Jakarta (VOA) —
The government’s commitment to implementing the Just Energy Transition Partnership (JETP) scheme is part of the energy transition solution for industrial players who still use coal-fired steam power plants (PLTU) to meet internal needs.
At the G20 meeting in Bali, November 2022, Indonesia and a number of developed countries and world financial institutions signed JETP to accelerate the transition to clean energy. The International Partners Group (IPG), led by the United States (US) and Japan, has committed to disbursing $20 billion or around IDR 308 trillion—including through grants and soft loans—for energy transition programs. One way is to reduce emissions by reducing coal use.
Many parties are skeptical that Indonesia can achieve the energy transition target in the JETP scheme, one of which is because of the existence of captive PLTUs or private power plants used by industrial players, especially by smelting minerals such as copper, aluminum, nickel and cobalt. The last two minerals are important raw materials in the production of electric vehicles and the battery supply chain which the government is touting as engines of economic growth.
Head of JETP Secretariat Edo Mahendra said the first solution is to build a smart grid or intelligent electricity network. If the smart grid has been built, industrial players can be directly connected to the State Electricity Company (PLN) electricity network to get electricity supply from renewable energy sources (EBT).
“Because if our grid is expanded and upgraded, we can accommodate renewable energy much more aggressively into our grid system. “So, there is no need for a captive (power plant),” Edo told VOA in an interview at his office, in Jakarta, at the end of last August.
The electricity transmission network stretches in Lambaro, Aceh Province, July 3 2023. (Photo: Chaideer Mahyuddin/AFP)
Smart Grid is an intelligent electricity grid system that can receive large capacity renewable energy, especially variable renewable energy, such as wind and solar, whose supply is unstable because it depends on weather conditions.
“The sun doesn’t always shine. In one day there is cloudy, there is rain, there is night. “Technology must be able to accommodate this so that the supply of electricity generation remains stable,” he explained.
The second option, said Edo, is to gradually add variable renewable energy to the energy mix of industrial players while continuing to operate generators that can meet base load demand, such as coal-fired power plants.
PLTU produces electricity constantly for long periods of time without interruption.
“So there is a transition period. For example, in the 3-5 year period using gas (gas power plant/PLTG). “Well, this has to be done so that the energy transition can truly support Indonesia’s economic development,” he said.
Edo confirmed that private PLTU was one of the considerations for postponing the launch of the comprehensive investment and policy document (CIPP) which was planned for 16 August.
An aerial view of the operations of PT Indonesia Morowali Industrial Park (IMIP), one of the largest nickel producers in North Konawe, Sulawesi. (Photo: Rizal Salman/AFP)
At the time it was signed, the new JETP took into account generators that were in the State Electricity Company’s (PLN) Electricity Supply Business Plan (RUPTL) or on-grid (in the network). In fact, private PLTUs used by industrial players also produce large amounts of carbon emissions.
According to the Global Energy Monitor report entitled Boom and Bust: Tracking The Global Coal Plant Pipeline which was released in April 2023, there are around 13 gigawatts (GW) of private PLTUs or 58 percent of the total 18.8GW coal power plants under construction at the end of 2022 A number of these plants are being built or are in the pre-construction stage to supply electricity for industries, such as aluminum smelting and nickel and cobalt processing.
By including the capacity of private PLTUs, said Edo, we can see the overall picture of electricity demand in Indonesia. Because economic growth will increase demand for electricity, which means increasing carbon emissions.
“Don’t let our industrialization economic development process stop. If someone says ‘oh, the solution is to stop industrialization’ it certainly can’t be done. This means we cannot move forward. “If someone says ‘that’s enough, make as much coal as possible’, that’s a losing solution in the long term because the low carbon economy is a circular trend,” he explained.
“Later we will find a solution. “What can we do to grow with this low carbon strategy?”
The Ministry of Energy and Mineral Resources is targeting the construction of 53 smelters by 2024. Of this number, 17 smelters are expected to be completed this year, said Minister of Energy and Mineral Resources Arifin Tasrif last January. In 2022, seven smelters will be completed, including a nickel smelter and an iron smelter.
PLN officers work at the Wind Power Electric Plant (PLTB) in Sidrap, Sidenreng Rappang, 26 October 2021. (Photo: Zulkifli/AFP)
According to calculations by the Indonesian Forum for the Environment (Walhi), Indonesia’s energy network, which still relies heavily on fossil energy, including a number of industrial areas which are nickel processing centers, is estimated to contribute 200 million tonnes of emissions.
Dadan Kusdiana, Secretary General of the Ministry of Energy and Mineral Resources (ESDM) separately said that by including private generators, a recalculation must be carried out for transmission purposes and a peak emission target of 290 MTCO2 (metric tons of carbon dioxide equivalent) in 2030.
Five investment focuses
The two solutions for private generators are part of the five investment focus areas in the JETP scheme. Other investment focuses are early retirement of coal plants, EBT plants that can be used for base load (dispatchable renewable energy) and development of the EBT supply chain manufacturing sector.
According to Edo, after the Indonesian Government and partners have finished reviewing the CIPP documents, the general public will be given two weeks to provide input on JETP’s investment plans.
“We also understand that there needs to be an adequate public comment window to capture public aspirations,” said Edo.
The secretariat will upload CIPP documents to the secretariat website for access by the public. However, Edo was reluctant to mention the target date for launching the CIPP document.
An electric car driver passes in front of the Association of Southeast Asian Nations (ASEAN) summit location in Labuan Bajo, May 9, 2023. (Photo: Bayu Ismoyo/Pool Photo via AP)
Putra Adhiguna, Energy Research Technologies Lead Asia from the Institute for Energy Economics and Financial Analysis (IEFFA) think tank, said that the JETP funding commitment is very small to finance investment in Indonesia’s energy transition.
“JETP is actually the initial commitment to get the ball rolling. For example, the construction of transmission between Sumatra and Java. That will be the enabler (pengbangun.ed). “When it is there, then further programs will develop,” said Putra on the sidelines of a discussion in Jakarta, at the end of last August.
Evy Haryadi, Director of Transmission and System Planning at PLN, on Thursday (7/9), calculated that PLN needed $172 billion or Rp. 2,635 trillion to build a smart grid and renewable energy generation of 60 gigawatts by 2040.
Don’t extend the coal power plant
Even though the CIPP document has not been released to the public, a number of experts and non-governmental organizations (NGOs) have raised issues that need to be considered in planning the energy transition using the JETP scheme.
Executive Director of Traction Energy Asia, Tommy Pratama. (Photo: Traction Energy Asia)
Tommy Pratama, Executive Director of Traction Energy Asia, said that because JETP aims to facilitate Indonesia’s transition to clean energy, it is very important for the Secretariat to ensure that no funding is used to extend the life of PLTUs by allowing the use of biomass fuel along with coal.
“Especially because planting trees to produce wood pellets risks further deforestation and increased emissions from land use changes,” Tommy told VOA.
Therefore, said Tommy, the government should focus on clean energy whose production process has a lower carbon footprint, such as wind, solar and unexplored ocean currents.
“The stakes are very big if we use palm oil continuously. “In fact, to adapt to this boiling climate, the role of forests is very important to absorb carbon and protect the ecosystem,” said Tommy. (gregorius giovanni/ah/dw)