COP26: A “Soundless” Recital by Jokowi

Many parties are waiting for President Joko Widodo’s speech at COP26. Jokowi is expected to declare more ambitious commitments to reduce emissions and deal with climate change as well as to outline concrete steps towards net-zero emissions. Indonesia’s strategic position as the leader of the G20 countries in 2022 should make Indonesia take one step ahead to lead efforts to reduce emissions for G20 member countries.

Unfortunately, in his speech at the High Level Segment for Heads of State and Government COP26 session, President Jokowi did not announce a higher climate ambition target nor a concrete commitment to support the Paris Agreement target to limit the increase in the average temperature of the earth below 1.5 degrees Celsius and achieve carbon neutral by the middle of the century. The IPCC AR6 report has stated clearly that we have less than a decade left to keep the earth’s temperature rise at 1.5 degrees Celsius. The opportunity to increase Indonesia’s climate ambitions is still open and of course the Government must take it and make the best use of it to save the earth from the damage caused by climate change.

Efforts to reduce emissions and address climate change must be seen as both a responsibility and an opportunity to transform Indonesia’s economic system from a carbon-intensive one to a more sustainable low-carbon economic system. According to the IESR Deep Decarbonization study, the transformation of the energy system will create 3.2 million new jobs in the renewable energy sector. An ambitious commitment by setting targets for reducing ambitions that are larger than the current NDC and building a comprehensive energy transition roadmap will send a good signal for investors to invest in Indonesia. This will encourage Indonesia’s economic strength to become more globally competitive.

Previously at the G20 Summit which took place on October 30-31 2021, the leaders of the G20 countries agreed to achieve net-zero emissions by the mid of this century. However, this commitment has not yet been accompanied by a target for the phase-out of coal-fired power plants. Holding a strategic role in the G20 leadership, Jokowi could actually take the opportunity to encourage G20 countries to stop operating coal-fired power plants and switch to renewable energy. Of course, in this case, Indonesia also needs to implement a policy of abandoning coal so that it can set an example for other G20 countries.

In addition, there is a difference between actions and facts on the ground in Jokowi’s speech at COP 26. He mentioned that he would build the largest PLTS in Southeast Asia and encourage the use of renewable energy to reduce emissions in the energy sector. However, until COP 26 took place, supportive policy support for the PV mini-grid ecosystem, such as the Revised Regulation of Ministerial Regulation 49/2018 concerning the Use of Rooftop Solar Power Generation Systems by Consumers of PT Perusahaan Listrik Negara (Persero) as well as Presidential Regulations concerning new and renewable energy, had not been officially issued.

More ambitious climate action is urgently needed now as the effects of climate change are becoming more frequent as La Nina returns. The Climate Transparency report 2021 states that changes in La Nina and El Nino patterns will have an impact on the onset and duration of the rainy season in Indonesia. This affects the agricultural sector such as rice production. The World Bank’s global risk analysis places Indonesia in the twelfth of 35 countries that face a relatively high risk of death from exposure to floods and extreme heat. Ranked as the fifth country with a population that lives in areas lower than the coastal zone, Indonesia is also vulnerable to sea-level rise.

Indonesia is able to make a significant contribution to tackling climate change and preventing worse impacts from the climate crisis. Utilizing vast forests as carbon sinks, having renewable energy potential reaching 7879.4 GW, and playing a strategic role in the G20 Indonesia should be able to achieve and exceed the current NDC target of reducing emissions by 29% on its own and up to 41% with international support from business as usual in 2030. By doing this, Indonesia will not only save the environment but also transform the economic system, as well as demonstrate leadership innovation to the members of the G20 countries.

IESR Launches the Study of Renewable Energy Technical Potential Map Study in Indonesia

Jakarta, October 25, 2021 – A comprehensive renewable energy potential map needs to be prepared to support the energy transition towards utilizing 100 percent renewable energy and achieving zero emissions in Indonesia by 2050.

Indonesia’s renewable energy technical potential data still refers to the General National Energy Plan (RUEN) of 443.2 GW. This data has not been updated since 2014. Moreover, the RUEN data is also much lower than the actual potential of renewable energy.

“The suboptimal data on the potential for renewable energy will affect the perspective, strategy, and decision making on the use of renewable energy in Indonesia. This data confusion will make the government and business actors unable to plan optimally the energy transition in Indonesia, and formulate policies to accelerate the use of renewable energy. Updating data is significantly strategic for the executives to plan Indonesia’s energy transition,” explained Fabby Tumiwa, Director of the Institute for Essential Services Reform (IESR).

IESR uses GIS to update solar, wind, and water technical potential data. Considering the variability and intermittent issues of these three types of renewable energy, IESR also examines the potential of biomass and pumped hydro energy storage (PHES) for complementing it. As a result, Indonesia has a total technical potential of solar, wind, hydro, and biomass energy of 7,879.43 GW and 7,308.8 GWh for PHES. 

“Biomass and PHES can be used as complementary sources to overcome the intermittent and variability issues of solar, wind, and water energy. Our calculation results show that the biomass potential reaches 30.73 GW. However, its efficiency is only 20-35%, so it requires PHES,” said Handriyanti Diah Puspitarini, Senior Researcher and Lead Author of the Study “Beyond 443 GW Indonesia’s infinite renewable energy potentials”.

This magnificent potential if utilized optimally will be able to meet all energy needs in Indonesia. The study of Decarbonization of Energy Systems in Indonesia, conducted by IESR and published last May, projected that energy capacity needs will reach 1600 GW by 2050. By utilizing 100% renewable energy, Indonesia can meet the electricity demand of 1600 GW and achieve zero emissions by 2050. Based on the study, its main contribution comes from 1,492 GW of solar PV (88% of the primary energy mix), 40 GW of hydropower, and 19 GW of geothermal and supported by optimal storage capacity.

The study “Beyond 443 GW Indonesia’s infinite renewable energy potential” also contains detailed data on the technical potential of solar, wind, water, biomass, and PHES in 34 provinces in Indonesia. This data can be adopted by the central and provincial governments to more aggressively promote and develop renewable energy projects that are decentralized according to their most prominent potential. Yet, it is still interconnected between islands and provinces to balance their energy supply.

“This renewable energy potential map can be further developed by considering the development to operational costs so that it can provide a more precise outline to stakeholders about the optimal location of renewable energy to be developed. Furthermore, the development of renewable energy can be realized with the support of the right policies and regulations,” added Handriyanti.

Through this study, IESR recommends that the government, first, improve data on renewable energy potential as the reference for planning in the energy and development sector, and conduct regular reviews as renewable energy technology matures. Second, the government and experts need to complete the technical potential map with a brief analysis of the network’s intermittent, variability, and grid readiness, including predictions of climate conditions in the next few years. Third, the government and stakeholders should start considering the development of the decentralized system and inter-island connections as a way to provide electricity from renewable energy that is accessible to communities throughout the island, especially remote areas. Fourth, the government needs to give more support to various renewable energy technology innovations so that they can open up opportunities for utilizing the huge potential of renewable energy.

Table : Technical Potential of Renewable Energy in Indonesia

Type

Technical potential

Scenario 1

Scenario 2
Solar photovoltaic (rooftop, ground mounted, and floating)

7,714.6 GW

6,749.3 GW
Micro- to small-hydropower, with capacity ≤ 10 MW

28.1 GW

6.3 GW
Onshore wind power

106 GW at 50 m hub height and 88 GW at 100 m hub height

25 GW at 50 m hub height and 19.8 GW at 100 m hub height
Biomass power (only from crop wastes and wooden biomass)

30.73 GW
Pumped Hydro Energy Storage

7,308.8 GWh

The study “Beyond 443 GW Indonesia’s infinite renewable energy potential” can be downloaded at the link s.id/Beyond443GW

The video of launch of the study “Beyond 443 GW Indonesia’s infinite renewable energy potential” can be watched on Youtube IESR Indonesia at https://youtu.be/eS_PQD3gEIs

IESR: Renewable Energy Portion in “Green” RUPTL Could Be Bigger

Jakarta, 14 October 2021– Institute for Essential Services Reform (IESR) The Institute for Essential Services Reform (IESR) appreciates the government’s commitment to making an energy transition towards decarbonization in 2060 or earlier by issuing the PLN 2021-2030 Electricity Supply Business Plan  (RUPTL), which has a larger portion of renewable energy generation. The government claims that this RUPTL is the greenest because it contains a portion of new and renewable energy generation capacity (EBT) of 51.6% or 20.923 MW in 2030. However, the 2021-2030 RUPTL still indicates the dependence of fossil energy on the energy system in Indonesia.

Pamela Simamora, IESR Research Coordinator who is also the main author of the Deep decarbonization of Indonesia’s energy system study, believes that the 2021-2030 RUPTL still shows a small renewable energy electricity mix, which is only 24.8% in 2030. This means that from 2025 to 2030, the increase in the renewable energy mix was only 1.8%. This number is much lower than the target mix increase from 2021 to 2025 which is 8% (from 15% today to 23% in 2025).

“The renewable energy mix should be higher in 2030 considering that the price of renewable energy in that year is predicted to be more competitive than fossil energy,” she says.

Indonesia itself has declared to achieve decarbonization by 2060 or earlier. IESR Executive Director, Fabby Tumiwa said that the target will be realized if, by 2030, around 70% of power generation capacity or around 80-85 GW comes from renewable energy so that energy sector emissions can reach their peak in 2030.

“To achieve this mix, it is necessary to reduce fossil energy generating capacity to open up more space for renewable energy plants to be included in the electricity system. The reduction in thermal generating capacity must be followed by the development of renewable energy. With this need, renewable energy in 2022-2025 should ideally reach 25-30 GW and accelerate to 45-50 GW from 2025 to 2030, in line with the plan for early retirement of PLTU, “he explains.

Responding to the government’s plan in the 2030 RUPTL to retire 1.1 GW of subcritical steam power plants in Muara Karang, Tanjung Priok, Tambak Lorok, and Gresik by 2030, the Transformation Energy Program Manager, Deon Arinaldo assessed that this step is still following the business as a usual plan because the PLTU is entering retirement age.

Moreover, the government’s intention to maintain fossil fuels by co-firing biomass at PLTU will set a greater risk of stranded assets and the environment when compared to focusing on developing renewable energy such as solar energy. PLN has even identified challenges such as the sustainability of the required biomass supply of 8-14 million tons per year, the impact on the efficiency of the power plant, and the increase in the basic cost of electricity supply.

On the other hand, RUPTL 2030 has also planned the development of electricity interconnection within islands and between islands to improve electricity reliability and distribute new renewable energy whose sources are far from load centers. The government targets that by 2024 the interconnection within the islands of Kalimantan and Sulawesi has been accomplished in the super grid system to overcome the oversupply in a large system. The government is also reviewing the development of the interconnection network between Sumatra-Java and Bali-Lombok. Referring to the study of Deep decarbonization of Indonesia’s energy system, this within-island, and inter-island interconnection network plan is a good thing and should be monitored for its development.

Furthermore, the development of varied renewable energy (VRE), especially solar energy, is focused on three strategies: solar PV for rural electricity, de-dieselization, and network connection (both PLN and IPP). However, de-dieselization by converting diesel power plants to solar PV equipped with a battery with a total capacity of 1.2 GWp is only intended for isolated systems that are not possible to be connected to PLN transmission.

“If it is intended to encourage a more aggressive penetration of renewable energy, the use of local renewable energy, either solar or other renewable energy sources, should be the main strategy for providing energy access, not a substitute, and must concentrate on to aspects of sustainability and reliability,” said Marlistya Citraningrum, Manager Sustainable Energy Access Program, IESR

Besides, the target of 4.7 GW of PV mini-grid by 2030 listed in the latest RUPTL does not reflect the much larger potential and pipeline project of PV mini-grid. The Scaling Up Solar in Indonesia report even shows that it requires at least 18 GW until 2025 to realize the target of 23% of the renewable energy mix. Meanwhile, according to the IESR Deep decarbonization of Indonesia’s energy system study to pursue emission-free Indonesia in 2050, 107 GW of solar PV is needed in 2030 with a storage system.

Energy Transition Finance: Possible Derisking Instruments on RE development to support the Decarbonization Process

Accelerating the decarbonization process in Indonesia will require a big amount of private and public finance, delivered in ways that respond to the needs of businesses and communities. On the public side, fiscal packages from governments are available opportunities to leverage the private sector in a transition to a low-carbon economy. Governments can also help mobilize capital from the private sector by improving investment frameworks, helping create bankable projects, and using international public financing effectively to accelerate the process. Some other derisking facilities need to be discussed to create a clean energy finance environment, reduce current perceived risks and bring down the high cost of capital. Private financial sector policies would also be crucial to channel financial flows into sustainable investments. The discussion will discuss what policies and practices are required to boost the investments needed on RE to support the transition into net zero-emission. It will start with a presentation showing the synthesis study of derisking facilities in Indonesia and some findings related to the issues. Subsequently, the discussion will respond to the results and identify how Indonesia can mobilize the capital needed to deliver zero emissions.

Measuring the Urgency of EBT Bill

Jakarta, 10 September 2021 – Since January 2021, the Indonesian House of Representatives Commission VII has prepared an academic paper for the New and Renewable Energy (EBT) Bill and is currently in the process of consolidation. This bill is considered important to provide legal certainty for the development of renewable energy in Indonesia. Even so, until now several parties have expressed objections to the substance or questioned the urgency of this law.

The development of renewable energy in Indonesia itself over the last five years has not been encouraging. The average additional installed capacity per year is only around 400 MW. In fact, Indonesia has a commitment to achieve 23% of renewable energy in the primary energy mix by 2025. Currently, Indonesia’s achievement is still in the range of 11-12%. As time is running out, various strategies are needed to accelerate the development of renewable energy in Indonesia. In collaboration with Soegijapranata Catholic University, the Institute for Essential Services Reform (IESR) held a webinar entitled “New and Renewable Energy Bill: for Whom?”. This webinar aims to explore the perspectives of various fields and hopes to formulate recommendations for this bill.

In his opening remarks, Fabby Tumiwa, Executive Director of IESR reminded the importance of the public knowing about the New and Renewable Energy (EBT) Bill and having the space and opportunity to provide their views on this Bill.

“In the midst of Indonesia’s current condition of pursuing net-zero emissions of 2060 or faster, the development of renewable energy is one of the keys to achieving this target. The role of the EBT Bill is important here,” explained Fabby.

Sonny Keraf, the Indonesian Minister of the Environment from 1999 to 2001, revealed that the problem of renewable energy which is slow in progress is not a problem in the regulations, but lies in the government’s seriousness in transitioning from fossil energy to clean energy.

“So if the big question is do we need this New and Renewable Energy Law? The answer could be no. Because we already have enough regulations that regulate energy in detail,” he said.

Irine Handika, Lecturer at the Faculty of Law, Gadjah Mada University, has a similar argument with Sonny. From the legal aspect, according to her, there are several things that are problematic about the New and Renewable Energy (EBT) Bill. One of them is the term ‘new energy’ which will make this law die before it is born. This is because the ‘new energy’ parameter itself is uncertain and unclear.

“We see that currently the main problem is at the implementation level of existing energy regulations, so making new laws may not be the right solution. Even if it is considered that there are things that have not been covered in existing regulations, the solution that can be taken is revisions or amendments to existing regulations or laws,” explained Irine.

On the other hand, Kardaya Warnika, DEA, member of the Indonesian House of Representatives Commission VII, explained that the EBT Bill aims to provide legal certainty for the development of new and renewable energy in the future. In the future, this law is projected to become a guideline for achieving national new and renewable energy targets.

“We see that the energy transition is very big, this law is a way for the state to be present to lead the energy transition process. I agree that the progress of NRE is bad because the government is not very supportive of renewables, even though the state must be present and lead the energy transition process. So it is hoped that this law will provide legal certainty forever for the development of renewable energy,” said Kardaya.

The partiality of the new law will really be seen when the draft law is finalized, but we need to ensure that the substance of the EBT Bill is not counterproductive to Indonesia’s decarbonization ideals to become net-zero emissions by 2060.

Deep Decarbonization of Indonesia’s Energy System in 2050 Needs Social Political Support

Jakarta, 20 September 2021– Indonesia’s commitment, incompatible with the Paris Agreement by not increasing the mitigation target in the updated Nationally Determined Contribution (NDC) and only targeting carbon neutrality by 2060 in the Long Term Strategy for Low Carbon and Climate Resilience (LTS-LCCR) document, is predicted to harm the environment and the Indonesian economy in the future. Indonesia is among the top 20 countries that are severely affected by the impacts of climate change in the form of extreme weather. Moreover, the global trade trends are embedding forward the green aspect of their manufactured products. Therefore, the Indonesian industry must compete harder with other countries in the world that have already developed renewable energy technologies and various policies to reduce carbon emissions by 2050 at the latest. 

The energy transition is the right step to overcome the earth temperature’s rise and keep Indonesia competitive in global trading, however, it needs clear and appropriate socio-political support to oversee the energy transition process. It was expressed by Prof. Dr. Kuntoro Mangkusubroto, Chairman of the Advisory Board of the Indonesia Clean Energy Forum (ICEF), at the opening of the annual Indonesia Energy Transition Dialogue (IETD) 2021 organized by ICEF and the Institute for Essential Services Reform (IESR).

“For developing countries like Indonesia, the phase-out of fossil fuel energy development is crucial otherwise it will be too late and too expensive to reduce greenhouse gas emissions and air pollution,” he said.

 

He said that the Indonesian government still has significant homework to do, such as immediately regulate an integrated national energy plan, mitigate the impact of the energy transition on the fossil fuel industry, use low-carbon technology in the transportation industry, and consider the just energy transition. 

Fabby Tumiwa, IESR Executive Director on the same event emphasized that based on the IESR’s study, Deep Decarbonization of Indonesia’s Energy System stated that Indonesia can achieve the target of the Paris Agreement carbon neutral by 2050. He added that this decade is vital because Indonesia must soon reach the peak of emissions in the energy sector by 2030 and boost the renewable energy mix in the electricity sector to reach 45%.

“It implies that the development and investment of renewable energy must be increased 7 to 8 times from the current status, including energy efficiency on the demand side, and start phasing out the thermal power generation to accommodate large-scale renewable energy, and modernizing our grid,” explained Fabby.

At the IETD 2021, Suharso Monoarfa, Minister of National Development Planning/Head of Bappenas in his remarks at the IETD 2021, said that the Indonesian government realized that the energy transition process needed to be carried out to reduce carbon emissions. He revealed that several steps are to be taken to decarbonize Indonesia’s energy system to accelerate the energy transition to renewable energy and develop new renewable energy.

 

“Another strategy is the energy efficiency program by considering the alignment between resource management, financial policy variables, and the role of all sectors,” he continued.

 

Still projecting carbon neutrality in 2060, Arifin Tasrif, Minister of Energy and Mineral Resources added that based on the scenario prepared by the government, the electricity demand in 2060 will be 1885 TWh. To meet electricity demand and achieve net-zero emissions, several policy steps have been taken including phasing out coal power plants, massive new renewable energy development, development of Indonesia’s super grid interconnection, and implementation of energy conservation. 

 

“All of these electricity needs will be fully supplied by new renewable energy power plants in 2060. Massive addition of variable capacity of renewable energy such as solar and wind will be carried out starting in 2031. Meanwhile, the utilization of geothermal and hydro energy will also be optimized to be able to maintain a balanced system,” said Arifin Tasrif.

 

Affirming Arifin Tasrif’s statement, Dadan Kusdiana, Director General of New, Renewable Energy and Energy Conservation, Ministry of Energy and Mineral Resources said that one of the challenges to realizing zero emissions in Indonesia by 2060 is to mobilize all sectors, not only the energy sector.

 

“Currently, in the electricity sector, the technology has already improved, while in the non-electricity sector, it still requires a more specialized study. The development of renewable energy has now begun, such as geothermal projects,” he explained.

 

IETD 2021 is held for five days, from 20-24 September in collaboration with Clean, Affordable, and Secure Energy for Southeast Asia (CASE), a partnership project from several countries in Southeast Asia and funded by the Federal Government of Germany. Further information can be accessed at ietd.info.

The Role of Media in Indonesia’s Energy Transition Journey

In the course of economic recovery after the Covid 19 pandemic, Indonesia is currently at a crossroads to choose the path of green economic recovery, or the path of economic recovery that produces high emissions. The COVID-19 pandemic has hit the Indonesian economy hard, as can be seen from the negative economic growth we are experiencing. But on the other hand, Covid 19 opens an opportunity to change the direction of economic development to be greener and lower emissions. Based on the report from the Intergovernmental Panel on Climate Change Assessment Report 6 (IPCC AR6), we are running out of time to keep the earth’s temperature rise within safe limits. As one of the countries with the largest economic growth in the world as well as the largest emitter in the world, Indonesia has a responsibility to reduce its emissions, especially from the energy sector. In the post-Covid-19 economic recovery situation, Indonesia must find a way to get out of the economic crisis and at the same time overcome the climate crisis. Making an energy transition is a must if Indonesia is serious about ‘greening’ its economic recovery program.

 

In overseeing the process of Indonesia’s economic recovery, all levels of society need to participate in monitoring and voicing their opinions to ensure that the path taken by the government is the path that will lead Indonesia to a low-emissions economic recovery. It is important for Indonesia as a nation to carry out an economic recovery that takes into account the climate crisis because the crisis is the source of all future crises. The urgency of the climate crisis and low-emissions economic recovery needs to be conveyed to the public, one of which is through the mass media, so that people can ‘demand’ the government when the government does not choose a greener economic recovery path.

 

To help journalists provide comprehensive coverage of energy transition issues, the Clean, Affordable, and Secure Energy (CASE) for Southeast Asia program, IESR organizes training for journalists. This training includes material input on energy and energy transitions, as well as how to write coverage of energy transitions so that they can be better understood by the wider community. This program will take place in ten sessions lasting from September to October 2021, and will be attended by 20 selected journalists from various regions in Indonesia.

 

In his remarks, Fabby Tumiwa, executive director of IESR emphasized the importance of the media’s role in the energy transition process. “The community must be able to support, encourage, and voice their opinions to policy makers. This is where the media plays an important role in building community collective awareness so that Indonesia builds a greener economy,” said Fabby.

 

In the first session which took place on Tuesday, September 7, 2021, participants were introduced to the concept of energy and energy transition guided by three speakers from Agora Energiewende.

 

Tharinya Supasa, Project Lead Energy Policy South East Asia Agora Energiewende, stressed that it is important for all levels of society to understand the importance of the energy transition.

 

“Because energy is very close to us, from cooking, watching TV to working with computers or other electronic devices. So whatever happens in the energy sector will affect everyone’s life,” said Tharinya.

In the course of economic recovery after the Covid 19 pandemic, Indonesia is currently at a crossroads to choose the path of green economic recovery, or the path of economic recovery that produces high emissions. The COVID-19 pandemic has hit the Indonesian economy hard, as can be seen from the negative economic growth we are experiencing. But on the other hand, Covid 19 opens an opportunity to change the direction of economic development to be greener and lower emissions. Based on the report from the Intergovernmental Panel on Climate Change Assessment Report 6 (IPCC AR6), we are running out of time to keep the earth’s temperature rise within safe limits. As one of the countries with the largest economic growth in the world as well as the largest emitter in the world, Indonesia has a responsibility to reduce its emissions, especially from the energy sector. In the post-Covid-19 economic recovery situation, Indonesia must find a way to get out of the economic crisis and at the same time overcome the climate crisis. Making an energy transition is a must if Indonesia is serious about ‘greening’ its economic recovery program.

 

In overseeing the process of Indonesia’s economic recovery, all levels of society need to participate in monitoring and voicing their opinions to ensure that the path taken by the government is the path that will lead Indonesia to a low-emissions economic recovery. It is important for Indonesia as a nation to carry out an economic recovery that takes into account the climate crisis because the crisis is the source of all future crises. The urgency of the climate crisis and low-emissions economic recovery needs to be conveyed to the public, one of which is through the mass media, so that people can ‘demand’ the government when the government does not choose a greener economic recovery path.

 

To help journalists provide comprehensive coverage of energy transition issues, the Clean, Affordable, and Secure Energy (CASE) for Southeast Asia program, IESR organizes training for journalists. This training includes material input on energy and energy transitions, as well as how to write coverage of energy transitions so that they can be better understood by the wider community. This program will take place in ten sessions lasting from September to October 2021, and will be attended by 20 selected journalists from various regions in Indonesia.

 

In his remarks, Fabby Tumiwa, executive director of IESR emphasized the importance of the media’s role in the energy transition process. “The community must be able to support, encourage, and voice their opinions to policy makers. This is where the media plays an important role in building community collective awareness so that Indonesia builds a greener economy,” said Fabby.

 

In the first session which took place on Tuesday, September 7, 2021, participants were introduced to the concept of energy and energy transition guided by three speakers from Agora Energiewende.

 

Tharinya Supasa, Project Lead Energy Policy South East Asia Agora Energiewende, stressed that it is important for all levels of society to understand the importance of the energy transition.

 

“Because energy is very close to us, from cooking, watching TV to working with computers or other electronic devices. So whatever happens in the energy sector will affect everyone’s life,” said Tharinya.

On Climate Crisis, Accelerating Energy in Indonesia is a Must

Jakarta, 27 April 2021 – Indonesia can protect the earth from carbon emissions by encouraging the acceleration of renewable energy development. The urge for the government to be more confident, courageous, and ambitious in developing clean energy was voiced in the discussion and book soft-launching “Footprints and Pathway for Indonesia’s Renewable Energy” by Kompas journalists hold by Harian Kompas and the Institute for Essential Services Reform (IESR) (27/4).

Sutta Dharmasaputra, Editor-in-Chief of Kompas Daily, said that Harian Kompas’ editorial policy supports the acceleration of renewable energy. He stated that the current increase in the earth’s temperature is due to the use of fossil energy so that the speeding up of renewable energy will be able to keep its temperature at not exceeding 2 degrees Celsius.

“Hydrometeorological disasters in Indonesia for one year caused a loss of 22.3 trillion rupiahs. I casually calculated that if using that amount of money to buy Padang rice, it would be equivalent to 639 million boxes of Nasi Padang (Lunch Box). It’s a huge loss, ”he said.

Fabby Tumiwa, Executive Director of IESR, on the same occasion, said that over time, the climate crisis would have to be more serious.

“The study of experts states that if the global temperature rises by more than 1.5 degrees, it has broader implications for the ecosystem, food production, and the economy as a whole,” he explained.

An energy transition is an option that must be taken by policymakers to reduce greenhouse emissions. Fossil energy systems contribute 75 percent of GHGs worldwide. The Paris Agreement even mandates all countries in the world to develop renewable energy to achieve carbon neutrality by 2050.

“This means, currently, our NDC target is not compatible with the Paris Agreement. If we want emissions compatible, then we have to reach the peak (peak emission) in 2030 and have to drop drastically by 2050. If it is too late, the efforts must be more drastic and more expensive, “he said.

IESR has completed carbon-neutral modeling of Indonesia in 2050 which shows that Indonesia will be able to achieve net-zero by 2050. Even by using 100% renewable energy, the cost of energy systems will be cheaper than systems based on fossil energy.

“The electricity sector is a quick win because the development of renewable energy in this sector can be faster than industry and transportation. Indeed, the energy transition policy requires many innovations, changes in regulations, and the way we look at the energy resources we have. However, if we can do 100% renewable energy, 3.2 million new jobs will be created, ”said Fabby.

In line with Fabby, the head of the writing team, Aris Prasetyo, explained that the development of renewable energy by boosting an energy transition is something that will happen. He also shared about the energy independence he met during his visit to Kamanggih Village in Kahunga Eti Subdistrict in East Sumba.

“The community is energy-independent. The electricity comes from the Micro Hydro Power Plant (PLTMH), and even they sold the surplus to PLN. For cooking, they use biogas from livestock manure. However, when this pandemic occurred, it turned out that PLTMH customers did not get a discount on electricity rates, meaning something clean and supporting government programs and climate change adaptation was not supported, while programs that depend on fossil energy received incentives, “he said.

Aris also added that policy imbalances also occur on an industrial scale, especially in the matter of buying and selling tariffs for electricity from renewable energy. He said that even the developer felt the tariff offered by PLN is not economical for developers because the production costs are higher. As for the renewable energy tariff policy, the Perpres does not establish yet.

Questioning about renewable energy policies, Sugeng Suparwoto, Chairman of the House of Representatives Commission VII DPR RI is determined to finalize the law on renewable energy, although, according to him, many interests do not support the emergence of this law.

“Even though the existence of this law will create an ecosystem that supports the development of EBT,” added Sugeng.

On the other hand, Satya Widya Yudha, a member of the National Energy Council, views that in building energy security, the government must ensure supply security, accessibility, affordability with capability, and environmentally friendly.

“If we talk about the economy, then the renewable energy that can be further developed is PLTS. We are pumping PLTS on a large scale, “he said.

Musrembang Paser: Transitioning towards green economy development

Jakarta, April 1, 2021, the Institute for Essential Services Reform (IESR)  presented on the Transition towards Green Economic Development in Paser Regency, East Kalimantan in Musrenbang (Musyawarah Rencana Pembangunan Daerah), and Public Consultation of the RPJMD (the regional mid-plan development) 2021-2026 Paser Regency (1/4). This opportunity was a follow-up to the IESR meeting with Bappeda East Kalimantan and Paser Regency in 2020.

In front of the Regent of Paser and his staffs, IESR encouraged the Paser government to no longer rely on coal in both the energy and economic sectors but began to diversify the economy to increase Paser’s economy such as industrial development, including the agricultural industry (rice, maize, shallots), the tourism industry, and the renewable energy industry.

Energy Transition is Happening, Coal Economic Contribution Will Fall

To date, Paser has depended on the Gross Regional Domestic Product (GRDP) on coal. It makes Paser vulnerable to economic turmoil due to decreasing demand for export coal. It is because many coal importing countries have adopted energy transitions. Particularly, since 80% of Paser’s coal production is exported so that Paser’s economic growth is strongly influenced by Reference Coal Prices (Harga Batubara Acuan, HBA).

“Coal export destination countries such as China, India, Korea, and Japan are very ambitious in making an energy transition. Furthermore, many countries to overcome the threat of the climate crisis are moving from fossil energy to renewable energy. It is estimated that in 2050 world coal demand will fall by 40-90%. Of course, this decline in demand will occur gradually soon. It warns the regions that have been the largest coal producer, such as East Kalimantan, “said Fabby Tumiwa, Executive Director of IESR.

This situation was also acknowledged by HM Aswin, Head of Bappeda East Kalimantan, “Although the structure of East Kalimantan’s GRDP is still dominated by the mining and quarrying sector, the declining coal price and low demand for coal from export destination countries still make the economic growth of the coal sector minus 4.58 in East Kalimantan.”

The contribution of the coal sector to the GRDP of Paser is very large, more than 70%, but the GRDP per capita of Paser Regency has been relatively stagnant in the last decade. This indicates that the mining industry has very limited leverage to support economic growth. For this reason, the government is required to develop a new economic sector.

“Coal production is relatively stagnant, but 95% of this production activity is carried out by one company only. So that in 2016 there was a decline in the production of the mining sector, especially coal, causing negative economic growth in Paser Regency 2016 (Diskominfo Paser, 2019), “added Fabby.

A similar opinion was conveyed by the Chairperson of the Paser Regency DPRD, Hendra Wahyudi, on the same occasion when he conveyed the main thoughts of the DPRD in the context of the preparation of the Paser Regency Work Plans 2022 and the Regional Medium Term Development Plan Public Consultation of 2021-2026. He emphasized that the economic contraction during COVID-19 was significantly impacted Paser, with economic growth of minus 2.77 in 2020.

“We suggest taking strategic steps by maximizing the non-mining economic sector such as the agricultural, processing, and trade industries so that they do not depend too much on the mining and quarrying industry,” he said.

The IESR analysis shows that the agriculture, fisheries, and hunting sectors absorb more labour than mining, which only ranks fourth. Moreover, the agricultural industries have experienced less significant economic fluctuations when compared to the mining sector.

Paser’s Agricultural Industry Included in the Focus of Green Development

The direction of the East Kalimantan Bappeda (Agency for Regional Development) as placing Paser as the center of agriculture and food for the New Capital City of Indonesia (IKN), especially for rice, onion, and chilli commodities, will encourage Paser to improve infrastructure that supports the agricultural industry and protects Sustainable Food Agricultural Land (LP2B).

Increasing the productivity of rice fields can also increase employment in the agricultural sector. The calculation of the increase in land productivity to 7 tons/ha and assuming a fixed amount of land, then Paser Regency can absorb around 9,479 workers. This figure is equivalent to the number of workers in the mining sector. It means that it can absorb the workforce affected by the decline in mining activities.

Furthermore, through the IESR calculations, Paser also has enormous renewable energy potential, with the successively technical production of Rooftop Solar of nearly 81000 GWh/year, water energy of 721 GWh/year, and pumped hydro storage (PHS), 3,5 thousand GWh/year. The development of the electricity sector based on renewable energy will be able to supply electricity for IKN and other areas around Paser.

IESR also revealed that maximizing the potential of the tourism sector in Paser will encourage economic growth. The Paser government could increase the tourism sector budget to attract more tourists. By taking into account infrastructure development and road access will be essential to support the development of the tourism sector.

“Paser Regency has Corporate Social Responsibility (CSR) funds of 58 billion in 2020. This fund can be used for the development of MSMEs and human resources more optimally,” said Fabby.

He suggested that the process of economic transformation requires careful planning. The Paser government must plan a more comprehensive study; the impact of the energy transition on the coal industry, local economy, environment, and health so that Paser can make a road map for Paser’s economic transformation. Another thing that needs to be prepared and deepened is the diversification of the economy, its supporting considerations, and policies.

Regent Paser in his speech also said that his party would prioritize the agricultural sector.

“I hope the agriculture department can compile a work plan to improve the agricultural program in Paser. We have large tracts of land in 139 villages. Activating this land with modern agricultural technology will open up job opportunities for youth. Agriculture will be our focus, ”promised the Regent of Paser, Fahmi Fadli.