The government is considered to need to accelerate the construction of power plants that have been planned in the RUPTL of PT Perusahaan Listrik Negara (Persero) or PLN to anticipate the potential deficit of a number of national electricity systems.
Read more on Bisnis Indonesia.
Interest, trust and high prices are still obstacles to the electric vehicle program in Indonesia. This was conveyed by the Executive Director of the Institute for Essential Service Reform Fabby Tumiwa.
Read more on RRI.
Indonesia is the third largest coal producing country after India and China in 2022. According to the Ministry of Energy and Mineral Resources, Indonesia targets coal production of 694.5 million tons in 2023, 0.47% higher than the previous year’s target. As of October 2023, Indonesia’s coal production has reached 567.2 tons or 81.67% of this year’s production target. Coal in Indonesia will mostly be sold to the export market (75%-80%) and consumed domestically (20%-25%). However, with the trend of energy transition, Indonesia’s coal demand seems to be declining, one of which is from India. India decreased its coal demand from Indonesia from 8.43 million tons to 6.11 million tons as of June 2023.
In addition to the downward trend in coal demand from abroad, the Indonesian government has endorsed several commitments that will affect the use of coal going forward in line with the energy transition agenda towards renewable energy. In 2022, the Government of Indonesia passed Presidential Regulation No. 112 of 2022 on the Acceleration of Renewable Energy Development for Electricity Generation, which explicitly stipulates a ban on the construction of coal-fired power plants starting in 2030. This commitment was supported through the signing of the Just Energy Transition Partnership (JETP) agreement between Indonesia and IPG and GFANZ. Through the CIPP document, the Government of Indonesia intends to achieve peak emissions in the power sector at 290 MT CO2 and a renewable energy mix of 34% by 2030. In addition, the document also states that Indonesia should strive for an equitable energy transition process where social, economic and environmental impacts are also a concern for policy makers. The existence of national and global policies also has the potential to affect the company’s business and also the socio-economic structure of communities around mining areas.
Extractive industry activities are often the main source of local revenue, but they also cause economic, socio-community and environmental losses. With the energy transition agenda, the government plans to limit coal consumption, which will lead to faster closure of coal mines and affect local community activities. In Law No.4/2009 on Mineral and Coal Mining, post-mining activities require business actors to restore the natural environment to its original state. This is also stipulated in Law No.40/2007 which requires companies in the natural resources sector to carry out Social Responsibility activities which are widely associated with community empowerment. By integrating activities that suit the economic needs of the community with the company’s plans, it is hoped that the community can independently develop their economic activities and can be free from dependence on the company. Thus, the role of the company and local government is important for post-mining activities.
Therefore, IESR intends to invite business actors to provide information and strategies for planning successful community and environmental empowerment programs in preparation for post-mining activities. This event is also expected to strengthen post-mining planning between the government and business owners in the fair energy transition agenda.
This activity has several objectives, namely:
BUMN Bank has a role as a positive catalyst to encourage other national banks to support financing energy transition. The government is finalizing a policy of distributing low interest credit through state-owned banks as a stimulus for the renewable energy ecosystem from the supply side.
Read more on Kompas.
The Ministry of Energy and Mineral Resources has identified and mapped three types of ocean energy potential as EBT, including tidal power, wave energy, and ocean thermal energy conversion (OTEC).
Read more on IDX Channel.
The realization of energy subsidies and compensation in 2023 is likely to be slightly lower than the budgeted ceiling in the 2023 State Budget of IDR 339.6 trillion.
Read more on Kontan.
Jakarta, December 21, 2023 – The Center for Marine Geological Survey and Mapping (BBSPGL) of the Geological Agency of the Ministry of Energy and Mineral Resources has conducted a survey and mapping of potential marine energy that can be utilized as electrical energy. As per their findings, 17 water points in Indonesia have been identified as having the potential for marine energy. These locations’ total electricity generation capacity is estimated to be around 60 GW (gigawatts).
The Executive Director of the Institute for Essential Services Reform (IESR), Fabby Tumiwa, explained that Ocean energy refers to the potential energy generated from the kinetic and potential energy of the sea. Furthermore, Fabby estimates that the potential of 60 GW is too low because the sea surrounds Indonesia, so the potential should be more than 60 GW. For this reason, the mapping should be done as a whole, not just 17 points.
“The ocean energy potential in Indonesia is estimated to be around 60 GW, much higher than the geothermal resources of approximately 29 GW. According to the Ministry of Energy and Mineral Resources, this makes ocean energy a promising alternative to achieve net zero emissions (NZE) targets in the electricity sector by 2050 and the entire energy sector by 2060, as per the long-term plan for energy system development in Indonesia,” Fabby said on iNews’ Market Review program on Thursday (21/12).
Fabby mentioned that ocean energy has distinct characteristics similar to geothermal and hydropower, considered predictable energy sources. Using ocean energy as a source of electricity can address the concerns of many stakeholders about integrating renewable energy into the electricity system. Moreover, Fabby has evaluated that tidal and wave energy have the highest potential for generating marine energy in Indonesian waters. This assessment is based on Indonesia’s technological readiness, economics, and conditions.
“Why these two types of ocean energy? Because of technological readiness, some technologies have entered the commercial market, so it’s easy. If it has entered the commercial market, it is easier to apply because it has been proven. Secondly, Indonesia’s conditions where we see the plant is suitable for providing electricity in coastal areas. For example, to provide electricity on remote islands. Third, both technologies are relatively low in price, making them attractive to develop,” Fabby explained.
On the other hand, Fabby discussed some of the challenges Indonesia faces in developing renewable energy. First, the viability of renewable energy projects depends on the quality of policies and regulations. Second, there are limitations in the electricity market structure as renewable energy can only be sold to PLN, which also depends on the readiness of the network and electricity demand. PLN has claimed to be in a state of overcapacity for the past three years. Third, renewable energy investment is not encouraging due to its high capital expenditures (CAPEX) and low operating expenses (OPEX). This type of investment is also associated with the type of funding available.
Semarang, 19 December 2023 – The annual Climate Summit (Summit) held in Dubai in November – December 2023 resulted in a number of global agreements, one of which was an agreement by 118 countries to transition and abandon fossil fuels. This agreement was born partly due to pressure from countries experiencing the impacts of climate change. 2023 was recorded as the hottest year in history.
In his opening speech for the Central Java Renewable Energy Acceleration Forum, Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) stated that the simplest thing to ensure the energy transition occurs is to add renewable energy capacity to the energy mix. To massively add renewable energy capacity requires significant investment costs and comprehensive enabling conditions.
“The complex and expensive energy transition can only occur if there are enabling conditions, including rules and regulations, support for public and private partnerships, community initiatives, and investment. Currently, to achieve the RUED target, regional funding capacity is still insufficient, so it is necessary to encourage investment,” said Fabby.
Head of the Central Java Province Energy and Mineral Resources Service, Boedyo Dharmawan, said that his party had contributed to achieving the target of 23% of the national renewable energy mix by 2025.
“In 2023, Central Java Province achieved a regional renewable energy mix of 21.2%. We will continue to encourage this capacity addition in the coming years. Apart from that, we also encourage energy conservation practices through energy and water saving movements, in government agencies and also in business entities, including energy audits,” he said.
Tavip Rubiyanto, Middle Expert Policy Analyst on Energy Substances and Mineral Resources, Directorate of SUPD I, Directorate General of Regional Development, Ministry of Home Affairs, highlighted the role of the entire OPD sector in matters of managing renewable energy in the regions.
“From the start, the ESDM Service had to coordinate with related agencies such as Environment, Transportation and Planning Services. So that RUED can be integrated into the RPJMD. “It does take effort to convince and provide understanding for Bappeda to support this EBT target, but that is what must be done,” said Tavip.
In terms of investment trends, Indonesia is becoming a global investment destination even though currently there are still several investment challenges. This was conveyed by Purwo Wiyatmanto, Head of Sub-Directorate for Promotion Strategy Analyst/ Middle Expert Investment Management, Ministry of Investment/BKPM.
“Investment in the new renewable energy sector is also increasing in demand. The increasing need for energy is also accompanied by an increasing share of renewable energy. Indonesia’s new renewable energy share of around 14.5% (below the ASEAN average) is a challenge in itself, but this is also an opportunity for growth,” he said.
From an industrial perspective, there is actually a need for clean electricity produced by sustainable energy sources. This need becomes stronger if an industry enters the global brand supply chain. Rudi Cahyono, Energy Carbon Manager, PT Selalu Cinta Indonesia (SCI) said this pressure was because his party was included in the supply chain of the footwear industry which is marketed globally.
“We are committed to using 100% renewable energy by 2030 as a consequence of our entry into the global supply chain. By 2024, the target is that we can reduce our carbon footprint by 99%,” said Rudi.
Sakina Rosellasari, Head of the Central Java Province One Stop Investment and Integrated Services Service (PMPTSP), added that her agency continues to actively promote projects that are ready to be developed by investors.
“Central Java is open to green investment, not only labor intensive, but also green economic management,” he said.
Apart from investment on an industrial scale, the use of renewable energy at the community level also needs to continue to be encouraged. Yanto, Head of Banyuroto Village (one of the Energy Independent Villages), Magelang Regency, stated that there is a lot of renewable energy potential on a small scale that can be utilized on a communal scale with the support of the local government.
“Future plans, we, the village government, are trying to increase the amount of biogas in the community, around 100 biogas digesters at least in the next 5 years and budget it in the (village fund) APBDes and are ready to collaborate with related agencies, campuses and other parties,” he said.
With 34 biogas digesters spread throughout almost the entire Banyuroto Village area, this digester has helped the welfare of the community since 2007, starting from cooking needs (reducing household cost), lighting without converters and zero waste from the results of the biogas process (solid and liquid fertilizer, bioslurry).
In 2023, the national government will make a number of important notes in the development of renewable energy. The revision of the National Energy Policy (KEN) document and the inauguration of the Cirata Floating PLTS are among the major points in the energy transition process this year.
Adimas Pradityo, Business and Commerce Development Manager, PLN Nusantara Power said that in 2024 there will be PLTS development in Central Java with a capacity of 140 MW in several locations including Batang and Pemalang. Adimas also shared PLN Nusantara Power’s experience in developing the Cirata floating PLTS.
“(One of) the challenges is explaining the PLTS concept to regulators. We really have a bottom up approach in licensing the development of the Cirata Floating PLTS,” he said.
Jakarta, 15 December 2023 – The Indonesian government continues to improve in terms of strengthening its commitment to climate change mitigation. Since starting to aggressively commit to climate mitigation in 2021, the Indonesian Government has continued to carry out follow-up actions through various assessments of funding commitments and creating decarbonization roadmaps in each sector.
Nurcahyanto, Policy Analyst for the Ministry of Energy and Mineral Resources (MEMR), said at the launch of the Indonesia Energy Transition Outlook (IETO) 2024 report organized by the Institute for Essential Services Reform that one of the efforts currently being carried out by the government through the Ministry of Energy and Mineral Resources is to carry out revision of the National Energy Policy (KEN). It is hoped that the results of the revised KEN will be more relevant to Indonesia’s current efforts to carry out comprehensive decarbonization, especially in the electricity sector.
“Target revision (KEN) is only a method based on numbers, but from an implementation perspective it must be supported by regulations and we need to optimize it. For example, in carrying out early retirement for PLTUs, a road map needs to be prepared, as well as consolidation with related ministries/institutions,” he said.
The issuance of Presidential Decree 112/2022 is one of the guiding documents for the decarbonization of Indonesia’s electricity sector, with the main point being to accelerate the cessation of coal-fired power plants.
August Axel Zacharie, Head of Energy Cooperation, Danish Embassy, said that in the global context, Indonesia’s position as a developing country (emerging economy) is an investment attraction in itself, but Indonesia needs to prepare a supportive ecosystem.
“Investment needs for the energy transition, which reach approximately 1 trillion USD until 2050, must be seen as not just building infrastructure, but within these cost requirements there are community aspects, job transition, quality of life, and other non-physical aspects,” added August.
Still related to the high need for investment in renewable energy, and the government’s obligation to guarantee energy security, the Indonesian Government provides energy subsidies. However, this policy is not a sustainable policy.
Evita Herawati Legowo, PYC Senior Fellow, stated that it is necessary to think about a more targeted method for providing energy subsidies.
“There needs to be involvement of all parties in this matter, not just collaboration but a clear division of tasks as to who does what, starting from industry, research, energy, as well as investors,” said Evita.
The Indonesian Government’s commitment to decarbonization is a binding guideline. Delivered by Unggul Priyanto, Main Expert Engineer, BRIN, especially after 2060, all energy sources must come from clean energy sources.
“(The use-ed) LNG, or natural gas, is one option during the transition. But after 2060, like it or not, it has to be replaced with a truly clean (energy source-ed),” he said.
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