Engaging More People in the Emission Reduction Effort

Jakarta, 22 April 2024 – Energy transition has gained traction and momentum in the past years. Countries have pledged to reduce emissions as well as accelerate their energy transition agenda to keep the global temperature rise on the 1.5-degree Celsius level. Indonesia pledged to achieve net zero emissions status in 2060 or earlier. This commitment is 10 years later than the Paris Agreement target in 2050. 

Irwan Sarifudin, Coordinator for Clean Energy Hub IESR, during the SEA Morning Show on 22 April 2024, said that the IESR’s study Deep Decarbonization shows that Indonesia technically can achieve zero emissions in the energy sector in 2050.

“This choice (to be NZE in 2050) is technically possible and economically viable for Indonesia,” Irwan said.

Irwan also explained that to push the government agenda in accelerating energy transition targets, multi-sector collaboration is essential. One of the initiatives launched by IESR is Generasi Energi Bersih (Gen-B), a youth community focused on personal emissions reduction. 

Maya Lynn, GEN-B Coordinator explained that the community encourages each individual to contribute to emission reduction efforts. Gen-B utilizes tools such as jejakkarbonku.id to calculate individual carbon footprints.

“Jejakkarbonku.id has already been customized to suit the Indonesian context, so the transportation options and food choices are developed according to the Indonesian habit and custom,” she said.

To further engage more people, the GEN-B community will keep encouraging the community members and will also be involved in the Community Funded Offset Project (CFOP) which is a carbon offsetting activity by providing renewable energy installation or mangrove planting. The CFOP itself is planned to be in several locations in Indonesia.

Carefully Designing Indonesia’s Energy Policy Framework

Jakarta, March 28, 2024 – The National Energy Council (DEN) plans to adjust the renewable energy mix target. Currently in the draft Government Regulation on National Energy Policy (RPP KEN), DEN plans to reduce the national renewable energy mix target to 17-19 percent by 2025. Previously, the renewable energy mix target was 23 percent by 2025.

The Institute for Essential Services Reform (IESR) considers this a step back from the Indonesian government’s commitment to overseeing the energy transition.

Raditya Wiranegara, IESR Research Manager, in a hearing with the National Energy Board expressed his concern behind the setting of the renewable energy mix target.

“IESR has previously conducted modeling that has been published in our annual report, Indonesia Energy Transition Outlook (IETO). Our modeling results show differences with the modeling results that form the basis for the formulation of the KEN RPP. This is especially evident in the final energy growth, where in the modeling for IETO we used Bappenas’ GDP growth assumption for Indonesia Emas 2045,” Radit said.

This was clarified by Retno Gumilang Dewi, ITB’s modeling team, who assisted DEN in the modeling, that the figures currently circulating are adjusted figures.

“The model we produced can be said to be an ideal model. The modeling was then brought for FGD (focused group discussion) and received various inputs, so it was adjusted,” said Retno Gumilang.

Fabby Tumiwa, Executive Director of IESR on the same occasion said that in preparing a country’s energy planning, it is important to ensure the choice of technology that is most relevant and tested with the latest technological developments.

“This step is important and crucial to avoid being locked-in by high-carbon technologies,” Fabby said.

Fabby added that if we are already trapped in the choice of high-carbon technology, it will require even greater investment to get out of the high-carbon technology. IESR also encourages the achievement of renewable energy targets that have been set in the RUPTL and national strategic projects as a driver of the growth of the domestic renewable energy industry.

Small and Medium Enterprises (SME) Emissions are not Small

Dekarbonisasi emisi UKM

Jakarta, 14 March 2024 – The industrial sector has become the backbone of the Indonesian economy. Not only large industries, Small and Medium Enterprises (SMEs) are also the driving force of the national economy, including creating employment opportunities and contributing 60.5% to GDP.

However, this economic contribution figure is also accompanied by large, haunting emissions. Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform, in his opening remarks for the Webinar on Decarbonization Opportunities for Small and Medium Enterprises in Indonesia and Learning from Global Experience, said that currently emissions from the SME industrial sector in 2023 are 216 million tons of CO2e.

“This figure is equivalent to one third of national industrial sector emissions. So, we need to seriously strive to decarbonize the SMEs industry because by prioritizing the sustainability aspect, SMEs will level up,” said Fabby.

As much as 95% of the SME sector’s emissions come from burning fossil fuels, the remaining 5% from burning waste. Large economic contributions need to be anticipated as a result of emissions output. If significant steps are not taken to reduce SME sector emissions, there is a possibility that SME emissions will increase in the future.

Abyan Hilmy Yafi, IESR Energy Data Analyst, explained in a survey carried out by IESR on 1000 SMEs throughout Indonesia that to start decarbonizing the SME industry there are several approaches from increasing understanding to technical solutions such as switching technology.

“For cross-sectors, there is a need to increase the understanding of SMEs about energy consumption and the emissions they emit. Active outreach is also needed to promote renewable energy. By sectoral approach, there are several technical recommendations such as the use of electric boilers in the textile and apparel industry,” he explained.

Bo Shen, Energy Environmental Policy Research, LBNL explained that globally, challenges to decarbonizing the SME industry include gaps in the knowledge of SME owners or managers regarding emissions, energy, or furthermore climate change and its relevance to their business.

“When SMEs already have sufficient knowledge and awareness to carry out decarbonization or reduce emissions from their business, finance becomes the next obstacle. The current upfront costs for, for example, looking for technology vendors or energy service providers (Energy Service Company – ESCO), are still quite high for the financial scale of SMEs,” explained Bo Shen.

Each country will use a different approach to encourage the decarbonization of their SMEs. In the United States, for example, governments are collaborating with universities to build industrial assessment centers.

“Apart from being useful for decarbonizing the SMEs industry, this approach also prepares skilled workers who have direct training opportunities in the SME industry,” explained Bo Shen.

Bo also added an interesting case from China which formed an initiative called Green Growth Together (GGT). This initiative encourages decarbonization of SMEs that are part of established product supply chains.

The established brands they supply require their entire supply chain network to implement emission reduction or decarbonization practices. This demand also comes with required financial assistance or technical assistance.

Ahmad Taufik from the Green Industry Center of the Ministry of Industry (Kemenperin) stated that Indonesian is currently experiencing challenges in the industrial sector. The contribution of the industrial sector to GDP continues to decline.

“Structurally, we are still continuing to improve various things, from industrial development, SME development, to ensuring the availability of environmentally friendly jobs (green jobs) and professional staff (green professionals),” said Taufik.

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.

Building a Framework for Understanding Mutual Cooperation on Renewable Energy

Bekasi, 23 January 2024 – Human life cannot be separated from various types of energy use. Starting from the household scale for cooking, to the utility scale such as power plants with a capacity of hundreds of megawatts. Even though energy utilization activities are carried out every day, understanding and literacy about energy still needs to be built, especially regarding the use of renewable and cleaner energy sources.

The Institute for Essential Services Reform (IESR) actively collaborates with various parties to continue to build understanding and capacity regarding the energy transition, one of which is through the Jelajah Energi program. Jelajah Energi is initiated by IESR, as an effort to document various good practices for using renewable energy in society and in the industrial sector.

Deon Arinaldo, IESR Energy Transformation Program Manager, in the introductory workshop on Jelajah Energi Jawa Barat (Jelajah Energi chapter West Java), stated that a deep understanding of the energy transition and its benefits for the environment as well as socio-economic benefits is the motivation to drive community participation in the energy transition process.

“It is hoped that proper public understanding of the use of renewable energy can provide full support in implementing clean energy-based solutions,” said Deon.

In the same forum, the Head of the West Java Energy and Mineral Resources (ESDM) Office, Ai Saadiyah Dwidaningsih, said that the Jelajah Energi Jawa Barat activity was a relevant relevant to the current situation in West Java which had recorded 23.41% of renewable energy mix by 2023.

“West Java has a renewable energy potential of 192 GW, ranging from solar, biomass, geothermal, hydro and wind. However, of this 192 GW potential, only 3.41 GW or still around 2% has been utilized,” said Ai.

Ai added that the activity will provide an experience to understand and know the development of this energy transition in Indonesia, especially in West Java, so it is hoped that cross-sector collaborative initiatives or input will emerge after.

After the introductory workshop, the Jelajah Energi trip began with a visit to the Bantar Gebang Waste Power Plant (PLTSa) unit. PLTSa Bantar Gebang is located at the Bantar Gebang Integrated Waste Disposal Site (TPST) and is one of the largest waste disposal sites in the world.

The Bantar Gebang PLTSa unit is a pilot project belonging to the DKI Jakarta Regional Government. Currently PLTSa Bantar Gebang produces around 750 kWh of electricity per day. The electricity produced is used for the operations of PLTSa and Bantar Gebang TPST, and uses around 300-450 kWh.

Harun Al Rasyid, Deputy Operations Manager for PLTSa Bantar Gebang, stated that there is a lot of excess power so it is necessary to think about options for using this excess power.

“Because we are not connected to the grid, now excess power is wasted,” explained Harun.

Apart from being used as PLTSa fuel, waste from the Bantar Gebang TPST is also used as refuse derived fuel (RDF). Ari Prihantono from the Nathabumi PT Solusi Bangun Indonesia Tbk team, said that RDF is a cost-effective alternative fuel.

“Waste sorting is the biggest challenge in the RDF supply chain process. Improving this sorting process is the key to improving the RDF supply chain. If we can sort from the start, we can cut the costs of centralized sorting,” said Ari.

PLTSa Bantar Gebang also produces paving blocks from Fly Ash Bottom Ash (FABA), the combustion residue from PLTSa. From 100 tons of waste per day, 10 tons of usable FABA can be produced.

Half-hearted Indonesian Climate Policy and Action

Jakarta, 30 January 2024 – The World Meteorological Organization (WMO) has declared 2023 as the hottest year. Historical records show that the earth’s temperature continues to increase from year to year. To keep the earth’s temperature rise to no more than 1.5 degrees, experts have recommended ensuring the world reaches peak global emissions in 2030 and must fall in the following years.

The use of fossil energy is one of the largest contributors to emissions in the world. Executive Director of the Institute for Essential Services Reform (IESR), Fabby Tumiwa, said that Indonesia needs measurable and real action for transitioning away from fossil energy.

“Based on the Climate Action Tracker (CAT) assessment, Indonesia has not shown a reduction in emissions, in fact it will experience an increase in emissions in 2022 and one of the causes is an increase in coal consumption used for down streaming. Indonesia’s rating even dropped from ‘highly insufficient’ to ‘critically insufficient’. The most important thing is real steps to accelerate the transition in this decade,” emphasized Fabby.

Indonesia, as one of the top 10 emitting countries in the world, actually received a bad record with Indonesia’s climate ranking dropping to the lowest level according to the Climate Action Tracker (CAT) assessment framework.

Delima Ramadhani, IESR Climate Policy Project Coordinator, said at the launch of the Climate Action Tracker report that throughout 2023, Indonesia has delivered a number of initiatives and policies that normatively support the acceleration of the energy transition, but this does not have implications for efforts to reduce emissions.

“Indonesia’s rating dropped from ‘highly insufficient’ to ‘critically insufficient’. ‘Critically insufficient’ means that if countries have climate commitments like Indonesia, the rate of global warming will be at the level of 4 degrees,” said Delima.

Mustaba Ari Suryoko, Intermediate Policy Analyst, Coordinator of the Aneka EBT Program Preparation Working Group, responded that the assessment of emissions reduction efforts is a reminder for all parties to continue working to achieve emissions reduction targets.

“Achievement number figures are an accumulation of various variables, so we hope that in planning we will not only determine ambitious targets but also make efforts to achieve them,” he said.

Anna Amalia, Functional Intermediate Planner at the Ministry of National Development Planning (Bappenas), said that to pursue Indonesia’s more ambitious climate targets there are several opportunities.

“The government is starting to move progressively, in the next 20 years we will have a RPJP (National Long Term Development Plan-ed) which focuses on reducing GHG emissions, how we encourage economic growth through low emission corridors and of course other policies will follow,” Anna said.

The annual Climate Transparency report also includes an Implementation Check Report to see the effectiveness of climate policy implementation.

Akbar Bagaskara, IESR’s Power Sector Analyst, explained that Indonesia’s electricity sector is in the medium category because the implementation of policies that support the transition in the electricity sector has not been effective.

“Historically, in the last five years we never achieved our annual renewable energy target. We need to strengthen policies to strengthen Indonesia’s renewable energy enabling environment, as well as involving various groups in the planning, procurement and evaluation processes,” explained Akbar.

Yosi Amelia, Forest & Climate Program Officer, Yayasan Madani Berkelanjutan, highlighted the lack of synchronization of strategies across ministries and government agencies which created unclear documents that should be treated as guidelines.

“There are inconsistencies between documents, for example regarding Indonesia’s deforestation quota. In the FOLU Net Sink 2030 strategy, there are no longer deforestation quotas, while the E-NDC still provides deforestation quotas,” said Yosi.

Driving the Energy Transition from the Sub-National Level

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.

IETO 2024: Reviewing Progress in the Energy Transition in Indonesia

Jakarta, 15 December 2023 – In the last three years, there has been a number of advances in the energy transition in Indonesia. Since 2020, the Indonesian government has begun to include the energy transition agenda in the government’s agenda.

At the launch of the annual flagship report Indonesia Energy Transition Outlook 2024, Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) emphasized that this progress is important.

“In the last 3 years, Indonesia has attempted to consolidate renewable energy incentive policies. The results are not yet widely visible, but the energy transition issue is increasingly being discussed, has become an important issue, and is on the government agenda. The next stage, with a consolidated policy, Indonesia’s energy transition steps can be faster.”

Fabby added that in compiling the IETO 2024 report, the IESR team used four frameworks to analyze the development of the energy transition in Indonesia including (1) policy and regulatory framework, (2) funding and investment support, (3) implementation of technology, and (4) social impact and public support.

On the same occasion, Dadan Kusdiana, Secretary General of the Ministry of Energy and Mineral Resources (MEMR), stated that the consolidation carried out by the government at this time was not only carried out from a regulatory perspective, but was also carried out from a techno-economic one.

“In our opinion, one of the keys to the success of NZE (net zero emissions) in the power generation sector is the existence of a super grid that connects the islands in Indonesia,” said Dadan.

Indonesia’s decarbonization achievements during 2023 are considered less than encouraging, where in this one year the addition of renewable energy capacity only increased by around 1 GW, far from the 2021-2030 RUPTL target which set 3.4 GW target in the same period.

Alvin Sisdwinugraha, IESR Electricity Sector Analyst, said that Indonesia needs to immediately improve to pursue its decarbonization target, especially in developing renewable energy projects.

“The government can implement a number of strategies including reviewing the project preparation phase, increasing project attractiveness, improving the domestic renewable energy supply chain, and immediately improving electricity network infrastructure,” he said

Alvin also highlighted the biomass development strategy, which is closely related to the availability of land for the feedstock. Considering the limited availability of land, he said. It would be good if the use of biomass is focused on hard-to-abate sectors.

Apart from the electricity sector, other sectors that consume energy are industry and buildings. The industrial sector is the trigger for a significant increase in energy consumption in Indonesia, or around 81%. In 2022, there will be the addition of 5 commercial smelter units, which could have an impact on the potential to double energy consumption by 2023.

Fathin Sabbiha Wismadi, Energy Efficiency Analyst in Buildings, IESR, said that the existence of binding regulations would be an acceleration of energy efficiency.

“We have 6 things that can contribute to reducing energy intensity in Indonesia, first, electrification. Second, energy efficiency, third, regulations regarding energy consumption and energy efficiency, fourth, ecosystem and infrastructure such as charging locations, fifth, incentives and sixth, increase awareness of the Indonesian people,” said Fathin.

From the supply side, at the sub-national level, a number of provinces in Indonesia have completed General Regional Energy Plans (RUED). Anindita Hapsari, Agricultural Analyst, Forestry, Land Use and Climate Change IESR highlights the need for assistance in each region in accelerating the adoption of renewable energy.

“The capabilities of each region are different, requiring assistance in the form of regulations and schemes, both financial and non-financial,” said Anin.

Availability of financing is one of the issues that hinders the acceleration of renewable energy. One reason is that the perception of renewable energy investment is still relatively low. Martha Jessica, IESR Socioeconomic Analyst conveyed that investment in renewable energy generation is still considered a high-risk investment.

“The realization of investment in renewables is also still low. The trend is very far from ideal, in which this year and last year did not reach the target, namely the investment target of USD 1.8 billion in 2023, but last semester only around 30% was achieved,” she said.

The electricity sector is the leading sector in Indonesia’s decarbonization agenda, because it already has a decarbonization roadmap. However, targets in the electricity sector are still not easy to achieve.

His Muhammad Bintang, Energy Storage and Battery Technology Analyst, IESR, said there are at least three things that need to be encouraged to ensure the electricity sector decarbonization target is achieved.

“First, we need to build a clean energy ecosystem, secondly physical and non-physical infrastructure, and prioritize interventions that have been proved,” he said.