Jakarta—Energy policy transformation and industrial decarbonisation are crucial steps in Indonesia’s efforts to achieve the renewable energy mix target and reduce greenhouse gas emissions. The Institute for Essential Services Reform (IESR) stated that a more sophisticated and measurable energy policy is needed to overcome the country’s slow development of its renewable energy sector.
Coordinator of IESR’s Energy Resources and Electricity Research Group, His Muhammad Bintang, said that the growth of the electricity sector, which is expected to boost the renewable energy mix, is still prolonged.
“There are several reasons for the slow implementation of renewable energy. First, energy demand is lower than projected. Second, an unequal playing field. Renewable energy plants must compete with coal-fired power plants with Domestic Market Obligation (DMO) regulations. Third, the integration of variable renewable energy such as PLTS and PLTB faces technical challenges from the current condition of the electricity grid system,” said Bintang in a discussion entitled Update on Energy Transition Issues and Policies in Indonesia, organised by IESR, Wednesday, July 3.
In addition, IESR emphasised that policy updates such as the National Energy Policy (KEN), the National Energy General Plan (RUEN), the Electricity Supply Business Plan (RUPTL), and the finalisation of the New and Renewable Energy Bill (EBET Bill) must include measurable increases in emission reduction targets and schemes that support these achievements.
The government is currently updating several regulations and policies in the energy sector. According to Bintang, active participation from industry players, media, civil society, and various other parties is very important to ensure that this policy update can solve the obstacles to renewable energy development so far. With increasing energy needs, especially in the industrial sector, the opportunity to improve the renewable energy mix is also wide open.
“Indonesia needs to immediately increase independence to meet the needs of the energy transition by developing a domestic renewable energy industry,” said Bintang.
Bintang also underlined the importance of capturing buyers’ demand for green products. In addition, world energy geopolitics dynamics affect Indonesia’s investment competitiveness. Carbon and tax regulations, such as the Carbon Border Adjustment Mechanism (CBAM) and Inflation Reduction Act (IRA), impact investment flows to southern countries, including Indonesia.
Director of Energy Conservation at the Ministry of Energy and Mineral Resources (EMR), Hendra Iswahyudi, stated that innovative and nationally integrated grid modernisation is necessary to build a resilient and reliable domestic transmission infrastructure.
“Referring to the National Electricity General Plan (RUKN), solar power plants (PLTS) will be developed massively in 2030, followed by the development of wind power plants (PLTB) in 2037,” Hendra said.
Hendra also explained that solar energy is prioritised for development with the support of declining costs. The PLTS development plan consists of developing rooftop solar power generation with a 2025 target of 3.61 gigawatts (GW) and large-scale PLTS targeted to reach 4.68 GW by 2030. In addition, the potential of floating solar power plants that can be developed reaches 89.37 GW.
Through comprehensive policy updates and concrete steps in industrial decarbonisation, Indonesia is expected to accelerate renewable energy development and achieve the net-zero emissions target by 2060. (Hartatik)
