Jakarta: Indonesia, like most other countries, has pledged to reduce carbon emissions by reducing dependence on coal and using more renewable energy sources, but the past year has presented major challenges to those efforts.
According to the Ministry of Energy and Mineral Resources, the installed capacity of new and renewable energy (EBT) will reach 12.5% of the total electricity generation capacity in mid-2023, still far below the target set for that year of 17.9%. .
This figure is slightly higher than 12.2% in 2021 and 12.3% in 2022.
Surya Darma, President of the Indonesian Renewable Energy Research Center, said that the expansion of NRE capacity in Indonesia is still lagging behind the capacity of coal-fired power plants.
“More serious and consistent government efforts are essential, including providing incentives to promote the use of clean energy in the country,” he told the Jakarta Post.
The Ministry's estimates for this year show that renewable electricity capacity in the country will grow by 115 megawatts (MW), or a third of the projected 368 MW.
In contrast, coal-fired power plants reached an electricity production capacity of 530 MW in the middle of the year.
According to the Institute for Basic Services and Reform, the figures show stagnation in the decarbonization of the energy sector, putting the country at risk of not achieving its peak emissions targets.
The government is also trying to accelerate the implementation of rooftop solar panels to reach the target of 2.14 GW by 2030, but this initiative is still far from the target, namely only reaching 95 MW, or only 4.4% of the target achieved in May 2023. ... .
Ahmad Zuhdi Dwi Kusuma, industrial and regional analyst at state-owned Bank Mandiri, said that in many cases, there are several factors that cause electricity generation from renewable sources to be more expensive than fossil fuels.
These include too long a distance between power plants using renewable energy sources and demand centers, which requires large investments in network development, and the problem of intermittent or unstable energy supply, which requires solving energy storage systems.
“If renewable electricity is cheap, demand and potential economies of scale will be greater. But if electricity produced by coal-fired power plants is cheaper, why should consumers use renewable electricity?” Ahmad told the Post.
He added that strong political will is needed to shift coal subsidies to renewable energy.
PLN Energi Primer Indonesia (PLN EPI), a subsidiary of PLN, said that the cost of providing electricity (BPP) from renewable energy sources is currently still relatively high, reported Kontan on December 17.
Referring to the company's main data for the 2018-2022 period, Eko Uniarta, Operations Director of PLN EPI, explained that hydroelectric power is the most economical renewable energy with an average BPP cost of IDR 430 per kilowatt-hour (kWh).
On the other hand, according to Eco, geothermal and solar power have a BPP of Rs 975 per kWh and Rs 4,712 per kWh respectively.
Renewable energy costs are falling
However, he also noted that the cost of renewable energy continues to decline every year. For example, three years ago, in 2020, the cost of generating solar power was Rs 11,817 million.
However, solar power is still less competitive in terms of BPP compared to coal, which averaged Rs 705/kWh in 2018-2022, he said.
"Renewable energy sources must be stimulated because BES is not yet available to the public," said Eco in the December 15 webinar. ., Canton reported.
However, Rajat Agarwal, partner and head of the energy and materials practice in Southeast Asia at consultancy McKinsey & Company, stressed that decisions to increase the competitiveness of renewables must be balanced in terms of reducing incentives for coal use and reducing renewables. . energy costs.
“I think the cost of renewable energy is gradually coming down and we need scale, infrastructure and local demand,” Karambir Anand, partner at Jakarta-based McKinsey & Company, told the Post on November 21.
The Ministry of Energy has confirmed that Indonesia will not reach its 23% renewable energy target by 2025, as most of the planned renewable energy projects will not start generating electricity until 2026 or later, depending on their operation. ).
Director General of Renewable Energy Yudo Dwinanda Priaadi said the ministry estimates the country will achieve additional renewable energy of 1.52 GW in 2025, far below the target set for that year of 5.54 GW.
"In terms of estimates and implementation until 2025, this goal will not be achieved," said Yudo at the November 15 meeting with the Seventh DPR Committee which oversees the energy and mineral resources sector.
He estimates that the installed capacity of EBT will grow by 5.55 GW in 2026, followed by 3.04 GW in 2027. The Ministry will also ensure the implementation of postponement of payments for RES projects, while floating hydroelectric and solar PV projects will be accelerated.
Financing problems
He also emphasized that, apart from local content requirements, funding remains a major obstacle for RES projects.
The fact that the grant represents only 1.4% of the funding promised to Indonesia's Just Energy Transition Partnership (JETP) has dampened hopes that the world's largest energy financing package will boost the country's energy transition efforts.
The grant represents just $300 million of the $21.5 billion awarded to JETP, with the remainder coming from loans and equity financing.
Vahyudi Askar Mediya, director of public policy at the Center for Economic and Legal Studies, said the minimum share of subsidies in ELITE could place a significant financial burden on organizations and state-owned companies participating in energy transition projects.
"The obligation to repay loans actually slows down the progress of the energy transition because it limits the ability to adapt to changing situations," he said on November 8, as quoted by Kompas. After its release in 2022, Indonesia will rely on assistance from JETP. to finance the early termination of coal-fired power plants with a total capacity of 16.8 GW.
However, a draft investment plan released last month revealed that only about $1.5 billion of JETF funds were allocated for phasing out coal in the country.
As a result, the government put forward a less ambitious plan to decommission coal-fired power plants. - Jakarta Post/ANN
9 YEARS OLD COMPLAINING WITH OTHER CHILDREN 👀😂 #Shorts
