Indonesia Needs to Overhaul Strategy to Pursue 23% Renewable Energy Mix in 2025

Jakarta, 1 February 2023 – The Ministry of Energy and Mineral Resources (MEMR) has announced the performance achievements for 2022 and the 2023 program plans for the MEMR sector, the Electricity Subsector and New Renewable Energy and Energy Conservation. In contrast to coal, whose production increased by 3% from the target of reaching 687 million tons in 2022, the achievement of the renewable energy mix in primary energy and electricity generation increased only by around 0.1% and 0.45%, respectively, from the previous year. Moreover, investment in the renewable energy sector is still far from the target. The Institute for Essential Services Reform (IESR) views this development as a warning signal for the government to immediately overhaul its strategy in achieving the target of a 23% renewable energy mix in 2025 and achieving net zero emission (NZE) in 2060 or sooner.

The renewable energy mix in electricity generation was recorded at 14.5% with an installed renewable energy capacity of 12,542 MW. This installed capacity exceeds the 2022 target but is still far from the minimum target of 24 GW in 2025. The low mix of renewable energy in power generation reflects the achievement of the renewable energy mix in primary energy, which only reaches 12.3% (Ministry of Energy and Mineral Resources temporary data) in 2022.

“The underdevelopment of renewable energy in the electricity sector in the last three years shows that there has been a misstep and a lack of breakthroughs in the strategy for developing renewable energy. Since 2019, renewable energy generation capacity has only grown by 2 GW, only 25% of the capacity needed to reach the target of 23%, according to government regulation No. 79/2014 concerning National Energy Policy. Renewable energy development has been held hostage by the continued construction of coal-fired power plants (CFPP) in the 35 GW program even though the electricity demand growth target was not achieved and PLN’s reluctance to increase the renewable energy mix under the pretext of overcapacity,” said Fabby Tumiwa, Executive Director of IESR.

The massive use of solar energy and cooperation should be a strategic effort for the government to achieve the target of the renewable energy mix. In 2021, the rooftop solar PV became a National Strategic Project (PSN) with a target of 3.6 GW until 2025 but is hampered by PLN’s reluctance to implement MEMR Regulation No. 26/2021. From the target solar energy installed capacity of 893 MW in 2022, only 270 MW was achieved. Instead of being more ambitious, in 2023, the government will reduce the solar energy development target by half from 2022 to 430 MW. The government needs to show the firmness and clarity of the rules that encourage the adoption of solar PV.

“The development of renewable energy, particularly rooftop solar PV, is hindering PLN’s interest in pursuing growth in electricity sales to absorb excess supply. The plan to dieselize the 500 MW diesel power plants by 2024 is also constrained by the PLN auction process and the lack of investor interest. Therefore, the government must look for a breakthrough to accelerate rooftop solar PV. Direct support from President Jokowi is needed to firmly order PLN to accelerate the development of renewable energy with the remaining two years, pursue the 10 GW target in RUPTL and integrate rooftop solar to achieve the PSN target,” continued Fabby.

Furthermore, the government needs to expedite the implementation of Presidential Decree No. 112 of 2022 concerning the Acceleration of the Development of Renewable Energy for the Provision of Electric Power, especially by releasing a roadmap for discontinuing the operation of coal-fired power plants and preparing an investment plan that is embodied in the Just Energy Transition Partnership (JETP).

Fabby Tumiwa added that from the results of the IESR study, there is a potential of 4.5 GW of PLTU capacity that can be retired before 2025, and an additional 3 GW from the list of PLTU projects in the 2021-2030 RUPTL, which have the possibility of being cancelled. Termination of the operation of old and inefficient power plants before 2025 allows for greater integration of renewable energy.

“In contrast to the government’s promise to reduce coal power plants before 2030, coal production is targeted to be 695 million tonnes this year. This increase in production came from an increase in domestic demand/DMO, which rose to 177 million tonnes. One of the factors driving this increase is domestic demand originating from electricity generation, including captive CFPP and CFPP integrated with industrial areas (PPU) outside the PLN system. This increase in demand is a steep road for the government to achieve the electricity sector’s peak emission target of 290 million tons of CO2 in 2030, as agreed at JETP,” explained Deon Arinaldo, IESR Energy Transformation Program Manager.

Likewise, the government plans to implement B35 in February 2023 with an allocation of biodiesel needs of 13 million kl. Meanwhile, to increase the blending ratio of biodiesel by 40%, it is estimated that the production of 15 million kl of biodiesel is required. IESR views that Indonesia can implement B40 at the end of 2023.

“Currently, biodiesel production capacity has reached 17.5 million kl and will continue to increase to close to 19.5 million kl at the end of 2023 in line with the addition of several new factories. So, biodiesel production can be optimized to increase the blend of biodiesel to B35, even up to B40. Especially if world oil prices tend to be as high as they are today. However, we must balance the sustainability of CPO production,” explained Deon.

IESR states that the government has to have more courage in leading the energy transition process and implementing the promises in the Bali Compact, the result of Indonesia’s presidency at the G20 2022, and showing its influence in leadership in ASEAN this year to attract more investment in the renewable energy sector. Renewable energy investment achievements, which are only USD 1.6 billion, are relatively small.

“Political will for the development of renewable energy needs to be increased and supported by consistent regulations (such as regulations for rooftop solar) that provide more support for renewable energy than fossil energy. As an example of political will, this can be reflected in the government’s renewable energy development target, which has fallen this year compared to the previous year. Others, such as the development of the New Energy and Renewable Energy Bill (EBET), which still provides support for fossil energy, so it does not give a clear signal to the market. Investor confidence in investing in renewable energy in Indonesia needs to be built because it is an absolute prerequisite for attracting investment,” added Deon.

IKEA, Google Cs Syaratkan Listrik EBT Sebelum Investasi

Jakarta, CNBC Indonesia- Direktur Eksekutif Institute for Esesential Reform (IESR) Fabby Tumiwa berpendapat, jika pembangunan dan investasi energi baru dan terbarukan (EBT) tidak berjalan lancar, dapat berdampak pada penanaman modal asing. Pasalnya, pengembangan EBT dapat menjadi daya tarik investasi.

“Perusahaan-perusahaan multinasional banyak yang mau investasi di sini, tetapi dengan syarat listriknya menerapkan EBT,” ujar Fabby kepada media saat dijumpai di Jakarta, Selasa (31/7/2018).Lebih lanjut, Fabby menjelaskan, di seluruh dunia, perusahaan-perusahaan multinasional seperti Unilever, IKEA, Microsoft, dan Google sudah punya target untuk membeli listrik 100% dari EBT. Di Indonesia, ujar Fabby, ada perusahaan produsen sepatu NIKE dan Adidas yang sudah mulai terapkan EBT.

“Bisa tidak kita Indonesia terapkan kebijakan seperti itu? Jika ke depan mau investasi, mau tambah kapasitas, mana negara yang bisa sediakan listrik dengan EBT. Saya contoh Malaysia, Thailand, Vietnam, Myanmar, mereka bisa tarik investasi dari sini, tutup pabrik juga kalau tidak ada EBT,” ungkapnya.

“Pemerintah harus concern tentang hal ini. Ini yang mau beli itu inginnya begitu. Harus ada fleksibilitas di jaringan PLN,” tandas Fabby.

Sebagai informasi, sebelumnya, melalui Rencana Umum Energi Nasional (RUEN), pemerintah telah menetapkan target untuk meningkatkan bauran EBT dari 7% saat ini menjadi 23% di 2025 dan 2030, yang setara dengan 45 GW kapasitas pembangkit energi terbarukan.

Sejauh ini perkembangan EBT masih terbilang lambat, dengan kapasitas terpasang saat ini baru sebesar 9 GW atau 14% dari total kapasitas terpasangan pembangkit listrik, dan baru 20% dari total kapasitas yang menjadi target RUEN.

Adapun, meski diakui sulit tercapai, Pemerintah mengklaim tetap berkomitmen untuk mencapai target bauran energi baru terbarukan (EBT) yang sebesar 23% pada tahun 2025.

“Komitmen 23% itu kita tidak ubah sampai hari ini, yaitu tetap di tahun 2025,” tutur Menteri Energi dan Sumber Daya Mineral (ESDM) Ignasius Jonan melalui keterangan resminya, Senin (23/7/2018).

Lebih lanjut, Jonan menjelaskan, pihaknya telah melakukan beberapa inisiatif untuk mencapai target bauran EBT tersebut, seperti  mendorong PT PLN (Persero) dan Independent Power Producer (IPP) untuk masuk ke pembangkit energi terbarukan, misalnya pembangkit listrik tenaga air (PLTA) dan pembangkit listrik tenaga panas bumi (PLTP).

Inisiatif lainnya, Jonan telah meminta PLN mengganti seluruh Pembangkit Listrik Tenaga Diesel (PLTD) dengan total kapasitas 3.200 megawatt (MW) menggunakan 100% minyak kelapa sawit.

Upaya lainnya adalah melalui penggunaan Rooftop Solar Photovoltaic (PV) atau rooftop panel surya. Jonan mengusulkan untuk menerapkan penggunaan rooftop panel surya kepada konsumen PLN jenis tertentu, seperti rumah tangga golongan 1 (R1) hingga R4 dan juga golongan bisnis.

Sumber :cnbcindonesia