Take the RE100 initiative as an example; where corporates could claim compliance to the 100 percent renewables pledge by 1) generating renewable energy on-site such as from rooftop solar PV; 2) buying grid electricity generated from renewables; 3) covering electricity consumption with energy attribute certificates or 4) conducting a corporate power purchase agreement (cPPA) directly with private power generation companies.At the moment, the market and regulations only allow industry consumers in Indonesia to use electricity from renewable energy through option 1 and 3. Purchasing green electricity from utility is not possible as Indonesia’s state electricity company, Perusahaan Listrik Negara (PLN), does not offer such a route and – considering its latest Electricity Supply Business Plan or RUPTL 2019-2028 – is unlikely to be available in the near future. Conducting a cPPA would not be possible unless the country opens its transmission and distribution services for private generators and ultimately allows a wholesale electricity market.
The World Economic Forum (WEF), under its Energy Transition Index 2019, has dubbed Singapore and Malaysia as frontrunners on the path towards renewable energy-based economies in Southeast Asia, followed by Thailand (3rd), Vietnam (4th) and the Philippines (5th). Indonesia ranked 6th and scored poorly in terms of energy transition readiness. Upon analysing the pillar of these ranks, a strong renewable energy policy appears to be a key component. Vietnam has made a bold move by implementing a Wholesale Electricity Market pilot in 2017 and is looking to start its cPPA pilot program in 2020. Many multinationals with manufacturing plants in Vietnam have been eyeing the PPA scheme and preparing to join the pilot program. Thailand has seen positive results in its decade long effort to transition to renewables as the electricity from its solar PV has achieved grid parity in recent years. The Malaysian Green Technology Master Plan in 2017 has helped the country to host the biggest solar PV industry workforce in Southeast Asia. Together with Vietnam and Thailand, the three countries are powerhouses for solar PV cell manufacturing with more than 15 GW manufacturing capacity.
Policy Acts of 2002 and 2005.
The Philippines holds the region’s record for biggest wind energy employer. The country is also finalising two new policies, the first is the Renewable Portfolio Standards which obliges the distribution of utilities to source a specific portion of their power from renewables and the second is the Green Energy Option which empowers consumers to demand their energy is sourced from renewables.These precedents have highlighted that boosting private investment and job creation require unwavering commitment from the government to refine not only direct trading and workforce legislations, but also policy for the supporting infrastructure such as in the case of the energy sector. Against this backdrop, the recently published draft of Omnibus Laws has the opportunity to harmonise policy and permitting processes to ease corporate renewables sourcing, and in turn the investment climate, in Indonesia. It is evident that sustainability concerns should be at the heart of Indonesia’s new Omnibus Laws, as the WEF revealed that corporates have identified climate change risks from environmental negligence, which are largely accommodated under the new Laws draft, as one of the top five threats to their investments.
Clean energy from local producers
Therefore, instead of removing Article 40 under Law No. 32/2009 which obliges businesses to obtain an environmental permit to secure a business license, the Omnibus Law could bring the much needed improvement to the country’s renewable energy sourcing policy under the Ministry of Energy and Mineral Resources Regulation No. 50/2017 by, among others, removing the cap on the purchase price of green electricity and changing the build-own-operate-transfer scheme for PPAs with the PLN that debunks a project’s bankability.
Renewable Energy Creates 5 Times More Jobs Than Fossil Fuels. An analysis done by the Department of energy in USA has discovered that throughout the nation, clean energy jobs outnumber fossil fuel jobs by more than 2.5 to 1. In fact, when comparing clean energy jobs to those of coal and gas, the renewable energy sector has created 5 jobs to every 1 job in the fossil fuels industries.
Without proper regard to corporate clean energy sourcing, Indonesia will continue to lose momentum and investment opportunities to its neighbours who have well-rounded policy support in their respective renewable energy sectors.
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There may be more than 90,000 MW overall of untapped water potential in the United States; through new hydropower technologies, such as advanced turbines, and new applications, such as tidal, wave, ocean currents, and in-stream hydrokinetic approaches, the industry could double its output over the next 20 years.