Jakarta, June 13, 2024 – In the National Energy Policy Update (Draft RPP KEN), one of the strategies mentioned to maintain energy security during the energy transition is to optimize the use of gas as a transitional intermediary. However, the use of natural gas carries significant risks such as methane leaks and prolonging dependence on fossil fuels, making this strategy inconsistent with efforts to phase out fossil fuels.
In the Asta Cita mission, Prabowo-Gibran outlined energy in their second mission, namely “Strengthening the country’s defense and security systems and promoting national self-sufficiency through self-sufficiency in food, energy, water, creative economy, green economy, and blue economy.” This mission serves as the foundation for the government to readjust the direction of energy policy, especially concerning the energy transition.
This was the main topic of discussion in an event organized by the Action for Ecology and People’s Emancipation (AEER) titled “Assessing the Direction of Energy Transition Policy Under the Prabowo-Gibran Administration” on Thursday (13/06) in Jakarta. The discussion featured Nizhar Marizi, ST, M.Si, Ph.D., Director of Energy Resources, Minerals and Mining at the National Development Planning Ministry/Bappenas, Satya Widya Yudha, M.Sc., Ph.D., Member of the National Energy Council of the Republic of Indonesia 2020-2024 and Energy Practitioner, Brilliant Faisal, S.Pi., M.Si, Functional Planning Expert at the Regional Development Planning Board of South Sumatra Province, and Pius Ginting, National Coordinator of the Action for Ecology and People’s Emancipation (AEER). The moderator was Sapariah Saturi, a journalist from Mongabay Indonesia.
The energy transition is a crucial agenda for Indonesia to achieve low-carbon emission targets and shift to cleaner and more sustainable energy sources. The share of new renewable energy (EBT) in the energy transition realization reached 12.3% by the end of 2022, while the target for 2024 is 17.9-19.5%. However, the slow transition is partly due to the imbalance between EBT demand and the green energy investment climate. Therefore, energy policies related to the energy transition, including potential investments, need to be a priority and an important agenda in the upcoming Prabowo-Gibran leadership.
Nizhar Marizi, ST, M.Si, Ph.D., mentioned that in the final draft of the National Long-Term Development Plan (RPJPN) 2025-2045, there are eight directions for the energy transition, one of which is the gradual retirement of coal-fired power plants (PLTU). In the final RPJPN draft, the first five years (2025-2029) will focus on developing EBT and reducing carbon emissions from the fossil energy we currently use.
The decarbonization investment scenario towards Net Zero Emission (NZE) 2025-2060 is IDR 794.6 trillion per year. In an ideal condition, where the government and private sector allocate 2% of their investments to green investments, there is still an investment gap of IDR 458.2 trillion from 2025-2060. The implementation of alternative green financing policies, such as subsidy reallocations, carbon taxes, and carbon trading, can cover 84% of this gap. This means that other innovative funding alternatives and sustainable green investments are still needed.
Brilliant Faisal, S.Pi., M.Si., said that South Sumatra, which still relies on fossil energy, especially coal, is ready to support the energy transition implementation towards NZE 2060 according to national direction and policy. South Sumatra, currently guided by Regional Regulation No. 4 of 2020 on the Regional Energy General Plan, has achieved the EBT mix target, even exceeding the national target, reaching 23.85%.
The current challenge is that South Sumatra is asked to be energy independent, but the authority of local governments, especially regencies, is limited. “Therefore, in the effort of energy transition, local governments need regulatory support from the central government that favors local governments,” said Brilliant Faisal.
Pius Ginting stated that besides policy factors, the challenge of energy transition that also needs attention is the funding aspect. Efforts to secure funding without increasing the national debt burden need to be implemented to alleviate debt burdens, enhance national fiscal resilience, and enable sustainable energy transitions.
Given the dynamics of the energy transition and the challenges faced, it is important for all parties to collaborate to promote energy policies for low-carbon energy transitions under the new Prabowo-Gibran administration, especially for carbon emission reductions and transitions to cleaner and more sustainable energy sources.
Instead of optimizing gas use, which is cited as having lower emissions than coal, maximizing the development of potential renewable energy in Indonesia such as solar, wind, bioenergy, and hydroelectric power should be a priority in the energy transition plan.
As mentioned in the IPCC report, the impact of climate change will worsen. If we do not immediately phase out fossil fuels, the cost of inaction will be much greater than the cost of action, with financial implications affecting everyone from governments and companies to families.
Stephanie – stephanie.r@aeer.or.id
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