Government and Industrial Sector Support for Energy Transition in Central Java

Semarang, December 8, 2022 – Indonesia is setting a target to achieve a renewable energy mix of 23% in 2025. In order to encourage the energy transition in Central Java, the Institute for Essential Services Reform (IESR) and the Central Java Provincial Government are holding the Central Java Stakeholder Gathering 2022 with the theme ‘Energy Transition for Development of Low Carbon Areas’ which takes place annually via hybrid.

Achmad Husein, The Regent of Banyumas, stated that he had closed the two most giant landfills​​ in Banyumas to reduce carbon. Garbage will be sorted into useful, non-organic and organic waste.

“In managing waste, Banyumas uses technological solutions divided into two types, first downstream (community), by using a waste bank. Second, an app initiative to reduce plastic waste upstream, by buying all plastic from the community (various types of plastic). Then, there is also an application for people to sort organic waste and get paid. Each kilogram of organic waste is paid Rp. 100, “explained Achmad Husein.

Tavip Rubiyanto, Head of Sub-Division of Energy and Mineral Resources, Directorate of Synchronization of Regional Government Affairs I, Directorate General of Regional Development, Ministry of Home Affairs, explained the importance of regional development, which can make a significant contribution to national development. However, several cities still need to prepare a Regional Energy General Plan (RUED), so assistance from the Central Government is required in its design. The problem is that regions can only contribute as much as the authority they hold.

“Regional authority for energy transition is relatively small, so its contribution is also relatively small. For this reason, the Ministry of Home Affairs will draft a Presidential Decree for Strengthening Regional Roles. Consequently, the regions need to revise the RUED according to the new authority/budget to support the energy transition target,” Tavip explained.

In line with Tavip, Djoko Siswanto, Secretary General of the National Energy Council (DEN) hopes that there will be better coordination and cooperation between local governments in Indonesia to achieve renewable energy goals. For example, ​​the Central Government can instruct local governments to use electric vehicles in implementing RUED. Even so, there are still obstacles in increasing energy utilization in accordance with regional potential, most importantly funding.

“On the other hand, we need international support to face the funding challenges in the energy transition. For this reason, regional regulations can become a basis for investors in developing renewable energy in the region. It could be with the cooperation of region-owned business entities, the private sector, and international parties,” said Djoko.

To support the acceleration of the energy transition in the region, Muhammad Firdaus, Deputy Head of Bank Indonesia Representative for Central Java Province, explained that green financing (green economy) in Central Java is significant o support a sustainable economy. The green economy is projected to deliver benefits such as job creation, and help ease export barriers. Thus the reduction in production costs is only a maximum of 10%, making it less attractive for companies to implement a circular economy.

“Bank Indonesia is trying to encourage banks to extend credit to the green economy sector. One of the projects that has been carried out is Green Loan to Value Ratio (LTV) 0% (without down payment) and allows buying green bonds to meet the Macroprudential Inclusive Financing Ratio (RPIM),” he said.

Meanwhile, Ignasius Iswanto, General Manager Engineering, PT Djarum OASIS Kretek Factory stated that Djarum had made efforts towards sustainability. For example, Djarum already has a carbon footprint report, water resources management, energy saving, and composting. Furthermore, PT Djarum uses a biomass boiler with wood chip fuel on boilers. Emissions reduced from planting rain trees (trembesi) in the Djarum Bakti Lingkungan Program amount to 4,457,400 million tonnes of CO2e. He also explained that through his efforts to make Djarum an environmentally friendly company, he discovered another energy producing source using wastewater, namely plasma energy.

“Plasma energy should also be considered as a source of renewable energy, where liquid waste can be broken down by plasma into electricity and clean water. However, its use is more suitable for industrial complexes,” said Ignasius.

CNN | The Government Requirements When Providing Subsidies for Electric Motorcycles

Executive Director of the Institute for Essential Services Reform (IESR), Fabby Tumiwa, explained the Government needed to explain the amount of the IDR 6.5 million subsidies in more detail. In addition, the Government also needs to determine the criteria for the electric motorcycle that can get assistance.

Read more on CNN.

Magnifying the Ambitious Climate Action from Business Sector

Direktur Eksekutif IESR

Jakarta, November 30, 2022 –  The Indonesian government needs to show strong attention to climate mitigation efforts by increasing commitment and may significantly reduce greenhouse gas emissions. The Executive Director of the Institute for Essential Services Reform (IESR), Fabby Tumiwa, stated that rising global temperatures are worsening the climate crisis. He conveyed his speech at the Astra Green Energy Summit 2022 with the theme “Real of Action on the Energy Transition Journey Towards a Sustainable Environment.”

“Since the United Nations Framework on Climate Change Conference (UNFCCC) document was agreed upon in 1992, most countries ratified its documents in 1994. Thus, all climate change negotiations are directed at preventing the earth’s global surface temperature increase,” said Fabby Tumiwa.

Quoting Climate Action Tracker 2022 data, said Fabby, Indonesia’s climate policies in the energy sector are deemed insufficient to withstand the increase in the average global temperature below 1.5°C as agreed at the COP 26 Summit in Glasgow in 2021. For this reason, Fabby argues that global greenhouse gas (GHG) emissions must peak in 2030 and then decline if Indonesia wants to prevent a rising temperature above 2°C, which has far-reaching implications.

“This means ambitious action is needed, especially for G20 states responsible for global greenhouse gas emissions (GHG). Reducing GHG emissions must also be carried out by economic actors. If it is only the government’s responsibility for its reduction, I think it will be difficult,” explained Fabby Tumiwa.

Fabby explained that the decarbonization process needs to be carried out comprehensively because it is related to Indonesia’s energy supply structure. Indonesia’s primary energy supply for electricity generation is mainly based on fossil fuel. The increase in fuel consumption was also relatively high, marked by the rise in motorized vehicles.

“Since the last ten years, Indonesia has replaced fossil fuels with biofuels. Until 2021, the proportion of fuel substituted for biofuels has reached 14%. Thus, the use of low-carbon fuels needs to be increased to 40-60% in 2040. This means we need to encourage the use of synthetic fuels other than biofuels,” said Fabby Tumiwa.

Energy and Mineral Resources Minister, Arifin Tasrif, said business entities are expected to be involved in accelerating the energy transition. For example, they apply energy efficiency throughout the business chain and develop technological innovations and clean industries. They are also expected to mitigate the impact of the energy transition in the business sector and supply chain.

“To overcome the obstacles to the energy transition, synergy between stakeholders, the government, the media, NGOs, and the private sector is needed to achieve zero emissions,” said Arifin.

IESR: Renewable Energy Integration in Electricity Plan Can Reach 129 GW by 2030

Jakarta, 24 November 2022- To be aligned with the GHG emission reduction target according to the Paris Agreement, the government and PLN need to achieve a renewable energy mix of up to 41% in the electricity system by 2030. However, until today the Indonesian government has only targeted 25% of the renewable energy mix by 2030. Technological innovation, competitive prices for renewable energy, and the potential for coal-fired power plants (CFPP) to become stranded assets are qualified factors for higher renewable energy penetration in eight years.

The Institute for Essential Services Reform issued its latest report entitled “Enabling high share of renewable energy in Indonesia’s power system by 2030” which analyzes the 2021-2030 electricity development plan (RUPTL), technological advances and prices, changes in fuel prices, and projections of electricity demand to provide more opportunities towards the integration of renewable energy into the electricity network in Indonesia. This study is based on the scenario of Indonesia’s energy system achieving net zero emissions in 2050, which is aligned with the target of limiting temperature rise below 1.5°C per the Paris Agreement. In this scenario, electricity growth is assumed to reach 4.5% and added to the additional electricity demand from accelerated electrification in the transportation and industrial sectors (heating).

Using a similar power system optimization model with PLN, IESR found that the capacity of renewable energy in the power grid in 2030 could be increased to 129 GW of renewable energy with 112.1 GW coming from solar energy, 9.2 GW hydropower, 5.2 GW geothermal, 1.5 GW wind turbine, and 1 GW of biomass in the combined Java-Bali, Sumatra, Kalimantan and Sulawesi systems. The renewable energy mix in the electricity sector is also projected to reach 32%, 35%, 35% and 51% respectively in the Java-Bali, Sumatra, Kalimantan and Sulawesi systems. Solar energy is dominant because of its highest potential, cheapest cost, and fastest installation period in any area, either on a roof or floating.

Meanwhile, the electricity mix from coal-fired power plants will significantly decrease to only 39% in the same year. Moreover, to overcome the variability and intermittency of renewable energy and maintain system reliability, Indonesia can optimize gas-fired power plants and build energy storage (batteries).

The findings from this study are far greater than the renewable energy in the 2021-2030 RUPTL, which only targets 20.9 GW.

“The results of this IESR study are very relevant to the Just Energy Transition Partnership (JETP) agreement that was announced at the G20. The target of JETP is a 34% renewable energy mix in 2030. Through this study, it is shown that the penetration of renewable energy generators in our electricity system is possible without impacting system reliability and electricity production costs,” said Fabby Tumiwa, Executive Director of IESR.

The results of the IESR analysis show that even with high penetration of renewable energy, the reserve margin (the percentage of additional installed capacity to annual peak demand) remains at PLN’s ideal limit of at least around 30%. This study also conducts a power flow analysis and analysis of system frequency stability in the Java-Bali and Sulawesi electricity systems in 2030. As a result, it requires upgrading several substations so that power can be distributed properly. However, this need can be minimized by distributing the development of renewable energy generators. Frequency stability was still achieved and complied with Indonesia’s grid code.

One of the keys to integrating renewable energy is increasing the flexibility of network operations, including implementing a flexible CFPP operation.

“Renewable energy’s intermittency is a challenge, but there are many strategic options that can be studied to be implemented in Indonesia. For instance, by using energy storage such as batteries and also more accurately forecasting renewable energy. System operations need to be changed to accommodate this,” said Akbar Bagaskara, Main Author of the Enabling high share of renewable energy in Indonesia’s power system by 2030 report.

The capacity of the transmission and distribution network also needs to be increased to ensure a smooth supply of electricity from renewable energy, especially in the Java-Bali and Sulawesi systems.

IESR views that higher integration of renewable energy in the electricity system needs to be encouraged by policymakers in Indonesia by issuing regulations that support the acceleration of renewable energy development, accelerate electrification in the industrial sector, stipulate flexible PLTU operating regulations, and support the development of the domestic solar panel industry.

Furthermore, PLN as an electricity utility company needs to actively develop infrastructure and network operations to become more flexible network operations to enable high integration of renewable energy.

“There is a need to change the operating paradigm of the electricity system to flexible operation, no longer baseload. Of course, it is necessary to develop an operating framework for an electricity system that can provide incentives for assets that can provide services to maintain network reliability or ancillary services. The design of this framework needs to be prepared from now on so that it is ready to be implemented when the renewable energy mix begins to grow rapidly,” explained Deon Arinaldo, Manager of the Energy Transformation Program, IESR.

Peluncuran & Diskusi Laporan Perencanaan Sistem Tenaga Listrik yang Selaras dengan Persetujuan Paris

Siaran Tunda

Pendahuluan 

Indonesia telah meratifikasi Perjanjian Paris melalui UU No. 16/2016. Sebagai hasilnya, Indonesia terikat secara hukum untuk berkontribusi dalam perjuangan global perubahan iklim melalui upaya dan tindakan yang ambisius dalam memitigasi emisi Gas Rumah Kaca (GRK) dan membatasi peningkatan suhu global rata-rata di bawah 1,5 derajat C. Dalam salah satu hasil model iklim IPCC untuk jalur yang kompatibel dengan 1,5 derajat C, emisi Gas Rumah Kaca (GRK) global harus turun 45% pada tahun 2030 dibandingkan dengan tahun 2010 dan mencapai emisi nol bersih pada tahun 2050. Saat ini, Indonesia termasuk dalam 10 besar penghasil emisi gas rumah kaca (GRK) dan masih diproyeksikan untuk meningkatkan emisinya, dengan sektor energi sebagai penyumbang GRK tertinggi pada tahun 2030. 

Dengan pangsa pembangkit listrik sebesar 66% pada tahun 2021, pembangkit listrik tenaga batubara telah menjadi penyumbang utama emisi sektor energi (sekitar 40%), dan bahkan 90% dari emisi sektor listrik. RUPTL PLN terbaru (RUPTL hijau) masih mempertimbangkan penambahan 13,8 GW PLTU Batubara dalam satu dekade ke depan. Porsi energi terbarukan hanya akan meningkat menjadi sekitar 24% pada tahun 2030 menurut rencana yang sama, yang mengakibatkan peningkatan emisi sektor listrik (dan sektor energi) secara keseluruhan. Dengan demikian, hal ini jelas bertentangan dengan mandat Perjanjian Paris. 

Menurut studi Institute for Essential Services Reform (IESR), secara teknis dan ekonomis, emisi sektor energi di Indonesia layak secara teknis dan ekonomis agar sesuai dengan Persetujuan Paris dan mencapai emisi nol pada tahun 2050. Salah satu tonggak penting adalah bahwa pangsa energi terbarukan dalam pembangkit listrik harus mencapai hampir setengahnya pada tahun 2030. Pada saat yang sama, elektrifikasi sektor transportasi dan industri juga akan meningkatkan pertumbuhan permintaan listrik total dan menciptakan ruang serta fleksibilitas yang diperlukan untuk integrasi energi terbarukan (variabel) yang tinggi. Dengan pertumbuhan permintaan listrik yang tinggi, kapasitas energi terbarukan dan pengembangan jaringan serta interkoneksi harus dikerahkan dalam kecepatan yang belum pernah terjadi sebelumnya, mencapai 140 GW pada tahun 2030 (peningkatan empat belas kali lipat dari kapasitas saat ini). 

Namun, integrasi energi terbarukan yang tinggi dalam sistem jaringan listrik berbasis kepulauan di Indonesia dianggap menantang. Perencanaan sistem tenaga listrik saat ini masih melihat sebagian kecil energi terbarukan, terutama energi terbarukan variabel (surya dan angin), yang akan beroperasi dalam sepuluh tahun ke depan. Selain itu, PLN sebagai operator jaringan listrik memiliki pengalaman yang terbatas dalam mengoperasikan jaringan listrik dengan porsi energi terbarukan yang tinggi. Studi dan pemodelan yang menunjukkan analisis tekno-ekonomi yang terperinci tentang pengoperasian energi terbarukan dengan porsi yang tinggi dalam sistem jaringan listrik nasional juga masih terbatas. 

Masih banyak tantangan lain yang perlu dihadapi. Hal ini menunjukkan pentingnya analisis komparatif perencanaan sistem tenaga listrik saat ini dengan perencanaan yang selaras dengan jalur 1,5 derajat C. Memahami perbedaan dalam hal biaya, tantangan teknis, pengurangan emisi, dan kelayakan dapat memperluas pilihan dalam perencanaan sistem tenaga listrik di masa depan di negara ini. Lebih jauh lagi, sebagaimana studi IESR Dekarbonisasi Mendalam Sistem Energi Indonesia menunjukkan, Indonesia dapat memperoleh manfaat tambahan seperti harga yang lebih kompetitif serta manfaat sosial-ekonomi lainnya (pekerjaan ramah lingkungan), sambil mengatasi krisis iklim secara bersamaan. 

Dengan latar belakang ini, IESR telah menyelesaikan analisis perencanaan sistem tenaga listrik, rencana perluasan kapasitas, dan uji keandalan sistem tenaga listrik dengan menggunakan PLEXOS dan DIgSILENT yang bertujuan untuk mengintegrasikan energi terbarukan untuk mengurangi emisi GRK secara keseluruhan dari sektor ini. IESR akan mengadakan webinar untuk meluncurkan laporan tersebut berjudul “Enabling high share of renewable energy in Indonesia’s power system by 2030: Alternative electricity development plan compatible with the Paris Agreement”, dan mengundang para pemangku kepentingan terkait untuk berdiskusi dan menyusun rekomendasi untuk dekarbonisasi sistem tenaga listrik. 

 

Tujuan

Tujuan dari peluncuran laporan dan webinar diskusi adalah sebagai berikut: 

  1. Untuk memberikan alternatif perencanaan sistem tenaga listrik berbasis penelitian yang dapat mendorong kemajuan Indonesia dalam upaya pengurangan emisi sektor energi kepada pemangku kepentingan yang lebih luas. 
  2. Untuk memberikan masukan bagi perencanaan sistem tenaga listrik yang diperbarui (RUPTL 2023-2032), yang diharapkan akan berjalan pada awal tahun 2023 
  3. Untuk mendiskusikan potensi tantangan dan peluang untuk mengatasi tantangan dalam mengintegrasikan pangsa energi terbarukan yang tinggi dalam sistem tenaga listrik. 

Materi Presentasi

Akbar Bagaskara – Penulis Studi, Peneliti Sistem Ketenagalistrikan, IESR

“Enabling High Share of RE in Indonesia Power System”

221124-Alternative-RUPTL-1

Unduh

Dadan Kusdiana – Plt Dirjen Ketenagalistrikan, Kementerian ESDM

“Enabling High Share of RE in Indonesia Power System”

221124-0016-PPT-Keynote-Speech-IESR-1

Unduh

 

COP27: The Race to Zero Emissions in 2050

Egypt, November 9, 2022 – The ambition of countries’ climate commitments to achieve their net zero is crucial by the middle of this century. The earth’s temperature has risen significantly to 1.1 degrees Celsius after pre-industrial levels. Measuring the policies and strategies of countries to achieve zero emissions needs to be done to encourage climate mitigation in line with the Paris Agreement.

Energy Transformation Program Manager of the Institute for Essential Services Reform (IESR) , Deon Arinaldo, at the COP27 side event in Sharm El-Sheik, Egypt, with the theme “Net-0 scenarios and How to Get Them Right” organized by the International Network of Energy Transition Think Tanks (INETTT) explained, Indonesia has realized the urgency of the energy transition. It can be seen from the existence of a low-carbon development strategy from the Ministry of National Development Planning of the Republic of Indonesia. The plan will show significant benefits when Indonesia achieves its conditional Nationally Determined Contribution (NDC) target by 2030. It starts with higher economic growth, job creation, and improving the quality of health.

However, Indonesia still provides significant fossil energy subsidies. Deon emphasized that fossil energy subsidy policies differ from efforts to make an energy transition and achieve decarbonization in the middle of this century.

“The Indonesian government’s policy of providing subsidies to shield the public will burden the state budget, especially with rising commodity prices in 2022. Energy subsidies are an “obstacle” to energy transformation, reformulation of energy subsidies is a priority agenda for the government,” said Deon.

This needs to be done by considering the best policy scenario for reducing emissions in the energy system, based on the IESR study entitled “Deep Decarbonization of Indonesia’s Energy System.” Deon recommends three stages of the best policy scenario: bending the greenhouse gas emissions curve and peaking emissions by 2030. Then,  removing a significant share of emissions through energy system transformation by 2045, achieving zero emissions through an increase in green synthetic fuel production, and decarbonize industry sector by 2050.

“With this strategy, achieving zero emissions by 2050 is technically and economically feasible. It opens up opportunities to improve climate policy. Decarbonization efforts have to simultaneously ramp up the overall energy system. This decade (2020-2030) is the critical period,” explained Deon.

Nhien Ngo To, Vietnam Initiative for Energy Transition, said Vietnam had implemented a strategy of reducing emissions to net zero emissions by 2050. The plan sets the overall goal of adapting proactively and effectively. Then, minimize the vulnerability and damage caused by climate change.

“Unfortunately, there are still some challenges to face. Such as inefficient use of energy, high energy intensity, lack of financing, lack of skilled workforce for energy transition, and gaps in the coordination of key stakeholders,” said Nhien Ngo To.

Energy Programme Manager and Climate Finance Lead at GreenCape, Jack Radmore, said South Africa has a reasonably mature policy sector and plans related to a green economy and decarbonization. It could be seen in the national climate change response strategy since 2004, which has been improved and adapted over the years.

“South Africa has established a committee to accelerate the energy transition. The government has also adopted more ambitious emission reduction targets. Considering that 90 percent of electricity in South Africa still depends on coal-fired power plants with more than 600,000 people working in the mining sector,” stated Jack Radmore.

Al Kumba, Energy Transition Director, SHURA, stated that Turkey had taken significant steps in terms of decarbonizing the electricity sector over the past decade. Currently, 50 percent of installed power in Turkey comes from renewable energy. In terms of power generation, around 40 percent comes from renewable energy. However, Turkey’s energy mix is ​​still dependent on fossil fuels, only about 16 percent of which is supplied by renewable energy.

“Decarbonization is important for Turkey. Several concrete steps to realize decarbonization, such as Turkey has ratified the Paris Agreement in October 2021 and announced its ambition to achieve carbon neutrality by 2053. Turkey also has a green action plan to build its ports more environmentally friendly and expand forests and protected areas. Turkey is one of the countries that take the lead in fighting desertification and erosion,” said Al Kumba.