In the face of global climate uncertainty, Indonesia is taking bold steps alongside state-owned enterprises (BUMN) to prioritize energy transition as a crucial strategy for environmental challenges and ensuring long-term energy sustainability. The recent signing of memoranda of understanding (MoU) for diverse programs and projects within the Energy Transition Mechanism (ETM) Framework marks a significant leap forward.
The Indonesian Government has actively implemented tangible measures to expedite energy transition, focusing on increased investments in renewable energy infrastructure. Concrete plans include the development of renewable energy-based power plants, expanding renewable energy capacity, and enhancing related infrastructure.
To support the shift to clean energy sources, the government has implemented strategic policies, including fiscal incentives for companies investing in the renewable energy sector.
Then, state-owned enterprises, as key drivers of Indonesia’s economy, play a crucial role in achieving sustainable energy transition. Through innovative programs and clean energy projects, state-owned enterprises take the lead in integrating the latest technologies to produce environmentally friendly energy. Significant investments in solar power, wind energy, and other forms of energy demonstrate their commitment to diversifying energy sources.
Thus, Indonesia is proactively seeking collaboration and support from various stakeholders to facilitate its energy transition. Multilateral cooperation involves international institutions, donor agencies, and strategic partners with the expertise and resources to contribute to clean energy development in Indonesia.
Landmark MoU Signing for Indonesia’s Energy Transition Projects
The MoU signing for various programs and projects under the Energy Transition Mechanism (ETM) Framework is hailed as a historic moment for Indonesia, according to Finance Minister Sri Mulyani Indrawati.
This is a historic moment for Indonesia to achieve a fair and affordable energy transition.
Finance Minister Sri Mulyani Indrawati, as quoted from Antaranews.
Several MoUs were signed, including the Accelerating the Managed Phase Out CFPP Cirebon-1 (1×660 MW) Framework Agreement, Project Development Facility for Pumped Storage in Sumatra (2×250 MW) and Grindulu (4×250 MW), development of Systems Control Centers in Sulawesi, Kalimantan, and Sumatra, and various potential collaborations to support Indonesia’s energy transition.
Furthermore, Indonesia aims to secure at least $97 billion by 2030 for the energy transition, making the establishment of the Energy Transition Mechanism (ETM) a crucial financing mechanism for global participation in addressing the climate crisis. The government emphasizes the importance of green low-cost financing through ETM and JETP, outlined in the Comprehensive Investment & Policy Plan (CIPP).
The signing took place during the first day of a working visit to Dubai, the United Arab Emirates, on Sunday (3/12), and involved key stakeholders such as PT PLN, PT SMI, INA, the Asian Development Bank (ADB), KfW, Global Energy Alliance for People and Planet (GEAPP), GPST, and NREL.
Harnessing Hydropower for Indonesia’s Energy Transition Projects
Minister of Energy and Mineral Resources Arifin Tasrif highlights the pivotal role of hydropower as the backbone of low-carbon energy development globally and in Indonesia. Despite having a hydropower potential exceeding 95 gigawatts (GW), Indonesia’s current utilization is only 7 GW, as quoted from Republika.
The recent launch of the Bali Statement during the World Hydro Power Congress (WHC) 2023 in Bali reaffirms the role of hydropower as a strategic element in Indonesia’s national strategy for a low-carbon economy. Arifin emphasizes that most untapped hydropower potential is concentrated in developing countries.
At COP 28 in Dubai, Arifin underlines the significant role of hydropower in global energy systems. Hydropower not only prevents approximately 3 gigatons (GT) of CO2 emissions annually, representing about nine percent of global annual CO2 emissions, but it also contributes to affordable electricity access and water management.
Arifin notes Indonesia’s recent achievement with the inauguration of the Cirata Floating Solar Power Plant, the largest in Southeast Asia, with a capacity of 192 MWp. This solar power plant, built on a 200-hectare reservoir with a 1 GW hydropower plant capacity, signifies Indonesia’s commitment to sustainable energy development.
The development of hydropower is expected to generate environmentally friendly electricity, enhance power grid stability, and contribute to shaping a sustainable energy future for future generations. Inclusive collaboration is required to achieve these goals.
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