ASEAN Solar Summit 2023 Calls for ASEAN Leadership for Acceleration of Solar Energy in the Southeast Asia

press release

Jakarta, July 25, 2023 – Indonesia, as the current chair of the Association of Southeast Asia Nations (ASEAN) has taken a significant stride towards a sustainable and greener future with the successful inauguration of the ASEAN Solar Summit 2023. This momentous event, organized by the Ministry of Energy and Mineral Resources, in collaboration with the Indonesian Solar Energy Association (AESI) and the Institute for Essential Services Reform (IESR), convened esteemed leaders, experts, and stakeholders from across the globe to promote solar energy as a key driver in the region’s energy transition. 

Held in Jakarta, the ASEAN Solar Summit 2023 aimed to enhance and accelerate energy transition in ASEAN member states with solar energy, cultivates active solar-focused partnerships within the region and globally, boosts clean energy investment, and showcases successful solar stories for knowledge exchange. This monumental gathering was attended by high-level policy makers in ASEAN and partner countries, business players, financial institutions, and non-governmental organizations, that addressed vital aspects of solar energy deployment, including policy frameworks, technological innovations and sustainable investment strategies. 

In the remarks of Minister of Industry, Republic of Indonesia, which was delivered by Taufiek Bawazier, Director-General of Metal, Machinery, Transportation Equipment, and Electronics Industries at the Ministry of Industry of the Republic of Indonesia, he stated that the Ministry of Industry encourages the domestic solar energy industry. 

“However, the current domestic market with the scale of the economy has not been fully met yet. Coordinating and collaborating in the planning of solar power development is essential, involving small and medium enterprises (SMEs), relevant ministries, local governments, and the private sector. This way, the development of solar PV products can align with the specifications required for solar panel construction,” Bawazir said.

 He also added that currently, the domestic solar panel industry has made progress. Until now, the total production capacity of the industry has reached the equivalent of 1,600 MW. 

“Nevertheless, the specifications of domestically-produced solar modules must continue to improve to meet the demand of the current solar panel development plans, especially for modules with a capacity above 550 watts-peak. Moreover, it is necessary to explore upstream needs to meet national demands,” Bawazir continued.

 

Director General of NREEC, Ministry of Energy and Mineral Resources, Republic of Indonesia, Dr. Dadan Kusdiana highlighted that ASEAN possesses advantages in terms of solar supply chain, including abundance of critical minerals and key ingredients for solar components. It is important to bring insights from this summit to the ASEAN energy ministerial meeting next month to sound the call to action for a consolidated effort in increasing the implementation of solar energy in the region, and developing the solar industry’s supply chain within our country.   

“It should be carried out through strong cooperation and collaboration among ASEAN countries to massively increase the use of renewable energy, particularly solar energy,” Kusdiana said.

Fabby Tumiwa, the Executive Director of the Institute for Essential Services Reform (IESR), stated that meeting the Paris Agreement’s target to limit global temperature increase of 1.5 degrees and combat the climate crisis offers several new economic opportunities.

“It can be achieved, if we collectively act boldly and ambitiously to transition our energy system from fossil fuel to clean energy. This is where solar energy plays a crucial role. Southeast Asia must ensure affordable access to solar technology by establishing a solar PV manufacturing and supply chain that includes polysilicon, ingot, and other components,” Tuwima highlighted.

He urged ASEAN to pursue strong cooperation in developing solar PV manufacturing capabilities and investing in the solar PV supply chain, with the growing domestic demand serving as an anchor market. 

“We request both the industry and energy ministries, in the upcoming ministerial meeting, to investigate the possibility of establishing an ASEAN solar PV manufacturing and supply chain. This initiative would strengthen our mutual economic interests and promote prosperity within the region,” Tumiwa said.

Andhika Prastawa, Chairman of the Advisory Board AESI, highlighted some challenges faced in developing solar energy in the country, including the competitiveness of solar, energy storage, and the high dependency on fossil fuels due to their reliable and continuous power at a relatively lower cost.

“Despite these challenges, we must remain optimistic and work towards breakthroughs in renewable energy, particularly solar energy. It not only provides us with clean energy but also promotes sustainability. The size of the domestic potential market is also attractive for the development of the manufacturing industry for solar PV and its components. However, significant efforts, research, and innovation are essential to support the industry and discover new approaches to harness solar energy efficiency,” Prastawa said.

ASEAN’s commitment to sustainable development extends beyond national borders, and the region actively collaborates on energy-related initiatives. The ASEAN Solar Summit 2023, hosted by Indonesia during its chairmanship for 2023, serves as a platform for fostering regional cooperation, knowledge exchange and partnerships in the solar energy sector. Through collaborative efforts, ASEAN member states can share best practices, pool resources, and collectively address common challenges in implementing solar energy projects and to attract collaborations as well as investments from its global partners. Such synergy will amplify the impact of solar energy development and accelerate the region’s transition towards a cleaner and more sustainable energy landscape.

The Role of Solar Energy in Supporting NZE and JETP Target

Jakarta, 10 March 2023 – Clear and earnest support from the government for the development of solar energy needs to be demonstrated, especially in achieving the Net Zero Emission (NZE) target in 2060 or sooner and the renewable energy mix target in the Just Energy Transition Partnership (JETP) of 34 % in 2030. 

“So far, JETP discussions are still focused on the early retirement of the coal-fired power plants (CFPP). There is no element of accelerated renewable energy yet. It needs to be noted, especially to accelerate the development of solar energy, which is projected to become one of the backbones of electricity generation in achieving the NZE, given Indonesia’s great potential, increasingly competitive economy and relatively short construction,” said Daniel Kurniawan, Researcher, Specialist Photovoltaic Technology and Materials, Institute for Essential Services Reform (IESR) in the Solar Energy Talk: Technology, Policy and Solar Energy Challenges in Supporting the Just Energy Transition Partnership (JETP) and Net Zero Emission (NZE) on Thursday (9/3/2023).

According to him, nowadays is the right time for the government to involve community participation by pursuing these various targets with policies that support the acceleration of solar energy and the use of rooftop solar power plants on a commercial & industrial and residential scale. He regretted that the public hearing held by the Ministry of Energy and Mineral Resources (MEMR) regarding the revision of Minister of Energy and Mineral Resources Regulation No. 26/2021, the government wants to cancel the net metering scheme for the residential sector, which will reduce the economy and customer interest in installing rooftop solar PV.

“The government should not remove policy support for the community in adopting rooftop PV mini-grid, especially for the household and the small business sector, at this very early adoption stage. On the other hand, policy support must be increased to encourage adoption to a mature market stage,” he stressed again.

On the same occasion, Widya Adi Nugroho, Sub Coordinator for Supervision of Renewable Energy Businesses, Ministry of Energy and Mineral Resources (MEMR), said that Indonesia has a renewable energy mix target of 23% in 2025. However, until 2022 it has only reached around 12.3 %. He said the utilization of new renewable energy power plants was prioritized according to the planning of the Electricity Supply Business Plan (RUPTL).

“Based on the 2021-2030 RUPTL, solar energy will increase by 4.6 GW in 2030. Solar will be the backbone of Indonesia’s electricity reaching 461 GW in 2060. In addition, the price trend for solar PV is getting lower and more competitive. Likewise, supporting components such as batteries so that development opportunities are increasingly open. However, there are challenges in developing solar PV, one of which is that the room for electricity generation is still full, so it requires community participation as consumers and producers to utilize renewable energy through solar energy. In addition, the system needs to maintain intermittent conditions, both with backup generators that can compensate for solar PV and also related to the local content requirement (LCR),” explained Widya Adi Nugroho.

Anindita Satria Surya, Vice President of Energy Transition and Climate Change, State Electricity Company (PLN) explained, his party continues to implement energy transition initiatives to achieve net zero emission (NZE) in 2060 or sooner. For this reason, it is necessary to increase internal capabilities and technology supported by innovation, policy and finance. Anindita estimates that the investment needed to reach the NZE in 2060 is around USD 700 billion. In addition, Anindita emphasized that the implementation of the de-dieselization program or the conversion of diesel power plants is a strategy to increase the energy mix, especially solar energy in the electricity system.

“There are several PLN strategies for integrating renewable energy, including in the short term achieving RUPTL (2021-2030) with around 4.7 GW or 22% coming from solar PV,” said Anindita.

In his presentation, other renewable energies that will be developed to achieve RUPTL include hydropower (44%) and geothermal (16%). In addition, his party will carry out de-dieselization, early retirement of coal, and co-firing of biomass. Then, in the long term to achieve NZE (2031-2060), steps to be taken include encouraging battery-based electricity storage and interconnection, as well as hydrogen co-firing. On the technology and ecosystem development side, PLN will focus on, among others, solar PV and electric vehicles.

“As an illustration, in the beginning, we built a powerful system, namely the baseload generator, built a strong transmission and coupled with strengthening the use of renewable energy, including solar PV. At the end of the 2035 period, most of the solar PV has entered our system,” he said.

Anindita emphasized that solar PV could be one of the solutions to increase the energy mix but the readiness of the infrastructure, especially batteries, to reduce intermittent nature must also be seen. For example, there are no batteries to support solar PV in Lombok, West Nusa Tenggara (NTB). Not only rooftop solar PV, but PLN is also trying to take advantage of the potential of floating solar PV. As part of supporting the implementation of the Indonesian Presidency’s G20 activities, a 100 kWp floating PLTS has been built in the Muara Reservoir, Nusa Dua, Bali.

Meanwhile, Rosyid Jazuli, a researcher at the Paramadina Public Policy Institute, explained that Indonesia has enormous solar potential. Unfortunately, currently, more than 60% of electricity in Indonesia still comes from coal. This is due to several challenges in implementing solar energy to support the implementation of the Just Energy Transition Partnership (JETP), such as unclear plans, overlapping regulations, and potential funding in the form of loans. Rosyid suggested that there should be coordination between ministries and agencies in supporting the implementation of JETP, considering that this issue is a complex matter.

“On the other hand, the potential for green funding, which reaches USD 20 billion should also be optimized, especially since the current world trend is towards sustainable development. Funding is also needed for research and development of solar energy and the potential to attract investment in solar power,” said Rosyid.

Solar Energy Talk is a series of public dissemination events about solar energy which are collectively organized by six institutions; Institute for Essential Services Reform (IESR), Solar Scholars Indonesia (SSI), Persatuan Pelajar Indonesia (PPI) Australia, Asosiasi Peneliti Indonesia Korea (APIK), Institut Energi Surya Generasi Baru (Insygnia), and Solarin.

Solar energy thematic dissemination will be held regularly, every two weeks until June 2023, covering topics; Indonesia’s solar energy landscape, current policies, technology, industry, socio-economic and human resource readiness in support of the Just Energy Transition Partnership (JETP) and the Net Zero Emission (NZE) target.***

Nationwide Synergy and Investment for Indonesia’s Renewable Energy

Jakarta, 6 February 2023 – Indonesia’s journey to net zero emission is still a long and winding road. One of the government’s actions in realizing this target is to make regulations to encourage the implementation of renewable energy. In reality, targets, regulations and implementation are often unaligned.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR), in the Market Review segment on the IDX channel (24/01/2023), stated that in 2022, Indonesia’s target for renewable energy development of 1000 MW has not been fully realized.

“There are several factors why this target was not fully realized, the first is the economic weakening which has caused unoptimized growth of electricity demand. Another factor is the pandemic, which caused delays on several renewable energy projects,” explained Fabby.

Furthermore, Fabby explained that Government Regulation no. 79/2014, which was more thoroughly mandated in Presidential Decree 22/2017, has set a target of a national renewable energy mix of 23% by 2025. To achieve this target, Fabby estimates that there needs to be a renewable energy growth of 3-4 Gigawatts per year. In fact, since the Government Regulation in 2014 was enacted, the average renewable energy increase rate is only 15% from 3-4 GW, which is around 400-500 MW.

This problem is also rooted in the country’s energy infrastructure itself. Indonesia’s energy source still depends on fossil energy, which accounts for 86%. To change this structure, it is also important to consider the growth in energy demand in Indonesia. Indonesia must then strive to use renewable energy to tackle this increasing energy demand. According to IESR calculations, energy transition efforts in Indonesia require around 1.4 billion dollars in funding. This fund covers renewable energy and energy infrastructure upgrades.

Regarding people’s economic perceptions, Fabby assesses that fossil energy is still seen as more economic because currently coal is still subsidized by the government. The Domestic Market Obligation Act in 2017 capped coal prices at $70/ton even if global prices are higher. This kind of incentive should also be given to the development of renewable energy. However, the incentive was also hampered by the Domestic Component Policy Level (TKDN).

“Solar PV has become the most efficient source of renewable energy, but in Indonesia it has become expensive. Compared to 10 years ago, the price of solar PV has decreased by 90%. The TKDN policy is actually a disincentive that can prevent investors from investing and make solar PV more affordable,” concluded Fabby.

Looking Closer to the Renewable Energy Development in the Industrial and Community Sectors in Central Java

Central Java, November 11, 2022 –  The Central Java provincial government is committed to supporting and encouraging renewable energy development from the industrial sector to the community level. It can be seen in several companies and villages implementing renewable energy in their environment. Renewable energy is generated from natural processes that are continuously replenished. Renewable energy includes solar, geothermal heat, wind, tides, water, and biomass. 

The Central Java Energy and Mineral Resources Department and the Institute for Essential Service Reform (IESR) held the Central Java Energy Exploration for two days, November 10 and November 11, 2022, with the theme “Energy Transition to Build an Environmentally Friendly and Sustainable Industry.” Participants visited two companies and villages implementing renewable energy on the second day, PT. Sarihusada Generasi Mahardhika – Prambanan Factory, PT. Tirta Investama-Klaten Aqua Factory, and Ngesrep Balong Kendal Village PLTMH.

Utilization of Rice Husk as Energy

Sarihusada Generasi Mahardhika – Prambanan Factory inaugurated the construction of a rice husk-fired Biomass Boiler in June 2022. The biomass boiler will use 10,500 tons of rice husk annually and can produce up to 6 tons of steam per hour. With this ability, it’s no wonder this rice husk-fired industrial biomass boiler is claimed to be the first in Central Java.

Rice husk is an agricultural waste sourced from several areas in Central Java Province, including the surrounding agricultural land within this Biomass boiler facility, which is one of the most significant contributors to rice production nationally. Joko Yulianto, Plant Manager of Sarihusada Prambanan Factory, stated that the biomass boiler operated by Sarihusada could reduce carbon emissions by 8,300 tons of CO2 or the equivalent of carbon emissions absorbed through planting 120,000 trees. It also reduces the carbon footprint generated from the production process at the Prambanan Factory by up to 32%.

“Biomass boilers are an alternative to environmentally friendly technology. The energy produced comes from natural renewable sources. In the form of biological elements such as dead organisms or living plants, “explained Joko Yulianto.

The IESR Study 2021 assesses the potential for biomass in Indonesia to reach around 30.73 GW, but the efficiency is still in the range of 20-35 percent. The use of biomass in the industrial sector is becoming increasingly popular with the emergence of sustainable business targets. Therefore it must ensure a reliable supply chain to ensure the availability of biomass sources. Biomass feedstocks include crop residues and other plantation product wastes such as oil palm, coconut, and sugarcane.

Solar Power Plants in the AQUA factory in Klaten

Meanwhile, PT. Tirta Investama-Aqua Factory, Klaten, inaugurated a rooftop solar power plant (PLTS atap) in 2020. The rooftop solar PV installed at the AQUA factory in Klaten consists of 8,340 modules of solar panels in four roof buildings covering an area of ​​16,550m2, with a peak power of around 350 watts per unit.

“This solar power plants can generate 4 GWh (Gigawatt hour) electricity per year which can supply 15-20% of electricity needs for operations while reducing 3,340 tons of carbon emissions per year. It was built starting in August 2019 and required 187,200 working hours carried out by 130 workers with zero accidents,” said I Ketut Muwaranata, Plant Director AQUA Klaten. 

Based on the latest IESR report entitled Indonesia Solar Energy Outlook 2023, the industrial and commercial sectors are the biggest drivers of solar power plant use, reaching up to 23 MWp in October 2022. In addition to sustainable business targets, especially for companies that are members of the RE100 coalition, renewable energy also reduces production costs. Innovative financing schemes, such as the zero-CAPEX offered by many solar PV developers, increase the attractiveness of rooftop PV mini-grid for industrial customers.

In the last three years, the growth of rooftop solar PV users in the industrial sector has increased, and when the 10 to 15 percent limit of capacity currently imposed by PLN continues, this trend will change and even decrease. This is unfortunate and does not support the various energy transition commitments from the government and companies, who cooperate in realizing Indonesia’s net zero emission.

PLTMH Lights Ngesrepbalong Villages’s Road

Based on the 2021 IESR study, the technical potential for micro-mini hydropower in Indonesia reaches 28.1 GW in all Indonesian provinces. In Central Java, the technical potential of micro-mini hydropower comes to 730.3 MW. If this potential is utilized optimally, it will increase the productivity of rural communities, thereby encouraging access to quality and affordable energy and improving the economy and people’s welfare.

The Micro Hydro Power Plant (PLTMH), Ngesrepbalong Village, Kendal Regency, was developed by the youth around 2020 and used for electricity at the Pucue Kendal Coffee shop, which is located on the northern slope of Mount Ungaran. In the process, the village youth got the state-owned company, Indonesia Power, to look at and help their businesses realize independent energy.

The PLTMH in Ngesrepbalong Village, Kendal Regency, has a capacity of around 1,000 watts and can turn on dozens of lights to illuminate the 200-meter road to the coffee shop and turn on the coffee processing equipment in the shop.

The Central Java Energy Exploration event was held to raise the issue of energy transition in Central Java based on the green industry and the Climate Village program. It also disseminates information regarding the urgency of the energy transition to the public, increasing exposure to the green industry and the Climate Village program in Central Java.