September 9, 2024
JAKARTA – The government has reiterated that it will pursue the energy transition at its own pace and in ways that match the country’s economic goals and fiscal ability, stressing that the strategies of advanced economies will not work for developing countries.
Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan said the economies of developing countries must still grow, while they pursued emissions reduction.
He also stressed that the world could not rely on certain technologies in pursuing global emissions reduction.
“We need to avoid being dogmatic about one technology in carbon emissions reduction,” Luhut said during the Indonesia International Sustainability Forum (IISF) in Jakarta on Thursday.
Luhut went on to say that Indonesia would involve the development of the green economy as part of its push toward energy transition.
He cited cooperation with Singapore in developing a solar panel manufacturing industry in exchange for exporting low-emission electricity to the city state. Singapore has approved the import of 3.4 gigawatts of electricity from Indonesia as of Thursday.
Luhut also boasted of the country’s push into electric vehicle (EV) manufacturing and EV adoption among Indonesians.
Moreover, Luhut is also eyeing boosting the country’s biofuel production, particularly from existing sources of crude palm oil and later exploring the use of seaweed, which it has in abundance.
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The Energy and Mineral Resources Ministry renewable energy director general, Eniya Listiani Dewi, said on the sidelines of the IISF on Friday that Indonesia would require US$55 billion in investment to push its energy transition for the next five years. She said next year the country would already need its first $14 billion.
She added that establishing a stable grid to effectively manage large shares of intermittent renewable energy sources like solar and wind power remained one of the major challenges to the energy transition in the country.
President Joko “Jokowi” Widodo during his remarks on Thursday said that Indonesia had over 3,600 GW of renewable energy potential, waiting to be developed, and 3.3 million hectares of mangroves that could absorb up to 12 times the amount of carbon dioxide absorbed by tropical rain forests.
He said none of this would yield much if developed countries “don’t have the courage to make investments, share their technology and provide affordable financing for developing countries”.
Putra Adhiguna, managing director at the Energy Shift Institute told The Jakarta Post on Friday that the government should focus on expanding renewable energy capacity and improving inter-island interconnections because electricity demand in Indonesia will continue to increase.
“The debate about coal base load versus renewable energy should not distract us. Both India and China are top consumers of coal worldwide but are also among the world’s largest and fastest renewable energy developers,” he said.
During the IISF, state-owned electricity monopoly PLN through two of its subsidiaries and Saudi utility developer ACWA Power signed a hydrogen purchase agreement with state-owned fertilizer company PT Pupuk Indonesia.
Last year, the companies signed an agreement to develop the largest green hydrogen facility powered by 600 megawatts of solar and wind power, which is expected to start commercial operations in 2026. The project will enable 150,000 tonnes of green ammonia production annually.
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Institute for Essential Services Reform (IESR) executive director Fabby Tumiwa, however, cautioned that despite the many hydrogen developments in Indonesia, the government is planning that most of it be exported. He told the Post on Friday that the country has yet to see an upward trend of hydrogen use domestically.
State-owned oil and gas company Pertamina also signed an agreement to jointly study the potential development of carbon capture and storage with partners, including Pupuk Indonesia and South Korean steel giant POSCO at the IISF on Thursday.
Rachmat Kaimuddin, under-secretary for transportation and infrastructure at the Office of the Coordinating Maritime Affairs and Investment Minister, reiterated during the IISF the country’s commitment to fighting pollution in its cities, especially Jakarta.
Rachmat said the government hoped it could soon introduce “much cleaner” gasoline in the first quarter next year and biodiesel before the end of this year.
He acknowledged that Indonesia had been lagging behind on determining emissions standards for its coal plants, unlike China, India, the European Union and the United States, but he gave an assurance that the government was working to improve its capability in this area.