National Energy Transition Needs Fantastic Funds Of Up To US$ 1 Trillion

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Indonesia continues to strengthen its steps to transition energy from fossil to renewable energy. Several steps have been taken by the government. However, this transition requires very large funds. Accelerating the energy transition in Indonesia requires an investment of up to US$ 1 trillion by 2060 for NRE generation and transmission.

This was conveyed directly by the Secretary General of the Ministry of Energy and Mineral Resources (ESDM) Rida Mulyana while attending the Business 20 G20 (B20-G20) Dialogue event in Nusa Dua Bali.

“Financial needs are getting higher considering that we will implement early retirement for coal-fired power plants in the coming years,” said Rida on behalf of the Minister of Energy and Mineral Resources Arifin Tasrif quoted Thursday (1/9/2022)

The amount of funding, continued Rida, requires the mobilization of all financial sources, both from private and public companies.

“Cooperation and collaboration among all renewable energy stakeholders, including public-private and business-to-business partnerships, has an important role to play in ensuring all the potential of renewable energy is utilized,” he explained.

In the NZE roadmap in 2060 or earlier prepared by the Government, there is an addition of up to 700 GW of NRE power generation from diesel, hydro, biomass, wind, marine, geothermal, as well as hydrogen and nuclear.

“We will also reduce the use of fossil fuels by phasing out fossil power plants, de-dieselization program and implementing clean technologies such as CCS/CCUS,” said Rida.

To achieve this, the government has several strategies in terms of demand. There are 3 (three) main sectors that are the focus of the government, namely transportation, industry, household, and commercial.

In the transportation sector, the government will increase the use of biofuels, penetration of electric vehicles, use of hydrogen for trucks, environmentally friendly fuels for aviation, low-carbon fuels for shipping (ammonia, hydrogen, biofuels), electronic fuels derived from syngas, green hydrogen, and electrification of ships for short distances.

The industrial sector will also be earmarked for increasing the share of electricity, hydrogen as a gas substitute, biomass substitution, and the spread of CCS.

Meanwhile, from the household and commercial sectors, the government is accelerating the use of induction stoves, utilizing city gas, to energy efficiency programs, including optimizing energy management and using energy-efficient equipment.

“All these efforts from the supply and demand side will reduce emissions by 1,789 million tons of CO2e by 2060. We will achieve zero emissions from the electricity sector, but 129 million tons of carbon emissions remain in the industrial and transportation sectors,” Rida explained.

For information, Business 20 or B20 is one of the leading engagement groups in the G20 under the Sherpa Track which represents the international business community.

Through the presence of business people from around the world, B20 reflects the role of the private sector as a driver of strong, sustainable, and balanced economic growth.