable energy mix in 2030 must reach 40 percent, this is somewhat different from the target adjustments made by DEN currently,” explained Fabby.
Fabby added that the new government’s homework related to the energy sector will be to accelerate the development of renewable energy, especially in the electricity and liquid fuel sub-sectors.
Industrial Decarbonization: Indonesia’s Strategy to Reduce Emissions in 5 Key Sectors
Jakarta, February 15, 2024 – Indonesia, as the largest economic power in Southeast Asia and one of the most populous countries in the world, has a major challenge in reducing greenhouse gas (GHG) emissions from the industrial sector. With a rapidly growing economy, mainly driven by a young workforce, abundant natural resources, and rapid technological advancements, measures to decarbonize industry are crucial in maintaining environmental balance and sustainable economic growth.
Deon Arinaldo, Program Manager of Energy Transformation, Institute for Essential Services Reform (IESR) explained, based on the Climate Action Tracker (CAT) report, Indonesia’s current ranking is critically insufficient to limit the earth’s temperature below 1.5°Celsius. This position is down compared to 2022, which placed Indonesia in the highly insufficient ranking.
“In fact, Indonesia has set an Enhanced-Nationally Determined Contribution (ENDC) containing an increase in carbon emission reduction targets from 29% or 835 million tons of CO2 to 32% or 912 million tons of CO2 by 2030. Reflecting on the ENDC target and CAT status, Indonesia needs to push to strengthen its commitment to achieve net-zero emission (NZE) by 2060 or sooner,” said Deon during the launch of an IESR study in collaboration with Lawrence Berkeley National Laboratory (LBNL), titled “Industry Decarbonization Roadmap for Indonesia: Opportunities and Challenges to Net-Zero Emissions”.
Farid Wijaya, Senior Analyst, IESR, explained that the total contribution of GHG emissions from the industrial sector is expected to double from 2011 to 2022, reaching more than 400 million tons of CO2e. Around 60-70% of these emissions come from energy use in the industrial sector (both heat and electricity), mainly due to fossil fuel consumption.
“Based on the IETO 2024 study, GHG emissions from the industrial sector are expected to reach 430 MtCO2e in 2022, a 30% increase from the previous year. This increase in the share of energy combustion indicates the growth of industrial processes that require high heat energy. Unfortunately, the need for these processes causes an increase in coal consumption which contributes to emissions of 174 MtCO2e,” said Farid.
Farid said that industry contributes to economic growth, therefore, decarbonization efforts need to be made to accommodate this growth. This study takes five major industrial sectors that need to be focused on decarbonization on social, economic, and emission parameters, namely cement, iron and steel, textiles, pulp and paper, and ammonia.
“Industrial decarbonization efforts can actually be encouraged in Indonesia based on the existing regulatory framework. However, the government needs to be encouraged to include stronger and more binding regulations in the future, including support and incentives for industry and ensuring that producers, consumers and markets are protected by product controls that support industrial decarbonization,” Farid said.
According to Farid, for industrial decarbonization to be achieved in Indonesia, many stakeholders need to work together, especially to build a green industrial ecosystem that supports the NZE concept. In addition, several general strategies need to be implemented to achieve industrial decarbonization. First, implementing an ISO 50001:2018 energy management system. Second, the utilization of alternative fuels, such as biomass and hydrogen. Third, the utilization of renewable energy such as solar power and hydropower.
“Fourth, maximize energy efficiency, materials, and process optimization and use highly efficient equipment. Fifth, regular monitoring and measurement of emission process control. Sixth, utilizing carbon emission capture and storage technology (CCS/CCUS) for the cement, iron & steel, and ammonia industries,” Farid said.
Not only general strategies, Indonesia also needs to implement specific strategies based on the five major industries. For example, for the cement industry, it needs to replace clinker and use alternative raw materials, promote hydraulic cement standards with lower clinker factors, and distribute cement using trains as an alternative to trucks.
“Based on our survey results, the five major industries in the cement, iron and steel, textile, pulp and paper, and ammonia sectors have high motivation to decarbonize. However, costs, competitive value, and regulatory obligations for businesses and consumers still face challenges and obstacles that must be resolved together,” Farid explained.
South Sumatra Journalists Form Energy Transition Journalist Network
Palembang, February 20, 2024 – The Alliance of Independent Journalists (AJI) Palembang together with the Institute for Essential Services Reform (IESR), a leading think tank in Indonesia that focuses on energy and the environment and the Society of Indonesian Environmental Journalists (SIEJ) took the initiative to form the “South Sumatra (South Sumatra) Just Journalist Network” to build public awareness of the energy transition through quality journalistic work. Through this Just Journalist network, it is hoped that there will be more quality news related to the issue of energy transition so as to increase public understanding and trigger the acceleration of the transition from fossil energy to renewable energy at the regional level.
Based on data in the report “Insights on energy transition news in the electricity sector in Indonesia from 2020-2022” published by CASE Indonesia in 2023, national media dominated the news about energy transition in the electricity sector. Meanwhile, regional media has yet to make a significant contribution. IESR views that optimizing the role of media in the regions is crucial to reach public participation in supporting the energy transition process and greater use of renewable energy.
Chairman of AJI Palembang, M. Fajar Wiko, said that journalists who are members of the South Sumatra Just Journalist Network can shape public opinion on energy transition, identify challenges and opportunities in covering complex issues related to renewable energy, and identify the economic, social and environmental impacts of the energy transition program effectively to communicate to the public.
“The establishment of this Network is expected to clarify the role of the media in providing explanations about renewable technologies, government policies, and private sector initiatives in the energy transition, as well as encouraging better public understanding to actively participate in supporting the energy transition, and encouraging the role of stakeholders to create a more favorable environment for renewable energy, to motivate collaboration between the media, government, private sector and society to design the best solution,” said Wiko.
Marlistya Citraningrum, the Program Manager of Sustainable Energy Access, IESR, mentioned that the energy transition is happening in various parts of the world, including Indonesia has diverse contexts at the regional or subnational level. The shift from fossil fuel to renewable and more sustainable energy systems is demonstrated by the trend of retiring and early retirement of coal-fired power plants around the world – as well as in Indonesia under the Just Energy Transition Partnership (JETP) plan. This will have a direct impact on Indonesia’s coal-producing provinces and districts, particularly in the economic and development sectors. Subnational governments need to anticipate this trend in advance, including to boost the alternative economy sector and optimize the use of renewable energy. The media can play a role in educating the public to immediately switch to low-emission energy.
“IESR’s studies in several coal-producing regions show that although regional income depends on the coal economy, the economic multiplier effect is not directly enjoyed by surrounding communities in the form of infrastructure, economic improvement, or basic services such as education and health. In Muara Enim, around 78% of profits are absorbed by mining companies, in addition to local laborers working more freelance for contractors or vendors of mining companies instead of professional workers in the company,” said Marlistya.
Aryansyah, Head of Energy Division, Energy and Mineral Resources Agency of South Sumatra Province, said that the province has a renewable energy potential of around 21,032 MW with an installed capacity of renewable energy of around 989.12 MW or around 4.70%.
“In the future, the utilization of clean energy based on renewable energy in South Sumatra can be further developed to all levels of society. Some of the strategies we carry out to encourage the use of renewable energy, including providing energy for regional needs by increasing exploration of the potential for new renewable energy, utilizing new renewable energy such as solar energy, water, geothermal and others, as well as conserving and diversifying energy,” said Aryansyah.
