Webinar The State of Southeast Asia Energy Transition

To support the low carbon transformation process, it is imperative to strengthen cooperation among key stakeholders in the SEA countries. Achieving this goal will face different challenges across the region as some countries are more advanced in terms of infrastructure in renewable energy and financial instrument compared to other countries. Therefore, discussion among key stakeholders in the region is pertinent to address the gaps and learn from each other to scale up the clean energy transition and meet the net zero economy targets.

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Russia’s Invasion May Affect Energy Transition in ASEAN

Jakarta, 5 April 2022 – Russia’s invasion of Ukraine for the past month has been steering up the global reaction, especially on energy security issues. Russia is known for its oil and gas global exporter, with the invasion going on, global leaders are taking stands in giving sanctions not to buy gas from Russia. Is this good or bad? We may need a longer time to see the impact, but one thing’s for sure, Russia’s sanction has become one of the triggers for European Union Countries to accelerate their energy transition and  seal emergency securities as well as reduce their reliance on fossil fuels.

Fabby Tumiwa, the Executive Director of the Institute for Essential Services Reform (IESR), said that EU action to ensure their energy security is accelerating the transition.

“EU countries try to reduce their reliance on fossil fuel by developing technology such as green hydrogen to ensure their energy security. This is such good news for the EU region yet it has a spillover effect as countries like Germany commit to supporting energy transition in emerging countries like Indonesia. The current situation may affect the speed and funding for the energy transition in emerging economy countries,” he explained.

Sufficient funding is crucial for decarbonizing the whole energy system. Enough funding means the government will be able to build modern low-carbon energy infrastructure. As most of the emerging countries lie in the Southeast Asia region, this area has become the hotspot for decarbonization. As one of the most populated regions, Southeast Asia’s energy demand is constantly growing. Ensuring the region has sufficient funding to transform its energy system into a cleaner one will be one of the determining factors of global decarbonization.

Consisting of ten countries, ASEAN has different characteristics in developing its energy transition mechanism based on the national priorities of each country. The various situations create different opportunities, one thing in common is that renewable energy sources, especially solar, are available abundantly in the region. Fabby added that soon solar energy will be a commodity just like oil and gas at the moment. 

“Therefore, it is important for ASEAN to have its manufacturing facility (for solar panels). To make sure the operation of the manufacturing facilities technology transfer from the main producer is a must,” Fabby said.

Sara Jane Ahmed, Founder, Financial Futures Center Advisor, Vulnerable 20 Group of Finance Ministers, added that partnership will be the key for ASEAN countries in accelerating the energy transition.

“In this time, China can actually play a bigger role by providing funds and transferring its technology to ASEAN countries,” she said.

Just Energy Transition Highly Required Attractive Policy, Regulation and Finance Access

Jakarta, 29 March 2022 – Just energy transition becomes one of the priority issues of Indonesia’s G20 Presidency 2022. Zooming in on a just energy transition issue, Yudo Dwinanda Priaadi, chair of the Energy Transition Working Group, explains that there are three issues related to energy transition to be accelerated i.e access, technology, and financing. 

The energy transition is about changing the whole system of energy from fossil fuel-based to renewables-based. It involves multi-sector reform to get there. Ensuring energy access is provided at an affordable cost and way is important as it is mentioned in Sustainable Development Goals (SDGs) 7 i.e affordable and clean energy. Therefore providing infrastructure of clean energy as the first step of the energy transition becomes crucial.

Technology transfer needs to be taken care of, as in Indonesia’s context, all the technology of clean energy right now was developed by other countries. To avoid Indonesia becoming only the market for other countries ‘selling’ their technology, we need the knowledge of technology and even have to be able to produce the technology by ourselves.

Fabby Tumiwa, the Executive Director of IESR, believes that the most important issue of energy transition currently is financing.

“If we have sufficient financing, we can access the technology and build the infrastructure of clean energy. At the same time we will also create a low carbon economy system in the country,” he said.

Luiz de Mello, Director of Economics Department OECD, added that there is an opportunity to make progress in a low carbon economy as the world tries to get out of the pandemic situation. According to him, there are at least three things the government should do, including mobilizing investment for low carbon infrastructure, making regulations and standards, as well as managing labor investment including training and retraining for those previously working in the fossil industry.

“On an international level we also need policy coordination as we are addressing a global issue, we need a global solution,” Luiz added.

The government also must provide a predictable regulation and framework to attract investors to invest in renewable projects. Frank Jotzo, Head of Energy, Institute for Climate Energy and Disaster Solutions, Australia National University, emphasized the importance of providing a de-risking instrument to accelerate the energy transition. 

“We realize that the investment needed (for energy transition) is enormous, yet there are a couple of things to do to figure out the way to finance the transition. For the note, it is a productive investment where most of the money goes for the upfront cost, and later we can enjoy the clean energy without too many costs needed,” Frank explained.

As the G20 President, Indonesia becomes the spotlight of its energy transition process. Masyita Crystallin, Special Advisor to the Minister of Finance on Macroeconomic and Fiscal Policy Ministry of Finance Indonesia, shares that the Indonesian Government strives for a just energy transition.

“Of course we aim for a just energy transition, meaning that stranded assets must be taken care of and the laborers who used to work in the fossil or mining industry are protected,” she explains.

Masyita also emphasized that the global policy mechanism should be ready as well to support the transition that happened per country.

Commercial and Industrial Sector Ready to Encourage the Use of Rooftop PV

Jakarta, March 15, 2022 – The development of rooftop solar PV in Indonesia in the last three years has been very rapid. Citing records from the Ministry of Energy and Mineral Resources, there is a significant increase in installed capacity from less than 1.6 MW in 2018 to 48.79 MW in 2021. This is certainly encouraging. Solar power has become a clean energy that costs one of the cheapest today. The massive use of solar energy is the Indonesian government’s strategy to achieve the target of a 23% renewable energy mix by 2025. In addition to large-scale PV projects, the government has launched rooftop PLTS as a National Strategic Project (Proyek Strategis Nasional – PSN) of 3.6 GW.

In addition to utilizing the technical potential of solar energy in the areas where it operates, there is a need in the commercial and industrial sectors to use clean energy in their production and business operations. Nurul Ichwan, Deputy of Investment Planning – BKPM in the webinar “Business Going Green” organized by the Ministry of Energy and Mineral Resources and the Institute for Essential Services Reform, said that as many as 349 multinational companies have issued commitments to use 100% renewable energy in their business activities (RE100).

“In addition, other regulations such as the carbon border adjustment mechanism which will be implemented in the European Union will certainly encourage companies to switch to renewable energy so that they can be competitive with market demands, the easiest is rooftop solar power,” explained Ichwan.

Ichwan also added that as an offtaker, PLN plays an important role in this energy transition process.

“The big consideration lies with PLN, if they cannot receive the maximum supply of renewable energy, this transition process will not run quickly,” he explained.

The industrial sector’s need to reduce carbon emissions was justified by Karyanto Wibowo, Director of Sustainable Development DANONE, who explained that his company continues to strive to reduce greenhouse gas emissions from its business activities, starting from energy efficiency, carbon offsetting, and installing rooftop solar panels on factory facilities.

“We plan to use 100% renewable energy (RE100) in 2030, currently we have installed rooftop solar panels with a total capacity of 6.2 MWp in 5 locations. With this installation, only 15 percent of clean energy is produced, we still have to catch up to another 85 percent until 2030,” he explained.

Karyanto continued that regulatory innovation for the power wheeling scheme would greatly assist the industrial sector in utilizing renewable energy.

From the developer side, George Hadi Santoso, Vice President of Marketing Xurya Daya, highlighted several problems with installing rooftop solar panels related to permits from PLN.

“We encountered many obstacles in West Java and Central Java. PLN is not responsive, and has not implemented regulations issued by the Ministry of Energy and Mineral Resources. We were once asked to become premium consumers first,” explained George.

The availability of export-import kWh meter is also still a problem with the slow flow of roof PV installations.

Aries, PLN’s APP Division, who was also present online clarified that the regulations currently being implemented by PLN still refer to the Minister of Energy and Mineral Resources Regulation 49/2018 which was revealed in the PLN Directors Regulations number 18 and 49. The derivative rules for the Minister of Energy and Mineral Resources Regulation number 26 /2021 which is an update of Ministerial Regulation 49/2018 regarding rooftop solar is still in the process of being drafted by PLN.

“Services at PLN units are strongly influenced by queuing conditions. It is necessary to reorganize the service mechanism in each unit so that all consumers can be served properly,” explained Aries.

Fabby Tumiwa, Executive Director of IESR and General Chair of the Indonesian Solar Energy Association, reminded that the Minister of Energy and Mineral Resources Regulation No. 26/2021 has officially taken effect as of January 22, 2022, so it should have been implemented by that date.

“I hope this condition can be resolved soon so that there is clarity for licensing arrangements from 15 days to 5 days,” said Fabby.

The service industry that attended the ‘Business Going Green’ forum shared their experiences for taking part in this decarbonization effort. Antonius Augusta, Executive Director of Deloitte Indonesia, stated that in his institution, emission reduction actions are derived to individual actions.

“Globally, we are committed to using 100% renewable energy by 2030 in office buildings and using electric vehicles as operational vehicles. In Indonesia itself, sustainability action is carried out by looking again at work methods to reduce business trips. Some employees have also used rooftop solar panels as a personal initiative to help reduce emissions,” explained Augusta.

The selection of vendors and suppliers who also have a strong commitment to sustainability is one of Pricewaterhouse Coopers (PwC) Indonesia’s strategies. Marina Mallian, Human Capital Business Partner of PwC Indonesia, explained that the company is more focused on sustainable actions that are integrated in the daily activities of employees, such as prioritizing local meeting destinations as well as doing carbon offsetting.

“Installing renewable energy such as solar PV is a bit difficult, because the building (office) is not ours. Even for changing vehicles to EVs (electric vehicles), we have concerns about the availability of battery charging infrastructure.”

Open Canvas: IsDB seeks advice on Energy Transition in Indonesia and Southeast Asia Region with IESR

Jakarta, 1 December 2021 – In the past year, the term energy transition has gained traction in the policy advocating process as well as public discourse. The energy sector, as the number one polluter globally, attracts the main spotlight as the world is in the race to limit its temperature to 1.5 degrees Celsius. Energy transition, though it is a need, unfortunately, has no universal formula for each region or country to implement. Each country needs to figure out the most suitable scenario for its energy transition considering the context and situation of the country. However, taking notes on the previous experience in preparing or initiating the energy transition could help to smoothen the process of transition preparation in a region.

Indonesia marked a quite progressive move along the year, starting from the announcement of the net-zero target in 2060 (sooner) and also the recent RUPTL that accommodates a bigger portion, 51.6% of renewables. Though the target is still considered not enough to achieve the Paris Target, the ongoing progress and commitment announced are attracting people to learn on how the government shifts its interest, and finally commits to cleaner energy.

On December 1st, 2021, IESR met the Islamic Development Bank (IsDB), Almaty, Kazakhstan to share the progress of the energy transition in Indonesia as well as lessons learned on the role of non-government stakeholders in accelerating energy transition both at the country and regional level. 

Sitting for the Central Asia region, IsDB identified the low investment and old infrastructure in power generation, transmission, and distribution as the main issue in the area. The potential renewable energy such as hydro and solar is only available during summer. In the winter where the temperature may drop, for instance up to -50 degrees celsius in Kazakhstan, a way to supply the power must be figured out, and what energy can be used to fulfill the demand.

In developing a more sustainable scenario, IESR as an independent think-tank actively advocating energy transition agenda through several means and channels i.e research dissemination, initiating movement, and actively influencing public discourse. 

“For instance, we push solar rooftop penetration into the grid, because we believe the technology could help to democratize energy access which in Indonesia is monopolized by PLN,” Fabby Tumiwa the Executive Director of IESR explained.

In influencing and shaping public opinion, IESR through the Clean, Affordable, and Secure Energy (CASE) for Southeast Asia project actively engaged with the government, media, academic institutions, and public to promote energy transition discourse for a wider audience. In policy advocacy matters, CASE is also in partnership with the Ministry of National Development Planning (Bappenas) to influence the long-term development goal.

Understanding that the energy transition is a multidimensional issue, it requires a collaboration of diverse stakeholders in planning and implementing it.

“That is our next goal, we’ll have a meeting with the Ministry of Energy and talk about the plan, and figure out what we can do to support the deployment of renewable energy and what works for them,” said Edzwan Anwar of the IsDB.

Kementerian ESDM dan Badan Energi Internasional memperdalam kerja sama untuk memajukan transisi energi di Indonesia

Jakarta — 8 Juli, 2020, IESR. Institute for Essential Services Reform menyambut baik dan mendukung rencana kerjasama Kementerian ESDM bersama dengan International Energy Agency (IEA) dalam sebuah proyek baru tentang ketenagalistrikan dan energi terbarukan. Rencana peluncuran kerjasama ini secara resmi diumumkan oleh IEA, yang dirilis melalui laman resminya pada hari Selasa lalu, 7 Juli 2020. Peluncuran proyek ini dilakukan menjelang KTT Transisi Energi Bersih IEA pada Selasa 9 Juli yang akan mempertemukan sekitar 40 menteri dan tokoh – tokoh penting dari negara-negara yang mewakili sekitar 80% dari permintaan energi global. 

IESR menilai kerja sama ini sangat relevan dengan situasi dunia dan situasi Indonesia yang sedang melakukan pemulihan ekonomi pasca-Covid-19 dan pada saat yang bersamaan menghadapi tantangan untuk memulihkan investasi di sektor energi, khususnya energi terbarukan untuk mencapai target 23% bauran energi pada 2025.Continue reading

Bagaimana Prospek Perkembangan Energi Bersih di Indonesia di 2020?

 

Pada Desember 2019 lalu, IESR meluncurkan laporan Indonesia Clean Energy Outlook 2020. Dalam laporan ini, disampaikan evaluasi perkembangan energi terbarukan dan efisiensi energi selama 2019, serta pandangan prospek pengembangan energi bersih di Indonesia pada 2020 ini. Bagaimana prospek perkembangan energi bersih, khususnya energi terbarukan di Indonesia pada 2020? Salah satu temuan dalam ICEO 2020 mengindikasikan investasi di bidang energi terbarukan mengalami penurunan.  Sejak 2015, realisasi investasi EBT terus menurun, padahal target investasi tahunan terus mengalami koreksi dari target Renstra KESDM 2015-2019. Bahkan target investasi EBT untuk 2019 sebesar $1,8 milyar hanya tercapai $1,5 milyar. Sepanjang 2015-2019 kapasitas pembangkit energi terbarukan (on-grid dan off-grid) bertambah 1,6 GW atau 11% dari total tambahan kapasitas terpasang pembangkit listrik sebesar 15,5 GW. Pencapaian ini jauh lebih rendah dari realisasi pada periode 2010-2014. Pada 2020 KESDM memasang target pembangkit energi terbarukan dapat bertambah 685 MW. Angka ini jauh lebih tinggi dari realisasi penambahan kapasitas pembangkit energi terbarukan pada 2019 sebesar 376 MW. Walaupun lebih tinggi tetapi sesungguhnya pertambahan kapasitas ini masih lebih rendah dari penambahan kapasitas pembangkit energi terbarukan yang ditargetkan dalam Rencana Umum Energi Nasional (RUEN). Untuk memenuhi target RUEN, setiap tahun sejak 2020, diperlukan penambahan kapasitas pembangkit energi terbarukan baru sebesar 4-5 GW.

Untuk dapat mencapai target tersebut maka diperlukan investasi yang cukup, kesiapan atau kemauan off-taker dan ketersediaan proyek-proyek yang feasible. Off taker yang terbesar adalah PLN yang memasok 95% energi listrik di Indonesia. Bagaimanakah status ketiga faktor ini di 2020?

Pertama, sejauh ini Indonesia belum menjadi target utama investasi energi bersih bagi investor asing. Daya tarik investasi untuk energi terbarukan tergolong biasa-biasa saja, tidak ada yang menonjol. Beberapa faktor utama antara lain: iklim investasi makro, kualitas kebijakan dan regulasi, rencana dan realisasi pembangunan energi terbarukan, ketersediaan pendanaan, serta akses pada teknologi dan rantai pasok domestik memiliki daya tarik yang lebih rendah bagi investor asing dibandingkan dengan negara-negara tetangga yang menjadi kompetitor kita. Investor berpandangan kebijakan dan regulasi tidak stabil, mudah berubah, kualitasnya rendah, dan ketidakjelasan dalam implementasinya. Hal-hal ini menyebabkan persepsi risiko investasi di sektor energi terbarukan sangat tinggi yang berakibat pada meningkatnya cost of money untuk investasi proyek energi terbarukan di negara kita.

Di 2020 ini, investor sepertinya akan mencermati langkah pemerintah memperbaiki iklim investasi energi terbarukan. Perubahan kebijakan dan regulasi yang menghambat perkembangan energi terbarukan selama tiga tahun terakhir ini ditunggu oleh para pelaku usaha. Rencana pemerintah menerbitkan aturan feed in tariff (FiT) untuk pembangkit listrik ET skala kecil dalam bentuk Peraturan Presiden menjadi angin segar bagi pelaku usaha swasta. Tapi FiT saja mungkin tidak cukup karena harga/tarif hanyalah sebagian dari hambatan pengembangan ET. Bagaimana pemerintah melalui instrumen regulasi mengalokasikan risiko-risiko tarif, kebijakan, teknologi, evakuasi daya secara berimbang untuk PLN dan pengembang, dan proses bisnis yang transparan juga menjadi perhatian para investor, khususnya investor asing. Sentimen positif akan terjadi di 2020 kalau ada realisasi komitmen politik dan produk perundangan yang signifikan di tahun ini. 

Kedua, PLN sebagai satu-satunya off-taker listrik swasta, perkembangan energi terbarukan sangat dipengaruhi oleh visi, minat, perencanaan, lelang dan eksekusi dari BUMN ini. Beban pencapaian target energi terbarukan pun sebagian besar harus dipikul oleh PLN. Untuk mencapai target 23% sesuai Perpres No. 22/2017 maka dalam lima tahun mendatang, minimal 75-80% penambahan pembangkit listrik baru harus berasal dari energi terbarukan. Pada prakteknya untuk dapat masuk ke dalam sistem ketenagalistrikan, maka proyek energi terbarukan harus masuk dalam perencanaan PLN, yaitu Rencana Umum Penyediaan Tenaga Listrik (RUPTL).

Pada RUPTL 2019-2028, PLN merencanakan menambah 16,7 GW pembangkit energi terbarukan dimana 8 GW direncanakan pada kurun waktu 2019-2024. Untuk mencapai target RUEN, maka kapasitas pembangkit untuk energi terbarukan harus ditambah menjadi 12-15 GW pada kurun waktu tersebut dan dilipatgandakan pada lima tahun berikutnya. Konsekuensinya untuk dapat menampung kapasitas pembangkit energi terbarukan yang lebih besar maka PLN perlu melakukan pengurangan kapasitas pembangkit-pembangkit thermal yang direncanakan atau yang telah dioperasikan 5-10 GW dalam lima tahun mendatang.

Ada perbedaan antara target KESDM untuk penambahan kapasitas terpasang pembangkit ET di 2020 sebanyak 685 MW dengan RUPTL PLN sebesar 933 MW. Perbedaan ini merupakan sinyal bahwa ada persoalan dalam perencanaan kelistrikan dan koordinasi, khususnya untuk pembangkitan ET. Bagaimana perbedaan ini akan direkonsiliasi dalam RUPTL 2020-2029 yang kemungkinan akan terbit dalam beberapa waktu kedepan juga menjadi perhatian para investor dan pengembang.

Ketiga, ketersediaan proyek-proyek energi terbarukan yang bankable dan siap didanai merupakan salah satu faktor yang penting dalam memenuhi target penambahan kapasitas pembangkit listrik. Selama ini ketersedian proyek-proyek pembangkit energi terbarukan yang bankable jumlahnya terbatas. Berbeda dengan pembangkit thermal yang berkapasitas besar, pembangkit energi terbarukan kapasitasnya bervariasi dari skala dibawah 5 MW, 5-10 MW, 10-50 MW, dan diatas 50 MW. Misalkan untuk PLTS yang direncanakan mencapai 0,9 GW, hingga 2025 nanti, dapat terdiri dari 20-50 proyek dengan ukuran rata-rata 20-50 MW per proyek. PLTB yang direncanakan hingga 0,85 GW hingga 2025 dapat terdiri dari 15-30 proyek dengan kapasitas 10-100 MW per proyek.

Jadi, prospek pengembangan energi terbarukan di 2020 sebenarnya lebih baik dibandingkan tahun-tahun sebelumnya dengan adanya komitmen politik dari Presiden, langkah-langkah merevisi kebijakan dan regulasi harga ET (FiT) oleh Menteri ESDM, dan dukungan jajaran direksi PLN untuk mengembangkan energi terbarukan untuk mencapai target RUEN. Walaupun demikian, aksi-aksi positif ini tidak serta merta langsung meningkatkan daya tarik investasi dan realisasi investasi pembangkit pada tahun ini. Apabila pemerintah melakukan langkah-langkah perbaikan di tahun ini, paling tidak untuk tiga aspek diatas, dampaknya pun baru akan terasa dua sampai tiga tahun mendatang, yang ditandai dengan meningkatnya minat investor dan meningkatnya stok proyek-proyek pembangkit yang siap dikembangkan secara komersial.

Pemerintah harus melihat bahwa 2020 adalah tahun untuk memulihkan kepercayaan investor, dan tahun untuk memperkokoh fondasi untuk transformasi energi yang berkelanjutan di Indonesia. Kegagalan untuk melakukan perbaikan di tahun ini dapat berujung pada hilangnya momentum positif, hengkangnya investor asing, serta hilangnya kesempatan membangun sistem energi modern yang berkelanjutan dan kompetitif secara biaya dalam jangka panjang. Kalau ini terjadi, perlu waktu lama untuk membalik keadaan.

Jakarta, 15 Januari 2020.