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As economies around the world recover from disruptions caused by the COVID-19 pandemic, countries have been doubling down to accelerate energy transition and achieve sustainability commitments. Energy transition has been a priority issue worldwide since the 2022 G20 Indonesian Presidency, which reached an agreement on the Bali Energy Transition Roadmap. In Indonesia’s case, the Indonesian government reached an agreement with advanced countries in the International Partner Group (IPG), led by the United States and Japan, to launch the Indonesia Just Energy Transition Partnership (JETP) which acquired US$ 20 billion commitment to finance Indonesia energy transition. Indonesia is also a member of the Japan-led Asia Zero Emission Community (AZEC), that seeks to help each member country achieve their net zero emission (NZE) targets by recognizing each member’s unique circumstances, policies, and development challenges. Indonesia has a target to achieve NZE in 2060 or earlier.
Indonesia’s electricity sector is guided by state electricity company PLN’s long-term electricity procurement plan (RUPTL) which also become national electricity supply business plan. In the commitment to achieve net zero emission (NZE) in 2060 or earlier, PLN as the solely electricity state own enterprise recently launched an accelerated renewable energy development (ARED) program which will be deployed in upcoming RUPTL with very ambitious target (39 GW renewable capacity addition by 2040) and requires massive investment (US$166 billion).
The biggest foreign investors in Indonesia’s energy sector, especially in electricity, have been those from China, Japan, and South Korea (CJK). These three East Asian countries are the biggest backers of CFPPs in Indonesia and the world. Globally, CJK countries are responsible for 95% of the funding for CFPPs that came from outside the countries where the plants are located.
Meanwhile, focusing specifically on Japan, the country is not only a co-leader of the Indonesia JETP and initiator of the AZEC but also a powerhouse in the renewable energy industry. Japan has become a significant player due to its variety of renewable energy sources with immense potential, including geothermal, hydropower, and wind. Notably, solar energy accounts for a substantial portion of the country’s new energy generation, positioning Japan at the forefront of the global photovoltaic market with 45% of photovoltaic cells manufactured in the country. Moreover, the country has been pushing what it calls “zero-emission thermal energy”, supporting the expansion of ammonia co-firing in coal-fired power plants, alongside CCS and biomass.
With Japan’s strength in renewable energy and financing, Indonesia has been seeking Japan’s investment in its renewable energy sector.
Japan RE Invest Indonesia is a multi-stakeholder platform to bring together renewable energy (RE) stakeholders from Japan and Indonesia, particularly RE investors and financiers from Japan and RE project owners from Indonesia to increase investment into Indonesia’s RE sector. Tenggara Strategics and CSIS, together with the Indonesian Embassy in Tokyo (KBRI Tokyo) have conducted the 1st Japan RE Invest Indonesia 2021 and the 2nd Japan RE Invest Indonesia 2022 virtually, as well as the 3rd Japan RE Invest Indonesia 2023 in a hybrid format and attracted a total of 828 participants from 473 institutions from Japan and Indonesia.
November 27, 2024
09.10 - 10:30 am (Tokyo Time)
07.10 - 08:30 am (Jakarta Time)
November 27, 2024
10.30 - 12:00 pm (Tokyo Time)
08.30 - 10:00 am (Jakarta Time)
November 27, 2024
13.00 - 15:00 pm (Tokyo Time)
11.00 - 13:00 pm (Jakarta Time)
Ambassador of the Republic of Indonesia to Japan and the Federative States of Micronesia
Speakers and Moderators
Head of the Implementation Joint Office of the Indonesian Energy Transition (Rumah PATEN)
Renewable energy expert from The University of Tokyo
SEVP Impact Investment, BNI Ventures
Minister Counsellor of Economic Affairs of the Indonesian Embassy in Tokyo, Japan
CEO of PT Awina Sinergi International
Session I: Indonesia’s RE Investment Opportunity in the Greenest National Electricity Supply Business Plan
Indonesia’s state-owned electricity company PT PLN, with support from the government, has committed to achieving net zero emission in the electricity sector in 2060 or earlier through the early retirement of CFPPs, development of smart grids, as well as the adoption of more renewable power plants. Such commitments mean a lot of opportunities for RE projects in Indonesia and its investments. In the past years, PT PLN has signed a memorandum of understanding (MoU) with Japanese financial institutions and corporations to accelerate renewable energy development in Indonesia. These financial institutions and corporations include Mitsubishi Heavy Industries (MHI), Ishikawajima-Harima Heavy Industries (IHI Corporation), JGC, JERA, and J-Power.
Aside from PLN’s deals, Japan is committed to supporting Indonesia achieve its NZE target under the AZEC mechanism through the AZEC Japan-Indonesia Joint Task Force. Under this framework, Japan and Indonesia will jointly hold discussions on challenges that projects for decarbonization may face and solutions thereto. Through this mechanism, Indonesia has received the support of Japan for 24 energy transition projects. During the 2nd AZEC ministerial meetings in Jakarta in August 2024, AZEC ministers agreed to launch zero emission power initiative that include increasing renewable energy capacity and reducing emissions from existing fossil-fuel thermal power plants.
Japan, the United States, other partner countries, and Indonesia launched a landmark partnership in 2022 called Just Energy Transition Partnership (JETP) Indonesia. Co-led by Japan and the United States, this partnership commits to mobilize an initial US$20 billion in public and private financing to decarbonize Indonesia’s energy sector, specifically in RE projects that come under JETP Indonesia’s five investment focus areas: (1) early coal-fired power plant retirement; (2) transmission and grid expansion; (3) acceleration of dispatchable RE deployment; (4) acceleration of variable RE deployment; and (5) renewable energy (RE) value chain enhancement.
Recently, PLN introduced the Accelerated Renewable Energy Development (ARED) program, which is set to be a cornerstone of the upcoming national electricity supply business plan—the greenest in the nation's history. ARED aims to transform Indonesia's energy mix by ensuring the upcoming electricity generation addition up to 2040 will be 75% from renewable energy sources (EBT) and 25% from natural gas
Furthermore, ARED is driving a transformative effort toward equitable national electrification through the Green Enabling Super Grid. This visionary initiative will integrate previously disconnected electricity systems across the Indonesian archipelago, creating a unified national grid. As a result, Indonesia will be able to tap into its vast, previously underutilized renewable energy resources, especially in remote regions, unlocking the full potential of large-scale EBT capacity from 22 GW to 61 GW in 2040. In total the ARED investment requires massive amount of investment, US$ 166 billion.
With this in mind, this session will discuss the opportunities and challenges presented by Indonesia’s unique energy transition landscape, and what’s in it for Japanese renewable energy players. This session will also hear Japanese investors’ perspectives on investing in Indonesia’s renewable sector, particularly to succeed Indonesia’s greenest national electricity supply bussiness plan through Japan-Indonesia collaboration.
Speakers
Head of the Implementation Joint Office of the Indonesian Energy Transition (Rumah PATEN)
Renewable energy expert from The University of Tokyo
SEVP Impact Investment, BNI Ventures
Moderator
Minister Counsellor of Economic Affairs of the Indonesian Embassy in Tokyo, Japan
Session II: Indonesian RE projects showcase
In pursuing energy transition, the Indonesian government and PT PLN are taking a two-prong approach, reducing or limited the fossil-fueled power plants on one hand and developing more dispatchable (baseload) and variable renewable power plants. While reducing and limiting the use of fossil-fueled power plants are driven more by government policy, building more renewable power plants need huge investments, especially for Indonesia where renewable energy constitutes a small portion of the total energy mix.
Under PLN's Accelerated Renewable Energy Development (ARED) program, Indonesia plans to build extensive renewable energy infrastructure by 2040. The projected investment required to achieve these goals is substantial, from total US$ 166 billion required investment, estimated US$ 139 billion is needed for the development of renewable energy generation capacity and an additional US$ 27 billion is deemed to upgrade and expand the transmission system.
Given the scale of investment required, the ARED program highlights the need for significant foreign investments to help finance the transition and realize Indonesia's ambitious renewable energy goals. This collaboration will be essential to expand the nation's renewable energy portfolio and support Indonesia's commitment to reducing emissions and achieving a sustainable energy future
This session will showcase a number of renewable energy projects under PLN subsidiaries, especially PT Nusantara Power and PT Indonesia Power, the two energy companies with the largest power generations in Indonesia. The session will hear explanations on projects on offer for Japanese investors.
Speakers
Moderator
CEO of PT Awina Sinergi International
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