Clean Energy Finance and Investment in Indonesia webinar, 26 July 2023, Paris OECD

1. CLEAN ENERGY FINANCING
IN
NET ZERO EMISSION 2060
Webinar “Clear Energy Finance and Investment in
Indonesia”
Wednesday, 26 July 2023
Gigih Udi Atmo
Director of Energy Conservation
MINISTRY OF ENERGY AND MINERAL RESOURCES
DIRECTORATE GENERAL OF NEW, RENEWABLE ENERGY & ENERGY
CONSERVATION

2. Directorate General of New, Renewable Energy, and Energy Conservation @2023 2
126 143
162
181
217
8.6% 9.2%
11.2%
12.2%
12.3%
11.6% 12.2%
13.4
14.5%
15.7%
17.9%
19.5%
23%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
22%
24%
2018 2019 2020 2021 2022 2023 2024 2025
Realization (MBOE) Target (MBOE) Realization (%) Target (%)
366.4
448.6
522.9
659.3
GHG EMISSION REDUCTION IN ENERGY SECTOR
No Sector
2010 GHG
Emission
(Million
Ton CO2e)
GHG Emission by 2030 Reduction
BaU CM1 CM2 CM1 CM2
1. Energy 453.2 1,669 1,311 1,223 358 446
2. Waste 88 296 256 253 40 45.3
3. IPPU 36 70 63 61 7 9
4. Agriculture 111 120 110 108 10 12
5. FOLU 647 714 217 -15 500 729
TOTAL 1,334 2,869 1,953 1,632 915 1,240
Enhanced NDC 2030
39
45
51
58
67
91
116
142
29
40,6
54,8
64,4 70
91,5*
2017 2018 2019 2020 2021 2022 2023 2024
Target Realization
358
 By 2022, the energy sector was able to reduce GHG
emissions by 91.5 million tonnes of CO2e.
 Energy sector mitigation actions in 2022 include
(million tons CO2e): implementation of renewable
energy (36.61), application of energy efficiency
(20.54), application of low-carbon fuel (15.47),
use of clean generation technology (12.31), and
other activities (6.57).
Achievement of Renewable Energy Mix & Emission Reduction

3. Directorate General of New, Renewable Energy, and Energy Conservation @2023 3
INDONESIA’S ENERGY SECTOR ROADMAP TOWARDS NET ZERO EMISSION 2060
Energy Sector Roadmap for NZE 2060
or sooner
2021-2025 2026-2030 2031-2035 2036-2040 2041-2050 2051-2060
Supply:
NRE Development based
on RUPTL 2021-2030,
cofiring on CFPP
Demand:
Induction stove, gas
network, DME, B35
mandatory, EV.
Supply:
NRE Development based
on RUPTL 2021-2030,
pump storage starts
by 2025
Demand:
Induction stove, gas
network, B40
mandatory, EV, energy
management.
Supply:
Green Hydrogen
utilization begin in 2031
for transportation
sector, BESS in 2034
Demand:
Induction stove, gas
network, B40 mandatory,
EV, energy management, &
hydrogen for
transportation sector
Supply:
Nuclear PP starting 2039,
massive Solar PV
development, along with
onshore and offshore wind
PP.
Demand:
Induction stove, gas
network, B40 mandatory,
EV, and CCS for cement
and steel industry
Supply:
Green Hydrogen
utilization begin to
substitute natural gas,
NRE dominate the energy
mix
Demand:
Induction stove, gas
network, B40 mandatory,
EV, & hydrogen for
industry.
Supply:
All electricity are
generated by NRE PP.
Remaining GHG emission
level: 129 million
tons CO2.
Demand:
Induction stove, gas
network, EV, and CCS
for industry
540,5
590,2
681,6
748,2
748,6
710,4
609,0
422,0
327,5
129,4
555,3
656,3
821,4
1009,5
1136,2
1340,2
1412,5
1465,8
1680,1
1927,4
2015 2020 2025 2030 2035 2040 2045 2050 2055 2060
NZE
≈93%
reduction
BaU
Unit : million tons of CO2e
Implementation Strategies:
1. Electrification (EV, electric stove,
etc)
2. Renewable energy development
acceleration (on grid, offgrid, biofuel)
3. Gradual retirement of coal-fired PP.
4. CCS/CCUS
5. Development of new energy (hydrogen,
ammonia)
6. More efficient technology utilization.
Emission Reduction Target

4. Directorate General of New, Renewable Energy, and Energy Conservation @2023 4
2022 2025 2030 2035 2040 2045 2050 2055 2060
Coal Gas Diesel Geothermal
Bioenergy Hydro Wind Solar
Nuclear Ocean Storage
NZE 2060 IN ACCORDANCE WITH ENERGY SECTOR DEVELOPMENT
NZE Power Plant Development Roadmap
NRE PP Installed Capacity in 2060: 708 GW
Solar 421 GW, Wind 94 GW, Hydro 72 GW,
Bioenergy 60 GW, Nuclear 31 GW, Geothermal
22 GW, Ocean Energy 8 GW.
Bioenergy 60,2 GW
Storage: Pumped Storage 4.2 GW, BESS 56
GW.
82
100
152
199
283
389
509
637
708
 The projected electricity demand reach 1,942 TWh and electricity
consumption per capita equal to 5,862 kWh/capita. Electricity
Demand dominated by industry and transportation sector.
 National power generation will be mainly sourced by VRE while
optimizing other RE resources to help maintaining system
stability.
 Pump storage enters the system in 2025, Battery Energy Storage
System (BESS) to be massively utilized in 2031.
 Nuclear PP will enter the system in 2039 to maintain system
reliability. By 2060, up to 31 GW nuclear PP will be deployed.
NZE 2060 Investment Required for Energy
Sector
Green RUPTL PT PLN
(Persero) 2021-2030:
Additional NRE PP
capacity: 20.92 GW
(51.6%), required
investment: USD 55,2
billion.
• Generation: USD 994.6 billion
• Transmission: USD 113.4 billion
Total investment: 1,108 billion USD or 28.5
billion USD/year
POWER PLANTS/
STORAGE
INVESTMENT
REQUIREMENT
(MIO USD)
CAPACITY
@ 2060
(GW)
HYDRO 168,568 72
NUCLEAR 216,210 31
SOLAR 159,879 421
WIND 156,393 94
GEOTHERMAL 71,270 22
OCEAN/TIDAL 24.205 8
BIOENERGY 122,347 60
COAL 21,693 -*
GAS 13,614 -*
OIL 207 -*
Storage
BESS 37,218 56
PUMP STORAGE 2,989 4
TOTAL 994,593 768
The huge investment of NRE development to
realize
Indonesia NZE 2060 requires substantial support
from stakeholders, including private sectors &
international parties.

5. Directorate General of New, Renewable Energy, and Energy Conservation @2023 5
ENERGY
POTENTIAL
(GW)
UTILIZATION
(MW)
SOLAR 3,294 322.6
HYDRO 95 6,738.3
BIOENERGY 57 3,118.3
WIND 155 154.3
GEOTHERMAL 23 2,373.1
OCEAN 63 0
COAL GAS. 30
TOTAL 3,687 12,737
NRE UTILIZATION TO SUPPORT ENERGY TRANSITION
National NRE Potential and
Utilization
Palm Oil
Mill
 Hydro: all over Indonesia’s areas,
particularly in North Kalimantan, NAD,
North Sumatra and Papua.
 Solar: all over Indonesia’s areas,
particularly in East Nusa Tenggara,
West Kalimantan and Riau which has
higher radiation.
 Wind (>6 m/s): particularly located in
East Nusa Tenggara, South Kalimantan,
West Java, NAD & Papua.
 Ocean: all over Indonesia’s areas,
particularly in Maluku, East Nusa
Tenggara, West Nusa Tenggara and Bali.
 Geothermal: in ring of fire areas,
including Sumatra, Java, Bali, Nusa
Tenggara, Sulawesi, & Maluku.
 Bioenergy: spread throughout Indonesia
Indonesia’s NRE resources are abundant, diverse and spread
throughout the country. Currently, only 0.3% of the total
potential has been utilized.
NRE PP Development Plan: Green RUPTL 2021-
2030
Sustainable Biofuel
Cofiring and Biogas Program
 Last year the B40 road test was
launched and conducted successfully.
 B35 Mandatory has started since
February 2023, around 13 million kL
are to be produced for domestic and
export purposes.
The government has launched Indonesian Bioenergy
Sustainability Indicators (IBSI) to enhance
sustainability of biofuel production which is mainly
sourced through CPO.
 Both programs are substantial in realizing green and
circular economy.
 Currently, 36 CFPPs have implemented cofiring
commercially. In 2023, cofiring implementation
produced 24 TWh of green energy.
 For Biogas, it is mostly used for domestic purposes.
Until April 2023, more than 52 thousands of communal
biogas are installed with production capacity reaching
 NRE additional capacity
is targeted to reach
20.9 GW (51.6% of the
power plant in RUPTL
2021-2030.
 NRE development has been
carried out in
accordance with the
systems’ electricity
balance.
 Another program, namely
dedieselization, is also
included on the plan.
2030 Additional Cap.
Target
Solar: 4,680
MW
Wind: 597 MW
Geothermal: 3,355
MW
Hydro: 10,390 MW
Bioenergy: 590 MW
NRE Base and Peaker: 1,310
MW

6. Directorate General of New, Renewable Energy, and Energy Conservation @2023 6
GREEN RUPTL PT PLN (PERSERO) 2021 – 2030
INVESTMENT OPPORTUNITIES
NRE PP
5,237 MW
110
117
193
230
300
1.180
3.108
4.521
PLTB
PLT Bio
PLTS
PLT EBT Peaker
PLT EBT Base
PLTP
PLTA/M & PS
Fosil
SUMATERA
NRE PP
1,741 MW
70
86
100
304
1.181
1.063
PLTB
PLT Bio
PLT EBT Base
PLTS
PLTA/M & PS
Fosil
KALIMANTAN
NRE PP
2,261 MW
50
75
130
176
230
1.600
896
PLT Bio
PLTP
PLTB
PLTS
PLT EBT Base
PLTA/M & PS
Fosil
SULAWESI
NRE PP
2,050 MW
27
106
181
185
450
1.101
1.324
PLTB
PLT Bio
PLTA/M & PS
PLTP
PLT EBT Base
PLTS
Fosil
MALUKU PAPUA
NUSA TENGGARA
232
260
1.915
2.906
4.321
11.848
PLT Bio
PLTB
PLTP
PLTS
PLTA/M & PS
Fosil
JAWA MADURA BALI
NRE PP
9,634 MW
02
SOLAR PV PP
Additional Capacity until 2030 :
4.68 GW
GHG Emission Reduction : 6.97
million tons CO2e
Investment Required : 3.2 Billion
USD
01
HYDRO PP
Additional Capacity until 2030 :
104 GW
GHG Emission Reduction : 46.46
million tons CO2e
Investment Required : 25.63
Billion USD
05
WIND PP
Additional Capacity until 2030 :
597 MW
GHG Emission Reduction : 2.22
million tons CO2e
Investment Required : 1.03 Billion
USD
BIOENERGY PP
Additional Capacity until 2030 :
590 MW
GHG Emission Reduction : 4.61
million tons CO2e
Investment Required : 2.2 Billion
USD
04
06
NRE PP - BASE
Additional Capacity until 2030 :
1.01 GW
GHG Emission Reduction : 4.51
million tons CO2e
Investment Required : 5.49
Billion USD
07
NRE PP - PEAKER
Additional Capacity until 2030 :
300 MW
GHG Emission Reduction : 2.01
million tons CO2e
GEOTHERMAL PP
Additional Capacity until 2030 :
3.35 GW
GHG Emission Reduction : 22.4
million tons CO2e
Investment Required : 17,.35
Billion USD
03

7. Directorate General of New, Renewable Energy, and Energy Conservation @2023 7
STRENGTHENING REGULATIONS TO ACCELERATE NRE INVESTMENT
In order to support the use of NRE in the primary energy mix
and achieve a reduction of global emissions, it is necessary
to optimize the authority of coordination and synergy between
the Central Government and Local Governments
Renewable Energy Development is carried out based on the
RUPTL, which takes into account the target of the renewable
energy mix, supply-demand balance, and the economic value of
power plants
Ceiling Price (HPT) for 2-stage staging without escalation
with location factors applies to stage 1, for each type of
renewables:
Type Stage 1 (cUSD/kWh) Stage 2 (cUSD/kWh)
Geothermal 7,65 – 9,76 x F 6,5 – 8,30
Hydro 6,74 – 11,23 x n x F 4,21 – 7,02
Excess Power
Hydro
5,80 x 0,7
Solar PV 6,95 – 11,47 x n x F 4,17 – 6,88
Wind 9,54 – 11,22 x n x F 5,73 – 6,73
Biogas 7,44 – 10,18 x n x F 4,46 – 6,11 x n
Biomass 9,29 – 11,55 x n x F 7,43 – 9,24 x n
B to B (requires MEMR approval): Peaker Hydro; Biofuel PP; Ocean PP
n: Technical Factor (0.7 – 1.0) F: Location Factor
(1 – 1.5)
PRESIDENTIAL REGULATION NO 112 TAHUN
2022
(Draft) LAW ON NRE
As a comprehensive regulation to create a climate for
EBT development that is sustainable and equitable
 Presidential Regulation 112/2022 also mandates the Government c.q.
The MEMR to prepare a roadmap to accelerate the retirement of the
CFPP's operational life and limit the development of new CFPPs,
except for those CFPPs that have been listed in the RUPTL and
which are integrated with industry.
 Local content implementation (TKDN) is carried out in accordance
with prevailing laws and regulations
PRESIDENTIAL REGULATION NO 11 TAHUN 2023 on Additional
Concurrent Government Affairs in the EMR Sector in the EBT Sub-Sector.
Additional Concurrent Government Affairs for Local Governments:
Supply management of Biomass and/or Biogas within the
province
Managing the utilization of Biomass and/or Biogas as fuel
within the province
management of Various New and Renewable Energy sourced from
sunlight, wind, water flows and waterfalls, as well as the
movement and differences in temperature of the sea within
the province
Management of Energy Conservation for activities whose
business permits are issued by provincial regions
Implementation of Energy Conservation in facilities and
infrastructure managed by regional apparatuses that carry
out government affairs in the field of energy and mineral
resources
Fostering and supervising the implementation of Energy
Conservation carried out by stakeholders at the provincial
level
f
a
b
c
d
e
(Revision) Ministerial Regulation on Solar Rooftop
Revisions is made to encourage the utilization of Solar PV
Rooftop, where the potential reaches 32.5 GW, but the
utilization has only reached 114 MWp. The revisions mainly on
removing capacity limits, changing in export value, eliminating
“parallel operation” costs, and implementation the PV Rooftop

8. Directorate General of New, Renewable Energy, and Energy Conservation @2023 8
ENERGY CONSERVATION TOWARDS NZE 2060 PROGRAM & CHALLENGES
Energy Efficiency Program
Standardization
and Energy
Saving Labeling
Application of
Energy Efficient
Technology
(electric
vehicles and
induction
stoves)
Energy
Management
Implementation
(ISO: 50001)
Energy
Conservation
Business
Development,
through Energy
Saving Companies
(ESCO)
Awareness &
Awards
142
164
200
233
254 268 281 295 310
142 168
214
268
322
374
422
469
519
2020 2025 2030 2035 2040 2045 2050 2055 2060
Industri
Transportas
i
Rumah
Tangga
Komersial
Sektor
Lainnya
Industry
Transportatio
Residential
Commercial
Others
Raw Material
 The energy demand growth rate is
projected to rise by 1.8% per year.
Energy demand is expected to
increase from 142 MTOE in 2020 to
519 MTOE (BaU) in 2060.
 Through mitigation actions and
energy conservation activities, it
is estimated that there will be a
decrease in energy demand by 209
MTOE (40%), so that energy
consumption will be 310 MTOE in
2060.
 According to IEA report, nearly 300
billion USD was allocated for
energy efficiency in 2021,
illustrating high potential value
for energy conservation globally.
TOTAL PROJECTION OF DEMAND NZE 2060
Opportunities & Barrier EE Investment in the
Public Sector
Create large &
stable demand
1
Remove barrier
to public
procurement of
EE
2
Facilitate the
adequate &
affordable
financing
3
Mobilizing
Alternative
Financing e.g.
PPP
4
Large
opportunity for
EE improvements
in Government
Sectors
We need to open the access of elevator by knowledge and awareness
Limited internal
capacity to manage
ESCO
Inability of
sign multiyears
contract
Public regulation
procurement
requires lowest
price bidder
Split Budget

9. Directorate General of New, Renewable Energy, and Energy Conservation @2023 9
THREE MAIN APPROACHES TO MITIGATING RISKS FOR EE
FINANCING
9
None of the risk mitigation measures should be understood as a ‘silver bullet’ to overcome EE financing risks. In order to
manage risks adequately, risk mitigation measures must be combined and embedded in an FI’s overall process for EE
credit risk appraisal, always keeping an eye on transaction costs.
Removing the risk source
Specific risk-bearing elements of
a project can be removed or
substituted by lenders or
borrowers of EE financing to
improve the project’s overall risk
profile.
Decreasing the risk
likelihood
The probability of risk
materialization can be reduced
through precautionary measures.
Sharing the risk
Risk-sharing mechanisms such as
insurance or guarantee funds can
help to make an EE investment
project bankable.

10. Directorate General of New, Renewable Energy, and Energy Conservation @2023 10
Growth &
Develop ESCO
market
Sustainable Project
Development & Commercial
Financing
GOVERMENT’S ROLE FOR DEVELOPING EE
FINANCING
Develop Policies
& Programs of EE
Cooperation
& Standard
Stimulating
EE Market
FUTURE TARGET
ESCO
Financial
Institution & Bank
Participation
Maturity Level
Corporate
Financing
Public
Financing
Less More
Gov’t Role
• Energy and EC
• Energy
Management
• Green Building
• MEPS and
Labelling
• Socialization
• Stakeholder and
Donor Cooperation
• Work Competency
Standard (Energy
Auditor, Energy
Manager, and MnV
• EM Standard
• EE Standard on
Building
• Capacity Building,
FGD and Workshop
• Pilot Project
• Road Map of
Sustainable Finance
• EE Award
• EE Guidance

11. Directorate General of New, Renewable Energy, and Energy Conservation @2023 11
GOVERMENT’S ROLE FOR FACILITATING
EE FINANCING IN BUILDING

12. Directorate General of New, Renewable Energy, and Energy Conservation @2023 12
ESCO INVESTMENT CHALLENGES AND WHAT NEXT TO DO
 Knowledge gap between Financial Institution and
ESCO Industry
 Debt issue (Collateral and Interest Rate)
 Limited capital and asset, and long-payback period
 Financial Institution low level of perception on
ESCO
 Energy Savings Performance Contracts (ESPC)
concept is relatively new in Indonesia
 Energy user often considered EE as intangible
output
 ESCO’s Low level of enforceable for acquiring
finance
 Difficulties of ESCO to be able to implementation in
public sector
1. Harmonizing and strengthening of policy
to support ESCO
2. Increasing enforceable of ESCO by
bankability increment
3. Developing Innovative financing scheme
4. Data evidence – by implementing pilot
project on several alternative financing
model fit to ESCO
5. Support for PT SMI and BPDLH to help
ESCO, International collaboration, and
Capacity Building
6. Adaptation of ESCO to be adjusted in
digital transformation and market
demand
What Next To Do
Several issues of the development of ESCO in Indonesia

13. Directorate General of New, Renewable Energy, and Energy Conservation @2023 13
INVESTMENT IN ENERGY EFFICIENCY
1. Reducing Energy Consumption Costs by Rp 352 billion and energy savings of 4,5 million GJ or equivalent to 1.265 GWh per year
by carrying out tool replacement and equipment modification activities.
2. Reducing Emissions by 384.257 tCO2e.
3. Additional Investment Costs in the Energy Conservation Sector of Rp 749 billion with an average return on investment over 4 years.
1. Emission reduction in 6 Industry sub-sectors
2. Reducing the intensity of Energy Consumption in 6
Industrial sub-sectors
3. Increasing Energy Efficiency Investment in 6
Industrial sub-sectors
URGENCY
Total Energy
Consumptuion
(GJ)*
Total Energy Saving
(GJ)
Total Energy Saving
(Rp)
Percentage of Savings
on Energy
Consumption
Emission
Reduction (tCO2)
Total Investment
Cost (Rp)
251.240.544,8 4.557.572 352.542.209.792 1,81 384.257 749.847.274.700
24 Companies in the Petrochemical, Pulp and Paper, Cement,
Food and Beverage, Steel, and Manufacturing Industry sub-
sectors that have submitted and implemented Energy Management
Reports and participated in the Subroto Award in the Energy
Efficiency Focus
*) Based on POME Reporting Data and Subroto Award for Energy Efficiency 2021 – 2022
BENEFIT
TARGET

14. Directorate General of New, Renewable Energy, and Energy Conservation @2023 14
Thank you
www.esdm.go.id
Jl. Pegangsaan Timur No.1,
Cikini, Menteng Jakarta
Address
Kementerian Energi dan
Sumber Daya Mineral
@KementerianESDM
@kesdm
KementerianESDM