Central Java Stakeholder Gathering 2022

Background

Since 2019, IESR and the Provincial Government of Central Java have continued to work together in the energy transition sector. There is a significant positive impact from the cooperation that has been carried out, in 2022, IESR and the Provincial Government of Central Java will renew their collaboration which is marked by the signing of a Joint Agreement on the Development of Renewable Energy for the Energy Transition. This is a form of multistakeholder institutional action to encourage Indonesia’s decarbonization system.

The contribution of religious parties, especially local governments, in supporting development that is oriented towards low carbon development and a green economy needs to be increased through various instruments, such as; policies and regulations, incentives, and some other supporting instruments to guarantee a just energy transition process. In addition, IESR also sees that regional policymakers and the general public have an important role in the smooth energy transition. Therefore, it is hoped that with the renewal and expansion of the scope of cooperation between IESR and the Provincial Government of Central Java, it is hoped that various policy stakeholders can work together in supporting the energy transition and regional decarbonization.

The expansion of the scope of cooperation as outlined in the joint agreement document (KSB) covers the energy, industrial and environmental sectors. The energy sector together with the Department of Energy and Mineral Resources (ESDM) on increasing the mix of renewable energy, especially solar energy. The industrial sector together with the Industry and Trade Service (Disperindag) to increase the implementation of renewable energy in the industrial sector. The environmental sector together with the Environment and Forestry Service (DLHK) reduces greenhouse gas emissions through the management of waste and waste into renewable energy. In addition, the expansion of the scope of cooperation also involves Regional Owned Enterprises (BUMD), and Central Java Petro Energi (JPEN) to accelerate the construction of PLTS in Central Java.

IESR work plans and programs with each Regional Apparatus Organization (OPD) of Central Java Province have been prepared and compiled in the 2022 KSB update. Several approaches and initial studies have been carried out and discussed together to obtain an up-to-date picture of the energy transition landscape in the regions to develop a plan of directed action and an equitable transition at the local level.

Considering the continuity and smoothness of plans and work programs on renewing cooperation between IESR and OPD of Central Java Province, it requires a strong commitment from various parties as a manifestation of the contribution of the role of local government in integrating energy transition issues into regional development plans. input, collaboration, and participation from various parties are widely open to push the energy transition agenda in the regions.

Therefore, IESR in collaboration with the Provincial Government of Central Java will carry out dialogue and public dissemination with related stakeholders under the title “Central Java Stakeholder Gathering 2022” to strengthen commitment, roles and joint responsibilities for implementing work plans and programs as well as a form of dissemination local government in encouraging community participation in the energy transition.

Objectives

  1. Presentation of the progress of the cooperation between IESR and OPD Central Java Provincial Government.
  2. Presentation of activity plans in collaboration with IESR and OPD Central Java Provincial Government in 2023.
  3. Dissemination of local government commitments and best practices on energy transition by various parties and stakeholders.

Observing the Efforts to Increase Electricity Consumption in Indonesia

Sinergi Stakeholder dalam Upaya Peningkatan Elektrifikasi dan Konsumsi Listrik per Kapita di Indonesia

Surabaya, November 25, 2022 – Electrical energy is one of the human needs that integrates into daily needs. Increasing access to electricity through 100 percent electricity ratio also needs to be coupled by providing energy sources that are more environmentally friendly.

Akbar Bagaskara, Electricity System Researcher, Institute for Essential Services Reform (IESR), in a public discussion forum with the theme “Stakeholder Synergy in Efforts to Increase Electrification and Per Capita Electricity Consumption in Indonesia” organized by the Directorate General of Electricity, Ministry of Energy and Mineral Resources, stated that there are five countries in ASEAN that have not achieved a 100% electrification ratio, such as Cambodia, Laos, Myanmar, Indonesia, and the Philippines.

“Based on data from the ASEAN Center of Energy as of 2021, Indonesia has an electrification ratio of 99%, followed by the Philippines at 97%, Laos at  95%, Cambodia at  81%, and Myanmar at 51%. Indonesia and the Philippines have not yet achieved a 100% electrification ratio due to the condition of the archipelagic countries. This condition is a challenge compared to other ASEAN countries, which are mainland, therefore, it is easier to distribute electricity, “explained Akbar.

Observing the electrification ratio must be connected to electricity consumption in Indonesia. Akbar said that the majority of electricity consumption in the household sector is used for lighting. As for cooking, they still use liquefied petroleum gas (LPG), with a ratio of total energy consumption in the household sector of up to 49%.

“The existence of these conditions creates the potential to electrify stoves used by the household sector, replacing LPG,” said Akbar.

In addition, based on data from the Ministry of Energy and Mineral Resources, said Akbar, electrification in the transportation sector still tends to be low, around only 1%. According to him, the Indonesian Government’s program to promote electric cars is crucial to increasing the adoption of electric vehicles.

“Full utilization of electrification potential will create opportunities to increase electricity consumption in the transportation and household sectors,” said Akbar.

Furthermore, Akbar explained that electrical energy use in Indonesia and other ASEAN countries is still only around 20%. It can be seen based on energy consumption data per capita for 2018-2021. On the other hand, based on the MEMR 2020-2024 Strategic Plan (RENSTRA), Indonesia’s electricity consumption target per capita is 1,408 kWh. Meanwhile, the average electricity consumption in ASEAN itself is around 3,672 kWh per capita.

Head of the Electricity Sector at the East Java ESDM Office, Waziruddin, stated that based on an electrification ratio of 99.32% in the third quarter of 2022, there are households that have not had electricity connections. This can also be seen from the number of low-income families (RTM) in East Java that do not have electricity, around 126,708. However, his party has budgeted around IDR 12 billion in house installation grants in 2023 and various other assistance to provide access to electricity for these households. In addition, Waziruddin  stated that the East Java Provincial Government continues to push for an energy transition policy to increase energy security.

“For example, using geothermal as a substitute for coal energy in power plants, considering that East Java is rich in geothermal potential. In addition, several industries in East Java have also installed rooftop solar power plants, developed biomass power plants, and utilized biofuels,” said Waziruddin.

Edy Pratiknyo, Sub-Coordinator of Business Commercial Relations Facilitation, Ministry of Energy and Mineral Resources, stated that the Directorate General of Electricity is pushing for an accelerated increase in electricity consumption.

“With the program to increase electricity consumption, the government is pushing through accelerating permits for charging infrastructure for Battery-Based Electric Motorized Vehicles (KBLBB),” Edy concluded.

Aligning the Electricity Supply to the Paris Agreement Pathway

Jakarta, 24 November 2022 – Electricity has become a primary need as well as an economic driver for everyone. The demand for electricity is predicted to continue to increase both from the industrial sector and from the residential sector. In order to meet this demand and reduce emissions in the energy sector, planning with greater use of renewable energy should be designed in the RUPTL (Electricity Supply Business Plan).

In the 2021-2030 RUPTL, PLN plans to increase renewable energy capacity by up to 51.6%. Unfortunately, the amount of this target is not enough to meet the target of the Paris Agreement, which is to limit emissions and global temperature rise at 1.5 degrees Celsius.

Akbar Bagaskara, IESR’s power system researcher, during the launching of the study report “Enabling High Share of Renewable Energy in Indonesia’s Power System by 2030” explained that as a country ranked in the top 10 largest emitters in the world, Indonesia has a responsibility to reduce its emissions systematically.

“Electrification in all sectors ranging from industry, transportation and other sectors as well as the maximum utilization of renewable energy is the main key to reducing Indonesia’s emissions and then pursuing the Paris Agreement target,” Akbar explained.

Akbar explained that the renewable energy capacity that can be added to the system reaches 129 GW consisting of 112.1 GW of solar energy, 9.2 GW of water energy, 5.2 GW of geothermal energy, 1.5 GW of wind energy, and biomass of 1 GW.

Akbar also added that this study was a follow-up of the “Deep Decarbonization of Indonesia’s Energy System” study launched by the IESR in 2021 which looked at the possibility of Indonesia’s energy system achieving net zero emission (NZE) status by using 100% renewable energy in 2050.

Kamia Handayani, PT PLN’s EVP Energy Transition and Sustainability, explained that the 2021-2030 RUPTL is indeed not suitable for pursuing the Paris Agreement target.

“RUPTL is indeed not fully aligned with the Paris agreement because there is still coal involved. We (PLN) have several scenarios to reach NZE, based on PLN’s NZE roadmap until 2060, CCS can be a technology that is utilized. Yet, we must see future technological developments to meet the NZE target,” said Kamia.

Elrika Hamdi, Energy Finance Analyst at IEEFA, added that in order to align with the Paris Agreement targets, there needs to be one agency that monitors the implementation and development of renewables.

“There needs to be an agency that ensures development targets and renewable procurement which, for example, is issued by the government in the electricity system so that curtailment can be anticipated,” said Elrika.

Ikhsan Asa’ad, Chairman of the Executive Board of PJCI, highlighted the importance of building a strong domestic renewable energy industry such as solar to meet ambitious renewable energy targets.

“Currently, the price of renewables is still relatively more expensive than PLN’s electricity, but the more massive the use, the more competitive the price is expected to be. Local industry must begin to be prepared to meet the increasing demand for renewable energy components in the country,” he emphasized.

Eko Adhi Setiyawan, Lecturer, University of Indonesia, said that there is a need for demand management to mobilize customers. In addition, it is necessary to translate the Paris Agreement terminology into more concrete targets.

APLSI Declares Just Energy Transition, Supports Acceleration of Green Energy Mix

press release

Jakarta, 15 November 2022- Presidential Regulation No. 112/2022 on the Acceleration of Renewable Energy Development for Electricity Supply mandates the Ministry of Energy and Mineral Resources (MEMR) to develop a roadmap for the early retirement of the coal-fired power plants (CFPP). It is in line with Indonesia’s commitment to the Global Coal to Clean Power Transition declaration at the Conference of the Parties 26 Summit (COP26 Summit), which considers the early retirement of coal-fired power plants in the 2040s, with international funding and technical assistance, and achieving the Net Zero Emission (NZE) target by 2060 or earlier as stated by President Joko Widodo.

The Institute Essential Services Reform (IESR) views that the government’s goal needs to be supported by various parties, including Independent Power Producers (IPP), who currently operate more than 15 GW of power plants in Indonesia.

“Indonesia Independent Power Producers (APLSI) supports the Government of Indonesia’s plans and policies that encourage decarbonisation and energy transition. We are ready to transform to continue contributing to an independent, increasingly environmentally friendly and sustainable national electricity, to support the Indonesian Government’s Net Zero Emission target,” said Arthur Simatupang, Chairman of APLSI, at the declaration of the Just Energy Transition Initiative by Indonesian Power Producers organized by IESR in collaboration with APLSI in conjunction with the 2022 Indonesia G20 Summit in Bali. 

“APLSI wishes to optimize the role of the private sector as a government partner in building a reliable electricity system based on just energy transition by diversifying investment in power plants from various renewable energy sources whose potential is huge in Indonesia,” Arthur explained.

It has also been stated in the Expression of Interest between APLSI and the Indonesian Chamber of Commerce and Industry (Kadin Indonesia) at the Kadin Net Zero Hub event at the B20 Indonesia Summit. At that event, Arthur mentioned that his party had signed an agreement to conduct an intensive joint study on the diversification of power plant investment so that the role of the private sector would be optimal in realizing low-carbon economic growth by partnering with the government in building a reliable, independent electricity system, and a just energy transition.

Furthermore, IESR said that a just energy transition would run with the availability of space for renewable energy development, including by terminating the operational period of CFPP more quickly.

“The IESR study found that to be consistent with limiting temperature rise to 1.5°C, all CFPPs, that are not equipped with carbon capture, must be retired before 2045. In the period 2022-2030, at least 9.2 GW of power plants must be retired, of which 4.2 GW comes from private electricity, without which it will be difficult to achieve NZE,” said Fabby Tumiwa, Executive Director of IESR.

On the same occasion, Rida Mulyana, Secretary General, MEMR, said the importance of partnership to decarbonise the energy system. He explained that based on Presidential Regulation 112/2022, Indonesia plans not to build new coal-fired power plants after 2030 except those that are committed or under construction.

Furthermore, Wanhar, Director of Electricity Program Development at the Directorate General of Electricity, MEMR outlined a roadmap for the early retirement of coal-fired power plants in Indonesia.

Through his presentation, Wanhar explained that the government also took various steps to achieve the NZE 2060 target, including ensuring the retirement of CFPP owned by IPP after the power purchase agreement (PPA) was ended, and Combined Cycle PP retired after the age of 30.  Furthermore, starting in 2030, there is an increasingly massive development of solar power plants, followed by wind power plants both on land and offshore starting in 2037.

However, Wanhar emphasized, several provisions need to be fulfilled in terminating the operational period of coal-fired power plants in Indonesia.

“Retirement of CFFP can only be done once grid reliability is ensured, with substitution from renewable replacement and/or transmission system installation, the assurance of just transition of a fair energy transition. There should not be any negative social impact from coal plant early retirement, affordable renewable energy generation prices, and the availability of international financing support,” Wanhar explained.

Based on IESR’s “Financing Indonesia’s Coal Phase-out” study with the Center for Global Sustainability, University of Maryland, to retire 9.2 GW of coal-fired power plants by 2030, Indonesia needs international funding support to meet the cost of retiring the power plants, around USD 4.6 billion by 2030. 

Supporting decarbonisation efforts in the power sector, the Government of Indonesia will work with the International Partners Group (IPG) to realize investment plans to support the early retirement of coal-fired power plants as well as other low-carbon technologies. The cooperation will support the achievement of Indonesia’s electricity system decarbonisation targets, including achieving peak electricity sector emissions of 290 million tonnes of CO2 by 2030, preparing CFPP projects that must be retired early, and ensuring the achievement of a renewable energy mix of at least 34% by 2030.

“For the early retirement of coal-fired power plants, especially those owned by IPPs, to take place with the principle of just energy, the government must form a national commission or task force involving relevant government agencies by the end of this year. Its tasks include comprehensively assessing the list of coal-fired power plants that have the potential to be retired immediately, as well as renegotiating with IPPs,” explained Deon Arinaldo, Energy Transformation Programme Manager, IESR.

Deon added that CFPP contract negotiations between PLN and IPP must begin by considering the potential for additional costs without jeopardizing the investment climate in Indonesia. 

“The government also needs to assess the appropriate financing mechanism to retire coal-fired power plants owned by private power producers. The financing mechanism also needs to support the link between the financing of early retirement of CFPP and investment in renewable energy so that it can mobilize international financial support,” he concluded.

The Declaration of Supporting the Roadmap of Just Energy Transition was carried out to coincide with the G20 Summit. This is expected to provide a positive signal for the Indonesian Government’s leadership at the G20, which also highlights the energy transition or the transition from polluting energy to renewable energy as one of the main issues.

“Indonesia’s leadership in conducting early retirement of power plants to accelerate the energy transition will create a good precedent for other G20 countries.  The spirit to accelerate the end of CFPP operations through the declaration of IPPs  supported by the government and PLN will be an example for India, which will hold the G20 presidency in 2023 and become an example for other ASEAN countries in Indonesia’s leadership in ASEAN in 2023,” concluded Fabby Tumiwa.***

Points of declaration:

Support the Roadmap for a Just Energy Transition in Indonesia

  1. Willing to transform to continue to contribute to an independent national electricity that is increasingly environmentally friendly and sustainable to support the net zero emission target.
  2. Support the Indonesian government’s plans and policies that encourage decarbonisation and energy transition.
  3. Diversify investment in power generation from various alternative renewable energy sources, in which Indonesia has enormous potential.
  4. Committed to opening up opportunities for renewable green energy sources and a sustainable energy supply ecosystem.
  5. Optimizing the role of the private sector as a government partner in building a reliable electricity system and a just energy transition. 

ISEO 2023 Launch: Encourage The Use of Solar Energy in Indonesia

Jakarta, October 27, 2022 – The use of solar energy in Indonesia needs to be accelerated. Clear rules, support for the solar PV component production industry, and capacity building in response to human resources needs in the solar energy sector also need to be prepared.

According to data from Indonesia Solar Energy Outlook (ISEO) 2023, the installed capacity of Solar PV has increased from 43.9 MWp in 2021 to 63.5 MWp in September 2022. This number is relatively small compared to other ASEAN countries, especially Vietnam, which already belongs to the Gigawatt order.

Senda Hurmuzan Kanam, Chair of Electrical Survey and Testing Center, MEMR, measures that the installed capacity of PLTS in Indonesia is still in its early stages, around 200 MW-400 MW. He stated that Indonesia needs a closer look at Vietnam, which can install about 10 – 20 GW of solar panels annually.

“Compared to Vietnam, Indonesia is far behind. We need to look for demand opportunities for renewable energy, especially solar PV. Currently, we have an incentive program for rooftop solar systems under a Sustainable Energy Fund (SEF) grant to attract more electricity consumers to use rooftop PV mini-grid,” Senda said at the Advancing G20 Solar Leadership event and the launch of the ISEO 2023 report organized by the Institute for Essential Services Reform (IESR) with support from Bloomberg Philanthropies, and in collaboration with the International Solar Alliance, and the Indonesian Solar Energy Association.

Similarly, a member of the National Energy Council (DEN), Herman Darnel Ibrahim, mentioned that solar energy development in Indonesia is still running slowly and relatively stagnant. He argues that Indonesia needed a more transparent plan to achieve the target of 23% of the renewable energy mix by 2025 by utilizing solar power.

“At least the Electricity Supply Business Plan (RUPTL) needs to show the solar energy program, all renewable energy clearly, and mention its potential locations. Currently, the existing RUPTL only discusses all renewable energy nationally and does not mention its possible areas in detail. Moreover, the government can calculate the new economy by location and network costs. So it’s better to build a resource inventory first,” Herman stated.

Although there are several challenges to accelerating solar energy, Andhika Prastawa, Chairman of the Indonesian Solar Energy Association (AESI), said solar panel production continues to grow under certain conditions. For example, Indonesia provides a clear incentive for consumers to use domestic solar panels rather than abroad. In addition, Andhika stated that there are two ecosystems to accelerate solar energy: the utilization ecosystem and the industrial ecosystem. 

“Ecosystem utilization, namely solar power, can be used in large or isolated systems. So we can extend access to electricity to all rural communities in the country. Then, the growth of this industrial ecosystem is closely related to its utilization ecosystem. To grow the industrial ecosystem, a market that can absorb solar modules is needed,” Andhika explained.

Meanwhile, Anthony Utomo, Deputy Chairperson of the Indonesian Solar Energy Association (AESI), explained that solar PV is necessary because of the decarbonization movement and the net zero emissions (NZE) approach. However, there are several challenges to intensifying solar energy.

“There are two challenges facing Indonesia. The user’s (customers) readiness to use solar PV, so we need consistent and massive education. It aligns with the National Energy Master Plan (RUEN) 2017, which became a shared consensus. It mandates a reduction in energy intensity, containing 30% of government buildings being encouraged to use solar PV, 25% luxury homes, and industrial downstream. Second, the competencies of solar PVinstallation personnel to develop the electrical system installation of the solar power plant. There is a need to provide solar preneurs or green MSMEs so that they can welcome the phenomenon of using rooftop solar PV in all regions, ” Anthony said.

The Institute for Essential Services Reform has consistently noted the progress and challenges of developing solar energy in the energy transition framework in the Indonesia Energy Transition Outlook (IETO). However, in 2023, IESR launched a progress report on solar power in Indonesia separately in the Indonesia Solar Energy Outlook (ISEO) 2023.

ANTARA | IESR Urges G20 Countries to Prioritize Solar Energy to Achieving NZE

The Executive Director of the Institute for Essential Services Reform (IESR), in a webinar entitled “Shine Bright: Advancing G20 Solar Leadership,” which was monitored online in Jakarta, stated that the G20 has a big responsibility to suppress global warming because the G20 contributes up to 80 percent of CO2 emissions from energy use.

Read more on ANTARA.