Energy Transition Strategy in South Sumatra

Palembang, May 30, 2024– South Sumatra, a region heavily reliant on fossil fuels, particularly coal, needs to accelerate the adoption of renewable energy to reach the net zero emission (NZE) goal by 2060 or earlier. The Institute for Essential Services Reform (IESR) considers this initiative crucial for environmental and economic sustainability.

Based on data from the Energy and Mineral Resources (ESDM) Office of the South Sumatra Provincial Government, in 2022, fossil energy still dominates the regional energy mix. Coal contributed 31.59 percent, natural gas 22.68 percent, and petroleum 21.88 percent. Meanwhile, renewable energy reached 23.85 percent of the total energy mix.

His Muhammad Bintang, an IESR analyst, stated that the potential and resources of renewable energy in South Sumatra are underutilized. The majority of the renewable energy mix in South Sumatra is still dominated by one type of renewable energy, which is bioenergy. This could pose a problem if bioenergy sources are not consistently available, underscoring the significance of diversifying the use of renewable energy sources.

Based on an IESR study, the enormous potential of renewable energy technicians in South Sumatra includes solar energy of 389.5 to 441.2 GW. However, its utilization is small, only 7.75 MWp until 2023.

“Opportunities for renewable energy utilization are still wide open. But local governments still have constraints related to authority and fiscal, so it also requires the role of the central government and the private sector to encourage the utilization of renewable energy,” said Bintang at the Energy Transition Journalist Network Workshop in Palembang, South Sumatra on Thursday (30/5). 

Bintang said the central and local governments need to work together to provide space for renewable energy development in South Sumatra. He assessed that the government needs to reconsider the plan to add power plants dominated by PLTU with a total capacity of 2.1 GW in South Sumatra based on the 2021-2030 RUPTL.

“About 62 percent of the planned additional capacity is mine mouth PLTU. If this plan has not entered the construction stage, it is better to replace it with renewable energy, such as PLTS or other renewable energy,” Bintang added.

He explained that several strategies are needed to spur the utilization of renewable energy in coal-producing areas such as South Sumatra. First, prioritize developing and utilizing variable renewable energy (VRE), such as solar power plants and wind farms, because the installation time needed is faster. Second, encourage the industrial sector, especially oil and gas and mineral and coal mining, to increase the use of renewable energy in operations and through corporate social responsibility (CSR) programs and contributions to the region by providing access to clean energy and environmental restoration. Third, it is essential to prepare for a sustainable economic transformation in South Sumatra, supported not only by the oil and gas and coal industries but also by the emergence of new economic activities that will increase electricity demand for renewable energy penetration. 

Marini, Head of the Tourism, Industry, and Trade Sub-directorate, South Sumatra Bappeda, said that economic transformation and equitable energy transition have been included as strategic issues in the draft Regional Long-Term Development Plan (RPJPD) of South Sumatra Province. 

“Some of South Sumatra’s strategies in the energy transition agenda include integration into regional planning. The integration is done through three ways, namely regional consultation forums, which strengthen the capacity of stakeholders. Furthermore, policy formulation and planning for equitable energy transformation. The next strategy is regional economic transformation by developing renewable energy businesses and strengthening competencies,” said Marini.