Encouraging the Energy Transition in the Industrial Sector in South Sumatra

Jelajah Energi Sumatera Selatan

Palembang, 26 February 2024 – Energy is a basic need for individuals and communities with various purposes. Even though energy is something crucial in human life, not many people know or are critical of the energy sources (such as electricity) that they use every day.

On a larger scale such as the industrial sector, energy needs will be directly proportional to the productivity and economic contribution of the products produced. Somewhat different from energy use on a household scale, energy use in the industrial sector is relatively well monitored. In terms of awareness of energy sources, industry tends to better understand the energy sources they choose.

In an effort to promote the use of renewable energy, the Institute for Essential Services Reform (IESR) collaborates with the South Sumatra Province Energy and Mineral Resources Office to organize the South Sumatra Energy Exploration (Jelajah Energi Sumatera Selatan) activity for one week starting from Monday, February 26th, 2024 to Friday March 1st, 2024. This activity also embraces journalists as strategic partners in increasing public literacy regarding the energy transition.

The series of events began with an introductory workshop to provide participants with a basic understanding of energy and the energy landscape of South Sumatra, which acts as an “energy barn”. However, the dominant energy used is fossil energy i.e coal. Meanwhile, apart from fossil energy sources, South Sumatra Province also has a technical potential for renewable energy reaching 21,032 MW, yet only around 4.7% or 989 MW has been utilized.

Rizqi M. Prasetyo, IESR Sub-National Project Coordinator, explained that with the renewable energy potential of South Sumatra, projects can be utilized to bring benefits to the community.

“One of the (good practices, ed) that has been carried out in South Sumatra is the CSR initiative to use solar PV to drive land irrigation water pumps,” said Risky.

Secretary of the South Sumatra Province ESDM Service, Ahmad Gufran, said that his party was open to various ideas for greater use of renewable energy.

“We will continue to contribute to the development of the renewable energy sector to obtain clean, environmentally friendly energy. In the future, we hope that the use of clean energy can expand to all levels of society,” said Ahmad Gufan.

After receiving a general introductory workshop, the Energy Exploration journey began by visiting PT Pupuk Sriwidjaja (PUSRI). PT PUSRI is the first fertilizer producer in Indonesia and has been operating since the 1970s. Considering that the company’s operational period is quite long, production assets have also entered a period of revitalization. This moment is also used to switch to a cleaner type of technology for future operational periods.

VP of Environment at PUSRI Palembang, Yusuf Riza, explained that in an effort to be in line with the government’s agenda to reduce greenhouse gas (GHG) emissions, PT PUSRI is taking a number of steps, including implementing energy efficiency practices, using electric vehicles as operational vehicles in factory environments, and installing on-grid rooftop PV for office operations.

“Currently we have installed a rooftop PV of 110 kWp as an energy source in office buildings, and this year (2024, ed) we plan to increase our (PV) capacity by 100 kWp. So in total we will have around 210 kWp PV capacity,” said Yusuf.

Exploring Renewable Energy Utilization in the Land of Sriwijaya

Palembang, February 27, 2024 – The Institute for Essential Services Reform (IESR) and the Energy and Mineral Resources Agency (ESDM) of South Sumatra Province jointly organized an event called Jelajah Energi to explore the potential and implementation of renewable energy in the South Sumatra region. The event was held from Monday, February 26, to March 1, 2024. On the second day of Jelajah Energi, the team visited Jakabaring to observe the utilization of solar energy and PT Buyung Poetra Energi to witness the use of biomass.

Solar PV Jakabaring is a project established through a partnership between Indonesia and Japan under the Joint Crediting Mechanism (JCM)—the project aimed to fulfill the electricity requirements during the 2018 Asian Games. The total investment value for the project was USD 139 million, with most of the funds coming from private Indonesian investment and subsidies from the Japanese Government.

Ali Kartiri, the Operations Manager of PT Sumsel Energi Gemilang, is responsible for overseeing the Jakabaring solar power plant. According to Kartiri, the South Sumatra Provincial Government took the initiative to build this solar power plant. In collaboration with Sharp Japan, the project secured subsidies from the Japanese Government. These subsidies were primarily allocated for funding technology and infrastructure that supports greenhouse gas emissions reduction targets.

“The Solar PV Jakabaring has a peak electrical energy production capacity of up to 2 Megawatts (MW) when the sunlight is optimal. However, during the rainy season, the plant’s productivity is sometimes affected, and it can only absorb about 10% of the solar energy. The plant has been successfully operational since 2018 and integrated into the PLN grid, contributing renewable energy to the local community.,” Ali said.

Meanwhile, The Jelajah Energi team recently visited PT Buyung Poetra Energi (BPE), a company that established a biomass power plant (PLTBm) to preserve the environment. The plant uses rice husks as fuel to generate electricity, which was previously considered waste. Candra Priansyah, the Operations Supervisor of PT BPE, explained how this approach has turned an environmental problem into a valuable energy source.

“Waste produced during rice milling in the form of husks will be burned in a boiler to generate steam. This steam will then be transferred to a steam turbine that will power a generator. The power plant requires 4 tons of husks per hour and has a capacity of 3 MW. However, not all the chaff produced is used for the power plant. Only about 70% of the available supply is used for generating power, while the remaining 30% is used for heating and drying rice grains,” Candra said.

Candra said that all chaff waste produced by PT BPE is being utilized environmentally friendly, and none of it is being disposed of into the environment. Moreover, the electricity generated from this PLTBm is sufficient to meet the company’s operational requirements. Candra hopes this power plant can help reduce the amount of rice husk waste, particularly from factories in South Sumatra where rice husks have been thrown away or simply burned. Candra’s team has even developed a machine to compress rice husk by-products into pellets at the Subang Factory located in West Java. These pellets are then sold to cement factories as fuel.

 

During the visit, it was evident that South Sumatra is dedicated to developing renewable energy sources to tackle global environmental challenges. South Sumatra is making significant progress towards a more sustainable and eco-friendly future by working with the public and private sectors and receiving support from foreign governments.

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Steps to Achieve Bali’s Net Zero Emission by 2045 and Attain 100 Percent Renewable Energy in Nusa Penida by 2030

Denpasar, February 21, 2024 – Following its declaration in August 2023, the Bali Provincial Government has formulated and executed strategies to pursue Bali’s target of achieving net-zero emissions (NZE) by 2045 and to actualize Nusa Penida as a location powered entirely by renewable energy by 2030. Collaborating with non-governmental partners in the Bali Net Zero Emission Coalition (comprising the Institute for Essential Services Reform, WRI Indonesia, New Energy Nexus Indonesia, and CAST Foundation), a series of initiatives supporting Bali’s NZE 2045 goal have been underway, including the formulation of the Bali NZE 2045 roadmap and the Sustainable Energy Bali public campaign conducted last November 2023.

In the development of the Bali NZE 2045 roadmap, the Institute for Essential Services Reform (IESR) conducted an analysis focusing on Nusa Penida’s transition to 100% renewable energy by 2030, effectively transforming it into a renewable energy-based island.

Nusa Penida was selected for this initiative due to three primary factors: its abundant renewable energy potential, its geographical separation from mainland Bali, and the economic opportunities presented by the development of green tourism. Fabby Tumiwa, Executive Director of IESR, highlighted the significant potential for Nusa Penida to serve as a pilot island for renewable energy and even to supply energy to the rest of Bali. Furthermore, the adoption of renewable energy is expected to enhance Nusa Penida’s appeal to tourists, consequently bolstering the local economy.

“In the IESR study conducted for Nusa Penida, an increase in renewable energy generation would result in lower electricity production costs compared to diesel-powered plants. Presently, the production cost using Diesel Power Plants (PLTD) alone can reach Rp 4.5 thousand/kWh. With 100 percent renewable energy, the production cost can decrease by 30-40 percent,” stated Fabby during the Media Gathering event “100 Percent Renewable Energy in Nusa Penida,” organized by IESR.

Additionally, Fabby disclosed that the initial study for Nusa Penida’s transition to 100 percent renewable energy by 2030 is underway and is scheduled for launch on March 6, 2024. This marks the first step in testing the concept and conducting electricity system planning. Achieving Nusa Penida’s 100 percent renewable energy target by 2030 necessitates support from various stakeholders, including governmental bodies at both central and regional levels, development and non-governmental partners, the private sector, and the community.

According to analyses conducted by IESR and Udayana’s Center of Excellence for Community-Based Renewable Energy (CORE), Nusa Penida boasts a renewable energy potential exceeding 3,219 MW, comprising 3,200 MW of ground-mounted solar photovoltaic (PLTS), 11 MW of rooftop solar PV, and 8 MW of biomass, excluding wind energy, ocean currents, and biodiesel potentials. Moreover, to address the variability of renewable energy availability influenced by weather conditions, Nusa Penida exhibits potential for pumped hydroelectric storage (PHES) of up to 22.7 MW. The analysis also underscores the necessity of energy storage systems such as battery energy storage systems (BESS).

IESR’s modeling results indicate that achieving 100 percent renewable energy in Nusa Penida by 2030 primarily relies on solar photovoltaic systems due to their cost-effectiveness and abundance. Alvin Putra Sisdwinugraha, IESR’s Analyst for Electricity Systems and Renewable Energy, asserted the technical feasibility of a 100 percent renewable energy electricity system for Nusa Penida, capable of generating electricity at lower costs compared to diesel plants. Currently, the roadmap is undergoing finalization following input from various stakeholders.

“The initial phase towards achieving 100 percent renewable energy by 2030 involves transitioning to a diesel daytime-off system, maximizing the utilization of solar and BESS systems during daylight hours,” explained Alvin. “Simultaneously, further studies on alternative energy sources such as biomass production, biodiesel, ocean currents, and wind are necessary. This will enable the harnessing of these potentials to phase out diesel usage by 2030,” Alvin concluded.

Industry’s Role in a Clean Future

Bandung, January 25, 2024 – Indonesia is blessed with abundant natural resources and committed to achieving the Net Zero Emission (NZE) target by 2060 or earlier. The industrial sector is crucial in this energy transition towards a sustainable future. Based on data from the Ministry of Industry (MoI), greenhouse gas (GHG) emissions from the industrial sector in Indonesia reached 238.1 million tons of CO2 in 2022. 2015-2022, it reached 8-20% of the total national GHG emissions. The most significant contributor to emissions comes from industrial energy use. 

Reflecting on these conditions, the West Java Energy Exploration team continued to visit several industries on the third day to see the utilization of renewable energy. PT Kahatex, PT Surya Energi Indotama, and Pertamina Geothermal Energy Area Kamojang show how industry can be central in utilizing renewable energy.

Reducing Emissions from the Garment Industry Production Process with Renewable Energy

The apparel and garment industry, particularly those involved in the global brands’ supply chain, must improve their production processes. The Carbon Border Adjustment Mechanism (CBAM) requires the industry to measure the carbon emissions produced during manufacturing.

Dedi Supriadi, Sustainability Compliance of PT Kahatex Majalaya, mentioned that the textile industry is competing with international brands to reduce emissions and increase the use of clean energy technology.

“From 2021, we (Kahatex Majalaya, red) installed rooftop solar power plants as much as 15% of the installed power capacity. From installing this solar PV, we managed to reduce emissions by around 40%-50% from 7,567e-1 CO2/unit to 3,190e-1 CO2/unit,” explained Dedi.

Kahatex has significantly reduced its greenhouse gas emissions and is now looking into utilizing other renewable energy sources to reduce its carbon footprint further. Since 2022, the company has been exploring biomass as a source of heat energy, which involves co-firing with coal. Since 2023, PT Kahatex Majalaya has been using 100 percent biomass to meet its heat energy requirements for production.

Solar Energy Illuminates the Earth of Indonesia

Director of Engineering & Operations, PT Surya Energi Indotama (SEI), Fajar Miftahul Falah, explained that SEI, as a subsidiary of PT Len Industri (BUMN), is responsible for developing renewable energy, particularly solar energy. Fajar stated that the business itself was the most significant challenge SEI faced since its establishment. Many people doubted its existence as a solar company at the beginning of its establishment. The high price of solar power and the belief that Indonesia was not ready to accept the offer made it even harder. However, with the acceleration of solar energy technology development, the price of solar PV has become more affordable. SEI has been in the solar power plant industry for over 15 years, with a total installed capacity of over 60 MW throughout Indonesia.

“Approximately 70% of the solar power plant construction projects we are currently working on are situated in Disadvantaged, Frontier, and Outermost (3T) areas or areas near them. Solar PV in these areas is challenging due to difficult terrain, making it hard to access the sites and creating safety concerns,” said Fajar. 

Operational room on PT SEI

Fajar mentioned that building solar PV in the 3T area is costlier than in other regions like Java. However, many believe the cost is the same in all areas. The fact is, while solar PV is affordable, the budget required to build it is expensive.

“We have been working on several solar PV projects, such as the Nusa Penida hybrid solar PV in Bali with a capacity of 4.2 kWp, the Merak Executive Terminal rooftop solar PV with a capacity of 324 kWp, and the Bakauheni Executive Terminal rooftop solar PV with a capacity of 192 kWp. Our main focus is on renewable energy, and we hope to contribute to Indonesia’s goal of achieving the NZE target by 2060 or earlier,” Fajar said.

 

Geothermal to Reduce Emissions

Raindrops welcomed the team from Jelajah Energi West Java upon their arrival at PT Pertamina Geothermal Energy (PGE) Kamojang Area. PGE is a PT Pertamina (Persero) subsidiary under the Upstream Directorate, which manages geothermal energy production from exploration activities to steam and electricity generation. The Kamojang geothermal energy sources are located in Ibun District, Bandung Regency, West Java, surrounded by beautiful pine forests.

Yustinar Uli, a representative of the PGE team, explained that PGE Kamojang Area became a pioneer of geothermal exploitation in Indonesia with the drilling of the first geothermal exploration well by the Dutch in 1926-1928. PGE Kamojang Area began operations on January 29, 1983, marked by the PLTP Unit 1 Kamojang operation.

“PGE constructed several units leading up to the PLTP Kamojang Unit 5 operation in 2015. Currently, PGE operates PLTP Kamojang Units 4 and 5 with a capacity of 60 MW and 35 MW, respectively. Meanwhile, PLTP Kamojang Units 1, 2, and 3, which have a combined capacity of 140 MW, are operated by PLN,” said Yustinar. 

Yustinar reported that the geothermal plants in the Kamojang area have a total installed capacity of 235 megawatts (MW). This is equivalent to reducing CO2 emissions by 1.2 million tons annually. The electricity generated from these plants is absorbed by PT PLN and distributed through the Java Madura Bali (Jamali) electricity interconnection system.

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.

Promoting Massive Use of Solar Energy in Jambi

Jambi, 28 November 2023 – In the General National Energy Plan (RUEN) document, Indonesia targets 23% renewable energy mix by 2025. Until 2023, Indonesia has only achieved 12.5% renewable energy in its energy mix. In the Jambi Government Forum organized by the Institute for Essential Services Reform (IESR) in collaboration with the Jambi Province Energy and Mineral Resources Office (ESDM) (28/11), Yunus Saefulhak, Head of the Energy Policy and Hearing Facilitation Bureau stated that the National Energy Council (DEN) predicts that in 2025 Indonesia will only reach 17-19 percent of renewable energy in the national energy mix.

“The province’s role in pursuing predetermined renewable energy targets is important, in accordance with the potential in each region,” said Yunus.

Yunus added that Jambi does have quite a lot of fossil resources, but it can still seize various opportunities to develop renewable energy, such as the use of rooftop PV on government buildings.

Anjas Bandarso, Energy Policy Analyst from the Directorate General of Regional Development, Ministry of Home Affairs, in the same forum highlighted the limited authority of regional governments for energy matters.

“Whatever the sub-national government does, as long as there is no authority given to the regional government, it will just be a story. So the central government is looking for ways in which regions can develop new, renewable energy. “This can be realized with Presidential Decree 11/2023 concerning additional concurrent authority for regional governments,” said Anjas.

Nanang Kristanto, Sub-Coordinator for RUEN Implementation Monitoring, National Energy Council, added that whatever target is the government’s priority, whether for Net Zero Emission (NZE) or achieving renewable energy mix figures, local governments have an important role.

“Regional governments have an important role in pushing the energy transition agenda by maximizing energy transition derivative activities in their regions, funding support, preparing human resources to maintain decentralized generating installations, as well as socializing new renewable energy in districts and even sub-districts,” said Nanang.

Apart from having natural products such as oil palm plantations and coal producers, Jambi also has large renewable energy potential. Jambi Province is targeting a renewable energy mix of 24% by 2025, and this target is optimistic that it will be achieved because currently the Merangin-Kerinci hydroelectric power plant with a capacity of 350 MW is being built.

Jambi also has quite large solar energy potential, reaching 281.5 GW based on land suitability. Marlistya Citraningrum, Sustainable Energy Access Program Manager, IESR stated that solar energy could be an option that allows various parties to contribute to the availability of clean electricity.

“Installing rooftop PVs has a number of benefits, such as being a means of mutual cooperation in achieving energy mix targets and reducing emissions, providing clean electricity sources in various regions, opening up business/employment opportunities for local residents, as well as increasing the competitiveness of the solar industry/business in Indonesia,” he said.

Marlistya added that the public wants incentives for rooftop PVs users, which could be in the form of ease of licensing, or facilitation of financing by the government.