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TERRENUS ENERGY

Indonesia

Indonesia eyes subsidies, nuclear power in renewable energy Bill

The Bill seeks to ensure all Indonesians have access to power and to entirely transition to renewable energy by 2060. Image: AFP

From Bloomberg

JAKARTA – Indonesia, the biggest thermal coal exporter, vowed to subsidise renewable energy projects and open its first nuclear power plant by 2045 in a draft legislation to help it reach its net-zero emissions goal.

The Bill, which still needs approval from President Joko Widodo and Parliament before becoming law, seeks to lead the country on a path that would both ensure all 270 million residents have access to power while also making the country entirely reliant on renewable energy by 2060.

The draft sets out a strategic outline, with more detailed rules to be issued later.

Officials have their work cut out for them, as the nation with the world’s fourth-largest population also has one of the world’s smallest wind and solar power fleets. Indonesia relied on fossil fuels for 86 per cent of its electricity in 2020, according to BloombergNEF.

Here are a few key issues in the latest draft of the Bill, which will soon be discussed by the government:

Export tax

Indonesia will prioritise local demand before allowing renewable energy to be transmitted overseas, with exporters required to pay a tax. The stipulation would follow a ban by nearby Malaysia, and could hamper neighbouring Singapore’s plan to import clean electricity. The focus on domestic use also applies to the coal sector, where miners will have to set aside at least 30 per cent of their output for local consumption at a ceiling price of US$70 (S$96) a tonne for high-quality coal, compared with current global prices around S$400 a tonne.

Funding incentives

The government will give incentives, including tax and administrative ones, to support new projects. It will also subsidise renewable energy when the cost of producing it is unable to compete with fossil fuels. A renewable energy fund will collect money from the state budget, export taxes, carbon trading funds and other sources, then use the cash to build infrastructure, give incentives for developers or to support research.

Nuclear power

Indonesia will set up a nuclear power assembly that will monitor the development and operation of atomic plants. Only state-owned companies would be allowed to build, operate and shut such plants. The country plans to operate its first one in 2045.

Coal reliance

The Bill differentiates between “renewables” – wind, solar, geothermal, hydropower, biomass and a few other small technologies – and “new energy”, which includes nuclear, hydrogen and several coal-based technologies, while carving out room for both to aid in the transition. Indonesia is building its first coal gasification plant that will start operating in 2024.

Local impact

The government seeks to ensure renewable energy investments would benefit surrounding communities. Companies must prioritise the use of local workers as well as domestically sourced materials, while investors are expected to transfer their technology to local workers. Companies must also prevent pollution and have recovery plans in place if their operations lead to environmental damage.

Opportunities arising from Middle East’s Asian pivot

Heidi Toribio, Regional Co-head, Client Coverage, Asia, Corporate, Commercial and Institutional Banking at Standard Chartered. Image: Standard Chartered

From The Business Times

The Middle East has always been considered an energy exporter to Asean, but this relationship has become more nuanced in recent years, especially as the former has shifted its focus to boosting non-oil exports.

Notably, countries such as Indonesia and Singapore have benefited.

Late last year, the Indonesian government announced they had secured US$32.7 billion worth of investment commitments from United Arab Emirates (UAE) businesses in various sectors, such as vaccine manufacturing and distribution.

“Indonesia is a very typical case of how I think Asean is becoming a magnet for foreign direct investment (FDI) from the Gulf countries,” said Gyorgy Busztin, a visiting research professor at the Middle East Institute, National University of Singapore.

Dr Busztin cited Asean’s political stability (outside of Myanmar) as well as a general lack of labour unrest as key factors that draw these Gulf countries to the region, even as he qualified that these countries have to be looked on a case-by-case basis.

“Compatibility, stability, and predictability, which are, of course, combined with the presence of a large, young, and highly trained workforce – it all comes together very nicely.”

Singapore too has benefited from the relationship.

A spokesperson from the Singapore Business Council, Qatar, noted that with Qatar is diversifying its economy away from oil and gas as part of its National Vision 2030, some of the key sectors they are looking at include sustainability and technology.

These are sectors in which Singapore has strong capabilities, he said.

“This makes businesses that wish to expand outside of the Middle East region look to Singapore as one of the key destinations to explore opportunities and use it as a base to springboard into the wider region due to its strategic location and easy access from the Middle East,” he said.

Alessandro Arduino, principal research fellow at the Middle East Institute at the National University of Singapore, added: “Expertise from Singapore will be beneficial to development in the Gulf and at the same time, can increase profitable cooperation between the Gulf and South-east Asia in areas ranging from artificial intelligence to Internet of Things, and smart cities.”

Leveraging Asean’s strengths

Economic ties between the Middle East and Asean have strengthened significantly since the first Asean-GCC Joint Vision was adopted in 2009.

In 2019, the two blocs further agreed to finalise the Asean-GCC Framework of Cooperation for 2020-2024 to advance collaboration in multiple sectors including smart cities, energy, connectivity, agriculture and halal products. Bilateral partnerships between individual countries have also risen.

The Singapore-UAE Comprehensive Partnership (2019) and the Malaysian Investment Development Authority’s (MIDA) MoU with the Investment Promotion Agency of Qatar (2019) are notable examples.

Heidi Toribio, regional co-head, client coverage, Asia, corporate, commercial and institutional banking at Standard Chartered, said: “As countries across the Middle East diversify into new non-oil sectors, Asean is emerging as an important trade and investment destination.”

In 2020, investments from the Middle East into Asean reached US$700 million, a three-fold growth from 2017. In the first three quarters in 2021 alone, merchandise imports to Asean from the Middle East grew more than 30 percent year-on-year, reaching US$52 billion in value, she noted.

According to a survey of Middle Eastern companies commissioned by Standard Chartered and prepared by PricewaterhouseCoopers, 82 per cent of Middle East respondents expect more than 10 per cent growth in their Asean business revenues this year.

They identified access to the large and growing Asean consumer market (60 per cent); access to a global market (from Asean) enabled by a network of Free Trade Agreements (58 per cent); and diversification of production footprint (51 per cent) as key reasons why they are interested in the region.

The Regional Comprehensive Economic Partnership (RCEP) is also expected to attract more investments; all of the respondents agreed that the ratification of the agreement will lead to more investments from their company. Close to 70 per cent said they expect their company to increase investments by more than 50 per cent over the next 3-5 years.

In terms of geographical preference, respondents chose Malaysia (78 per cent), followed by Singapore (69 per cent) and Indonesia (67 per cent).

Of those who picked Singapore, 94 per cent of the senior executives from the 45 companies based in the Middle East said they consider the city-state a major regional R&D/innovation centre.

A further 87 per cent said Singapore is a desirable hub for regional procurement and that Singapore is an ideal place to set up their regional sales and marketing headquarters.

Finding new growth opportunities

The report identified 5 growth sectors which it expects to drive the future of the Middle East-Asean corridor. They are namely refining and petrochemicals; infrastructure and real estate; renewable energy; retail and consumer goods; and digital infrastructure and services.

Perhaps unsurprisingly, consumption of fuels and petrochemicals continues to grow strongly in Asean, driven by rising consumer and industrial demand. To address energy security concerns, the region is also now focusing on boosting local production capacity by building integrated refining and petrochemical facilities.

Similarly, rapid economic and social progress have accentuated Asean’s infrastructure needs.

“The infrastructure segment will continue to dominate the construction industry, maintaining a 46 per cent share in sector GVA (gross value added) by 2025, followed by commercial real estate (32 per cent) and residential real estate (22 per cent),” said the report.

“In particular, demand for healthcare and transport infrastructure as well as logistics and industrial real estate are expected to drive growth, which is creating new investment and business opportunities for Middle East companies.”

Separately, demand for digital solutions and enabling digital infrastructure is expected to see significant growth. Indeed, the region’s flourishing digital start-ups are increasingly attracting capital from leading investment firms globally, including many from the Middle East.

In terms of more nascent sectors, Asean nations are increasingly prioritising solar and wind solutions to meet their future energy requirements. Retail and consumer goods sector in Asean is also expected to regain momentum in the years ahead, led by an expected surge in consumer spending.

Author: Mindy Tan

Singapore and Indonesia enjoy strong ties, can do more together in green and digital economy: Lawrence Wong

Mr Lawrence Wong was speaking in an interview with Singapore media at the end of his four-day visit to Indonesia. Image: MCI

From The Straits Times

JAKARTA – Singapore and Indonesia enjoy strong relations underpinned by mutual confidence and trust, and as both countries recover from the pandemic, there is much more they and their people can do together, Singapore’s Finance Minister Lawrence Wong said on Friday (May 20).

On the economic front, businesses can look beyond Batam, Bintan and Karimun, the main islands closest to Singapore collectively known as BBK, and venture to other regions, including Central Java, as well as beyond traditional sectors such as manufacturing and infrastructure to the digital economy and the green economy, he said.

Both sides can also do more to encourage exchanges between their people, especially among students and youth, now that borders are open and flights have resumed, he said, adding that both sides would like to resume greater air connectivity.

Mr Wong was speaking in an interview with Singapore media at the end of his four-day visit to Indonesia, his first since helming the finance portfolio in May 2021.

Mr Wong was also announced as leader of the People’s Action Party’s fourth-generation, or 4G, team last month, putting him in line to be Singapore’s next prime minister – a point noted in Indonesian media reports on his visit this week.

He said his interactions with his counterpart, Finance Minister Sri Mulyani Indrawati, have been very good, and that the visit was a good opportunity for him to meet a broader range of Indonesian leaders, interact with them and get to know them better.

“Overall, on the bilateral front, our relations are certainly in good order. We have had very close cooperation with Indonesia across many fields for many years. In the last two years, we have continued to strengthen our cooperation, especially working together to tackle the pandemic,” he said.

“We have also in recent years resolved certain longstanding bilateral issues, namely the agreements we have on extradition, defence and the Flight Information Region. We are now waiting for these agreements to be ratified,” he added.

“On the whole, it is a relationship that is underpinned by mutual confidence and trust. On that basis, we can certainly do much more together.”

Mr Wong met Dr Sri Mulyani as well as Jakarta Governor Anies Baswedan on Friday (May 20).

Earlier in the week, he met several key ministers, including Coordinating Minister for Economic Affairs Airlangga Hartarto, Coordinating Minister for Maritime Affairs and Investment Luhut Pandjaitan, Defence Minister Prabowo Subianto, Health Minister Budi Gunadi Sadikin, State-Owned Enterprises Minister Erick Thohir, and Tourism and Creative Economy Minister Sandiaga Uno.

He also met Bank Indonesia governor Perry Warjiyo, Central Java Governor Ganjar Pranowo, Kendal Regent Dico Ganinduto and Semarang Mayor Hendrar Prihadi.

Their discussions touched on potential cooperation in new areas, among others.

“On the whole, it has been a very fruitful visit. And I look forward to doing my part to build on the strong foundations we have and take our bilateral relations to even greater heights,” he said.

In green finance and the green economy, he noted that both Singapore and Indonesia are determined to achieve net-zero emissions and accelerate the green transition.

“Indonesia has many more opportunities to do so, because it has got the ability to embark on more renewable energy projects, and more scale to do so than Singapore,” he said.

It also has the opportunity to do nature-based carbon mitigation projects, which Singapore will not be able to do on a similar scale, he added.

Thus, there are opportunities for both sides to work together to finance these projects or collaborate on them. “There are companies, businesses and investors who are interested in this space, and who will be keen to collaborate with Indonesian partners on such projects.”

There are similar opportunities for mutually beneficial exchanges in the digital economy, he said, noting that the Indonesian start-up space has become a lot more vibrant in recent years because of the size of the economy and the strong entrepreneurial culture.

He cited Indonesian start-up eFishery, which is part of a growing aquaculture sector.

He noted that Singapore does have research and development on how barramundi and other fish can become more resilient, and on achieving higher productivity on fish farms. “We have limited space, but we can certainly tie up with Indonesian companies to use the technology and expand and do more in Indonesia,” he added.

“Indeed, such partnerships are happening in the digital space, in foodtech, in fintech, in a whole range of the digital economy,” he said. “The opportunities for collaboration are truly immense.”

He also noted similarities in the food culture on both sides, and one businessman hoped there could be more restaurants selling Singapore food in Indonesia.

“That is certainly one area that can help to strengthen cultural and social ties, and perhaps there might even be economic possibilities,” Mr Wong said.

And with borders reopening, he hopes direct flights can resume from Singapore to Indonesian destinations such as Semarang.

He said: “The airlines would need some time to catch up with demand. There are constraints with supply and crew, manpower… but they are ramping up, and I hope before too long, we will be able to get the capacity increased and we will be able to resume more direct flights. And hopefully, that will also help to bring down air fares.”

Author: Arlina Arshad

S’pore, Indonesia ink climate change partnership to pursue goals, including green finance

Senior Minister Teo Chee Hean (right) and Indonesia’s Coordinating Minister for Maritime and Investment Affairs Luhut Binsar Pandjaitan at the signing ceremony. ST PHOTO: Jason Quah

From The Straits Times

SINGAPORE – Singapore and Indonesia inked a climate change partnership on Monday (March 21) that could see them working on clean technology research, or pilot projects related to various ecosystems on land and sea.

They may also share best practices or develop projects related to implementing Article 6 of the Paris Agreement, which outlines creating an international carbon market to help countries meet emissions reduction targets.

Four key areas that both nations will collaborate on are carbon pricing and markets, nature-based solutions and ecosystem-based approach, clean technology and solutions, and green and blended finance.

Blended finance refers to a mix of sources of capital to support sustainable projects in developing countries.

Senior Minister and Coordinating Minister for National Security Teo Chee Hean and Indonesia’s Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan inked a memorandum of understanding (MOU) on Monday to commence various collaborations on sustainability and climate change.

The agreement was developed following the Singapore-Indonesia Leaders’ Retreat in January this year.

Annual high-level ministerial meetings and an inter-agency working group involving senior government officials from both countries will commit to advancing the agreement’s objectives, said Singapore’s National Climate Change Secretariat and Indonesia’s Coordinating Ministry for Maritime and Investment Affairs on Monday.

A work plan, including pilot projects, research collaborations and technical exchanges, between both countries will be developed.

Both countries will also explore financing solutions in areas such as carbon credit projects, carbon capture and storage, and the development of renewable energy solutions to support regional decarbonisation.

Speaking on the sidelines of the signing at Parkroyal Collection Marina Bay hotel, Mr Teo said the MOU will create development opportunities and jobs.

“Singapore will continue to seek opportunities to collaborate with like-minded regional and international partners to create new solutions for a decarbonised and sustainable future.

“Such partnerships will enable Singapore to achieve our net-zero goal by or around mid-century, as we create and seize new green growth and job opportunities,” added Mr Teo, who also chairs the Inter-Ministerial Committee on Climate Change.

Mr Luhut said Indonesia will establish a Blended Finance Alliance under the Group of 20 (G-20) framework.

The alliance will be a multilateral and international institution to pool funds and projects related to climate change and the United Nations’ sustainable development goals.
Indonesia took over the leadership of the G-20 this year, and Mr Luhut invited Singapore to join its Blended Finance Alliance.

Elaborating on the new Blended Finance Alliance, Indonesia’s Deputy Minister for Environment and Forestry Management Nani Hendiarti said blended finance can be used to fund the country’s mangrove rehabilitation and restoration projects, as well as its goals to partially retire its coal-fired power plants, and replace them with renewable energy.

Jakarta has developed a proposal to establish an early retirement of some of its coal-fired power plants with a capacity of 5.5 gigawatts, and replace them with renewable energy with a capacity of 3.7 gigawatts by 2030, added Dr Nani.

Mr Luhut invited Singapore to be a partner in Indonesia’s food estate project, which focuses on improving yields on existing farmland and developing new agricultural land to raise the archipelago’s food security.

Government agencies and other stakeholders, such as the private sector and academia, will be involved in the tie-up between both nations.

Mr Luhut said Indonesia will establish a Blended Finance Alliance under the Group of 20 (G-20) framework.

The alliance will be a multilateral and international institution to pool funds and projects related to climate change and the United Nations’ sustainable development goals.

Indonesia took over the leadership of the G-20 this year, and Mr Luhut invited Singapore to join its Blended Finance Alliance.

The G-20 is an international grouping of 19 advanced and emerging economies, and the European Union.

Singapore, although not a G-20 member, has been invited to participate in the G-20 summits and its related processes.

In January, the Republic was invited by Indonesia to attend this year’s G-20 Summit in Bali later this year.

Elaborating on the new Blended Finance Alliance, Indonesia’s Deputy Minister for Environment and Forestry Management Nani Hendiarti said blended finance can be used to fund the country’s mangrove rehabilitation and restoration projects, as well as its goals to partially retire its coal-fired power plants, and replace them with renewable energy.

Jakarta has developed a proposal to establish an early retirement of some of its coal-fired power plants with a capacity of 5.5 gigawatts, and replace them with renewable energy with a capacity of 3.7 gigawatts by 2030, added Dr Nani.

Mr Luhut invited Singapore to be a partner in Indonesia’s food estate project, which focuses on improving yields on existing farmland and developing new agricultural land to raise the archipelago’s food security.

The project is currently in progress.

Under the new agreement between both countries, collaborations and exchanges on carbon pricing are on the cards.

Last month’s Budget announced that Singapore’s carbon tax would be raised from the current $5 a tonne of emissions to between $50 and $80 by 2030.

During last year’s United Nations Climate Change Conference in Glasgow, Indonesian President Joko Widodo announced a regulation that sets a price on carbon emissions and creates a mechanism to trade carbon.

Author: Shabana Begum

Made in Indonesia

A 145MW floating PV array on Cirata Reservoir to be completed by the end of this year. The developers have already identified ways to meet a 40% local content requirement, which is one of the project’s biggest challenges. Image: Masdar

Indonesia has set itself some ambitious goals for PV manufacturing, backed by domestic content requirements and other incentives. But local demand is limited, and the nation faces stiff competition from China and other countries on the export market. While real obstacles remain, a restructuring of state-owned electricity company PLN and local raw material riches mean the potential is growing.

From pv magazine 03/2022

Abu Dhabi-based Masdar and Indonesia’s PJBI expect to complete a 145MW floating PV array on Cirata Reservoir by the end of this year. The developers have already identified ways to meet a 40% local content requirement, which is one of the project’s biggest challenges.

Indonesia is aiming for at least 6.5GW of local PV manufacturing by 2025, but produced just 154MW in 2021. With a significant catch-up required in the next three years, the country will have to overcome several major obstacles to get close to this ambitious goal.

The Indonesian Solar Panel Manufacturers Association (APAMSI) records 10 manufacturers with a total capacity of 515MW, the largest contributor being PT Len Industri, with a capacity of 70MW. APAMSI chief and Len Industri’s director of business and portfolio strategy, Linus Andor Mulana Sijabat, points out that coal remains the competition in terms of Indonesia’s electricity supply.

“Currently, everything from generating electricity to distribution is covered by the state-owned company Perusahaan Listrik Negara (PLN) which has a monopoly. PLN mostly generates electricity from Indonesian coal at a cheaper price in comparison to PV,” said Sijabat. “So the regulator needs to give assurances that PV will be able to compete with non-renewable energy sources.”

In January 2022, Indonesian news outlet Kontan reported that the Ministry of State Owned Enterprises (BUMN) wants to restructure PLN. Under this plan, PLN will focus on the country’s transmission infrastructure, while the generation of energy will be conducted by sub-holding companies. Sijabat said he is looking forward to this development, but warns that security on investment and clear regulation will still be needed to assure growth in Indonesia’s PV industry.

“As the provider of the national grid, PLN shall also be responsible for building the grid extensions to PV power stations. [It must not] leave developers alone with private investments and unclear regulation on land acquisition.”

Domestic components

By the end of 2021, the government of Indonesia demanded that 85% of the components of solar panels should be produced domestically. As stated by the Ministry of Industry, this development will be supported by the development of ingot- and solar-grade polysilicon factories. The government even wants to establish metallurgical-grade silicon factories that can hopefully boost the share of nationally made components to up to 90% in 2025.

Sijabat, as head of APAMSI, sees the government plan as a chance for domestic economy growth. He also describes how raw silicon materials from Indonesia are exported at too low of a price.

“In one province they sold 1 tonne of silicon sand to [a company in] China at a price of US$35. The price for solar wafer, which requires about six tonnes of silicon sand per megawatt, is something like US$0.05 per watt. Can you imagine the price difference there?” asked Sijabat.

“In order to prevent this kind of thing from happening, just like in the field of nickel production, we need to first produce it locally before we export it to China. That is what I saw from the plan on ingot factories and smelters – but again, to process these raw materials and build our own solar cells the investors need assurance that the end product will be utilised. It is a big investment, we need all stakeholders to be well connected, from industry to the investors.”

Sijabat also explained that PT Len Industri initially wanted to further invest in wafer production, but the demand on the domestic market is still too small. “Our company currently assembles about 70MW/year but the utility is just about 10% to 15%.”

Dealing with tech

PT Deltamas Solusindo is another of Indonesia’s solar panel producers. The company offers mono and multicrystalline modules branded as Solar Quest, with a maximum power rating of about 400W, and also produces lithium ferrous phosphate batteries.

Its solar modules and lithium batteries have been incorporated into PLN’s solar plant projects in various villages of Eastern Indonesia. The company claims to have pioneered the use of robotic machinery in a PV module assembly line in Indonesia in 2018. “The challenge for us as a solar module manufacturer is to keep up with the technology and to produce the most efficient and safest products. It has been a dynamic industry and it will stay that way for the next couple of years,” said Faustin Saputra, director of manufacturing for Solar Quest.

“Unfortunately, the Chinese are dominating the international market. They are more mature and advanced compared to Indonesia in terms of manufacturing technology. They are also able to sell their products at a cheaper price due to their scale and vertically integrated business model.”

Currently, PT Deltamas Solusindo has accomplished a total of 45.5% domestic components for their PV module by acquiring components such as glass and aluminium frames from domestic suppliers.

PV potential

With the high tariffs imposed on Chinese products by the United States, Southeast Asia has become a big solar manufacturing hub, mainly producing modules for export. Yali Jiang, solar analyst for BloombergNEF on solar manufacturing in Southeast Asia, noted the heavy focus on exports, and said that local markets are still supplied by imports from China.

“Right now, according to BloombergNEF data, as we track global manufacturing capacity, there is over 30GW of cell and 40GW of module capacity already in place in Southeast Asia. This is mostly located in Malaysia, Thailand and Vietnam,” she explained. “There are also at least two Chinese manufacturers with production capacity in Indonesia. Local markets, however, do not really develop there. It is mainly just to supply the US.”

Jiang is unsure about labelling Indonesia as a future solar production hub, given the weight of China. “There is enough capacity in Southeast Asia to supply the US market. And China is a mature manufacturing hub with its driven technology, and complete supply chain in operation to supply the rest of the world.”

With its existing scale and experience, China has the advantage when it comes to scaling up further. “In terms of polysilicon production, Chinese players with experience and expertise can build new plants within one to one and half years,” Jiang continued. “But it could take three to five years, or more, if a new entrant would like to start polysilicon production in Indonesia. There are many cases we have seen that never came true in solar manufacturing in the past, particularly for polysilicon.”

Indonesian manufacturing has its challenges, but not all hope should be lost, given political impacts on trade. “It highly depends on politics, rather than economics, that countries led by the US turn against Chinese imports,” said Jiang. “Indonesia could also maximise the local content requirements for its domestic market, but it still needs scale to compete with the remaining production for global markets.”

Author: Sorta Caroline

Indonesia, Singapore prepare rules for solar power export

A 600-kilowatt-peak (kWp) solar power plant on Gili Trawangan Island in Lombok, West Nusa Tenggara. Source: PLN/PLN

From The Star

JAKARTA (The Straits Times/Asia News Network): The government is working on a new regulatory framework to enable solar power exports to Singapore after signing an agreement with the city-state to form a working group on the matter.

The group is tasked with discussing the rules and technicalities concerning cross-border electricity sales.

Institute for Essential Services Reform (IESR) executive director Fabby Tumiwa said solar power exports would require Indonesia and Singapore to harmonize their regulations on the power sector to enable the electricity trade.

The discussions are expected to encompass details on a mechanism for deciding who will build and manage the electricity transmission network.

“Regulations to govern the electricity trade must be [put in place] before the [solar] power plants begin to operate,” he told The Jakarta Post on Tuesday (Feb 22).

Indonesia, Fabby explained, already had regulations on electricity exports, including Energy and Mineral Resources Ministerial Regulation No. 11/2021 on the electricity business, which includes stipulations on cross-border electricity trade.

Under the prevailing rules, there were three schemes for exporting electricity, namely the point-to-point, grid-to-grid-I and grid-to-grid-II schemes, the energy ministry’s electricity business development director, Ida Nuryatin Finahari, explained in an interview with CNBC Indonesia on Feb 7.

Nevertheless, the IESR’s Fabby expected a revision to the existing regulations, considering the complexity of the electricity trade projects between Indonesia and Singapore.

“We are [preparing] for an update [of the electricity export regulations],” Ida told the Post on Tuesday.

On Jan 21, Energy and Mineral Resources Minister Arifin Tasrif and Singapore’s Second Minister for Trade and Industry Tan See Leng signed a memorandum of understanding (MoU) to strengthen bilateral energy cooperation.

“[The MoU] is a basis for the two countries to encourage and improve initiatives for energy cooperation projects at the government and business levels,” Arifin said in a statement issued by the energy ministry on Jan 27.

The scope of the MoU includes cross-border electricity interconnections and regional power grids, energy trading and energy project financing between the two countries.

The agreement also stipulates the formation of a Working Group on Energy, which would become a regular forum to establish, monitor and evaluate energy cooperation initiatives between the two countries.

“[We] will make sure that electricity exports are based on a thorough cost and benefit analysis for all stakeholders involved and will not interfere with the electricity supply in Indonesia,” the energy ministry’s Ida said, speaking in an interview with CNBC Indonesia on Feb 7.

The MoU is part of Singapore’s larger scheme to achieve its climate target of peaking greenhouse gas emissions by around 2030 and halving them by 2050, according to the statement from Singapore’s foreign affairs ministry.

Furthermore, the city-state targeted 4-gigawatts-worth (GW) of low-carbon electricity imports by 2035, or roughly 30 per cent of its total supply, to diversify supply and boost energy security.

As of today, there are a total of four joint ventures set up to develop solar power plants with the goal of exporting the produced clean electricity to Singapore, all of which are currently in the pilot project phase.

Abu Dhabi-based renewables firm Masdar signed on Jan 18 an MoU with Singapore’s Tuas Power, France’s EDF Renewables and Indonesia’s PT Indonesia Power to explore renewable energy within Indonesia for Singapore.

The project is expected to have 1.2 GW of installed capacity and “potential associated storage”, according to a statement issued by Masdar.

“We welcome the steps taken by the government to meet domestic and regional [renewable] energy supply,” Indonesian Coal and Energy Suppliers Association (Aspebindo) chairman Anggawira said on Tuesday.

Source: https://www.thestar.com.my/aseanplus/aseanplus-news/2022/02/24/indonesia-singapore-prepare-rules-for-solar-power-export

Indonesia expected to lead G20’s push in climate action: COP26 president

Source: The Star

From The Star

JAKARTA (The Jakarta Post/Asia News Network): As this year’s Group of 20 (G20) president, Indonesia will have a critical role in spurring other G20 members to come up with more ambitious climate action, the United Kingdom’s president for the United Nations Climate Change Conference (COP26) said.

Indonesia officially started its G20 presidency in December last year. It has identified three primary issues for its presidency, namely global health architecture reform, digital-based transformation and the sustainable energy transition.

COP26 president Alok Sharma (pic), in his latest visit to the country, said Indonesia’s leadership in the G20 will be “vitally important in driving forward climate action.”

“Every year, there are a number of big international events that take place, which allow an opportunity for countries to come forward and show more [emission reduction] ambition,” said Sharma on Thursday.

“And I think there is a historic opportunity for Indonesia to preside over the first net-zero G20 – all the G7 countries have signed up to net-zero in their economies by the middle of the century.”

Sharma was referring to pledges made by countries to significantly reduce their greenhouse gas emissions to reach net-zero around the middle of this century in a push to achieve the goals set in the 2015 Paris Climate Accord, namely limiting a temperature rise of the planet to around 1.5 degree Celsius from preindustrial levels.

Most of the advanced economies in the G20 have pledged to achieve net-zero by 2050, while countries such as China, Brazil, India, Indonesia, Saudi Arabia, Russia and Turkey have pledged to achieve net-zero beyond 2050.

He went on to add that the UK, as the COP26 president, would also work closely with Indonesia to push other G20 members to come up with more ambitious 2030 emission reduction pathways, which was one of the points agreed in the Glasgow Climate Pact that was produced during COP26 last year.

Another key issue that was addressed in the Glasgow Climate Pact was climate financing, with the text noting “deep regret” over the failure of developed countries to meet its annual collective target of mobilising US$100 billion by 2020 to help developing countries mitigate and adapt to the changing climate.

It also urged developed countries to deliver the goal “urgently and through to 2025.”

Sharma pointed out that the UK had published its Climate Finance Delivery Plan ahead of COP26, which outlined the trajectory for developed countries to deliver on their promise.

According to the plan, it was projected that the developed countries would meet their collective goal by 2023.

“We want to see, during this year, that we keep to the trajectory [as outlined in the Climate Finance Delivery Plan],” said Sharma.

He also added that the private sector in developed countries would also play an important role in the efforts to reach the climate finance goal.

“We are very keen to ensure that private finance, which is going to be absolutely vital, also starts to flow toward climate action.”

Separately, Greenpeace Southeast Asia climate and energy campaigner Tata Mustasya said Indonesia should use its G20 presidency to accelerate its transition to a greener economy.

However, Tata said the government’s green energy transition pledge often contradicted its own energy policies.

He pointed out that while Indonesia pledged to retire up to 9.2 gigawatts of coal-fired power plants by 2030, it still planned to build up to 13.8 gigawatts of new coal-fired power plants over the same period.

“If Indonesia truly wants to transition to green energy, it is vital for the country to accelerate such a transition to meet its self-imposed target,” said Tata.

Tata urged the government to accelerate its coal-fired power plants early retirement programme and stop planning the construction of new coal-fired power plants, while also adding that ramping up the underutilized renewable energy sources would be essential in the country’s steps to decarbonize its energy sources.

Source: https://www.thestar.com.my/aseanplus/aseanplus-news/2022/02/21/indonesia-expected-to-lead-g20039s-push-in-climate-action-cop26-president

Indonesia presents roadmap for its energy transition

Screenshot – Minister of Energy and Mineral Resources Arifin Tasrif delivering his remarks at the launch of the G20 Energy Transition forum monitored in Jakarta, Thursday (February 10, 2022). Source: ANTARA/HO-Ministry of Energy and Mineral Resources

From Antara News

Jakarta (ANTARA) – Minister of Energy and Mineral Resources Arifin Tasrif presented a roadmap for Indonesia’s energy transition to the World Bank leaders present at the G20 Indonesia Presidency.

Tasrif met with Managing Director for Operations Axel van Trotsenburg and Vice President for East Asia and the Pacific Manuela Ferro.

“The Indonesian government has committed to achieving a 23-percent share of new and renewable energy in its energy mix by 2025. By the end of 2021, the energy mix of new and renewable energy had reached around 11.7 percent,” Tasrif noted in a statement in Jakarta, Wednesday.

In the roadmap, additional power generation after 2030 will only be from new and renewable energy power plants. Starting from 2035, power will be generated mainly by variable renewable energy sources, such as solar power followed by wind power and ocean power in the subsequent year.

Hydrogen will also be used gradually starting in 2031 and massively in 2051. Moreover, nuclear power will be included in the generation system starting in 2049.

In an effort to achieve the target of new and renewable energy to reach 23 percent of the total energy mix by 2023, the Ministry of Energy and Mineral Resources has passed regulations related to rooftop solar power plants. The government targets an additional 3.6 gigawatts of rooftop solar panels to be installed by 2025.

The minister noted that Indonesia receives maximum solar radiation, as it is a tropical country, thereby making it suitable for installing rooftop solar power plants. Moreover, Indonesia has the potential for producing wind energy, hydropower, and ocean power.

In his presentation, Tasrif also highlighted other efforts to achieve this energy mix, specifically through the construction of 10.6-gigawatt new and renewable energy power plants, including replacing diesel power plants with clean power plants and using biofuels of up to 11.6 million kiloliters.

“In the electricity supply plan, we have ocean currents, solar, water, geothermal, and so on. However, currently, the biggest energy source is solar energy. In addition, we have not taken into account the use of nuclear power (in the near future) but started in 2049,” Tasrif stated.

Indonesia will also build a super grid to boost electricity connectivity. New transmissions between systems and islands are deemed necessary to share renewable energy sources owned by a region.

Tasrif further affirmed that the Indonesian government should build infrastructure to connect the main islands with transmission from new renewable energy power plants.

“For instance, North Kalimantan will be connected to Sumatra and Sulawesi. In addition, electricity supply from Nusa Tenggara, where there are many sources of solar energy, can be connected to Sulawesi and Kalimantan,” he added.

At the conclusion of the meeting, Arifin vouched to maintain sound relations with the World Bank to achieve the planned energy transition targets.

“We will continue to work closely with the World Bank and hope we can arrange for other programs to be executed,” he remarked. 

Authors: Sugiharto P, Azis Kurmala

Source: https://en.antaranews.com/news/215601/minister-tasrif-highlights-roadmap-for-indonesias-energy-transition