Which Southeast Asian country is the largest producer of energy? What are the region’s plans to transit to renewable energy and will it succeed? Join ABYA’s team of writers as we scour the internet for ‘expert’ views — Kidding, we rode on the coattails of all hyperlinks you can find below. This article is intended to be informative and provide ABYA youth readers an overview about our region’s latest energy transitions.
In 2020, this country alone produced 2,773 TWh of energy, accounting for about 40% of Southeast Asia’s total energy production. Each year, it produces more energy than Russia (1130 TWh), Germany (656TWh) and France (652TWh) combined– equivalent to the amount of energy that could power an airplane ride from New York to London, 14,000 times. In this article, we look at some of Indonesia’s latest carbon announcements, and discuss how its transition is pivotal to green energy access across the rest of Southeast Asia.
At the G20 Summit in November 2022, Indonesia launched the most ambitious energy transition programme in its history, the Just Energy Transition Partnership (JETP)[1] , calling for renewable energy to comprise 34% of its power generated by 2030. The JETP will see the private sector, as well as member states of the International Partners Group provide financial and technical assistance towards enabling the US$20 billion transition to green energy, over the next 3 to 5 years. Alongside international efforts to support Indonesia’s transition to green energy are its domestic priorities to retire 15 gigawatts of coal power generation over the next three decades, create the world’s largest green industrial park, and its commitment to produce 15.2 million electric motorbikes and cars combined, by 2030.
With its vast potential for renewable energy exports, such as hydropower, geothermal and solar power, Indonesia stands to not only export renewable energy — but also holds the key to producing the very right to emit– Renewable Energy Certificates (RECs). RECs are tradable certificates that represent the generation of one megawatt hour (Mwh) of renewable energy. These are used to track the environmental attributes of renewable energy, such as the amount of greenhouse gas emissions avoided. In the absence of an expert, we at ABYA asked Google’s Bard what it thinks about how Indonesia’s renewable energy sector could be impacted by Singapore’s latest announcement to increase its carbon tax.
Bard explains that alongside Indonesia’s announcement of its green transition is that of Singapore’s plans to increase its carbon tax from current levels of S$5/tCO2e, to S$25/tCO2e in 2024 and 2025, with a view to reach S$50-S$80/tCO2e by 2030. The introduction of Singapore’s carbon tax is likely to have a significant impact on renewable energy trading in the region. The tax will make it more expensive to generate electricity from fossil fuels, which makes renewable energy more competitive. As a major producer of renewable energy, Indonesia has the potential to export RECs to Singapore, and other countries in the region.
We’ve heard enough from Bard. Other ‘experts’ that ABYA gathered found that, according to Reuters, Singapore and Indonesia announced joint plans in March 2023, to develop a renewable energy industry in Batam, that will produce equipment and build power plants to supply electricity into Indonesia for export. Singapore’s National Climate Change Secretariat also reports that Singapore and Indonesia (alongside its other partners) have signed an MOU on carbon credits collaboration, as well as a small-scale trial import of renewable electricity of 100 MW from a solar farm in Pulau Bulan, Indonesia. Indonesia’s transition to green-energy, not if but when it succeeds, will mark a paradigm shift from business as usual across Southeast Asia. As Nikkei Asia puts it, the time to look at Indonesia’s energy potential is now.
[1] At the G20 leaders’ summit in Bali, also in November, Indonesia’s JETP deal was announced: USD 20 billion in finance over 3 to 5 years, half from the donors and half due from the private sector. This partnership is co-led by Japan, along with the United Kingdom, Germany, France, Canada, Italy, Norway and Denmark. The JETP laid out an emissions trajectory for the country and how to achieve it: peaking power sector emissions by 2030, and capping carbon dioxide emissions levels about a quarter lower than previously expected by the same time. Source: https://www.iisd.org/articles/insight/just-energy-transition-partnerships