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Indonesia aims to drive growth of clean energy but challenges remain

24 October 2018

Indonesia, the world’s fourth populous country and Southeast Asia’s biggest economy, will need significantly increased energy supplies in the future to meet the expected sharp jump in electricity consumption driven by the population and economic growth

According to the World Bank, Indonesia’s electricity consumption level stands at about 812 kilowatts per capita. The number is higher compared to India and is predicted to continue to increase every year. The government’s ambitious plan to boost the electricity ratio to 99 percent next year contributed to the rise in power needs in the country.

The expected increased electricity supply also means the increased demand for energy sources to generate power plants. The type of energy sources for power plant generation is in the spotlight, especially when linked to global climate change.

Indonesia has been heavily relying on oil fuel, natural gas and coal when it comes to power plant generation for economic reasons. Power produced by fossil fuel-based power plants is much cheaper compared to those produced by renewable energy power plants.

Experts warned that the continuous use of fossil fuel would leave power supply sustainability under threat, not only due to increasingly depleted fossil fuel, but also the harmful effect it has on the environment. Fossil fuel is considered to be the leading source of global warming.

All fossil fuels emit carbon dioxide and other harmful air pollutants when burned. These emissions lead to a wide variety of public health and environmental costs that are borne at the local, regional, national, and global levels, according to www.ucsusa.org, a website focusing on developing and implementing innovative, as well as practical solutions to some of the planet’s most pressing problems, including global warming.

But Iwa Garniwa, the director of Electrical Power and Energy Studies at Universitas Indonesia, sees the urgency of Indonesia to seek new and renewable energy sources from the angle of reserves of fossil fuel, which according to him, are increasingly limited although he agrees on the increasingly preferred clean renewable energy sources.

“It is normal for Indonesia to seek other types of energy sources to replace fossil fuel energy sources,” he told The Jakarta Post in Jakarta recently.

Indonesia’s proven fuel reserves accounts for only 0.4 percent of the world’s fuel reserves, which will be only enough for the next 12 years unless new reserves are discovered. Other types of fossil energies, such as natural gas, will be depleted in the next 40 years and coal in the next 50 or 60 years.

Indonesia is home to abundant renewable energy sources, such as wind, water (hydro), solar, geothermal, sea currents and biomass. “But our challenge is how to make the electricity produced by the non-fossil fuel-generated power plants relatively affordable to people in general so that more have access to electricity,” said Iwa who is also a professor at the university.

According to him, the price of the electricity produced by fossil fuel-generated power plants is relatively low. For example, the price of electricity produced by coal-fired power plants is set at between Rp 500 and Rp 600 per kWh, compared to between Rp 800 and Rp 1,000 per kWh for renewable energy sources.

Iwa attributed the high price of power produced by renewable energy sources to technology, saying that Indonesia still relies on imported ones.

Therefore, preparing technology to support renewable energy sources is crucial to ensure affordability, but the immediate shift from fossil fuel to renewable energy sources not only entails technological mastery, but also competent human resources.

“Immediate shifts to renewable energy generation technology will potentially place a heavy burden on the economy, the government and the people,” he said.

Indonesia, the world’s largest archipelagic country which comprises many islands and has its own typical geographical condition, called for its own approach toward renewable energy supplies instead of referring to other countries like the United States and China.

According to Iwa, all types of energy sources developed in the world were available in Indonesia and so “what type of energy is best suited to be developed will entirely depend on the availability of resources in the respective regions”.

With regard to the nationwide need for renewable energy, the government aims to increase the share of renewable energy mix to 23 percent by 2025. The target is part of a string of policies related to the country’s Nationally Determined Contributions (NDC) under the Conference of Parties (COP) 21 that Indonesia signed in Paris in 2015. Under the Paris Agreement on Climate Change, Indonesia is committed to reduce emissions by 29 percent under Business as Usual in 2030.

Data from the Energy and Mineral Resources Ministry reveals that renewable energy potential in Indonesia reached 443.2 gigawatts (GW), comprising 75 GW from hydro energy, 207.8 GW from solar energy, 29 GW from geothermal energy, 60.6 GW from wind, 32.6 GW from bioenergy and 17.9 GW from marine currents.

The capacity of power plants that utilize hydro power is targeted to reach 14,036 MW, geothermal 6,290 MW, bioenergy 3,041 MW, wind current 615 MW, waste-to-energy (WtE) 552 MW, and solar energy 57 MW. Such great renewable energy potential will be enough to meet Indonesia’s power needs of 115 GW in 2025.

As of last year, renewable energy that comprises geothermal and hydropower accounted for 12.11 percent, while the remainder is fossil fuel energy sources: oil fuel (5.81 percent), natural gas (24.82 percent) and coal (57.22 percent).

Despite the lingering challenges that include the aforementioned price (affordability) and technology, the supply and utilization of renewable energy continue to grow, showing that the sector is increasingly attractive to investors.

The director general of New and Renewable Energy and Energy Conservation (EBTKE), Rida Mulyana, told the media that the price of renewable energy was getting more competitive, which at a certain point in time would not be a burden to the public.

According to the EBTKE, the total value of investment in renewable energy as of October last year reached Rp 11.74 trillion, while in 2014, it was around Rp 8.63 trillion, it then grew to Rp 13.96 trillion in 2015. In 2016, the total investment reached Rp 21.25 trillion.

The sector also saw the growth in energy capacity. The installed capacity of geothermal power plants (PLTP) reached 1,808.5 MW as of October last year. Meanwhile, the installed capacity of solar power plants (PLTS) and micro-hydroelectric power plants (PLTMH) reached 259.8 MW, while bio-energy power plants have installed capacity of 1,812 MW.

From 2014 to last year, the government had constructed 471 renewable energy-based power plants. The total capacity of the plants reached 38.9 MW, according to Rida.

Meanwhile, the president director of state-owned electric company PLN, Sofyan Basir, expressed his optimism that going forward, investments in renewable energy would continue to grow, ensuring that PLN would not deter the development of renewable energy power plants. As stated in the National Energy Policy (KEN), the company is mandated to help achieve the target of 23 percent total mix energy in the country from renewable energy by 2025.

When it comes to power project implementation, the development of renewable energy sources in forests has been criticized.

Iwa opposed the view that the construction of a hydropower plant in a forest would cause serious damage to the environment. “Any construction of a plant may have an effect on the environment but the construction of the hydropower plant in question must offer more advantages than disadvantages,” he argued.

“So, don’t be too naïve when viewing the issue of a power plant. Electricity supply is needed or else we will return to the Stone Age? Or are we going to continue to use fossil fuels?”

Source: Jakarta Post, 24 October 2018