Kompas | Energy Transition is Highly Complex, Requires Acceleration of Coal-Fired Power Plant Retirement and Integration of Renewable Energy Networks

Energy transition is a complex process with significant implications, requiring multi-stakeholder dialogue to anticipate and mitigate the impacts of energy transition in Indonesia. This is the foundation for the Indonesia Energy Transition Dialogue (IETD) 2023, which will be held on September 18-20, 2023.

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ISEW 2022: Unity of Action and Indonesia’s Energy Transition Strategy

Ambassadors joined the discussion in ISEW 2022 on the topic of International cooperation in advancing energy transition in Indonesia

Jakarta, 09 October 2022 – The government of Indonesia needs a strong commitment to implementing energy transition through strong political and policy support. It supports global efforts to keep the global average temperature rise below 1.5 C, achieve energy security, and focus investment on sustainable development, such as renewable energy development. In addition, the involvement and participation of all Indonesian people are crucial in the energy transition process. Unity of action and strategy in the energy transition is a discussion that will be explored further at Indonesia Sustainable Energy Week (ISEW) 2022.

“This event will create a common understanding, provide understanding, especially regarding the efforts that need to be done in pursuing the Net Zero Emissions (NZE) target by 2060 or sooner,” said Rachmat Mardiana, Director of Electricity, Telecommunications and Informatics, Ministry of National Development Planning/Bappenas in media briefing and virtual launch of ISEW 2022.

Rachmat added that the Indonesian government hopes to escape the middle-income trap and become a developed country before Indonesia’s 100th anniversary in 2045. He emphasized that internalizing energy transition efforts in preparing long-term development plans is more important.

Yusuf Suryanto, Coordinator of Electricity, Directorate of Electricity, Telecommunications and Information, Bappenas, explained that to become a developed country, Indonesia needs to increase economic growth and expand its financial growth center area.

“The point is, Indonesia’s economy is expected to grow more than 6%, and the role of the eastern part of Indonesia needs to be increased to 25% so that economic growth outside Java will dominate,” said Yusuf.

Furthermore, he emphasized that the outer Java region’s economic growth could align with the energy transition process in eastern Indonesia. 

Fabby Tumiwa, Executive Director of the Indonesia Clean Energy Forum (ICEF) & Institute for Essential Services Reform (IESR), said that Indonesia has an opportunity to increase energy consumption and supply while reducing the intensity of greenhouse gas emissions.

“The key in policies and regulations and proper planning to encourage low-carbon technologies to replace energy supplies of which 87%, according to government data, comes from fossil energy,” explained Fabby.

The Government of Indonesia’s commitment to the energy transition is demonstrated by the issuance of Presidential Regulation (Perpres) No 112/2022 concerning the Acceleration of Renewable Energy Development for the Provision of Electricity. This Presidential Regulation regulates the setting of tariffs for renewable energy, which has the potential to revitalize the renewable energy investment climate in Indonesia. Not only that, but this Presidential Decree also provides a mandate for the Ministry of Energy and Mineral Resources to prepare a roadmap for accelerating the termination of the PLTU operational period.

“Regarding the energy transition, the Minister of Energy and Mineral Resources compiled a roadmap to accelerate the termination of the PLTU operational period after coordinating with the Minister of Finance and the Minister of SOEs. Follow-up actions that it will carry out include consolidating and aligning perceptions with PLN and the relevant Ministries contained in this Presidential Regulation,” explained Andriah Feby Misna, Director of Various New Renewable Energy, Ministry of Energy and Mineral Resources.

Fabby added that to achieve Net Zero Emissions by the 2060 Scenario (NZE), new and renewable energy generation will be driven by 786.2 GW, with 60.2 GW coming from battery power.


The energy transition to renewable energy will have a social, economic, and environmental impact on the people of Indonesia. Indonesia, as a country that exports 75% of its coal production, the Indonesian economy will contract significantly if there is a decline in demand. We can see the strengthening climate commitment of Indonesia’s coal export destination countries such as China, India, Japan, and South Korea. Economically, constructing renewable energy plants is predicted to be cheaper than building a new PLTU in 2023 and more affordable than operating an existing PLTU in 2030. A production decline will have a negative impact based on an IESR study entitled Redefining Future Jobs. Employment along the coal value chain from production, processing, transportation, and end-use.

Widhyawan Prawiraatmadja, an Indonesia Clean Energy Forum (ICEF) member, emphasized that the energy transition must be carried out fairly. Anticipating the impacts, especially in the affected sectors, such as the coal industry, needs to be done.

“Workers, especially in sectors undergoing adjustment, such as in the coal sector, need to be prepared for their capacity and capability to switch to clean energy,” he explained.

Widhyawan said that energy transition needs to be ensured with the support of incentives from the government. Furthermore, he also encourages public awareness and contribution to energy efficiency, which is still far behind developed countries.

Indonesia’s energy transition process will be discussed at ISEW 2022, especially concerning accelerating the retirement of Indonesian PLTU. ISEW 2022 will discuss various aspects of support, inclusiveness, and mitigation strategies in detail on the implications of the energy transition that Indonesia needs to prepare for the energy transition process.

ISEW was held in collaboration with the Indonesia Clean Energy Forum (ICEF), the Institute for Essential Services Reform (IESR), and Clean, Affordable, Secure Energy for Southeast Asia (CASE). CASE is a cooperation program between two countries: Indonesia – Germany (Directorate of Electricity, Telecommunications and Information Technology, Ministry of National Development Planning/Bappenas, and funded by the Ministry of Economy and Climate Action of the German Federation Government). Previously, it routinely held discourse on energy transition in Indonesia at the Indonesia Energy Transition Dialogue (IETD), which this year participated in ISEW 2022. First maintained in 2022, ISEW will last five days from 10-14 October 2022 with the theme Reaching Indonesia’s Net Zero Energy System: Unite for Action and Strategy. All levels of society can participate in this activity free at isew.live.***

Luhut: President Jokowi orders to promptly implement the energy transition

Jakarta, 20 September 2021 – Indonesia needs to take several steps to accelerate the transition and development of renewable energy by 2050 by aligning regulations and policies and encouraging investment in renewable energy.

Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan said that basically, the Indonesian government always stays committed and tries its best to prevent the increase of earth’s temperature to more than 1.5 degrees Celsius. He stressed that President Jokowi’s directions explicitly ask for an immediate energy transition as the government is currently preparing an energy transition mechanism, especially for Indonesian coal-fired power plants.

“Financial support is significant to support the transition to renewable energy. We need help from developed countries to achieve carbon neutrality by 2060 or sooner. Currently, the transition from coal to renewable energy is underway. There are coal-fired power plants that must be replaced (by renewable energy) and are being prepared with PLN. We are optimistic it can be done faster because technology is also developing. So it is more efficient,” said Luhut in The 4th Indonesia Energy Transition Dialogue (IETD) organized by the Institute for Essential Services Reform (IESR) and the Indonesia Clean Energy Forum (ICEF), Monday (20/09/2021) virtually.

He said that the Indonesian government is targeting tourism areas, especially Toba Lake and Bali to be carbon neutral in 2045 or the 100th anniversary of Indonesia’s independence.

“Toba Lake is possible (to phase out from fossil fuel-ed) because it has 1,000 megawatts of geothermal and some hydropower energy. Therefore, the community there no longer needs to use fossil energy, so as Bali,”  he added.

In his opinion, the change is undeniable even in the next six years. Currently, all industries worth almost USD 100 billion have started to use renewable energy.

“We have great potential for renewable energy. By 2050 Europe will not use fossil fuels. We have goods from renewable energy or green products. PLN must also participate and make a start,” he said.

On a different occasion, at the Press Conference of The 4th Indonesia Energy Transition Dialogue (IETD) 2021. The Director of Electricity, Telecommunications and Information at the Ministry of National Development Planning (Bappenas), Rachmat Mardiana, said that Bappenas had compiled several studies on net-zero emission. The study comprises considerations of social, economic, environmental, and the needed funding to accelerate decarbonization in Indonesia.

“Indeed, we also need to explore the efforts to reduce coal dependence through several endeavors. For instance, studying future technological developments, the potential of hydrogen energy to meet the needs of transportation, industry, power plants,” said Rachmat at the Press Conference of The 4th Indonesia Energy Transition Dialogue (IETD) 2021, Monday (20/09/2021) virtually.

Director-General of New, Renewable Energy and Energy Conservation of the Ministry of Energy and Mineral Resources, Dadan Kusdiana, said that the transition to renewable energy needs to wait for the National Electricity Supply Business Plan (RUPTL). 

“We will complete the RUPTL, examine it from the budget side, whether it needs a state budget or replacement costs. Then we will inform the Ministry of Finance of the Presidential Decree on New Renewable Energy (EBT). It has been processed, soon the National Electricity Supply Business Plan (RUPTL) will be discussed, then the Ministry of Finance will only do the budget calculations,” said Dadan. 

Furthermore, the integration of renewable energy needs to be supported with solutions to overcome the oversupply from power plants. The Executive Director of the Institute for Essential Services Reform (IESR), Fabby Tumiwa said that it can be overcome through deep decarbonization in the industrial and business sectors.

 “The solution is by substituting heating energy that uses fossil fuels to electrification. The second solution, the most effective,  is with rooftop solar PV. Official data from the government in 2019, the solar PV only covered 186MV, but data in the Solar Energy Association is much larger, on 2020-2021 both in the pipeline and complete stage until July shows the total of 480 MW, “says Fabby.

Fabby said the government needs to scale up investment opportunities for renewable energy projects. The IESR study shows that to meet the target of 23 percent of the renewable energy mix by 2025, it requires investment of around US$14 billion to US$15 billion, or equivalent to Rp. 210 trillion. 

Meanwhile, to achieve net zero-emission, IESR estimates that the required investment until 2030 will reach US$25 billion to US$30 billion per year, or around Rp 420 trillion per year. This number will be higher in 2030–2050, reaching about US$50 billion to US$60 billion per year. The investment cost includes the development of low-carbon technology in the electricity, transportation, and industrial sectors. Fabby said the investment also includes the development of green hydrogen, as well as synthetic fuels for the transportation sector that are difficult to electrify such as planes and ships.

In terms of the coal industry, a member of the Indonesia Clean Energy Forum (ICEF), Widhyawan Prawiraatmadja said the coal industry needed a robust signal through a carbon tax to participate in the transformation and support the decarbonization of the energy system. 

“In this context, we apply the tax carbon US$ 5 per ton. The fossil fuel producer will think that it is okay to deal with such a tax (low tax-ed). So, it means that the regulation is not working. Unless like in another country where the tax is about USD 50 (per ton). It will drive you to deeply consider using fossils,” said Wawan.