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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.
Like Indonesia, China has pledged to peak emissions by the end of the decade and deliver a carbon-neutral society by 2060. Not only that, China also promised not to export emissions abroad, with President Xi Jinping promising to stop investing in coal power plants abroad. That would be a gamechanger in renewable energy investment, considering that China is the biggest investor in Indonesia’s PLTUs, being involved in 70 percent of PLTUs, with US$9.3 billion in investments in 2000-2019.
For several years, China has been at the center of global supply and demand for renewable energy, leading it to account for about 40 percent of capacity growth from 2015 to 2020. China, Europe, the United States and India accounted for 80 percent of global capacity growth for the period and are projected to increase that hold to 87 percent between 2021 and 2026. China’s capability in renewable energy, however, has yet to tap into the huge opportunity in Indonesia’s renewable energy sector. With Indonesia’s and China’s target to reach carbon neutrality by 2060, the two countries can work together to help reach each other’s goals. Therefore, there needs to be a platform to help connect China’s renewable energy (RE) investors and financiers with the need and opportunity in Indonesia’s renewable energy sector.
Looking at the shifting policies, Tenggara Strategics, again, with CSIS and the Indonesian Embassy in Beijing will host China RE Invest Indonesia 2022 to maintain the momentum of high interests among RE investors from China, update the investors on the latest development of Indonesia’s drive toward renewable energy and connect more RE investors and financiers from China with project owners in Indonesia. A total of 441 participants from 330 institutions attended China RE Invest Indonesia 2021.
China RE Invest Indonesia is a multi-stakeholder platform established by Tenggara Strategics, in cooperation with the Centre for Strategic and International Studies (CSIS), to bring together the Indonesian Embassy in Beijing, the Energy and Mineral Resources Ministry, the Investment Coordinating Board (BKPM), PLN and energy companies from Indonesia and China.
China 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 wind energy that Chinese companies have the edge to offer.
May 19, 2022
09:15 - 10:15 am (Beijing Time)
08:15 - 09:15 am (Jakarta time)
May 19, 2022
10:15 - 11:15 pm (Beijing Time)
09:15 - 10:15 am (Jakarta time)
May 19, 2022
11:15 - 12:15 pm (Beijing Time)
10:15 - 11:15 am (Jakarta time)
Ambassador of the Republic of Indonesia to the People’s Republic of China and Mongolia
Senior Fellow CSIS, Former Indonesian Ambassador to the UK and Ireland, Designate Executive Director of the forthcoming Indonesian Centre for Contemporary China Studies
Speakers and Moderators
Director General of New, Renewable Energy and Energy Conservation (EBTKE)
Deputy Investment Minister/BKPM for Investment Planning
Acting Director General of International Cooperation of China National Energy Administration
Executive Vice President Electricity System Planning PLN
Director of Centre for Green Industry (CGI), Ministry of Industry
LEN industry business strategy & portfolio director
Chairman of the Indonesian Solar Energy Association (AESI)
Strategic Advisor to CEO and Chief Technology Officer of Digital Power Business Unit of PT. Huawei Tech Investment
Indonesia Country Manager of LONGi
Manager of Variable Renewable Energy of IPP Project at PT.PLN
Vice Chairman of the Indonesian Wind Energy Association (AEAI)
CEO of Pondera Consult/PT Hywind Energy Solution
Deputy General Manager of Asia Center, Goldwind Energy
Head of the Economic Department, CSIS
Executive Director Tenggara Strategics
CEO of PT Solardex Energy Indonesia
Session 1: Investment Opportunity: Commitment to Replace PLTU 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 Chinese 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 Chinese investors over RE investment in Indonesia?
Speakers
Director General of New, Renewable Energy and Energy Conservation (EBTKE)
Deputy Investment Minister/BKPM for Investment Planning
Acting Director General of International Cooperation of China National Energy Administration
Executive Vice President Electricity System Planning PLN
Moderator
Head of the Economic Department, 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 China 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 Centre for Green Industry (CGI), Ministry of Industry
LEN industry business strategy & portfolio director
Chairman of the Indonesian Solar Energy Association (AESI)
Strategic Advisor to CEO and Chief Technology Officer of Digital Power Business Unit of PT. Huawei Tech Investment
Indonesia Country Manager of LONGi
Moderator
CEO of PT Solardex Energy Indonesia
Session 3: Wind Energy
Wind energy is the least developed renewable energy sector in Indonesia. So far Indonesia has only 147 MW of installed wind power capacity from two commercially operated win power plants in Jeneponto and Sidenreng Rappang (often abbreviated to Sidrap) regencies, both in South Sulawesi. The number is still far below the 60,647 MW of wind energy potentials, spreading in Sumatra, Java, South Sulawesi, Nusa Tenggara and Maluku. Indonesia's diverse archipelagic landscape is reportedly the primary challenge to developing utility-scale wind farms.
In its 2021-2030 RUPTL, PLN plans to invite independent power producers to build more wind powered power plants, with total capacity of 527 MW until 2025. PLN said that a number of developers have proposed to build wind power plants in a number of areas, including Aceh Besar, Padang Sidempuan, Sukabumi, Garut, Banten, Tanah Laut, Kupang, Soe-Oelbubuk, Ambon, Nusa Saumlaki, Kei kecil, Tuban dan Jeneponto. But all these proposals still need further studies to find utility-scale wind farms.
The session will feature wind power players and investors to address a number lingering issues around wind energy such as: What has been done to invigorate wind energy development? How should the government coax the regulatory ecosystem so that Chinese investors would want to take part in the plan regardless of Indonesia's challenging geographic landscape?
Speakers
Manager of Variable Renewable Energy of IPP Project at PT.PLN
Vice Chairman of the Indonesian Wind Energy Association (AEAI)
CEO of Pondera Consult/PT Hywind Energy Solution
Deputy General Manager of Asia Center, Goldwind Energy
Moderator
Executive Director Tenggara Strategics
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