Indonesia Accelerates Green Energy Transition
May 15, 2024
In recent years, Indonesia has actively promoted the use and development of green energy and has become the energy transformation center of Southeast Asia, creating favorable conditions for achieving the net-zero emission goal in 2060. According to data from the Indonesian National Energy Commission in 2023, Indonesia's current energy structure is still dominated by coal (40.46%), oil (30.18%), and natural gas (16.28%), with clean energy accounting for only 13.09%. The government's goal is to increase the proportion of clean energy to 19.49% by 2024, 23% in 2025, and 31% in 2050. At the same time, Indonesia's sovereign wealth fund will invest approximately US$1 billion in all industries this year, with green energy as one of its priorities. Indonesia is also actively promoting potential investment in the electric vehicle ecosystem and geothermal energy, and is seeking financing for the early retirement of coal-fired power plants, the Indonesian Investment Authority said.
Combining Indonesia's own rich natural resources, creating an electric vehicle ecosystem, developing clean energy, and replacing coal-fired power plants have become the troika for Indonesia to promote energy transformation.
Indonesia is one of the countries with extremely rich reserves of battery raw materials. Its nickel ore reserves account for more than 22% of the world's total, and its nickel production accounts for more than 37% of the world's total production. At the same time, Indonesia is also the second largest cobalt producer, accounting for approximately 5% of global cobalt production. In addition, Indonesia also has relatively sufficient reserves of raw materials for other automobile parts such as bauxite and copper ore.
Data from the Indonesian Ministry of Energy and Mineral Resources show that Indonesia's clean energy potential reaches 3,686 GW, including solar energy, wind energy, hydro energy, bioenergy, geothermal energy and ocean energy. As a country of volcanoes, Indonesia accounts for more than 40% of the world's geothermal resources and has a geothermal power generation potential of 23.9 GW. In addition, Indonesia has many oceans, whose currents, waves and tides can also be converted into electricity.
With the promotion and incentives from the government and other parties, Indonesia is becoming one of the hot spots for electric vehicles. Electric vehicle manufacturers from around the world are looking to set up factories or sell their products in Indonesia. Chinese companies such as Wuling, Chery, Nezha and BYD have developed rapidly after entering Indonesia and have received widespread attention. Indonesia plans to build an electric vehicle ecosystem by 2027 to 2028, achieve domestic electric motorcycle and electric vehicle ownership reaching 13 million (including modified vehicles) and 2.2 million vehicles respectively by 2030, and sell only electric vehicles by 2050. Cars and electric motorcycles. Eric, Indonesia's Minister of State-owned Enterprises, said that currently, Indonesia's electric vehicle sales have reached 3% of total vehicle sales, showing obvious growth momentum.
Indonesia has also made positive progress in clean energy development. In November 2023, the Zilata floating photovoltaic project in Indonesia, constructed by Power China, was connected to the grid at full capacity to generate electricity. This project is the first floating photovoltaic project in Indonesia and the largest floating photovoltaic project in Southeast Asia. It is also the deepest floating photovoltaic project under construction in the world. It plays an important role in demonstrating and leading the development of clean energy in Indonesia and even Southeast Asia. After the completion of the project, it is expected that the annual power generation will reach 300,000 megawatt hours, which can save Indonesia 117,000 tons of standard coal every year, and at the same time provide enough electricity for 50,000 households, greatly easing the power supply tension around West Java, Indonesia.
Data shows that as of the end of 2022, Indonesia's installed geothermal power generation capacity reached 2,356 MW, surpassing the Philippines and becoming the world's second largest geothermal power generation country after the United States. In order to meet the growing demand for electricity, Indonesia's Ministry of State-owned Enterprises hopes that Indonesia's State Power Corporation will purchase more than 1 GW of new and renewable energy in 2024. According to the plan of Indonesian National Power Company, Indonesia's newly installed geothermal power generation capacity is expected to increase to 3,355 MW in 2030, of which 141 MW will be added in 2024 and 870 MW will be added in 2025.
In 2023, Indonesia will add 43 MW of geothermal power generation, lower than the target of 190 MW. This is mainly due to the difficulty in obtaining development licenses, excessive localization requirements for components, and time-consuming negotiations on the purchase and sale agreement with Indonesian State Power Corporation. Riza, secretary-general of the Indonesian Geothermal Association, said that these problems have a serious impact on obtaining financing from financial institutions.
In order to cope with the rapid development of renewable energy and solve outstanding problems such as the mismatch between clean energy distribution and power demand centers, Indonesia's National Power Corporation is accelerating the construction of power interconnection and building a "super grid" to connect dispersed inter-island power systems . At the same time, Indonesia is also studying the construction of smart grid projects.
The development and use of clean energy will not only help Indonesia save energy and reduce emissions, support green and sustainable economic development, but also reduce the burden of imported oil and natural gas and extend the service life of coal reserves. Indonesian Minister of Energy and Mineral Resources Arifin recently stated that Indonesia's daily oil production is 600,000 barrels, but it still needs to import 840,000 barrels to meet domestic demand, and the gap is still large. In addition, Indonesia imports 5.5 million tons of liquefied natural gas every year.
According to the Indonesian Mining Association, as electric vehicles continue to increase, the useful life of Indonesia's coal reserves will reach 150 years. Indonesia's coal resources amount to 99.19 billion tons, with proven reserves of 35.02 billion tons. If coal production is 700 million tons per year, it is expected that the new coal reserves will be exhausted within 47 to 50 years.
Nonetheless, Indonesia's energy transition still faces many challenges. For example, public acceptance of electric vehicles is still not high. On the one hand, although the sales of electric vehicles in Indonesia have increased, their proportion in the total car ownership is still very low; on the other hand, despite the government's subsidy policies, the sales of electric motorcycles have not changed significantly. In 2023, the government allocated 1.4 trillion Indonesian rupiah to provide subsidies for 200,000 new electric motorcycles (including modified vehicles), but only 11,532 quotas were used; although the subsidy intensity has increased in 2024, there are still remaining quotas so far There are 576,400 vehicles, and only 10,643 quotas have been applied for.
Financing issues are also prominent. In 2022, Indonesia released the world's largest energy transition financing plan. In the next 3 to 5 years, it will raise US$20 billion in funds through the international financing mechanism "Just Energy Transition Partnership" to develop clean energy, including supporting coal-fired power plants. Early retirement. A coalition of international partners led by the United States and Japan has pledged to help Indonesia wean itself off coal power generation and achieve carbon neutrality by 2050, but so far no substantial progress has been made, and private capital is even less supportive of the early retirement of Indonesia's coal-fired power plants. interest. Ariffin said in February that the government's priority would shift from decommissioning coal-fired power plants to optimizing transmission infrastructure.
At the same time, the legal foundation for clean energy development in Indonesia remains weak. Fahmi, a scholar at Gajah Mada University in Indonesia, said that Indonesia has not yet passed the New Energy and Renewable Energy Act. In addition, the Electricity Law also needs to be improved to accelerate the energy transition. (Economic Daily reporter in Jakarta, Chen Xiaofang)
Globally, the development of new energy has shown a significant growth trend, and important progress has been made in many fields. New energy vehicles are developing strongly, and the copper caps for electric vehicle fuses we produce take into account both quality and price. If you are interested, you can click this link to learn more:
https://www.stamping-welding.com/fuse-cap-and-contact/ev-fuse-copper-contact-cap.html
Through strict quality control and continuous technological innovation, we are committed to providing customers with high-quality cha and excellent services to meet their needs and continuously enhance our competitiveness and market position. If you have any needs, you can contact us through the following methods, and we will provide you with a solution as soon as possible.
