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Indonesia has reached a new milestone in its journey to achieve net-zero carbon emissions by 2060. To achieve that, as stated in the country’s Nationally Determined Contribution (NDC), Indonesia has established the development of clean energy sources as a national policy directive, where collectively, these policies will eventually put the country on the path to decarbonization.
The Energy and Mineral Resources Ministry, through state utility firm PLN’s newest 10-year electricity procurement plan (RUPTL), has made new and renewable energy the priority energy source for new power plants to be built in the next 10 years. The 2021–2030 RUPTL, does not approve of any new coal-fired power plants (PLTU) and only allows the completion of plants that are already under construction or have reached their financial close. PLN plans to start replacing its coal-fired and gas-fired power plants with new and renewable energy (EBT) power plants in 2025. This opens up a huge opportunity for Indonesia’s future in harnessing renewable energy and it has appealed to foreign countries to invest in developing the sector.
At the same time, Japan declared in October 2020 its aim to reduce greenhouse gas emissions to net-zero and to realize a carbon-neutral, decarbonized society by 2050. The Japanese government followed up this pledge by unveiling the Green Growth Strategy, which places reliance upon the expansion of renewables, a recovery of nuclear power, carbon recycling and the deployment of new technologies to decarbonize the electricity sector. This was further reflected during Japan’s participation at the 26th United Nations Climate Change Conference (COP26) and a leaders’ summit on the UN Framework Convention on Climate Change (UNFCCC), where Prime Minister Fumio Kishida emphasized the use of technologies in Japan’s approach to clean energy.
In recent years, Japan has made substantial progress in renewable energy. Solar power has become the largest renewable energy source in Japan due to generous feed-in tariffs, and Japan has become one of the first countries to launch a national hydrogen strategy. According to the International Energy Agency (IEA), hydrogen is expected to play a central role in Japan’s clean energy transition. Japan has also become a driver in climate financing, as seen by Prime Minister Fumio Kishida’s promise to add US$10 billion in climate finance for developing countries, announced during COP26. With this pledge, Japan’s funding commitment rises to $70 billion. Furthermore, Fumio made a point of improving infrastructure investment in Asia, and with strong support from the government, Japan is well set up to develop and finance renewable energy (RE) projects within and beyond its national border, including in Indonesia.
Looking at the enthusiasm, Tenggara Strategics, again in partnership with CSIS and the Indonesian Embassy in Tokyo will host Japan RE Invest Indonesia 2022 to maintain the momentum of high interests among RE investors from Japan, update the investors on the latest development of Indonesia’s drive toward renewable energy and connect more RE investors and financiers from Japan with project owners in Indonesia. A total of 370 participants from 230 institutions attended Japan RE Invest Indonesia 2021.
Japan RE Invest Indonesia is a multistakeholder platform established by Tenggara Strategics, in cooperation with the Centre for Strategic and International Studies (CSIS), to bring together the Indonesian Embassy (KBRI) in Tokyo, the Energy and Mineral Resources Ministry, the Investment Coordinating Board (BKPM), PLN and energy companies from Indonesia and Japan.
Japan RE Invest Indonesia includes a panel discussion on fossil fuel phase out and RE investment opportunities in Indonesia, and two sessions on solar energy and smart grid that Japanese companies have the edge to offer.
June 16, 2022
14:30 - 15:30 pm (Tokyo Time)
12:30 - 13.30 pm (Jakarta time)
June 16, 2022
15:30 - 16:30 pm (Tokyo Time)
13:30 - 14.30 pm (Jakarta time)
June 16, 2022
16:30 - 17:30 pm (Tokyo Time)
14:30 - 15.30 pm (Jakarta time)
Ambassador of the Republic of Indonesia to Japan and the Federative States of Micronesia
Minister for Energy and Mineral Resources of the Republic of Indonesia
Speakers and Moderators
Director General of New, Renewable Energy and Energy Conservation (EBTKE)
Deputy Commissioner for International Affairs, Ministry of Economy, Trade and Industry (METI), Japan
Executive Vice President Electricity System Planning PLN
President Director of PT Mitsubishi Power Indonesia
Director of Mega Project and New and Renewable Energy PLN
Chairman of the Indonesian Solar Energy Association (AESI)
President Director of PT Quint Solar Indonesia
Chairman of the Indonesian Smart Grid Initiative (PJCI)
Executive Vice President of Engineering and Technology PLN
Renewable energy expert from The University of Tokyo
Executive Director of the Centre for Strategic and International Studies (CSIS)
President Director of PT Awina Sinergi International (A-Wing Group Japan)
Executive Director of Tenggara Strategics
Session 1: Investment Opportunity: Commitment to Replace PLTUs with RE
When opening Business-20 (B-20) Indonesian Inception Meeting 2022, President Joko “Jokowi” Widodo said that a total of 5.5 gigawatts (GW) capacity of coal-powered power plants (PLTU) are ready for early retirement, as part of the Indonesian commitment to reach net zero carbon emissions in 2060. Indonesia has an ambitious yet promising goal to fully phase out coal power plants by 2056. According to PLN’s 2021-2030, 2025 will see the start the replacement of coal-fired power plants in Indonesia by renewable energy. Under the country’s recent pledge at COP26, Indonesia seeks to retire up to 9.2 gigawatts (GW) of coal-fired power plants by 2030. On top of that, the country also commits to scaling up the deployment of renewable power generation, scaling up technologies and policies to move from unabated coal power generation, and strengthening domestic and international efforts to support affected parties during the energy transition to renewable energy.
Considering Indonesia’s commitment to phasing out coal-fired power plants along with its budding renewable energy sector, this situation provides opportunities for investors to take part in the country’s transition to renewable energy. In the near term, the 2021-2030 RUPTL itself offers great opportunity for RE developers and investors. In the RUPTL, PT PLN has targeted 40.6 GW new power plant installations in 2021-2030, of which 20.9 BW or 51.6 percent will be sourced from new and renewable power plants. Many of the renewable projects in the RUPTL are actually to achieve a shorter-term target of 23 percent renewable energy in Indonesia’s energy mix in 2025. According to a government estimate, Indonesia requires an investment of US$70 billion to achieve the target of 23 percent renewable energy by 2025.
In this session, opportunities and challenges presented by the 2021-2030 RUPTL and the longer-term coal phase out will be discussed: What are the opportunities available for Japanese investors? What are considerable threats that could hold Indonesia’s RE development? Why should foreign investors consider Indonesia’s transition to clean energy in the first place? What are the concerns of Japanese investors over RE investment in Indonesia?
Speakers
Director General of New, Renewable Energy and Energy Conservation (EBTKE)
Deputy Commissioner for International Affairs, Ministry of Economy, Trade and Industry (METI), Japan
Executive Vice President Electricity System Planning PLN
President Director of PT Mitsubishi Power Indonesia
Moderator
Executive Director of the Centre for Strategic and International Studies (CSIS)
Session 2: Solar Energy
Indonesia has a vast potential for generating and balancing solar photovoltaic (PV) energy to meet future energy needs at a competitive cost with solar energy identified as an energy source whose technical, environmental and economic potential far exceeds Indonesia’s present and future energy requirements and is far larger than all other renewable energy resources combined. Solar irradiation is available at a stable level all year long, offering an energy potential of more than 200 gigawatts (GW).
In the 2021-2030 RUPTL, PLN relies so much on solar to meet the 2025 renewable energy target of 23 percent in the country’s energy mix. In the five-year period of 2021 to 2025, PLN plans to generate a total of 3,910 megawatts peak (MWp) from solar energy or 36.7 percent of 10,640 MW of electricity from all renewable energy plants. PLN plans to build solar panels in remote islands not connected to grids, work together with independent power producers to build floating solar panels on lakes, existing dams as well as encourage the people and businesses to build more rooftop solar PVs. Moreover, the government’s latest regulation on rooftop solar PV increases net metering/electricity exporting to PLN from 65 percent to 100 percent. All these developments open more investment opportunities for investors/financiers to invest in solar PVs.
This session will convene stakeholders and industry players from Indonesia and Japan to address the most pressing issues around developing and investing in Indonesia’s solar energy sector, discuss how collaborations between local stakeholders and potential investors could raise the standards of solar projects so that they are investment-worthy, and tackle the problems that have been hindering investment realization into the promising sector.
Speakers
Director of Mega Project and New and Renewable Energy PLN
Chairman of the Indonesian Solar Energy Association (AESI)
President Director of PT Quint Solar Indonesia
Moderator
President Director of PT Awina Sinergi International (A-Wing Group Japan)
Session 3: Smart Grid (SG)
Most of the grids in the country were designed decades ago, and nowadays they need to be more flexible, efficient, and reliable to support the forthcoming energy demand and supply, as well as the related grid complexity. Therefore, the application of Smart Grid in Indonesia would significantly boost the country’s ability to increase the proportion of renewable energy in its primary energy mix to 23 percent by 2025. Increasing SG's application would help the country to transition its energy use because the technology promotes greater efficiency, reliability and resiliency along the supply chain through digitalization. With greater grid flexibility, power producers would have more capability to integrate various energy resources, which would lead to increasing renewable energy penetration, hence decarbonization in the long run.
In its 2021-2030 RUPTL, PLN has a smart grid roadmap for 2021-2025 and 2026-2030. For the 2021-2025 roadmap, PLN would focus on digitalization of power generation, outomation of transmission and distribution centers through automatic dispatch system, distribution grid management, smart micro grid, and advanced metering infrastructure. PLN opens cooperation with private investors in building the smart grid. And Japanese players have the edge to help Indonesia realize its smart grid ambition. Hitachi Energy of Japan, for example, has deployed its Grid Edge solutions across the country, including the first and largest microgrid facility of a mining company in Bontang. The company has also collaborated with the state utility company, PLN, to provide smart grid solutions to deliver reliable electricity in Semau, near Kupang, East Nusa Tenggara. Recently, the company was also involved in another PLN’s smart grid pilot project on Selayar Island.
This session will discuss PLN’s efforts to achieve renewable energy targets through adoption of smart grid, and discuss what are the opportunity and challenges of its implementation such: Can Indonesia's electricity sector apply lessons from successful electricity digitalization processes in Japan? How fast PLN will adopt smart grid?
Speakers
Chairman of the Indonesian Smart Grid Initiative (PJCI)
Executive Vice President of Engineering and Technology PLN
Renewable energy expert from The University of Tokyo
Moderator
Executive Director of Tenggara Strategics
Contact Us
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