Between Low Renewable Energy Target and High Economic Growth Ambitions

Jakarta, 20 February 2024 – Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) assesses the steps taken by the National Energy Council (DEN) to adjust the renewable energy mix target in the Draft of Government Regulation on National Energy Policy (RPP KEN)  from the original 23 percent to 17-19 percent 2030 is a backward step because it is not in line with the stated goal of reducing emissions and achieving Indonesia’s net-zero emissions target by 2060 or sooner.

Fabby also highlighted the energy transition agenda carried by each pair of presidential candidates in the 2024 election, which includes a number of renewable energy mix targets until 2030 in an interview with the Squawk Box program.

According to him, each candidate has an energy transition agenda, one of which is the desire to pursue the same renewable energy mix target as the current National Energy Policy, ranging from 27-30 percent by 2030. Apart from that, each candidate also has a commitment to limit the operation of coal power plants.

“For candidate number 02, what is clearly visible is the increase in the use of biofuel to replace or reduce fuel subsidies as stated during the campaign,” said Fabby. They (presidential and vice-presidential candidates’ number two) are targeting a biofuel blend percentage of 50 percent by 2029, as well as ethanol utilization of 10-20 percent.

Furthermore, Fabby emphasized that for the electricity sector, the aim of ending coal plant operations early must be accompanied by adding a larger portion of renewable energy. Apart from replacing the electrical power that was initially supplied by coal-fired power plants, renewable energy generation must also meet the projected electricity growth needs in the future. Moreover, Indonesia has the ambition to pursue economic growth of up to, for example, 6-7 percent, so electricity demand is projected to grow even greater.

“Based on IESR’s calculations, to achieve these various targets, the renewable energy mix in 2030 must reach 40 percent, this is somewhat different from the target adjustments made by DEN currently,” explained Fabby.

Fabby added that the new government’s homework related to the energy sector will be to accelerate the development of renewable energy, especially in the electricity and liquid fuel sub-sectors.

Exchanging Insights on Local Solar Manufacturer in Indonesia and Viet Nam

Ha Noi, 14 December 2023 – The Ministry of Science and Technology of Viet Nam hosted its annual event: Technology and Energy Forum 2023, in collaboration with the Ministry of Industry and Trade and Project Clean, Affordable and Secure Energy for Southeast Asia in Viet Nam.In recent years, Viet Nam has witnessed remarkable development in the trends of energy transition, particularly in wind and solar power. By the end of 2022, the total capacity from wind and solar power had reached 20,165 MW, constituting 25.4% of the overall power capacity within the system.

However, despite this progress, 90% of equipment for renewable energy projects in Viet Nam is imported from countries like China, Germany, India, and the US. This reliance is due to the country’s limited ability to perform specific tasks during project assessment and development phases and its high dependence on imported technologies. Factors contributing to this situation include inadequate local technology capacity, production levels falling short of requirements, and a lack of support from industrial policies and mechanisms to encourage renewable electricity.

Consequently, Vietnamese enterprises and local supply chains have seen limited participation. Similarly, Indonesia faces comparable challenges in its procurement of renewable energy, particularly in solar power. Despite both countries boasting immense potential in solar power, their domestic markets are not yet equipped for solar manufacturing. This deficiency stems from uncertainties in local demands and the lack of competitiveness in the local supply chain.

Fabby started with an explanation about local content regulation that could minimize dependence on imported products. 

“Indonesia is currently facing domestic market issues; these local products encounter difficulties entering the market. The lack of a credible development pipeline limits financial viability for new solar modules manufacturing facilities. When it comes to Rooftop PV, PLN limits the installation capacity to 15%. This regulation further restricts the market for domestic solar modules,” state Fabby.

Fabby went on to highlight several lessons learned from implementing Local Content Regulations (LCR) in Indonesia, which could potentially accelerate the development of Viet Nam’s solar energy local content. First, despite the projected growth in solar power, there’s insufficient market signal to stimulate the growth of the solar module industry without a reliable pipeline. Second, inconsistencies in policies across government bodies might discourage investment in the solar power market due to increased uncertainty. Third, support for the domestic solar modules industry should encompass downstream raw material industries to reduce import dependency and enhance the competitiveness of end products. Lastly, governments should offer incentives, both fiscal and non-fiscal, to encourage the development of solar module manufacturing facilities. Fabby emphasized that LCR, without a conducive investment climate for the industry, might impede rather than foster the development of solar power.

Implementing the Energy Transition: Policies in Colombia, Germany, India, Indonesia and South Africa

Background

The Global Stocktake is clear: All countries need to raise their ambition to curb their emissions effectively, to a degree that is fair to their development status.

But ambitious targets are not sufficient on their own; policies need to be in place and be implemented effectively. Climate Transparency’s new Climate Policy Implementation Check has been designed to assess, rate, and monitor the implementation status of policy instruments along four categories: legal status, institutions and governance, resourcing, and oversight.

Facilitated by the Climate Emergency Collaboration Group, we analyze the implementation of a variety of climate policies in the power sector of India, South Africa, Indonesia, Colombia, and Germany.

Ahead of COP28, we want to discuss possibilities and implications for international cooperation to effectively implement the energy transition away from coal and towards a renewable energy future. With their strong interlinkages in coal production and consumption, the countries we analyze exemplify the possibilities and challenges of successful transformations, and they will be key to the debate on how to change long-standing international relationships from brown to green.

Agenda

  1. Selected Energy Transition Policies in India, South Africa, Indonesia, Colombia, and Germany: Implementation status and outlook
  2. International implications of domestic energy transitions

Language

This event uses the English language

Towards COP-28: Indonesia Needs to Speak Out for Concrete Action in Addressing the Climate Crisis

Jakarta, November 2, 2023 -The United Nations Framework Convention on Climate Change (UNFCCC) Conference of the Parties (COP-28) is scheduled to take place in Dubai, United Arab Emirates (UAE) from November 30 to December 12, 2023. Guntur, a policy analyst from the Coordinating Ministry for Maritime Affairs and Investment, has stated that the COP-28 meeting will include the first-ever global stocktake (GST) to evaluate the progress made in implementing the Paris Agreement.

 

“The GST is a crucial turning point for taking climate action in this critical decade, where the global community is aware that the implementation of the Paris Agreement is currently off track. For this reason, collaboration between various parties is needed in course-correcting efforts and improving solutions that are reflected in the results of the negotiations as well as in the COP28 Presidential Actions Agenda,” he explained at the Pijar Foundation Policy Playground event on Thursday (2/11/2023).

 

Guntur mentioned that COP28 is focused on several issues to fulfill the pillars of the Paris Agreement, particularly related to energy transition, especially renewable energy. Indonesia also continues to prepare the pavilion as soft diplomacy or diplomacy with a socio-cultural approach. This is also an effort to convey to the world the concrete steps and concrete actions that Indonesia has taken in reducing emissions and addressing climate change. In addition, Indonesia took the theme of climate action to be held in the Indonesian pavilion during the implementation of COP28. 

 

Arief Rosadi, Coordinator of Climate Diplomacy Institute for Essential Services Reform (IESR), said the climate crisis harms the world. Based on the UNFCCC report in 2022, global emissions will increase by almost 14% throughout this decade. The UNFCCC’s 2023 data shows that current policies will result in a temperature rise of 2.8°C by the end of the century.

 

“For this reason, Indonesia must take real action to address the climate crisis, and collective efforts are needed to address and deal with it by emphasizing the principle of Common But Differentiated Responsibilities and Respective Capabilities (CBDR-RC). There are currently various opportunities for young people to participate in international conventions despite possible challenges, such as closed processes and limited financial, regulatory, and logistical support. Citing data from the Yale Program on Climate Change Communication, most Indonesians feel morally obligated to protect the environment,” Arief said. 

 

Based on the agenda, Arief said, the delegation of the Republic of Indonesia (RI) will pay more attention to three global crises. These three crises, also known as the triple planetary crisis, include climate change, pollution, and biodiversity loss. These are significant global challenges that require bilateral and multilateral collaboration and cooperation to ensure that the Earth remains habitable for the future.