Accelerate a Fair and Equitable Sustainable Energy Transition in Indonesia by Termination of CFPP Operations

JETP

Jakarta, June 27, 2023 – Environmental sustainability and overcoming the climate crisis have driven the need for an energy transition toward cleaner and more sustainable energy sources. The early termination of fossil energy generation operations as one of the largest emitters is a fundamental step towards accelerating the energy transition in Indonesia.

Director of Electricity Program Development at the Ministry of Energy and Mineral Resources (ESDM), Wanhar, explained that Indonesia already has regulations regarding the termination of coal fired power plants (CFPP) contained in Presidential Regulation (Perpes) Number 112 of 2022 concerning Acceleration of Renewable Energy Development for the Supply of Electricity which was stipulated and promulgated in September 13, 2022. Furthermore, Wanhar emphasized that in the Perpres, it was stated that new PLTUs were prohibited from being built except those that had been stipulated through the Electricity Supply Business Plan (RUPTL).

“The strategy related to the early retirement of the PLTU based on Presidential Decree No. 112 is currently being discussed in depth in the general energy planning. In addition, Indonesia also needs to accelerate the acceleration of the national electricity general plan (RUKN). We prioritize using renewable energy and tighten licenses for captive PLTUs, except for those from the government,” said Wanhar at the JETP Convening for Exchange and Learning event at Ayana Midplaza.

Wanhar mentioned that the Government of Indonesia and the State Electricity Company (PLN) have a shared vision to encourage renewable energy by considering four factors: the newly built substitution network, guaranteeing a fair transition, affordability, and international financial support. Terminating the PLTU must be accompanied by using renewable energy, for example, solar power.

David Elzinga, Senior Energy Specialist at Asian Development Bank, explained there is concern about the return on investment in ending PLTU operations early. Considering that some financial institutions are still hesitant to fund the coal-fired power plant early retirement program. For that, the Asian Development Bank (ADB) decided to take over this matter.

“There are several challenges in the energy transition, including managing energy reliability and supply. With the existence of a just energy transition partnership (JETP), it is hoped that green job opportunities for people working in coal production will be wide open as well as capacity building (skills) need to be strengthened,” said David.

On the other hand, Vikesh Rajpaul, General Manager of Just Energy Transition at Eskom Holdings SOC Ltd explained, in carrying out JETP implementation, extending the life of the CFPP was not considered for old generators. However, some units may need to remain operational longer than planned to overcome a power crisis.

“There is no energy transition without transmission, and equality is the key to implementing the energy transition, considering that the process will have environmental, economic, and social impacts. We have seen the potential for an energy transition in South Africa, including the abundant solar and wind power potential. For this reason, South Africa can encourage using renewable energy,” said Vikesh.

Jerredine Morris, Senior Manager at Carbon Trust, said that the management of JETP funds in South Africa is carried out by protecting vulnerable groups and workers with early retirement from CFPP. In addition, in implementing JETP, the most important thing is to consider the interests of local residents or what is commonly called a bottom-up approach.

“In implementing the CFPP’s early retirement, we look at the eligibility of retirement from the age of the CFPP, as well as maintenance costs. We also look at the economic feasibility and social impact of these retirements. The main obstacle is the retiring capacity of the coal-fired power plants and how we build renewable energy around it,” said Jerredine.

Pariphan Uawithya, Asia Director for the Global Energy Alliance for People and Planet (GEAPP), stated that there are three essential stakeholders in the early retirement process for coal fired power plants (CFPP) in Indonesia: the government, the private sector, and the community. According to him, the early termination of CFPP operations in Indonesia is critical in reducing greenhouse gas emissions and air pollution. Retiring old power plants will also open up opportunities for investment in alternative energy sources, such as renewable energy, increasing the country’s energy sustainability.

“Along with the energy transition, the government has also issued regulations regarding carbon markets as a form of Indonesia’s commitment to the issue of climate change. However, remember that in the energy transition process, coal is not the only asset; diesel generators can also be replaced by renewable energy,” he said.

The Ford Foundation in Indonesia organizes the Just Energy Transition Partnership (JETP) Covening, the Institute For Essential Services Reform (IESR), and the African Climate Foundation (ACF), with support from the Global Energy Alliance for People and Planet (GEAPP) to facilitate the forum exchange of learning between stakeholders.

IESR Encouraging Community Capacity Building Through the Energy Transition Academy

Fabby Tumiwa

Jakarta, June  23, 2023 – The Institute for Essential Services Reform (IESR) encourages community capacity building towards an emission-free Indonesia by launching the Energy Transition Academy platform, accessed via the academy.transisienergi.id website. The platform serves as a forum for learning about energy transition and climate change issues connecting with the growing popularity and frequent use of the phrase “energy transition” in public spaces.

The Executive Director of IESR, Fabby Tumiwa explained that the Government of Indonesia had launched a gradual energy transition and would achieve net zero emission (NZE) in 2060 or earlier. Howeverd, based on the IESR study entitled “Deep decarbonization of Indonesia’s energy system: A pathway to zero emissions by 2050” shows that technologically and economically, Indonesia’s energy sector can achieve zero carbon emissions by 2050. The transformation of energy supply and utilization across all energy sectors is crucial to attaining NZE.

“By achieving NZE by2050, Indonesia can generate 3.2 million new jobs in the renewable energy sector. This presents opportunities for economic growth and job growth. Therefore, there is a need to build new capacities, expertise, and skills, considering that the energy transition must bring social and economic benefits. Reflecting on this, the energy transition academy can serve as a means for the community to participate in the energy transition by enhancing insight and capacities,” explained Fabby Tumiwa.

Panel discussion on energy transition platform launching

Irwan Sarifudin, Coordinator of the Clean Energy Hub, IESR, highlighted that through the Energy Transition Academy platform, it is expected that the general public can apply knowledge about energy transition in their daily work. Particularly for Non-Governmental Organizations, by gaining knowledge about the energy transition, can enable them to initiate renewable energy projects, without solely relying on assistance from the central government.

“The Energy Transition Academy platform offers several features that  facilitate learning, distinguishing it from other platforms, such as Synchronous and Asynchronous, Continue Later, As Fast as Your Understanding, Ask Anywhere, Data Sources & Reference, and Tutor Guidance,” said Irwan.

Raditya Wiranegara, IESR Senior Researcher, mentioned the Energy Transition Academy collaborated with various well-known universities and institutions in three phases of module development. In the first phase of the Energy Transition Academy partnered  with ITB, UNS, and ATW Solar, the second phase was collaborated with UI, Swiss German University, ITS, Mongabay, and Tempo, and the third phase was collaborated with UGM, Mataram University, PEC, Ministry of Energy and Mineral Resources and so on.

“There are several energy transition academy classes with guaranteed quality, including the basics of the energy transition, an introduction to the energy transition roadmap in Indonesia, and rooftop solar power training,” said Raditya.

The launch of the Energy Transition Academy has received positive feedback from various sectors. Khoiria Oktaviani, GERIYA Program Manager at the Ministry of Energy and Mineral Resources, explained that the existence of the Energy Transition Academy is expected to provide insight and knowledge related to the energy transition.

“We think there is a gap where college students primarily acquire theoretical knowledge, so after graduation, they often feel a lack of  practical experiences in the field. The limitation of GERILYA lies in the selection, which sometimes results in an even distribution of participants across Indonesia,” said Khoiria.

Irvan S. Kartawiria, Deputy Chancellor of the Swiss German University (SGU), emphasized that the Z and alpha generations are highly concerned about the social impact of the work to be carried out, how work impacts others, and environmental sustainability. For this reason, several universities (including SGU, red) prepare their students to meet these needs.

On the other hand, Efri Ritonga, a TEMPO journalist, stated that this energy transition is highly complex process, not only the change in the energy system from fossil-based energy to clean energy, but is closely related to other sectors,such ass of energy, electricity, battery-based transportation.

“From the journalist’s point of view, it is not easy to understand the issue of the energy transition. The easiest things that directly affect people, such as home energy consumption, electric vehicles, the issue of coal-fired power plants (CFPP) pollution, our need is to understand issues directly grounded in society,” said Efri.

Hadi Priyanto, Climate & Energy Campaigner at Greenpeace, assessed that the government’s Just Energy Transition Partnership (JETP) commitment is increasingly focused on the energy transition. However, to mainstream the energy transition to society, broader and more massive awareness and more stable regulations from the government are needed.

Muhammad Arman, Legal Consultant Advocate & AMAN Mediator, said the practice of clean energy has long been carried out with local wisdom by indigenous peoples. For example, several villages have implemented energy independence in Sorong, West Papua.

“The principle of the energy transition is inclusive, equitable, and fair. Do not let the energy transition create injustice and lots of piracy. For that, we need an Indigenous Peoples Law to ensure that Indigenous peoples protect the environment,” said Arman.

 

The Energy Transition Academy launch event was held on Friday (23/6/2023) with two sessions, namely the launch and workshop of the Energy Transition Academy platform. Several students and the general public participated in trying out the Energy Transition Academy platform in the workshop.

 

The Important Role of Renewable Energy to Build a Bright Future

Jakarta, June 24, 2023 – Raditya Yudha Wiranegara, Senior Researcher at the Institute for Essential Services Reform (IESR), explained several challenges in retiring PLTU and how renewable energy plays a role in shaping the future. This was discussed in the Energy Talk event held by the Hasanuddin University Society of Renewable Energy (SRE).

Raditya, or mostly referred to as Radit, opened the discussion session by explaining that human activities, especially in the energy sector, are the main contributor to the increase in earth’s temperature. The energy source is still dominated by coal and followed by consumption of fossil fuels. Radit considered this as work to be done for Indonesia, to start making plans to reduce dependence on coal-based power plants.

Furthermore, Radit points out that Presidential Decree 112/2022 regulates the acceleration of renewable energy development, and the third article contains a mandate for the Ministry of Energy and Mineral Resources (MEMR) to start making scenarios for accelerating retirement of coal power plants. There are also restrictions not to build coal fired power plants (CFPP) after this Presidential Decree is passed, except for those that are currently being planned, and those that are included in national strategic projects.

“The existing CFPP must also start reducing their emissions, until all are retired in 2045. However, this plan is still in dynamic discussion; the State Electricity Company (PLN) plans to retire CFPPs in 2030,” Radit explained.

Moreover, Radit mentioned , the benefits of early retirement from CFPPs are 2-4 times the cost that can be saved, based on an IESR study with the University of Maryland. Radit emphasized that these benefits include the benefits of health costs on air quality and reduced electricity subsidies that must be issued considering that our electricity is now subsidized. However, retiring coal-fired power plants includes several challenges, including the need for quite large upfront costs, around USD 4.6 billion by 2030 and USD 27.5 billion by 2050, which require substantial international support to achieve them. Second, USD 1.2 trillion is needed to replace PLTU electricity generation with renewable energy. Third, the legal aspect. Radit assessed that both PLN and independent power producers (IPP) have several scenarios that must be met in retiring their generators. For example, PLN needs to be investigated by an auditing agency if there is a loss to the state due to a reduction in the power plant, and the IPP can file a claim for the loss.

“From the results of the study we conducted, we found that in terms of mitigation costs, canceling the PLTU project is the most affordable option in reducing carbon emissions. Canceling will also avoid the big costs that will occur when you have to retire later, “said Radit.

Radit emphasized that with the Just Energy Transition Partnership (JETP) momentum, Indonesia must be able to catalyze more investments and build an attractive market climate in Indonesia for foreign investors. JETP is a climate change and energy transition funding partnership from the G7 countries plus Norway and Denmark for the development of electric vehicles, technology, and the early retirement of fossil-based power plants in Indonesia. This partnership also promotes an equitable energy transition that takes into account the lives and livelihoods of affected communities at every stage of the energy transition journey, so that no one is left behind. Indonesia has received an allocation of USD 20 billion to support the energy transition in Indonesia through the JETP framework.