Jakarta – A new global survey has found that 88 per cent of corporate executives in the country believe that renewable energy is more profitable than maintaining dependence on coal.
The findings are part of a report titled “Powering up: Business perspectives on shifting to renewable electricity”, a survey of 1,477 business leaders in 15 major emitting countries, including Indonesia. The survey was conducted by Savanta at the request of We Mean Business Coalition, E3G, and Beyond Fossil Fuels.
According to Maria Mendiluce, CEO of We Mean Business Coalition, businesses now see renewable energy as a strategic necessity. “The shift away from fossil fuels is no longer an ideological debate. It is a rational business decision to create competitive advantage, create jobs, and ensure energy price stability,” she said in a written statement on Monday, 28 April.
Maria said that business leaders have invested in renewable energy and want to accelerate the transition. However, they demand that the government accelerate the planning and licensing process for clean energy projects, including the development of power grids and energy storage facilities.
Although the business community is pushing for an accelerated transition, the reality on the ground shows that Indonesia is still heavily dependent on coal. Currently, 62 per cent of the nation’s power generation capacity comes from coal, supported by reserves reaching more than 31 billion tonnes.
In the past two decades, coal-based electricity production has nearly quintupled, from 52 GWh in 2002 to 249 GWh in 2022. Ironically, 95 per cent of Indonesian business leaders said they support a coal phase-out by 2035.
Gas is not a transitional solution
Interestingly, the majority of Indonesian businesses also reject natural gas as an intermediate solution. A total of 72 per cent prefer a direct transition from coal to renewable energy, without passing dependence on gas.
A total of 69 per cent of executives surveyed believe that accelerating the transition to clean energy can also reduce the impact of the climate crisis, a pressing issue for Indonesia which is vulnerable to droughts, floods and rising sea levels.
In addition to moral support, businesses made a number of concrete demands on the government: 76 per cent believe the transition to renewable energy will lower the cost of electricity for companies and consumers; 52 per cent requested simplification of the renewable energy project licensing process; 51 per cent urged accelerated investment in grid modernisation; and 53 per cent called for a workforce skills improvement programme to support the growth of the renewable energy industry.
Indonesia has committed under the Just Energy Transition Partnership (JETP) framework to achieving 44 per cent renewable energy in the national electricity mix by 2030. However, funding constraints remain a serious challenge. Currently, investment in solar energy, for example, falls short of the USD 14.4 billion needed to reach the 2025 capacity target.
According to the report, the 21 GW renewable energy expansion plan by 2030 can create 100,000 jobs and attract investments of up to USD 4.3 billion. (Hartatik)
Banner photo: Image generated by OpenAI’s DALL·E via ChatGPT (2024)
