Socialization of Energy Transition Issues with South Sumatra Journalists

Indonesia and other countries signed the Paris Agreement in 2015 in an effort to reduce greenhouse gas emissions and protect our Earth. This agreement has established a strong foundation for fighting climate change, with one of the main focuses being the energy transition, which refers to the transition from using fossil energy, which is limited and damages the environment, to renewable energy which is clean and environmentally friendly. Indonesia has a big responsibility to lead this change. In facing global climate change, energy transition is the key to ensuring the sustainability of Indonesia’s natural resources and economy.

In connection with this, the Institute for Essential Services Reform (IESR) held a Media Briefing event entitled “Energy Transition and IESR Study in Muara Enim Regency” on September 26, 2023. The Media Briefing event was attended by 18 journalists from various printed and online media in South Sumatra. IESR gave a presentation on the results of a study in Muara Enim Regency to provide a comprehensive picture of the impact of the energy transition in social and economic sectors.

Representative of the IESR Sustainable Energy Access program, Reananda Permono, explained that the Media Briefing activity was held to increase the insight of journalists in South Sumatra regarding the energy transition issue. Apart from that, IESR wants to bring journalists closer to competent sources regarding renewable energy issues by presenting four panelists from various backgrounds, namely the provincial government (ESDM Sumsel), district government (Bappeda Muara Enim), academics (Unsri), and CSO (HaKI).

“The energy transition cannot happen alone, but also needs to involve the active participation of society and various parties, such as journalists. By conveying accurate information, voicing diverse perspectives, and maintaining accountability, they help shape society’s views on energy and provide the necessary encouragement for stakeholders to move towards a cleaner and more sustainable future,” explained Reananda.

Social and Economic Analyst from IESR, Martha Jessica Mendrofa, explained that the global energy transition carried out by countries that import coal from Indonesia, such as China, India and Vietnam, will have an impact on the national economy since more than 70% of Indonesian coal production is exported. The economy of South Sumatra, with the second highest coal reserves in Indonesia at 9,345.57 million tons, will also be affected considering that the coal and lignite mining sector contributes 15.78% of the province’s GRDP in 2022. In this regard, IESR has conducted a study of the impact of the energy transition and economy in Muara Enim during 2021-2023. Muara Enim was the target of the study because it has become the top two coal producers in South Sumatra in the last five years, with production of more than 20 million tons per year.

“Based on IESR analysis, the mining sector in Muara Enim Regency does not have the highest multiplier impact in terms of income and employment, whereas the service, trade and agriculture sectors still have a higher impact on the economy. “Apart from that, the coal industry does not provide high added value to labor wages because companies capture a larger portion of income, the ratio is around 20% versus 78%,” he explained.

Head of the Energy Division of the South Sumatra Energy and Mineral Resources (ESDM) Department Dr. Aryansyah explained that the world energy transition trend would have an impact on domestic conditions. For this reason, his party has done several things to perpetuate the energy transition, such as issuing a special regional regulation for the development of the renewable energy sector, a gubernatorial regulation on electric-based vehicles, and a study of renewable energy in all districts/cities of South Sumatra.

“Currently, South Sumatra is an energy reservoir. We have an electricity surplus of 1,000 MW and that electricity is exported to other provinces such as Jambi and Bengkulu. There must be a generating source to replace that. We are ready for the energy transition. “For example, we have a mini hydro power plant for Pagar Alam’s electricity supply,” explained Aryansyah.

Representative of the Muara Enim Regency Bappeda, Fajrin Ulinnuha, said that his party had prepared the Muara Enim Industrial Area (KITE), to face the reduction in coal production in the future, the development of which had reached 80% as of June 2023. This industrial area covers the CPO (crude palm oil) business. or palm oil) and the coal downstream industry. Muara Enim also has a PLTP (Geothermal Power Plant) owned by Supreme and Pertamina.

“We need to ensure the availability of access to clean energy for all groups, especially in the electrification sector because the majority of electricity sources come from coal. Sources of funding are also an important issue as the energy transition continues.

There are many new projects, so large funds are needed. “Regional governments also need research and technology support from other institutions, as well as training for reliable human resources to be ready to face the energy transition,” said Fajrin.

Sriwijaya University development economics lecturer Dr. Muhammad Subardin reminded that the goal of development is to reduce unemployment and poverty. So, it is necessary to ascertain whether an industrial sector can lift the economy of a region or not. Subardin introduced the term Dutch Disease, where areas with high natural wealth tend to have low economic levels. Through his own research, Subardin succeeded in proving this condition in South Sumatra by comparing the economic conditions in “mineral districts” and “non-mineral districts”.

“I identified eight mineral districts in South Sumatra, including Muara Enim. Almost the entire Muara Enim area is included in the coal concession area. Based on research I conducted, it is proven that the economic level of mineral districts is no better than non-mineral districts in South Sumatra. “This proves that the mining industry cannot improve the welfare of a region because this industry is capital intensive, not labor intensive,” explained Subardin.

Executive Director of the Kita Forest Association Institute (HaKI) Deddy Permana stated that apart from economic problems, knowledge and information gaps are important in energy transition activities. This is where journalists can play a role in disseminating information to the wider community.

“There is often a gap in information between local communities and the elite because people only know the conditions that occur on the ground. For example, companies actually understand this energy transition trend because some of them are already focused on developing businesses outside of coal. “Another problem is that sometimes CSR funds are not channeled to posts that can support energy transition activities,” explained Deddy.

Media Briefing: Preparing for Indonesia’s Energy Transition & Anticipating Its Implications and Launching The Indonesia Energy Transition Dialogue (IETD) 2023

Playback Recording

Background

Between 2021 and 2022, the Intergovernmental Panel on Climate Change (IPCC) issued reports from three working groups, all of which uniformly conveyed that there is already scientific evidence related to the climate crisis and its impact on the Earth. One of the key findings of the report is that greenhouse gas emissions due to human activities have contributed to an increase in the Earth’s average temperature by 1.1°C since 1850-1900 and have the potential to rise beyond 1.5°C within the next 20 years. Furthermore, the report also outlines mitigation options that can be pursued and the scale of change that needs to occur, especially in this decade, to stay on track for 1.5°C.

Indonesia ratified the Paris Agreement through Law No. 16/2016. This means that Indonesia has legally committed itself to addressing the challenges of climate change by supporting global efforts to limit the increase in the average temperature to 1.5°C below the pre-industrial era average temperature. According to one of the IPCC models, to achieve this temperature limit, greenhouse gas (GHG) emissions must be reduced by 45% by 2030 compared to GHG emission levels in 2010 and reach net zero by 2050.

As a country that has ratified the Paris Agreement, Indonesia has reaffirmed its commitment to contribute to addressing the climate crisis. Indonesia’s own GHG emission reduction target in the Updated Nationally Determined Contributions (UNDC) is 29%, which increases to 31.89% in the Enhanced Nationally Determined Contributions (ENDC), while the target with international support in the UNDC is 41%, increasing to 43.20% in the ENDC.

A study by the Institute for Essential Services Reform (IESR) and the University of Maryland (2022) found that 9.2 GW of coal must be phased out from the state-owned utility (PLN) grid by 2030, and all unabated coal generation must be retired by 2045 at the latest, to put Indonesia on track to achieve the Paris Agreement’s global temperature target of 1.5°C. The study also concluded that coal emissions should begin to decline before the end of the decade.

Several initiatives and measures are in place to support and facilitate the early retirement of Indonesia’s power plants. In addition to the Transition Mechanism (ETM) launched at COP-26, during the G20 Summit, Indonesia and the International Partnership Group (IPG) have also signed the Just Energy Transition Partnership (JETP) agreement. This agreement aims to achieve the power sector’s peak emissions target of 290 million metric tons of CO2 (MtCO2) by 2030, attain a renewable energy mix of 34% by 2030, and make the power sector carbon-neutral by 2050.

In an effort to strengthen Indonesia’s climate action, the Government of Indonesia received a funding commitment of USD 20 billion from the Just Energy Transition Partnership (JETP) program. The formulation of the implementation of the funding is translated into a Comprehensive Investmentand Policy Plan (CIPP), which focuses on investment areas consisting of developing transmission and distribution networks, the early retirement of coal-fired power plants, accelerating the utilization of baseload-type renewable energy, accelerating the utilization of variable-type renewable energy, and building renewable energy supply chains. The government has finalized the CIPP document and will conduct public consultations over the next few months.

The energy transition can reduce Indonesia’s exposure to similar problems in the future. A smooth and successful energy transition requires the support of all parties, including the general public. Therefore, the process of preparing for the energy transition also needs to pay attention to aspects of inclusiveness. Additionally, it is important to consider impact management and anticipate the implications of the energy transition process. This includes considerations such as the fate of CFPP workers whose operational periods are ending prematurely, the creation of new jobs (green jobs), and how Indonesia’s energy transition can support economic growth through the shift from fossil industries to low-carbon industries.

Therefore, to further discuss the readiness of the energy transition in Indonesia and the launch of the 6th Indonesia Energy Transition Dialogue (IETD), we will organize a Media Briefing. This media briefing aims to provide an overview of the process and impact of Indonesia’s energy transition and to convey the implementation plan of the IETD as a forum for fact-based discussions that support the best policy formulation in the energy sector, facilitating more ambitious climate targets.

1 www.ipcc.ch/sr15/chapter/chapter-2/

2 IESR UMD, 2022, Financing Indonesia coal phase-out

Objective

  1. To inform about the JETP program’s Comprehensive Investment and Policy (CIPP) development.
  2. To discuss the socio-economic implications of the energy transition and anticipation measures in Indonesia.
  3. To announce the implementation details of the Indonesia Energy Transition Dialogue 2023 event on September 18-20, 2023.

Presentation Material

ESDM

130923-DEK-IETD-IESR-ESDM

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Faisal Basri

130923-DEK-IETD-IESR-Faisal-Basri

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Dicussion and Media Briefing : Towards the G20 Summit, How are G20 Climate Actions?

Indonesia, which is hosting the G20 this year, is the world’s fourth largest coal exporter and 75% of its energy mix still comes from fossil fuels (Climate Transparency 2022). Despite its reliance on fossil fuels, Indonesia proposed the core theme of Sustainable Energy Transition in its G20 presidency. The energy crisis proved to be one of the most challenging in the Energy Transition Ministerial Meeting in reaching an agreement or joint communique. The failure to produce a joint communique was highlighted as a setback to the G20’s climate commitment to achieve the 1.5 degrees Celsius target.

According to the Climate Transparency Report’s latest publication, the G20’s climate action still falls short of preventing the earth’s temperature from rising above 1.5 degrees Celsius, although it is not too late. Meanwhile, in the assessment of each country’s achievements by the Climate Transparency Report, it can be said that Indonesia is not yet on track to achieve the 1.5 degrees Celsius target. The energy crisis caused by the conflict between Russia and Ukraine has led to many G20 countries taking ‘temporary’ measures to secure their energy supply, which has hampered the achievement of the zero net carbon target. The same report also states that all G20 countries need to strengthen their NDCs (nationally determined contributions) to be more in line with the 1.5 degrees Celsius target.

The G20 Summit is scheduled to be held in Bali on 15-16 November 2022. As the G20 event draws to a close, the world is waiting to see what commitments and actions the G20 will take to slow the rate of climate change impacts. The pressure on the G20 is even higher, given that the G20 Summit will be after COP27 in Sharm El-Sheikh, Egypt. G20 countries need to convince their people that they are keeping the promises and commitments made at COP26 in Glasgow. As major contributors to the world’s total greenhouse gases, there is hope that the G20 Summit can be a catalyst for climate action based on multilateralism.

To strengthen the transparency framework for global adaptation and mitigation action, Climate Transparency has launched its annual report. The report provides an assessment of emissions and projections of G20 climate adaptation, mitigation and financial mobilisation to prevent global temperature rise. In addition, the report presents analyses of responses and recommendations for a green recovery aligned with the Paris Agreement. The Climate Transparency Report 2022 was made available globally on 20 October 2022. As Climate Transparency’s partner in Indonesia, IESR will disseminate the Climate Transparency 2022 report and Indonesia Country Profile inviting the government, CSOs, policymakers, and the general public to the event.