- Is Indonesia serious about making a renewable energy transition?
- A new op-ed argues that it is not, as the government and banks continue to permit and fund electricity sources reliant on fossil fuels.
- “Will we as citizens remain silent when the government is not serious about carrying out the energy transition agenda?” the writer wonders.
- This post is a commentary. The views expressed are those of the author, not necessarily Mongabay.
In 2022, the public in Indonesia often talked about the energy transition as an effort to fight the future climate crisis. In fact, the climate crisis occurred in 2022 – various disasters due to it, such as floods, landslides, and droughts happened – not only in Indonesia, but also all over the world.
Almost everyone knows that the main cause of the climate crisis is greenhouse gas emissions. Fossil energy is the main contributor to this. Citizens in many countries, including Indonesia, are urging leaders to make an energy transition, leaving fossil energy for renewable energy that is more environmentally friendly.
In November 2022, during the G20 Summit in Bali, the energy transition became the dominant discourse. During the event, the Indonesian government announced a new energy transition funding mechanism in the form of the Just Energy Transition Partnership (JETP). In this funding mechanism, a number of G7 member countries as well as partner countries from the European Union will mobilize funding for Indonesia’s energy transition worth $20 billion (around Rp. 310.4 trillion).
JETP is claimed to significantly accelerate Indonesia’s transition to a cleaner energy future, reducing cumulative greenhouse gas emissions by more than 300 megatons by 2030 and a reduction of well over two gigatons by 2060 from Indonesia’s current projections. In the midst of Indonesia’s dependence on fossil energy, the question is whether Indonesia is really serious about making an energy transition?
A true energy transition is not just a matter of funding but also the commitment to implement it. Some of the emerging policies actually show that the government is not yet serious about implementing the energy transition.
For example, recently, President Joko Widodo issued Presidential Regulation Number 112 concerning the Acceleration of Development of Renewable Energy for the Provision of Electricity. Even though the title of the presidential regulation is about renewable energy, its contents actually provide ‘protection’ for coal, one of the fossil energy sources that causes the climate crisis.
Presidential Regulation 112 actually still opens space and even provides certainty and protection for plans to build new coal power plants, so that they can be built until 2030. There are at least 13,819 megawatts (nearly 14 gigawatts) of electricity from coal fired power plants that can still be built between 2021 and 2030.
The Ministry of Energy and Mineral Resources is also not serious about carrying out the energy transition. For example, almost simultaneously with the launch of JETP, Minister of Energy and Mineral Resources Arifin Tasrif said that investment in oil and gas, which is also fossil energy that causes the climate crisis, is still attracting investors. The statement that contradicts the spirit of the energy transition emerged during the signing of a memorandum of understanding between several business actors in the energy sector at the B20 Summit forum side event, two days before the G20 Summit opened.
In fact, the Ministry of Energy and Mineral Resources is also openly developing the potential for CCS/CCUS cooperation. What is CCS/CCUS? CCS is a technology used to capture carbon dioxide from exhaust emissions, then move and store the carbon dioxide gas in a certain storage location (usually underground) so that its negative impact on the atmosphere can be avoided. While in CCUS (Carbon Capture, Utilization and Storage), the extracted carbon dioxide is reused in industrial processes, thereby reducing the overall carbon footprint.
See related: Indonesia to build coal plants despite $20b deal on clean energy transition
Neither CCS nor CCUS are part of a solution to the climate crisis, because they are actually extending the use of fossil energy by labeling it eco-friendly or green. The use of this technology, in essence, still maintains the use of fossil energy which causes the climate crisis.
State-owned banks are also not serious about supporting the energy transition. A research report by my organization, 350-Indonesia, together with a civil society coalition, found that Bank Mandiri issued $3.19 billion in loans to 10 coal companies between 2015 and 2021. Meanwhile BRI, from 2015-2021, provided loans worth $122.5 million to three coal companies, and BNI lent $53.4 million to three coal companies. State-owned banks should be at the forefront of funding for renewable energy, but in fact they continue to choose to fund dirty coal energy.
So, the government and state-owned banks are not serious about supporting the energy transition. In 2023, maybe the conditions will be the same, or even worse. The reason is, 2023 is a political year. In a political year, usually the owners of capital in the coal sector will fund campaigns for legislative and presidential candidates.
If in 2022, the government and state-owned banks were not serious about supporting the energy transition, then in 2023, it is not impossible that the owners of capital in the fossil energy industry will encourage the government to fail 100% of the energy transition efforts. They want this country to depend on fossil energy again. If that happens, the ecological disaster caused by the climate crisis will occur more quickly.
So, will we as citizens remain silent when the government is not serious about carrying out the energy transition agenda? Are we also going to be silent if the owners of capital in the fossil energy sector hijack the energy transition agenda?
We can’t be quiet. We must always urge policy makers to support the energy transition 100%. We also need to continue to push for the energy transition to become an important agenda that is debated in the legislative and presidential elections. We all need to prevent the failure of the energy transition agenda in 2023.
Firdaus Cahyadi is Indonesia Team Leader for the climate campaign group 350.org.
Banner image: A solar power plant. Image by Zbynek Burival via Unsplash.
Indonesia seals $20 billion deal with G7 to speed up clean energy transition