As Indonesia makes a bold transition from coal and other fossil fuels towards renewable and clean sources of energy, a burning question arises - can the country meet its zero emissions targets by 2060? A recent webinar hosted by the United Nations Development Programme (UNDP) sought to address the issue further.

Lying on tropical and equatorial climate, Indonesia is blessed with abundant sources of renewable energy such as solar, wind and water. And yet the country is among the lowest in the world in terms of renewable energy utilisation. But as Indonesia copes with the COVID-19 pandemic, any transition towards renewable energy must not hurt the country’s economy which still depends on fossil fuels. 

Organised by UNDPs ’s Market Transformation for Renewable Energy and Energy Efficiency (MTRE3) project, the webinar focused on Indonesia’s win-win approach to capitalize the enormous opportunity of green energy. It discussed the challenges involved and sought to address the best way forward —socially, technically and financially. Much of the discussion centred on UNDP’s the June 2021 global consultation forum which brought together coal-dependent countries which have been transitioning to renewable sources of energy.

Four out of 10 developing countries currently dependent on coal have successfully increased the use of new renewable sources of energy at lower risk and lower costs of technology and capital. Although Indonesia, one of the world’s largest coal producers, is not among these countries, the country has taken some steps to phase out the use of coal

Speakers from state-owned energy firm PT PLN, coal producer PT TBS Energi Utama Tbk, South Sumatra-based rice producer, PT Buyung Poetra Sembada and the Asian Development Bank discussed technical readiness for transition to renewables, the transformation of the coal industry and the potential for green jobs. The financial commitment required for transition was also discussed.

Coal makes a sizeable contribution to the country’s GDP and employment levels. In fact, the top three biggest coal producing regions in Indonesia —Tanjung Enim & Lahat in  South Sumatra, Berau and Samarinda  in East Kalimantan and South Kalimantan — are also the largest employers  in the region. There are concerns that energy transition may impact GDP in the region, according to a report published by  the Institute for Essential Services Reform (IESR) in 2020. Thus, it is important to prepare and develop strategies for a gradual transition away from coal to minimize impact and to ensure no one is left behind in the process.

It is also critical to make sure the electricity grid in the coal producing regions are prepared for renewable energy by  the  Net Zero Emission target in 2060.

Dadan Kusdiana,Director General of New Renewable Energy and Energy Conservation, Ministry of Energy and Mineral Resources noted the multi-sectoral approach to the transition, “The Equitable Energy Transition does not just depend on government policies, it also involves the business sector which can ensure sustainable energy sector, as well as international organizations, academia and other organizations working in sustainable energy,” he said.

Agus Prabowo Head of UNDP Indonesia’s Environment Unit noted the importance of considering the socio-economic impact of the transition. “As the largest energy consumer in Southeast Asia, with an ever-increasing source of electricity demand, Indonesia is the key to an effective energy transition in the ASEAN Region, ” he said.

“Energy transition to Net Zero Emissions in 2060 will certainly have an impact on socio-economic aspects: jobs and local communities who depend on the related sector. To ensure an equitable and inclusive transition, we need to include socio-economic, environmental, and even local cultural dimensions in the areas that will be most affected by this transition to renewable energy,” he added.

Looking ahead, the government is now formulating its  strategic plans towards meeting the net zero emissions targets by 2060. The Government is also committed to  finalise “Energy Compact”, a voluntary ambitious national commitment, as part of Indonesia’s contribution to the United Nations High-Level Dialogue on Energy (HLDE), scheduled for Sept. 24 this year.

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Written by Kaneisha Alifputri

Edited by Tomi Soetjipto and Ranjit Jose