Realizing ESG and Green Energy in Indonesia Must Be Through Collaboration

GREEN ENERGY - JAKARTA. In order to realize a better business future, business actors must pay attention to the environment, social, and governance (ESG). Collaboration from stakeholders is the key word that must be continuously encouraged in realizing ESG and green energy.

Collaboration from stakeholders is the key word that must be continuously encouraged in realizing ESG and green energy. National Energy Council member and Professor at Gadjah Mada University (UGM), Tumiran revealed, the transition from conventional energy to new and renewable energy (EBT) will not work if the economy does not grow and at the same time the energy sector must grow.

“The electricity sector will also not grow if the economy does not grow. If electricity does not grow, other sectors will not grow," said Tumiran, in a seminar held by the Indonesian Heavy Equipment Expert Association (Pertaabi), on Monday (23/1).

Indonesia's energy consumption is still low, on average per capita only spends Rp 150,000 per month. Therefore, the government's target to realize the 2021-2030 Electricity Supply Business Plan (RUPTL) with a target of EBT portion in the national energy mix can reach 23% by 2025 is difficult to achieve. "The industrial sector is the driver for our economy to grow so electricity consumption is encouraged to grow," he explained.

Central Kadin Management and President Director of Clean Power Indonesia, Jaya Wahono hopes that in the development of EBT, everyone must feel the effect of growth, all regions, not just on Java Island. “We participate in increasing understanding, especially increasing awareness that climate change affects future business. Don't let our concern not provide real evidence," he concluded.

Our 23% EBT target is still far to be achieved in 2025. "It can't just be a protest, we should take a faster step to change. We can no longer depend solely on fossil energy, by promoting EBT," Jaya emphasized.

Edi Wibowo, Director of Bioenergy - Directorate General of EBTKE Ministry of Energy and Mineral Resources highlighted the dependence on imports, resulting in a trade balance deficit and the possibility of an energy crisis. "Energy management faces the Energy Trilemma (three energy dilemmas) in this country," said Edi.

The Energy Trilemma, first, energy resilience, our challenge is in the effort to provide energy by considering the supply chain from domestic and foreign sources and the continuously increasing demand.

Second, energy equity, we face challenges in providing access to and affordability of energy for everyone. Third, Environmental Sustainability means the development of renewable energy-based infrastructure and other low-carbon energy sources as well as improving energy efficiency from both the supply and demand side.

Edi revealed that the investment cost for the construction of EBT power plants, especially solar power plants and wind power plants (including integration costs) is cheaper and can compete with the existing 800MW coal-fired power plants. The O&M (operation & maintenance) cost of EBT power plants is also relatively low. Tax reductions and levies on using natural resources can be alternative incentives for more competitive EBT electricity prices.

The roadmap for the development of electric vehicles in Indonesia until June 2023 reaches 72,000 electric vehicles. With details of 17,000 four-wheeled vehicles and 80,000 two-wheeled vehicles. From here, we can save energy of 29.79 TWh and reduce emissions by 7.23 million tons of CO2.

“This achievement is expected to be in line with the EV roadmap target in 2030 for two-wheeled vehicles 13 million and four-wheeled vehicles 2 million units. The Ministry of Energy and Mineral Resources has initiated a program to convert ICE motorcycles into electric motorcycles to stimulate the market. The government provides conversion incentives of Rp 7 million- Rp 10 million per unit and strengthens the capacity of local workshops," said Edi.