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Renewable Energy Growth Remains Weak Until 2022, Lagging Behind Coal

Adi Ahdiat 21/02/2023 17:55 WIB

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Between 2017 and 2022, the share of coal in Indonesia's national energy mix increased by 8.8 percentage points. Meanwhile, the share of New and Renewable Energy (NRE) only grew by 1.04 percentage poi

Indonesia's Primary Energy Mix for Power Generation (2017-2022)

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Indonesia's Primary Energy Mix for Power Generation (2017-2022)

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The Indonesian government has committed to reducing carbon emissions, partly through a transition from fossil fuels to new and renewable energy (EBT).

To accelerate this transition, the government has targeted a 23% share of EBT in the national energy mix by 2025.

However, according to a report by the Ministry of Energy and Mineral Resources (ESDM), by the end of 2022, the EBT mix was still at 14.11%.

Over the past six years, the growth trend of the EBT mix has been fluctuating and relatively stagnant, rising or falling by only about 1-2 percentage points per year.

If this trend continues, the EBT mix may only reach around 17% by 2025, far from the expected target.

On the other hand, although the mix of fossil fuels such as natural gas and fuel oil (BBM) has decreased, the role of coal in the national energy supply has grown rapidly.

From 2017 to 2022, the coal mix increased by 8.8 percentage points. Meanwhile, the EBT mix only grew by 1.04 percentage points during the same period.

This weak growth in EBT is consistent with the low investment in the sector.

According to the Ministry of ESDM's report, in 2017, investment realization in Indonesia's EBT sector reached USD 2 billion. In subsequent years, it tended to decline, reaching USD 1.6 billion in 2022.

However, according to the International Renewable Energy Agency (IRENA), accelerating Indonesia's energy transition requires USD 314.5 billion in investment during the period 2018-2030, or an average of approximately USD 17.4 billion per year.

"A significant obstacle in driving Indonesia's energy transition is funding and investment. Funding sources need to be expanded, and local financing capacity needs to be improved," said IRENA in its Indonesia Energy Transition Outlook report released in October 2022.

"In many cases, banks in Indonesia have not implemented financing for renewable energy. Developers who need financing for renewable energy projects need to approach international investors or financial institutions," it continued.

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."

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Renewable Energy Growth Remains Weak Until 2022, Lagging Behind Coal

Renewable Energy Growth Remains Weak Until 2022, Lagging Behind Coal

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Renewable Energy Growth Remains Weak Until 2022, Lagging Behind Coal

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