What is the plan of your country to have a 100% green energy supply and is the plan achievable?

DO WELL DO GOOD
What is the plan of your country to have a 100%
green energy supply and is the plan achievable?
Learning Unit Presentation
7 February 2021
Ashfia Pramita Nurfitriani
Dimas Al Ghifari
Priscilla Catherine Angelita
Rafi Ramadhan Seba
Junior Member
Institut Teknologi Bandung
LU Energy

2
Copyright ©2021 ShARE. All Rights Reserved
Executive Summary
• Indonesia has a high potential for renewable energy, however the usage is not optimized
yet due to high demands of fossil fuel which is relatively accessible by the current
society. This leads to the reluctance of shifting to renewable energy resources.
• Recently, however, Indonesia’s government has tried to amplify the campaigns on using
renewable energy through its social media posts in collaboration with student bodies.
• Technology-wise, Indonesia still needs to enhance its technology to match with the
current energy demand. However, this will be hard since Indonesia is dependent on the
imported technology which is more efficient and cheaper.
• Financially speaking, Indonesia has not given enough efforts in investment, leading to
the production cover being not covered. Moreover, there is no clear data on how the
financial schemes are working out.
• Policy-wise, Indonesia has designed a great roadmap, however there is a great deal of
miscommunication among the major parties. Moreover, there are also some barriers for
the growth of renewable energy due to the unfavorable policies in producers. However,
recently, the government has planned to ease the rules to increase efficiency in
renewable energy in Indonesia.
• With the current efforts given by the government, Indonesia is left behind compared to
some countries due to financial issues and market liberization.
• Indonesia also has difference in actualization in its planning due to overestimation and
usage; however, if the current policies scenario and energy transition scenario work out,
Indonesia may be able to reach its 31% renewable energy usage by 2050; and hopefully,
with continuous efforts in enhancing RE regulations and collaborations, Indonesia will
reach 100% green energy supply in the future.

3
Fossil fuels dominate the national energy mix and final energy
consumption
Source: IETO (2021), HEESI (2019)
9%
19%
35%
37%
Primary Energy Supply
2019
1620
MBOE*
Fossil fuels also contributes heavily to the
end-user’s energy consumption reaching
63% by the end of 2019
Final Energy Consumption
by Type 2019
20%
28%
10%
18%
17%
7%
Coal
Electricity
Biofuel
Fuel
Natural Gas
LPG
1 MBOE
The national energy mix remains dominated
by fossil fuels, reaching 91% in 2019
Comments:
• At least 2-3 GW of renewable capacity need to
be added annually in order to meet the national
renewable mix target
• IESR analysis predicts that only about 400-500
MW of new capacity could be added due to the
slowing economy
Coal
Oil
Gas
Renewables
* MBOE: Million Barrels of Oil Equivalent
Comments:
• Transportation, household and electricity sector
are the main consumers of the final energy
consumption.
• Pushing biofuel mixing in transportation sector
could effectively reduce the fuel’s share in final
energy consumption.

4
Renewables are still seeing stagnant progress while coal
plants are still being favored by the government
Source: IETO (2021), HEESI (2019), RUPTL 2019-2028.
Increase in installed renewables capacity remains
only at stagnant growth of 12% creating more
pessimism in renewables target achievability
Installed Renewables Capacity
2015-2020 (MW)
12%
CAGR
26.4 28.4
30.8 31.6
34.7 35.2
43
51
56 58
2015 2016 2017 2018 2019 2020* 2022 2024 2026 2028
Coal Plants Installed Capacity
2015-2020
(GW)
Historical
RUPTL
6.6%
CAGR
13%
Proj. Growth
Indonesia continues to push its coal plants
addition up to 58 GW capacity pursuing the
35,000 MW capacity addition goal
Comments:
• By Q4 2020, only 187.5 MW of renewables
capacity has been added exclusively from
hydropower and solar PV, a 1.8% YoY increase
• Geothermal saw no capacity addition due to no
new tenders to conduct a new project
*Until Q2
Comments:
• Indonesia’s plan to push coal production is in stark
contrast with the global trends to reduce carbon-
emitting power generations.
• National coal balance would experience prolonged
oversupply as the international demand is slowing.

5
Indonesian government has made efforts to regulate
renewable energy through various laws
Before 1981 1981 2007 2008 2014 2015 2016 2017 2020
General
Renewable
Energy
Policy
Kebijakan
Umum Bidang
Energi
Indonesia's
energy
management
can be better
managed
Peraturan
Pemerintah
Nomor 79
Tahun 2014
Explain
Indonesia’s RE
23% target for
2025
Undang-
Undang
Nomor 30
tahun 2007
mandate the
formulation of a
National Energy
Policy (KEN)
Peraturan
Menteri ESDM
No. 4 Tahun
2020
The focus now is
about RE
projects and
supply
Undang-
Undang No.
30 Tahun
2008 about
electricity
regulation
Peraturan
Menteri
ESDM No. 19
Tahun 2015
about
renewable
energy power
generation
tariff
Other
Renewable
Energy
Policy
Undang-
Undang
No. 21
Tahun
2014 on
geothermal
Social responsible firms
Peraturan
Menteri
ESDM No.
38 Tahun
2016 about
rural
electrification
regulation
Source: ShARE Analysis
Peraturan
Presiden
Republik
Indonesia
Nomor 22
Tahun 2017
RUEN is the
main topic of the
law

6
Even among the top 4 renewable source of energy in Indonesia,
its technology could not compete with imported technology from
a financial standpoint and quality
Source: ShARE Interview
• Mature high-quality technology
from China, Korea and Japan
• Cheaper price due to economics of
scale
Foreign Local
from Sweden and Germany.
• Only 10 manufacturing companies
from PV assembly
• 1 company in the rumors of
manufacturing solar cells
• No local technology yet; most of
them are of joint ventures with
other countries
them are of joint ventures with
other countries
them are still imported
Solar
Geothermal
Hydropower
Bioenergy

7
Indonesia possesses a total of 390 GW renewable potentials
with solar energy as the most promising source
Source: RUEN (2017), IETO (2021).
Renewable Energy Potentials by
Sources
81.8 82 82
62.7
91.4
74.6
86.7 92.3
106.2
152.4
181.2
2015 2016 2017 2018 2019 2020**
Solar Installed Capacity 2015-2020
(MWp*)
Off-grid On-grid Other Total
Solar energy is the most abundant renewable
source with about 207 GW potential electricity
generation
Solar capacity addition shows a strong YoY
growth of 19% despite the pandemic situation
Comments:
• Only 2.7% of the total renewable potentials that
has been effectively harnessed
• Solar PV alone could provide up to 2600 TWh or
7.7 MWh per capita by 2050
* MegaWatt-peak
** Until Q3
Comments:
• Strong growth of solar capacity addition in largely
contributed from the government’s $1 billion
rooftop solar initiative and the ambitious utility-
scale solar development program.

8
Indonesia’s society is generally reluctant to shift to renewable
energy resources due to several factors
Source: ShARE Interview, Kontan News.
“There are several underlying challenges during the development of renewable energy,
which is the competitive price. Well, first things first, the prices for purchasing the fossil
fuel is significantly cheaper compared to renewable energy resources.”– Arifin Tasrif,
Indonesia’s Ministry of Energy and Mineral Resources
“When we are talking about society; we are talking about end users: industry and
household. The industrial sector is not really ready to shift yet; the cost of production
for renewable energy is expensive. Society-wise, the prices are really cheap for fossil
fuels; and the society has not considered sustainability yet for energy.” – Fano
Alfian, AILESH Energy
Educating the society as well as marketing this source will be required to
raise awareness.

9
Government has started to show dedication through its efforts in
renewable energy through hosting events
Source: semrush.com, KESDM’s Official Accounts
Recently, Indonesia’s Ministry of Energy and
Mineral Resources has actively promoted
renewable energy in social media and events…..
…and it is worth it due to the staggering
increase in number of visitors in the website
• Competitions
• Talkshows
• Relatable posts (Tik
Tok, IG posts)
Comments:
• Among the 463.3K number of traffics worldwide,
Indonesia shares about 97% of the traffics,
accounting to 451.4K number of traffics.
• In the beginning of 2020, KESDM has actively tried
to engage the general public through the events,
which explains the increase in the organic traffic
for the website.

10
Amplifications of the current efforts done by the government are
due to the existing efforts of student bodies in Indonesia
• A student body hosted initially started in 2019 at Bandung Institute of
Technology.
• Hosted National Youth Summit for Renewable Energy which attracted more
than 40,000 students and youths all over Indonesia.
• Expanded to 10+ universities in Indonesia over the span of 2 years (and is
still growing).
Sources: SRE ITB, StudentEnergy, Dewan Energi Mahasiswa UGM
• A student body hosted initially started in 2019 at Universitas Padjajaran.
• Hosted webinars covering the issues regarding renewable energy sectors.
• A student body hosted initially started in 2012 at Universitas Gadjah Mada.
• Hosted webinars covering the issues regarding renewable energy sectors.
Society of Renewable Energy
Dewan Energi Mahasiswa UGM
Student Energy Universitas Padjajaran

11
RUEN is the basis policy of the Indonesia’s Central Government
regarding the national level energy management plan which
becomes the elaboration and implementation plan of the
National Energy Policy
Source: Coaction Indonesia.
UU No. 30/2007
on Renewable Energy
National Energy Policy
(KEN)
RUEN
Made by government
and appointed by DEN
RUKN
Made by central
government involving the
regional government
RUKD
Province RUED
City RUED
Involves various parties:
Industrial company and
citizen to establish the
RUEN and RUED
Comment:
• The Indonesian government has tried to involve companies in deciding renewable energy policies.

12
In addition, Indonesia has already had a guideline to develop
New and Renewable Energy
“Indonesia has already had a detailed guideline on developing Renewable Energy; even they have already
had targets for each energy sectors respectively.” – Fano Alfian, AILESH Energy
Source: Energypedia, ICLG.com (2020).
Increasing the capacity of power plants
in producing energy through
construction of hydro power plants
and geothermal power plants.
Reducing oil fuel subsidy cost through
substitution of Diesel Engine Power
Plant to NRE power plant.
Increasing access to modern energy in
isolated regions through micro hidro,
solar power, biomass, and biogas.
Reducing greenhouse gas emission.
Reducing energy saving at large
scale.
Indonesia’s government has released five steps to develop NRE:

13
Difference in policy making as well as uncertainties in the rules
established often causes spark among PLN and KESDM
“The government has clearly elaborated the efforts to reduce CO2 gas emission in RUEN
(State’s Energy Plan). However, at the same time, the government did sign the RUPTL
(Supplier’s Energy Plan) which does not align to that of RUEN. This is a paradox; the
target does not fit, how would you expect us to achieve this?” – Dr. Surya Darma, Leader
of Indonesia’s Renewable Energy Society (METI)
Source: ShARE Interview, IESR (2020).
“There is not enough information on who is in charge for the implementation of RUEN,
which leads to overlapping policies. It always changes according to who leads the
country.” – Pekik Argo Dahono, Bandung Institute of Technology’s academician
“The source of conflict is more of the internal issues which are conflicting with one
another. If anything, these two parties have recently reconciled.” – Fano Alfian, AILESH
Energy
A clear rule needs to be established in order to avoid future conflicts.

14
Indonesia’s government has come up with a regulation aiming to
increase cooperation between the two parties
Source: Kontan (2020), DPR (2020).
Case Study : Peraturan Menteri ESDM No. 4 Tahun 2020
• The purchase of electrical energy resources is carried out by PLN through a direct selection
mechanism
• Management and maintenance of renewable energy-based electricity is carried out by PLN
• The market of renewable energy is monopolized by PLN
Changes done and its impact
1
2
Legalization of RUU EBT in 2021
Ratification of Ministry Regulation No. 4 year
2020 to be Presidential Regulation
Increased collaboration between the Ministry of Energy
and Mineral Resources and BUMN as well as clearness
of the regulations
Easier for developer to start their business in Indonesia
due to lower prices
An initiation to increase collaboration between governmental parties and
developers in renewable energy.

15
There have been some existing financial schemes for renewable
energy sector
Source: ShARE Interview, SMI (2020), Indonesia.go.id (2020), RUU (2020),
BPKM (2020)
• PT Sarana Multi Infrasruktur (SMI) as a special purpose vehicle for government funding
• Green sukuk (government securities) raising 17.75 trillion for 2018.
• Green bond with a total of 11.9 trillion Rupiah for 2019.
• Indonesia’s state budget of around 21 trillion Rupiah.
• Government subsidy from Indonesia’s new and renewable energy legal plan.
General Information
Government
Residential
Business
• Using individual money.
• In the case of Solar selling electricity to PLN is not favorable due to 0.65 price/kWh.
• Using companies' money.
• In the case of solar, capacity charge is 40 hours.
Foreign
Financial
Institution
• Foreign direct investment handled by Badan Koordinasi Penanaman Modal (BPKM)
recorded a total of US$ 1.07 billion from South Korea in various sectors including
renewables in 2019.
• “The current financing scheme in Indonesia are project financing loan that relies on
company's cash flow of the project and corporate financing loan that relies on the
company’s entire asset. The latter is not accessible to the developer due to them being
new in nature. Moreover, developer is not given enough incentive considering the 15%
interest, a split with the government would help”
• “Political Insurance may be used to mitigate the political risk due to 5-year government
cycle” – Arliza Nathania, World Resources Institute

16
However, renewable energy financing in Indonesia still faces 3
major challenges of lacking profitability, project development
funding, and credit enhancement
Source: ADB (2019)
Challenges Counter action
• Competitive auctioning of premium payments.
• Incentive for developers to negotiate power purchase
agreement as high as possible enabling competitive
bidding.
• Aims for maximal cost-efficiency.
• Provide funding through continuous project
identification case by case.
• Mezzanine debt are preferred to equity instrument to
a more efficient post-investment portfolio .
• Apply different levels of commerciality financing
depending on commercial viability and investor
interest.
• Utilization of guarantee and a credit line instrument
to mobilize the local capital market.
• Playing an active central role together with
the financial institution to build experience in
renewable energy sector.
• Complemented by strong, well-planned technical
assistance targeted at lenders and developers
Lack of
Profitability
Project
Development
Funding
Credit
Enhancement
for
Investment
Causes
• Power tariffs in grid have a maximum of 85%
or 100% prevailing tariff for basic cost of supply
• PLN have a negotiating power causing
nontransparency.
• PPA prices are difficult to estimate.
• RE have smaller investment compared to
conventional projects.
• Difficulty in project financing.
• Increased levelized cost of electricity due to
policy inconsistency.
• Majority RE project developers are SME with
limited portfolio for permits, licenses and
financing.
• High perceived risk by lenders results in higher
required returns.
• Short tenors from financial institutions.
• Excessive collateral requirements.

17
Iceland
Germany
41,6%
Four years after Paris Agreement, countries are racing to
increase renewable’s shares on their energy supply
Source : International Energy Agency
Comments
• Renewables accounted for over 40% of the global
growth in primary energy in 2019, which is larger than
any other fuel.
- Cost reductions in renewables and advances in digital
technologies are opening huge opportunities for
energy transitions.
“Energiewende”, as the German energy
transition has been labelled, is among
the most successful energy transition
programs globally. In 2017, wind power
surpassed both nuclear and natural gas
to become the second-largest source of
German’s electricity generation.
The 13th Renewable Energy Five-
Year Plan targets on generating 27%
of total China’s power generation.
Between 2019 and 2024, China will
account for 40% of global renewable
capacity expansion.
100%
27,6%
China
Australia
21,9%
India
21,6%
Netherlands
18,9%
Denmark
79,1%
Japan
18,7%
United States
18%
Indonesia
11,4%
World’s electricity generation mix on renewables in 2019

18
Source : 1. Institute for Essential Services Reform
2. KfW (Kreditanstalt für Wiederaufbau)
3. Expert Interview
Market liberalization and additional support from the
governments helped these countries to thrive on green energy
supply
• The pilot projects of the retail
liberalization and wholesale
electricity market reduce the
local electricity tariffs and
helped the government
establish the most ideal power
market in China.
Liberalized
market
Financial
support from
the
government
• The electricity market
liberalization benefits Germany
as it creates a level playing field
for new market entrants that
wish to compete with the
established former utilities both
on the generation and retail side.
• PLN holds 90% of Indonesia’s
electricity market. Hence, they
monopolize the market and
reportedly, due to their lack of
internal corperation, they made it
difficult for those who want to
increase the renewable
• Germany has KfW (Kreditanstalt
für Wiederaufbau) that provides
loans and supports for various
renewable energy projects with
lower interest rate.
• There’s no financial incentives, in
the past nor in the near future
“MEMR is still on initiation step
and identifying problems, they
haven’t implement any real
actions or effort to boost the
use of renewable energy.”
- Fano Alfian, AILESH Energy
• To conduct R&D of renewables
technologies, goverments of
China provide funding which
are regulated di the Renewable
Energy Development Fund,
National High Technology R&D
(863) Program, and 8 others
1.7
1.8
1.9 1.9
2014 2015 2016 2017
China’s renewables R&D
expediture
(USD billion)
”Looking where Indonesia is at,
with no government support like
incentives or reduce of tariffs,
23% green energy supply is
impossible in the year of 2025.”
– Oktoviano Gandhi, Alfa
Energy
31.4
69.6
85.5
0.4
13.9
0.65
Volumes of loans by KfW in the
programme RE Standard in 2018
(%)
Renewables Others Wind energy
onshore
Biogas Photovoltaic Others

19
5.2 5.3
7.1 7.5 8 8
4.88 5.03 5.07 5.17
5.02
-2.07
RUEN Realization
Indonesia’s journey to increase renewable energy share faces
lots of challenges and is amplified by the current pandemic
The economic growth is significantly different
from the estimated growth by RUEN, indirectly
affecting on electricity demands
Indonesia’s economic growth
(%)
2015 2016 2017 2018 2019 2020
It is too late for Indonesia to be a supplier for
RE’s technology, therefore, demands on
energy are expected to increase RE’s shares
with lack of initiatives from governments
TKDN is made compulsory, causing the
usage of 40% of technology produced in
the country which is more expensive than
the spare parts from that of China.
“On RUPTL, calculation on electricity demand’s growth is
8%. However, in 2019, the growth only reached 3,5-4%–
the demand is very low, moreover during this pandemic, it
dropped very low” – Edwin Nugraha, Executive Vice
president Electricity System Planning PT. PLN
While it is possible to maximize the demand due to the
abundance of natural resources and the number of
stakeholders such as WRI, IESR, World Bank, and many
more, this may be hard due to several hindrances from the
governmental party:
High tariff for purchasing renewable
energy in Indonesia compared to other
countries under the same capacity
Selling price of energy from solar cells is
65% of its purchasing price, making this
product undesirable
Difficulties in licensing for investment and
plant installation
Source : 1. Central Bureau of Statistics Indonesia
2. Expert Interview

20
A clear discrepancy between the goals set and the realization
scenario is shown due to overestimated projections and low
consumption
Based on RUEN
Source: Institute for Essential Services Reform
Projections of Indonesia’s primary energy mix
23%
400
MTOE
31%
1,012
MTOE
259
MTOE
15%
23%
646
MTOE
2025 2050
Based on Realization
Scenario
2025 2050
Base assumption and indicators set uses
overestimated projections of the 2016-2050
figures in the recent RUEN 2017 which uses real
data only up to 2015.
Disproportional projections from RUEN in terms
of energy and electricity consumption.
Rate of consumption of primary energy in
realization scenario is lower than the ones set on
RUEN.
In reality, the consumption of energy is low due to
low realization of economic, industrial, and society
growth.
It will be impossible to achieve the 23% target set due to the discrepancy shown.
Renewable Coal Gas Oil

21
However, with the current regulations and policy, Indonesia may
be able to catch up to the 31% goals
Projections of Indonesia’s
primary energy mix
18%
259
MTOE
66%
773
MTOE
Current Policies Scenario
18%
259
MTOE
40%
654
MTOE
2025 2050
2025 2050
Energy Transition Scenario
Basis and assumptions Impacts
Successful launch of
biodiesel program (B50 in
2021, B100 in 2030)
Increased demand for
electric cars
Increased demand for
power plants
Achieved 31% RE
consumption by 2050
based on the RUEN set
Have not considered
2020’s policies and
governmental actions in
the past 2 years
No new coal power plants
will be built and all coal
power plants operating
more than 30 years will be
shut down
Installed capacity for RE in
2025 and 2050 should be
at least 23.74 GW and 408
GW respectively
Renewable Coal Gas Oil
Source: Institute for Essential Services Reform

22
Indonesia may need a long time to achieve 100% green energy
usage; however, it may be feasible due to the current efforts
despite the suggested long process
• Make regulations favorable
for renewable energy
production in private
companies as well as
among the existing parties
• Increase collaborations
with stakeholders
(producers, students) to
accelerate energy growth
• Invest in renewable energy
development through
funding from government
In order to achieve 100% green energy supply,
Indonesia must work on these sectors…
… which will hopefully raise the chances to
achieve milestones over milestones.
• Launch B50 and B100
programs in 2021 and
2030 respectively
• Installed RE capacity as
much as 23.74 GW and
408 GW by 2025 and
2050 respectively
• Achieve 31% renewable
energy usage through
acceleration of the set
scenarios
• Accelerate to 100%
green energy supply
with continuous efforts

DO WELL DO GOOD
Thank You
7 February 2021

What is the plan of your country to have a 100% green energy supply and is the plan achievable?

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