Overseeing the Indonesia Government’s Strategy in Energy Transition in 2022

press release

Jakarta, 18 January 2022 – Entering 2022, the Ministry of Energy and Mineral Resources shared Indonesia’s energy transition strategy in the “Press Conference on 2021 Performance Achievements and the 2022 Work Plan for Energy and Mineral Resources and the EBTKE Subsector”. The Institute for Essential Services Reform (IESR) views that even though the direction of the energy transition is becoming more evident, it is crucial to speed up the energy transition to reduce GHG emissions and align with Paris Agreement pathways to limit the earth temperature well below 1.5 degree Celsius. Moreover, some overlapping strategies need to develop in a more focused roadmap, such as Dimethyl Ether (DME) utilization, gas grids, and induction cooktops to meet household energy needs.

In the 2021-2030 Energy Transition Roadmap, the government focuses on new and renewable energy power plants’ construction which reach 20.9 GW, while the solar rooftop is targeted at 3.6 GW. The solar rooftop construction will be massive in 2031-2050 with a total amount of 279.2 GW.

Based on the IESR study entitled “Deep Decarbonization of Indonesia’s Energy System”, the construction of renewable energy power plants should be accelerated in the 2021-2030 period to achieve the renewable energy mix target, and reach peak emissions in the electricity sector before 2030. In addition, there is a need for at least a 14-fold increase in the total renewable energy capacity in 2020, with around 117 GW coming from solar rooftops and 23 GW from other renewable energy plants.

The government’s report on the achievement of new and renewable energy power generation capacity until 2021 reaches 11,152 MW. Fabby Tumiwa, Executive Director of IESR, feels that the target for adding renewable energy generating capacity has always been below the government’s target since 2019 and is not on track with the renewable energy mix target of 24 GW by 2025.

“The reasons for the low obtainment of renewable energy plants are structural. For instance, the Minister of Energy and Mineral Resources No. 50/2017 makes renewable energy projects unbankable, PLN does not carry out the regular and on schedule basis of the procurement of renewable energy plants, the lack of competitive domestic financing support, and the delay in project realization due to the pandemic,” said Fabby Tumiwa, Executive Director IESR.

Highlighting the investment target for the new and renewable energy sector in 2022, the government has set an investment entry of USD 3.9 billion, up 2.6 times from the previous investment achievement of USD 1.51 billion in 2021. Deon Arinaldo, Program Manager of Energy Transformation, IESR, thought that although the target has almost tripled, it is a small amount to fund efforts to decarbonize Indonesia’s energy system.

“Based on the study of the Indonesia Energy Transition Outlook 2022, investment in renewable energy for the electricity sector alone requires  11.1 billion USD per year for the next decade. Several renewable energy policies and regulations that should have been released last year, need to be finalized immediately to increase investor confidence and the renewable energy investment climate. Renewable energy investments outside of PLN’s RUPTL (National Electricity Supply Business Plan), such as solar rooftop, also need to be fully supported to attract investment from the beginning of this year, “added Deon.

Furthermore, the government’s strategy to maintain fossil energy subsidies will slow down the pace of energy transition in Indonesia. As well as increasing the burden on the state, it is also an easy trap for Indonesia to get into the fossil energy crisis.

“Reflecting on the coal energy crisis earlier this year, it can be seen that the use of fossil energy such as coal and subsidized support (in the form of DMO) also does not guarantee the country’s energy security, but instead creates distortions in the price of electricity generation. The price of electricity generation from coal-fired power plants looks cheaper than it should be and does not create a level playing field for renewable energy,” said Deon.

The government’s strategy to accelerate the national energy transition is constrained by the fact that the Minister of Finance has not yet approved the Draft Presidential Decree for the Purchase of Renewable Energy. Deon believes that there needs to be strategic coordination between ministries to support the acceleration of achieving the carbon-neutral target so that regulatory support that is considered critical should be issued immediately and run effectively.

“Apart from issuing regulations, effective implementation is important, but this is the opposite. For example, Ministerial Regulation 26/2021 regarding rooftop solar power plants, which should be able to support the achievement of the 900 MW rooftop solar power plant target in 2022 according to the MEMR target, however, was delayed earlier this year,” said Deon.

Besides the regulatory perspective, IESR sees the synergy of inter-ministerial carbon neutral targets as important. Reviewing the targets and realization of electric vehicles in 2022, the Indonesia Energy Transition Outlook 2022 found two different targets in the two ministries. The Ministry of Industry plans to produce 750,000 units of LCEV (low carbon emission vehicle), consisting of electric cars and 2.45 million units of electric motorcycles by 2030. Meanwhile, the Ministry of Energy and Mineral Resources (ESDM) targets 2 million cars, electric vehicles and 13 million electric motorcycles by 2030. Different targets and roadmaps in the development of electric vehicles will make it difficult to see a coherent and consistent effort by the government to increase the penetration of electric vehicles in the country.

“An integrated and well-designed national electric vehicle roadmap must be created. Alignment between the electric vehicle (EV) roadmap of the Ministry of Industry and the Ministry of Energy and Mineral Resources, for example, will increase the confidence of EV players. It also will maximize economic benefits for Indonesia in the form of an industrial value chain formed from the transition process from internal combustion engine (ICE) vehicles to EVs,” closed Deon.

Indonesia’s Energy Transition Overshadowed by Government Uncertainty

Jakarta, December 21, 2021 – Closing 2021, the Institute for Essential Services Reform (IESR) has launched its annual report entitled Indonesia Energy Transition Outlook (IETO) 2022. Since 2017, IETO – previously called Indonesia Clean Energy Outlook (ICEO), has consistently explained the development of the energy transition in Indonesia in various sectors as well as provided projections of Indonesia’s energy transition in 2022. For the second year in a row, IETO has specifically analyzed Indonesia’s energy transition readiness.

At a global level, 2021 was marked by some important events such as the Climate Summit hosted by the US president, Joe Biden, who called for the whole world to take more ambitious steps to tackle the climate crisis. The G20 Summit and COP 26 reiterated that the commitments and actions to mitigate the climate crisis of all countries are still not sufficient to suppress the increase in the global average temperature of 1.5 degrees Celsius. More ambitious and aggressive climate mitigation actions are needed.

Although not yet in line with the Paris Agreement, Indonesia has begun to show a quite progressive political commitment by setting a net-zero target by 2060 or earlier, plans to retire 9.2 GW  coal-fired power plants early, and the issuance of a new RUPTL which gives the share of renewable energy up to 51.6%. According to IESR, this commitment can be seen as a breath of fresh air for the development of renewable energy in Indonesia. However, this still has not been able to accelerate Indonesia’s energy transition, and achieve the Paris Agreement target of achieving carbon neutrality by the middle of this century.

Julius Cristian, the lead author of the IETO 2022 report, saw some uncertainty from the government.

“For example, although the latest RUPTL has accommodated about 50% of renewable energy or around 20 GW when compared to the need for decarbonization which reaches 130 GW, this plan is certainly far from what is needed. In addition, the government is still relying on strategies that we think are not feasible, such as the use of nuclear and CCS which are more expensive than renewable energy,” he explained.

The IETO 2022 assesses that Indonesia is capable of achieving net-zero by 2050. To achieve this, Indonesia must reach peak emissions before 2030, and after that start reducing them. One of the implications of this is that Indonesia is no longer allowed to build CFPPs and must immediately start retiring old CFPPs.

Considering the potential and availability of resources, solar PV will be the backbone of Indonesia’s decarbonization. However, its growth in 2021 was only around 18 MW, even though the demand will reach 108 GW in 2030, or an average increase of 10 GW per year.

Handriyanti Diah Puspitarini added that there has been a slight improvement in terms of policy quality and social (public acceptance) regarding the energy transition, but commitment from the government and the renewable energy investment climate still needs a lot of improvement.

“We need to see how the implementation of various regulations that will come and have been issued will be implemented. The government must also realize that the public has begun to be aware of this issue and support the energy transition, so the government should also support this already high public support,” explained Handriyanti.

Herman Darnel Ibrahim, a member of the National Energy Council (DEN), stressed the importance of renewable energy to grow exponentially to meet electricity demand and meet international agreement targets. Although throughout 2021 there is a momentum for growing awareness to transition Indonesia’s policy direction, it is still uncertain where it will go.

“For example, RUED, ​​although the regions already have RUED, ​​the authority to execute is centralized in PLN and Pertamina, so these regions have RUED but cannot affect the results,” said Herman.

Faela Sufa, Southeast Asia Director of ITDP, sees that the transportation sector can be one of the drivers of the renewable energy ecosystem in Indonesia.

“For example, for the electrification of public transportation, we need to synchronize together and identify what incentives need to be given so that it can be more tangible in energy use and coordination with various sectors related to renewable energy for electrification,” explained Faela.

Yusrizki, Chairman of the Standing Committee of the Indonesian Chamber of Commerce (KADIN) for New and Renewable Energy, said that KADIN has declared it will become a net-zero organization in 2060 and is actively encouraging its members to have a-net zero target.

“In the 2022 G20 summit, we are expected to have 100 Indonesian companies that have pledged a net-zero target and this is a very ambitious target. We start from education, assisting -helping them to make their agenda-, to pledge their commitment,” Yusrizki explained.

Meanwhile, Arief Sugiyanto, Vice President of PLN’s RUPTL Control, explained that his party is currently trying to meet the energy mix target of 23% by 2025.

“The target of 23% NRE in 2025 is indeed a formidable challenge. One of PLN’s strategies is to change diesel power generators in isolated areas gradually with NRE generators available in those locations,” said Arief.

Net-Zero Emission Agenda Private Sector Opportunity to Increase Competitiveness

Jakarta, 14 December 2021 – 2021 is considered as a progressive period marked by a number of important events and the birth of various commitments aimed to reduce the impact of climate change. A number of heads of state in the world are competing to show their leadership in dealing with climate change. This is not surprising because according to the report from the Intergovernmental Panel on Climate Change (IPCC) AR6, in August 2021, it was stated that the time for us to repress the increased global temperature below 1.5 degrees Celsius is less than a decade. Our climate action in a couple years to go will determine whether we will succeed in achieving the climate target under the Paris Agreement, which is to achieve net-zero emissions by the mid of this century.

To explore perspectives and encourage collaboration from various parties, the Indonesia Business Council for Sustainable Development (IBCSD) held a webinar titled “What Net Zero Emission Means for the Private Sector” on Tuesday, December 14, 2021.

Indonesia through the Ministry of Environment and Forestry has updated its NDC and equipped it with a strategic document, Long Term Strategy – Low Carbon Climate Resilience aligned with the Paris Agreement (LTS – LCCR). Indonesia also announced net-zero emissions by 2060 (or sooner). With climate change increasingly critical, the Government of Indonesia is urged to accelerate its net-zero emission target.

Laksmi Dewanthi, Director General of Climate Change Control at the Ministry of Environment and Forestry, said that the government is aware of the need to accelerate net-zero emissions.

“So, if we want to achieve net-zero faster, we ask all stakeholders to take more roles in Indonesia’s net-zero plan,” she said.

Medrilzam, Director of the Environment at National Development Agency (Bappenas) added, collaboration and concrete actions from all parties will be the key to achieve the net-zero emission target in Indonesia. “The government needs to prepare enabling conditions so that cooperation with the private sector and other parties can run well,” he said.

Medrilzam also emphasized that based on the Bappenas study, low carbon development results in higher economic benefits than business as usual.

Not only for the government, there are various benefits for corporations if they have a net-zero emission target.

“Aligning to climate science is good for business. Because apart from being in line with the government’s agenda, implementing climate commitments also increases the competitiveness of companies. Companies are expected to continue to seize such opportunities,” explained Amelie Tan, Regional Lead for the Carbon Disclosure Project.

On the same occasion, the Executive Director of IESR, Fabby Tumiwa, emphasized that the government needs to intervene in at least four areas to encourage private sectors to move towards low-carbon businesses. The four sectors include (1)policies and regulations, (2) low-carbon technology and infrastructure, (3) innovation, and (4) raising market and consumer awareness to choose low-carbon products.

“Our study shows that the energy system in Indonesia can technically and economically achieve zero emission by 2050 with 4 strategies, namely increasing renewable energy capacity, reducing fossil fuels, electrification, and using clean fuels,” he said.

Fabby also added the importance of carbon emission disclosure for corporations who are committed to reducing their emissions so that the wider community knows which companies have commitments to control climate change. 

Book Discussion “Jejak dan Langkah Energi Terbarukan Indonesia” or “Indonesia’s Renewable Energy Trails and Steps”

Book Discussion “Jejak dan Langkah Energi Terbarukan Indonesia” or “Indonesia’s Renewable Energy Trails and Steps”. This dynamic of renewables development in Indonesia has been covered by the media. Kompas, as one of the biggest media in Indonesia, has created many in-depth coverage writings on this topic. These daily in-depth reports are compiled in a book called “Jejak dan Langkah Energi Terbarukan Indonesia”, written together with the Institute for Essential Services Reform (IESR). This book aims to describe the actual conditions of energy transition in the field.

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Indonesia Energy Transition Outlook (IETO) 2022

IETO 2022 will be launched in a webinar that is also intended to obtain views/perceptions from policymakers and actors on the trends that will occur in the coming year in the energy transition. Discussions at this meeting will focus on the energy transition readiness framework in Indonesia’s electricity sector as well as various lessons learned in 2021 to overcome the challenges of encouraging the energy transition in 2022.

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Signed the Global Declaration to Phase Out Coal, Indonesia Needs to Prepare a Coal Transition Roadmap

Jakarta, 05 November 2021- At the 26th World Leaders Summit on Climate Change or COP-26, Indonesia signed the Global Coal to Clean Power Transition declaration. On the same day, the Minister of Energy and Mineral Resources, Arifin Tasrif, also stated that the government was reviewing the opportunity to early retire coal-fired power plants with a total capacity of 9.3 GW before 2030 (4/11/2021) which could be done with funding support reaching $48 billion.

Although Indonesia has decided to exclude the third point of the Global Coal to Clean Power Transition, which demands to cease the issuance of new permits and the construction of unabated coal-fired power plants, the Institute for Essential Services Reform (IESR) appreciates the steps taken by the Indonesian government, especially the leadership shown by the Minister of Energy and Mineral Resources at COP-26, to encourage a just energy transition through the development of renewable energy as widely as possible and to phase out coal-fired power plants as part of Indonesia’s action to prevent a global crisis.

“The openness of the Indonesian government to make an energy transition, through one of which is reducing the power plant in stages, should be appreciated. Post-Glasgow, the government, and the National Energy Council must accelerate the preparation of a comprehensive roadmap and strategy for the energy transition in Indonesia. Dependence on fossil energy will end if we do not rapidly increase the capacity of renewable energy. The policy focus is no longer coal as the first option, but renewable energy must be the main choice. So the energy transition needs to be carefully designed, with the priority of developing and utilizing renewable energy as much as possible and optimizing energy efficiency,” said Fabby Tumiwa, Executive Director of IESR.

Fabby emphasized that the decision to gradually stop fossil fuels, especially coal-fired power plants, is inevitable, not only from the perspective of the climate but also from the economic side of technology.

“Remarkably, with innovation and the price of renewable energy and storage technology is more competitive than fossil energy, the use of renewable energy to ensure the reliability of energy supply to achieve net-zero emission is becoming more feasible,” said Fabby.

The results of the IESR analysis from the study of Decarbonization of Energy Systems in Indonesia projected that renewable energy complemented with storage batteries will increase significantly by 2045. The share of batteries will reach 52% of the total storage system, followed by hydrogen at 37% and other storage systems around 11%. The share of electricity demand covered by energy storage increases significantly from around 2% in 2030 to 29% in 2045. The main users of battery storage will come from utility-scale systems, and to a lesser extent from commercial and industrial areas, and housing systems.

Concerning the early 9.3 GW of coal-fired power plants with details of 5.5 GW of early retirement without replacement to renewable energy power plants and 3.2 GW of early retirement with the replacement of renewable energy plants, Deon Arinaldo, Manager of the IESR Transformation Program, views this as a progressive step for decarbonization of energy system in Indonesian. However, according to IESR’s calculations, to implement the Paris Agreement targets and keep the global average temperature rise below 1.5C, there is around 10.5 GW of steam power plants that need to be retired before 2030.

“There is still a difference of 1.2 GW that needs to be retired and can be targeted for coal-fired power plants outside PLN’s business area,” said Deon.

Referring to the study of Indonesia’s Energy Decarbonization System, at least it requires investment in renewable energy and other clean energy of USD 20-25 billion per year until 2030 and increasing thereafter for the gradual financing of coal and the development of renewable energy for emission-free by 2050. However, phasing out coal-fired power plants will avoid the risk of financial loss from the stranded assets which reached USD 26 billion after 2040.

With large funding requirements for the gradual cessation of coal-fired power plants, Indonesia is working with ADB to launch the Energy Transition Mechanism (ETM) program, which is expected to raise around $3.5 billion to launch 2-3 coal-fired power plants per country.

“The existence of ETM, which will provide a financing platform, is expected to be able to provide a source of funds to retire the steam power plant and encourage the larger investment flows in renewable energy. This is crucial so that Indonesia can optimally plan the transformation of its energy system,” concluded Deon.***

Not Renewable energy but Communicate that Coal is Intermittent and Expensive

ACEF side event

Communication is a powerful instrument that can be used to build public awareness of the transition to energy and renewable energy. As for how to use this tool to reach various groups of people, not only for people whose daily life is involved in the energy world is an interesting topic of discussion in the side event of the Asia Clean Energy Forum 2021 entitled Evidence-based Communications to Propel the Energy Transition which was organized by the Clean Affordable and Secure Energy for Southeast Asia (CASE) project team in collaboration with Asian Development Bank.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR), explained that communications play a significant role in achieving CASE goals. The goals of CASE include building a constructive dialogue with stakeholders from the non-energy sector and creating broader public discussions supporting the acceleration of the energy transition.

Christiane Rossbach, the Business Director, Multilateral, Sustainability, Agri-Food and Health at Edelman and Co-lead CASE Communication Team, in her presentation, emphasized the essentiality of defining energy transition as a crucial mission to targeted audiences.

“What are the communication roles to propel the energy transition forward by making key stakeholders realize the opportunities, in particular decision-makers, non-energy stakeholder, financial, business entities, influencer consumers; those who are more engaged with society and impact of business. More likely to share their opinion with, and like to attend a public meeting, while they are not decision-makers per se, but more influential in shaping the way of business,” she said.

Moreover, she explained, during the pandemic, the consumption of online content doubled, therefore,  it needs to carefully decide which evidence or argument will work best for which audiences. The approach she suggested in delivering the message of the importance of energy transition to raise awareness, drive engagement, and create a conversation is by storytelling.

“Beyond fact and figures, storytelling is powerful. Human brains are hardwired to process and store information in the form of a story. They stimulate our sense emotionally and intellectually; they can put a face on the issue and help us connect with true empathy,” she added.

Talking about the energy transition narrative, Renato Redentor Constantino, Executive Director of the Institute for Climate and Sustainable Cities (ICSC) from the Philippines, shared his views. In his opinion, the narrative that needs to be conveyed by both non-governmental organizations and the government is that the energy transition is underway.

“The landing zone is that clean energy will be dominant, the question is how soon we get there? Can we arrive sooner to bring the benefit of modern and clean, affordable, and secure energy to the table of the inside of the house of a family? Civil Society Organization doesn’t have to monopolize on good intentions here, we need to recognize that governments also share the dream of clean, affordable, and reliable secure energy as their premier objectives,” he said.

In contrast to the Philippines, which has progressed in communicating the narratives, Gandabhaskara Saputra, Outreach, and Engagement Adviser CASE Indonesia revealed that most of the news coverage in Indonesia is still dominated by coal.

“We are still challenging to bring the energy transition conversations towards public engagement and advocacy through the past 5-10 years in a way. While it doesn’t really speak to their daily basis and as long as they have the access to energy,” he stated.

On the other hand, Markus Steigenberger, Deputy Executive Director of Agora Energiewende, sees the need to align research planning with the political agenda.

“The problem that we have been facing many times, once the research is done, and the political agenda has already moved ahead, it’s too late. So whatever you say is interesting to experts but still irrelevant,” he explained.

He said 2 things need to be done, first, strategic anticipation by predicting the political situation in the next two or several years and linking it to relevant research or evidence.

“We have already started thinking about the communication before we actually started the actual research,” he said.

Next, determine an integrated and inclusive methodology by involving stakeholders as early as possible in research.

“We have relevant stakeholders sitting at the table, we share and make data and assumptions transparent, we invite them to share their views and opinions. It helps in terms of creating a sense of belonging,” he explained.

Rana Adib, Executive Secretary of REN21, said that to move a narrative, it is also necessary to look at it from two sides: from renewable energy and also from fossil energy. Citing the latest report released by REN 21, over the past decade, there has been an increase in final energy consumption in renewable energy from only 9 percent to 11 percent. Ironically, the final consumption of fossil energy did not register a significant change, only moving from 80.3 percent to 80.2 percent. This fact asked the strong push from the government and business people to target the use of renewable energy in all sectors immediately.

“We are very far from being on track. RE has shown especially in the power sector that they are able to deliver, technology matured, least-cost options. Today is not enough to say that let’s support renewables, we need to clearly have a message on banning fossil fuels,” she stressed.

Agreed with it, Renato views, communicating a narrative supported by concrete evidence is necessary for the development of renewable energy and the discontinuance of the use of fossil energy.

“The reality that we need to communicate better is that coal is actually intermittent, most of the unreliable, expensive, and insecure fuels,” he concluded.

IESR launches a pathway to zero emissions by 2050

Technologically and Economically Feasible, Indonesia Just Needs a Strong Political Will and Bold Plan to Reach Zero Emissions by 2050

The narrow time is running out to overcome the increasingly threatening climate crisis. In contrast, Indonesia’s NDC is lacking ambition in complying with the Paris Agreement to keep the earth’s temperature below 2 degrees, let alone the 1.5 degrees Celsius. It was evident in the 2050 Long-term Strategy on Low Carbon and Climate Resilience (LTS-LCCR) document in mitigating climate change which only targets carbon neutrality in 2070. 

Institute for Essential Services Reform (IESR) new report “Deep decarbonization of Indonesia’s energy system: A pathway to zero emissions by 2050” shows that Indonesia’s energy sector is technologically and economically feasible to achieve zero carbon emissions by 2050. 

This report is the first comprehensive study in Indonesia to present a path to achieving a zero emission energy sector by 2050. It is an important milestone as the current mitigation action in the energy sector is not ambitious enough. The emissions from the energy sector are predicted to increase to 58% by 2030, as indicated under the BAU scenario in Indonesia’s Nationally Determined Contribution (NDC), mainly driven by the increase in the final energy consumption. 

“As one of the largest economies in the world and with its strategic position in Southeast Asia, Indonesia should take a lead in transforming its energy system now. Decarbonization of Indonesia’s energy system could bring significant impacts on the region and inspire other countries to accelerate energy transition. Making this happen will require strong political commitment and leadership by President Jokowi,” said Fabby Tumiwa, Executive Director of IESR.

He added that the first and crucial step of this journey is to reach an emission peak by 2030 at the latest. With strong policy support, renewable energy shall be deployed at large scale, accompanied by declining thermal power capacities. 

Using the Energy System Transition Model developed by the Lappeenranta University of Technology (LUT), this report shows that it is achievable to use 100 percent of renewable energy in the power, heat, and transport sectors in Indonesia.

“The model used for the detailed scenario analyses for Indonesia is designed for hourly temporal resolution and interconnected regions, as this is of highest relevance for the energy transition of Indonesia for ensuring a stable energy supply for all hours and all regions,” said Christian Breyer, LUT Solar Economy Professor.

This decade will become a crucial time for decarbonization efforts in Indonesia. To bend the emission curve, Indonesia needs to install around 140 GW of renewable energy by 2030, of which about 80% is solar PV. Sales of electric cars and motorcycles should increase to 2.9 million and 94.5 million by 2030 respectively, a dramatic increase from nearly zero sales today. Meanwhile, electric heating should become the main heat producer in the industrial sector, accompanied by biomass energy. Most importantly, PLN needs to stop building new coal-fired power plants by 2025.

By 2045, renewable energy supplies 100 percent of the electricity in Indonesia. For the first time, the Indonesian power sector becomes carbon free. Solar PV is the largest contributor in power generation with 88% share, followed by hydropower at 6%, geothermal at 5%, and other renewable energy at 1%. To address the intermittency issue, energy storage technology is used, mainly batteries. Meanwhile, synthetic fuels, hydrogen, and electric heating will play a greater role in decarbonizing the transport and industry sectors. The importance of grid integration of Java, Sumatra, Kalimantan, and other islands will increase from 2030 onwards as renewable energy becomes the backbone of Indonesia’s energy system. The IESR model shows that by 2050, an overall transmission capacity of 158 GW is required to connect the archipelago from west to east. 

By continuing the decarbonization efforts in the much-harder-to-abate transport and industry sectors to 2050, Indonesia will reach a point where the whole energy sector becomes carbon free through the use of 100% renewable energy. The decarbonized energy system would potentially reduce the annual system cost by 20% compared to a fossil-based energy system. 

To reach such an ambitious target, Indonesia will need investment of USD 20-25 billion per year from now until 2030 and will increase to USD 60 billion per year between 2030 and 2040. Considering the big investment needs, the government should attract investment from the private sector and individuals. Improvement of the investment climate is therefore crucial in this endeavor. 

 “The size of the challenge should not obscure the fact that deep decarbonization will bring enormous benefits and opportunities to Indonesia’s economy,” said Pamela Simamora, Research Coordinator of IESR and author of this report.  

Through deep decarbonization, Indonesia will see at least 3.2 millions of new, sustainable and quality jobs, the improvement of public health (which will also imply a substantial reduction in health costs), and the establishment of a modern economy, which enable the country to compete in the growing world market for carbon-neutral products. To get there, a strong political will is required. The Indonesian government also needs to put in place the right policies and regulations today and remove regulations and policies perceived as barriers to clean technology investments.

The report “Deep decarbonization of Indonesia’s energy system: A pathway to zero emissions by 2050” is a study by IESR in collaboration with Agora Energiewende, and Lappeenranta University of Technology (LUT). The launch of the report is held on May 28th, 2021. The report can be downloaded at the following link:

Deep decarbonization of Indonesia’s energy system: A Pathway to zero emissions by 2050

The Jakarta Post | Tug of war: Stakeholders clash over nuclear, fossil fuel addition to green energy bill

Green energy businesses and watchdogs are up in arms over the House of Representatives’ decision to add nuclear and “new” fossil fuel technologies into a landmark green energy bill. Industry players have issued statements and held public hearings with lawmakers over the past two weeks to protest such an addition in the long-awaited New and Renewables Energy (EBT) bill, which promises legal certainty and incentives for listed industries.

This article was published in thejakartapost.com with the title “Tug of war: Stakeholders clash over nuclear, fossil fuel addition to green energy bill”. Click to read: https://www.thejakartapost.com/news/2020/09/25/tug-of-war-stakeholders-clash-over-nuclear-fossil-fuel-addition-to-green-energy-bill.html.