*4.1. A Snapshot of Renewable Energy Development in Indonesia*

Following the introduction, the moderator described the precarious situation of Indonesia's inevitably declining fossil energy supply and the urgent need for a transition from fossil to renewable energy. Using this opening statement, the moderator then invited the FGD participants to voice out their views.

First to speak was DK, Secretary to the Director-General of New and Renewable Energy of the Ministry of Energy and Mineral Resources, representing the Director-General of New and Renewable Energy, RM. In general, DK outlined the Indonesian government's readiness in developing Indonesia's renewable energy sector, as well as provided the government perspectives as to the current situation and challenges of the industry. For example, DK highlighted the imperative of developing renewable energy in Indonesia, not only from the aspect of promoting environmental consciousness but also as a crucial element in the realisation of Indonesia's sorely needed and ambitious national electrification goal.

*"Renewable energy is driven by its environmental aspect, given its environmentally friendly and clean nature. For us, aside from the environmental aspect (there is a presidential regulation already in effect concerning emissions), renewable energy contributes to reducing greenhouse gases".* (DK)

According to DK, what was deemed important from the point of view of energy and mineral resources was the ultimate goal of developing renewable energy is to help accelerate energy access for the large population of the nation who live in far-flung areas from the capital.

*"In Java, Madura, or Bali, electricity is sufficiently supplied by PLN [State Electricity Company], but if we travel to the eastern regions and islands, there are still many of our brothers and sisters who have not yet benefited from electricity."* (DK)

Recent data indicated there are 12,500 villages in the eastern Indonesia regions have been electrified, but this figure is far from ideal as there are at least 2500 villages are still without any access to electricity. Responding to the queries from the audience, he further stated:

*"We will carry out our village electrification program until 2019. The Director-General of New and Renewable Energy has been tasked by the Minister of Energy and Mineral Resources to assist in the provision of access to electricity sources".* (DK)

Furthermore, he mentioned that it has been promulgated in Government Regulation No. 79/2014, also known as the National Energy Policy, that renewable energy is targeted to comprise 23% of the primary energy mix by 2025. However, Indonesia currently has only 7% of renewable energy in its energy mix. To make up for the relatively significant difference in renewable energy composition within the energy mix, DK highlighted key renewable energy potentials as well as several ongoing government strategies for renewable energy development. These include, among others, Indonesia's 11,000 hectares of oil palm plantation which can be used for biodiesel.

The second speaker was PS, Deputy of Finance and Monetisation at the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas). PS made several key observations, firstly concerning present obstacles in Indonesia's oil and gas industry stemming from the global decline of oil prices. As a representative of the government regulatory body for oil and gas, PS also interestingly noted that

*"... [the oil and gas] business has become over-regulated. Our oil and gas management practices are currently under scrutiny. Are our current regulations capable of providing incentives to bring results to our oil and gas resources?"* (PS)

Concerning renewables, PS posed important statements from his observation:

*"* ... *considering the fact that major corporate players in fossil-fuel energy have been uniformly and consistently diversifying their portfolios into the renewable energy sector, is our capability in managing the fossil energy business transferrable to the renewable energy business?"* (PS)

This was subsequently responded by other participants proposing differing views. Nonetheless, they in the end reached a collective view, acknowledging that although the technicalities differ, long-time corporate players have arguably brought along their managerial and economic know-how of the fossil energy industry to leverage their business activities in renewables, particularly geothermal. It can therefore be concluded that learning from Indonesia's experience in managing fossil fuel, the country is hopeful to use its wealth of experience and know-how to manage the renewable energy sector. Exactly how these are going to be managed indeed needs further elaboration and thoughts.

Following PS, the third speaker was FI from the Renewable Energy Division of the Indonesian Chamber of Commerce (Kamar Dagang Indonesia or Kadin). FI expressed his disappointment with the present state of Indonesia's renewable energy sector. He then proceeded to identify the primary barrier of uptake from the private sector:

*"Kadin is pushing forward in the renewable energy sector, but what is the obstacle? Regulation!"* (FI)

Referring to tenurial disputes over several renewable energy projects, particularly geothermal, FI also mentioned that the development of renewable energy in Indonesia is often "*... hampered by NGOs, indigenous communities, and others.*"

FI also hit on the barriers to renewable energy development that cause the slow uptake by investors, mentioning that

*"* ... *feed-in-tariffs must also be fairer and involve stakeholders, not suddenly prescribed. This is indeed a problem in the renewable energy sector; as initial technologies are exorbitant, investors choose to wait and see."* (FI)

Lastly, FI sees the need for a strong local manufacturing and supply chain, so that components for renewable energy would be cheaper to produce domestically rather than that of an import.

The final speaker was BSE, an observer of the renewable energy industry. BSE opened by hypothesising that energy sustainability is linearly correlated with welfare and the wealth of a nation. BSE proceeded to outline his solutions:

*"The question that follows is how to satisfy the large amount of energy needed by low-cost, clean energy sources? We cannot do business as usual. We must push for breakthroughs."* (BSE)

He asserted that electrification consists of three large components: power generation, transmission, and distribution. Therefore, it would be sensible to clearly split the responsibilities between those components. BSE argued that this was necessary to stimulate a healthy competition and to foster the core competence.

*"PLN [State Electricity Company] should only focus on transmission and distribution of electricity, giving an opportunity for other parties, including private sectors to 'play' in the renewable energy generation arena, especially clean, large-scale power generation. There are only three options: hydro, geothermal, and nuclear."* (BSE)

The moderator concluded this first session with a summary of key findings and lessons learnt.

**Finding 1:** There remain problems in both planning and implementation stages of renewable energy, mainly due to the [lack of] regulations, but this does not necessarily mean that both stages do not adhere to the same vision.

**Finding 2:** Lessons learnt from the oil and gas sector should later be transferred over for the future development of renewable energy, so as not to fall into the same pitfalls that impede and create inefficiency in the oil and gas sector.

#### *4.2. Renewable Energy Types in Indonesia*

The second session of the FGD analysed in detail several documents, mainly government policy analyses of various renewable energy sources. The moderator led the discussion (following the method illustrated in Figure 1) and asked the participants of FGD to comment on the suitability of the six sources of renewable energy and come up with a collective decision on the most suitable renewable energy source that Indonesia should develop going forward.

In order to hit 23% of renewables in the primary energy mix by 2025 and 31% by 2050, Indonesia has been attempting to achieve the targets [23]. Renewables accounted for just 15.7% of the country's primary energy mix by 2019, while fossil fuels accounted for 87.6% by 2019 [23,24]. Indonesia is a host to a variety of renewable energy sources, namely, wind energy, solar energy, ocean energy, biomass energy, hydropower, and lastly geothermal energy [25]. The development of each type of energy sources varied, and the FGD looked at each type of renewable energy, how they have been developed in Indonesia, and the challenges that each energy type encounters, with an expectation that the group came up with a collective view on the preferred renewable energy type.
