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.

Civil Society Coalition: New Energy Sector Rules Set Back Energy Transition Commitment

press release

Jakarta, March 8, 2024 – The Renewable Energy Movement’s Civil Society Coalition is questioning the government’s commitment to the energy transition. They consider some regulations to be disincentives for switching to renewable energy. These regulations include the Energy and Mineral Resources (ESDM) Ministerial Regulation on solar PV, the Presidential Regulation (Perpres) on carbon capture and storage, and the Draft Government Regulation (RPP) on the National Energy Policy (KEN).

The Ministry of Energy and Mineral Resources (ESDM) has recently issued Regulation No. 2 of 2024, which outlines new rules for Rooftop Solar Power Plants. Unfortunately, these changes may discourage the public from installing rooftop solar power plants, particularly in households and micro, small, and medium enterprises (MSMEs). The first change is that excess rooftop solar power production can no longer be exported to PT PLN. Therefore, it won’t be counted as a bill reduction. The second change is that the development of rooftop solar PV will follow a quota system set by PLN. In addition, there will be only two registration periods per year. The problem is that the export of electricity to the PLN grid is the attraction of rooftop solar PV. With this provision, people can pay more to install batteries. Not only that, the payback period for rooftop solar power plants will also be extended to 9-10 years. In fact, with the 100% excess electricity export provision as in the current regulation, the cost of installing rooftop solar power plants can be recovered in four to five years.

“This regulation is a setback because it will reduce public participation in installing rooftop solar power plants. Not only does it hinder household consumers, but this new regulation also makes it difficult for industries that want to install rooftop solar power plants. This means that the new regulation shows that the government is getting further away from its commitment to energy transition,” said Jeri Asmoro, Digital Campaigner of 350.org Indonesia.

Community enthusiasm for rooftop solar power installation in rural and urban areas is relatively high, according to Reka Maharwati, Coordinator of Enter Nusantara. For instance, the people of Sembalun Village in West Nusa Tenggara and the Al-Muharram Mosque community in Taman Tirto, Yogyakarta, have installed rooftop solar power to achieve their dream of energy independence.

“I’m sure many other communities want to install rooftop solar panels in their homes or even be empowered to work collectively in the community. The government should be able to collaborate with these enthusiasts and create new schemes more beneficial to the community,” said Reka.

Similarly, Hadi Priyanto, a Renewable Energy Campaigner of Greenpeace Indonesia, revealed that an equitable energy transition can only be realized if the community is involved. “Community participation is one of the keys to achieving the energy mix target, but various revisions to existing regulations show the government’s lack of seriousness in energy transition efforts. The principles of fairness and democratization of energy that have been echoed in the JETP program will only be a platitude without real steps to break away from fossil energy dependence,” he added. 


Similar to the updated regulations about rooftop solar PV, the draft RPP KEN containing a reduction in the renewable energy mix target from 23% to 17-19% in 2025 also hinders the acceleration of the energy transition. In the National Energy Council (DEN) document on the draft RPP KEN, the renewable energy mix until 2030 is targeted at 19-21% and will only increase in 2040 to 38-41%.

Deon Arinaldo, Program Manager of Energy Transformation, Institute for Essential Services Reform (IESR), explained that the draft KEN RPP only allows Indonesia to reach peak emissions in 2035, which is 7-10 years later than what is needed to limit the increase in global average temperature below 1.5°C, as recommended by the Intergovernmental Panel on Climate Change (IPCC) report. This puts the achievement of the Paris Agreement and carbon-neutral commitments by 2060 or sooner, which the government has aimed for, at risk.

The delayed peak emission in Indonesia means that the country will have to speed up its energy transition in a shorter time frame than previously anticipated, resulting in higher costs and more significant social impacts that will be difficult to mitigate. The draft policy has also affected the perspectives of various actors, including renewable energy investors and developers, regarding the government’s commitment to promoting renewable energy development.

“This also marks the reduction in primary energy mix targets in 2025 and 2030, especially the share of renewable energy such as solar and wind, which can hamper the cooperation of the energy transition. This is because renewable energy that can enable energy democratisation, such as solar energy, has a small portion. Greater support is given to large-scale projects such as fossil plants with carbon capture storage (CCS) or nuclear technology. So the draft KEN RPP does not favour energy transition with the community,” said Deon Arinaldo.


The plan to change KEN also contradicts Indonesia’s JETP Agreement commitment, which targets a renewable energy mix of more than 44% by 2030. It is feared that changes to KEN will impact the revision of the JETP commitment. In addition, as a large umbrella for national energy planning, the draft KEN RPP also has the potential to undermine efforts to transition to renewable energy that have been carried out in the regions.

Red Carpet for False Solutions

Not only does it disincentivize renewable energy development, but government policy encourages false solutions as an energy transition strategy. This step is fatal because it can lock Indonesia into fossil energy dependence, which leads to failure to achieve carbon neutrality.


In the revised KEN, for example, until 2060, the government still plans to operate fossil energy-based power plants and ‘green’ them with carbon capture and storage (CCS) technology. In addition, the government intends to operate nuclear power plants (PLTN) by 2032 and use gas fuel for transportation and households until 2060.

The government’s support for fake solutions is also shown by the issuance of Presidential Regulation No. 14 of 2024 concerning implementing Carbon Capture and Storage Activities. This regulation allows companies to inject and store carbon emissions into underground reservoirs. The IEEFA Report shows that out of 13 CCS projects with a total of 55% of the world’s capacity, seven projects performed poorly, two failed, and one stopped operations. The application of CCS technology is feared to be a greenwashing effort that perpetuates fossil energy-based power plants.

These three regulations raise questions regarding how serious the government is about encouraging renewable energy development. This is because the national renewable energy mix has always been below the target in the last five years. 

“Regulations will be a long-term legal basis to ensure that energy transition steps are carried out legally. If the legal basis is made exactly the opposite of the target stated by the government, then where is the commitment to the energy transition? If the regulations are continuously directed to continue utilising fossil energy, investors interested in doing renewable energy business will withdraw because they do not have legal certainty. Our problem is in legal certainty,” said Agung Budiono, Executive Director of the CERAH Indonesia Foundation.

Kata Data | Rooftop Solar Power for Households will be More Expensive due to New Rules

The government has just issued Minister of Energy and Mineral Resources Regulation Number 2 of 2024 which regulates rooftop solar power plants. Secretary General of the Ministry of Energy and Mineral Resources, Dadan Kusdiana, admitted that household consumers will find it difficult to adopt rooftop PTS after the new regulation is issued.

Read more on Kata Data.

MEMR Regulation No. 2/2024 Limits Public Participation to Support Energy Transition through Rooftop Solar PV

press release

Jakarta, February 23, 2024 – The Indonesian government has officially issued Minister of Energy and Mineral Resources (MEMR) Regulation No. 2 of 2024 concerning Rooftop Solar Power Plants Connected to the Electricity Network of Holders of Electricity Supply Business License for Public Interest, which is a revision of MEMR Regulation No. 26 of 2021. 

In this new regulation, the net-metering scheme is abolished so that excess electrical energy or export of electrical power from users to State Electricity Company (PT PLN Persero) cannot be calculated as part of the reduction in electricity bills.  The regulation also stipulates a quota mechanism for rooftop solar power systems in the electricity system of owners of Electricity Supply Business License for Public Interest (IUPTLU) for five years. In addition, this regulation stipulates the registration period twice a year and the compensation provided by the state to PLN if the cost of electricity supply is affected due to the penetration of rooftop solar PV.

The Institute for Essential Services Reform (IESR) considers that the elimination of the net-metering scheme will make it difficult to achieve the National Strategic Project (PSN) target of 3.6 GW of rooftop solar PV by 2025 and the 23% renewable energy target in the same year. The impact of the elimination of this scheme is a decrease in the economic level of rooftop solar power plants, especially in the household segment, which generally experiences peak loads at night. 

Fabby Tumiwa, Executive Director of IESR said that household or small business customers will tend to delay the adoption of rooftop solar PV because their peak electricity demand occurs at night, while solar PV generates peak energy during the day. Without net-metering, rooftop solar PV investment becomes more expensive, particularly when users have to spend additional funds for battery energy storage.

“Net-metering is actually an incentive for household customers to use rooftop solar systems. With PLN’s controlled electricity tariffs, net-metering helps improve the economic viability of rooftop solar systems installed at a minimum capacity of 2 – 3 kWp for R1 category consumers. Without net-metering and the relatively high cost of batteries, this minimum capacity cannot be met, resulting in higher investment costs per kilowatt-peak unit. This will reduce the economics of rooftop solar systems,” said Fabby Tumiwa.

For rooftop solar PV with a capacity greater than 3 MW (three megawatts), this regulation requires users to provide weather forecast database settings that are integrated with the Supervisory Control and Data Acquisition (SCADA) system or distribution smart grid owned by the Holder of Electricity Supply Business License for Public Interest (IUPTLU).

“The regulation removes the obligation to pay parallel generation charges, i.e. capacity charges and emergency service charges previously applied to industry – equivalent to 5 hours per month. The elimination of this parallel charge adds to the attractiveness for industrial customers, but the obligation to provide weather forecasting for systems of more than 3 MW will also add to the installation cost component,” said Marlistya Citraningrum, Program Manager of Sustainable Energy Access, IESR.

Marlistya also highlighted the regulation of the term for submission of applications by prospective customers, which is carried out twice per year, namely every January and July.

“This arrangement and the determination of quotas per network system raise questions regarding the transparency of quota determination and approval, especially for industrial customers who want to install rooftop PLTS on a large scale, while the IUPTLU mechanism to add quotas when the system quota has run out is not clearly regulated in this regulation,” he continued.

This regulation guarantees that customers who have utilized rooftop solar power systems before this regulation is enacted, remain bound by the previous regulation, for the next 10 years. This includes still benefiting from the rooftop solar power export system.

“As an on-grid rooftop PV user, I actually have questions about this transitional rule – considering that during installation, rooftop PV exports are still calculated as equivalent to 0.65 of the electricity tariff based on Permen ESDM No. 49/2018, not 1:1 like Permen ESDM No. 26/2021. This transitional rule needs to be clearly informed to current rooftop solar power users,” said Marlistya.

IESR regrets that this regulation is too favorable to the interests of PLN, which can have an impact on hindering the participation of electricity consumers in supporting the government’s goal of accelerating Indonesia’s energy transition, efforts to reduce GHG emissions at low cost and not burdening the state because renewable energy investments are made by electricity consumers without the need for state subsidies.

Fabby Tumiwa hopes that this new regulation can be implemented by paying attention to the benefits obtained by the state if rooftop solar PV is allowed to grow rapidly, namely increasing renewable energy investment, growing the solar PV industry, creating jobs, and reducing GHG emissions. For this reason, IESR urges an evaluation after a year of the Ministerial Regulation’s implementation to determine its effectiveness in encouraging the utilization of renewable energy in Indonesia. The government needs to openly revise it in 2025 as the threat of electricity overcapacity faced by PLN in Java-Bali decreases.

Communities Build Sustainability-Based Businesses

Cirebon, 26 January 2024 – On the fourth day, the West Java Energy Exploration team continued their journey to Cirebon. Precisely in South Kesunean, Kasepuhan Village, Lemahwungkuk District. There, the group moved towards the shoreline to plant mangroves. South Kesunean has one problem, namely the emerging soil phenomenon. This raised land appears due to the accumulation of rubbish on the shoreline which is compacted to form new land.

This habit of residents threatens a mangrove ecosystem which functions to resist sea abrasion. For approximately one year, a group of Kesunean residents took the initiative to form a Working Group (Pokja) to care for the mangrove area located in their area.

The West Java Energy Exploration group visited the Kesunean mangrove area to participate in planting mangroves as an effort to restore mangrove forests.

Pepep Nurhadi, Chair of RW 09 South Kesunean, as well as chair of the South Kesunean Mangrove Working Group (Pokja), said that the presence of mangroves in South Kesunean plays an important role in preventing flooding and abrasion as well as protecting coastal ecosystems.

“For this reason, we thank all parties who have supported us in this mangrove planting effort. “We hope that in the future our area can become an ecotourism area so that it can be more beneficial for local residents,” he said.


Karya Nugraha Jaya Cooperative Pioneers Sustainable Dairy Farm:

People and communities continue to look for ways to use renewable energy technology. In the landscape of micro businesses and cooperatives, community groups such as the Karya Nugraha Jaya Producers Cooperative strive to ensure that livestock operational processes can be clean and sustainable.

The Karya Nugraha Jaya Cooperative is a dairy farming cooperative located in Cipari Village, Cigugur District, Kuningan Regency, West Java, founded in 2004 and has around 4000 cows with a cooperative membership of 100 farmers. This cooperative is motivated to organize clean and sustainable livestock farming.

Iding Karnadi, Chairman of the Karya Nugraha Jaya Cooperative, said that the first thing that was initiated was the installation of a biogas reactor to process cow dung waste.

“Initially, dairy cow dung was an environmental problem, apart from being dirty, it also smelled bad. Finally, we collaborated with ITB to create this biogas installation,” he said.

The biogas installation was finally installed with a production capacity of 100 m3 of gas per day. The gas produced is used for electricity needs for water heating on farms. It doesn’t stop there, the Karya Nugraha Jaya Cooperative also installed hybrid solar panel installations on farms and feed factories amounting to 56 kWp.

“For the feed factory, we currently fully use electricity from PLTS amounting to 40 kWp, no longer using electricity from PLN,” said Iding.

Iding then continued that his party continues to look at other opportunities to make its livestock cooperatives more advanced and adopt more sustainable practices. Currently, the party is collaborating with ITB to treat livestock wastewater. In the future, the management of this cooperative hopes that the location of this cooperative will become an educational tourist attraction about Sustainable Dairy Farms.

Driving the Energy Transition from the Sub-National Level

Semarang, 19 December 2023 – The annual Climate Summit (Summit) held in Dubai in November – December 2023 resulted in a number of global agreements, one of which was an agreement by 118 countries to transition and abandon fossil fuels. This agreement was born partly due to pressure from countries experiencing the impacts of climate change. 2023 was recorded as the hottest year in history.

In his opening speech for the Central Java Renewable Energy Acceleration Forum, Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) stated that the simplest thing to ensure the energy transition occurs is to add renewable energy capacity to the energy mix. To massively add renewable energy capacity requires significant investment costs and comprehensive enabling conditions.

“The complex and expensive energy transition can only occur if there are enabling conditions, including rules and regulations, support for public and private partnerships, community initiatives, and investment. Currently, to achieve the RUED target, regional funding capacity is still insufficient, so it is necessary to encourage investment,” said Fabby.

Head of the Central Java Province Energy and Mineral Resources Service, Boedyo Dharmawan, said that his party had contributed to achieving the target of 23% of the national renewable energy mix by 2025.

“In 2023, Central Java Province achieved a regional renewable energy mix of 21.2%. We will continue to encourage this capacity addition in the coming years. Apart from that, we also encourage energy conservation practices through energy and water saving movements, in government agencies and also in business entities, including energy audits,” he said.

Tavip Rubiyanto, Middle Expert Policy Analyst on Energy Substances and Mineral Resources, Directorate of SUPD I, Directorate General of Regional Development, Ministry of Home Affairs, highlighted the role of the entire OPD sector in matters of managing renewable energy in the regions.

“From the start, the ESDM Service had to coordinate with related agencies such as Environment, Transportation and Planning Services. So that RUED can be integrated into the RPJMD. “It does take effort to convince and provide understanding for Bappeda to support this EBT target, but that is what must be done,” said Tavip.

In terms of investment trends, Indonesia is becoming a global investment destination even though currently there are still several investment challenges. This was conveyed by Purwo Wiyatmanto, Head of Sub-Directorate for Promotion Strategy Analyst/ Middle Expert Investment Management, Ministry of Investment/BKPM.

“Investment in the new renewable energy sector is also increasing in demand. The increasing need for energy is also accompanied by an increasing share of renewable energy. Indonesia’s new renewable energy share of around 14.5% (below the ASEAN average) is a challenge in itself, but this is also an opportunity for growth,” he said.

From an industrial perspective, there is actually a need for clean electricity produced by sustainable energy sources. This need becomes stronger if an industry enters the global brand supply chain. Rudi Cahyono, Energy Carbon Manager, PT Selalu Cinta Indonesia (SCI) said this pressure was because his party was included in the supply chain of the footwear industry which is marketed globally.

“We are committed to using 100% renewable energy by 2030 as a consequence of our entry into the global supply chain. By 2024, the target is that we can reduce our carbon footprint by 99%,” said Rudi.

Sakina Rosellasari, Head of the Central Java Province One Stop Investment and Integrated Services Service (PMPTSP), added that her agency continues to actively promote projects that are ready to be developed by investors.

“Central Java is open to green investment, not only labor intensive, but also green economic management,” he said.

Apart from investment on an industrial scale, the use of renewable energy at the community level also needs to continue to be encouraged. Yanto, Head of Banyuroto Village (one of the Energy Independent Villages), Magelang Regency, stated that there is a lot of renewable energy potential on a small scale that can be utilized on a communal scale with the support of the local government.

“Future plans, we, the village government, are trying to increase the amount of biogas in the community, around 100 biogas digesters at least in the next 5 years and budget it in the (village fund) APBDes and are ready to collaborate with related agencies, campuses and other parties,” he said.

With 34 biogas digesters spread throughout almost the entire Banyuroto Village area, this digester has helped the welfare of the community since 2007, starting from cooking needs (reducing household cost), lighting without converters and zero waste from the results of the biogas process (solid and liquid fertilizer, bioslurry).

In 2023, the national government will make a number of important notes in the development of renewable energy. The revision of the National Energy Policy (KEN) document and the inauguration of the Cirata Floating PLTS are among the major points in the energy transition process this year.

Adimas Pradityo, Business and Commerce Development Manager, PLN Nusantara Power said that in 2024 there will be PLTS development in Central Java with a capacity of 140 MW in several locations including Batang and Pemalang. Adimas also shared PLN Nusantara Power’s experience in developing the Cirata floating PLTS.

“(One of) the challenges is explaining the PLTS concept to regulators. We really have a bottom up approach in licensing the development of the Cirata Floating PLTS,” he said.