Energy Sector – The Government of Indonesia is committed to reduce carbon emissions in the energy sector by 2060. This is done to create a better and sustainable environment. This commitment is announced through the Press Release of the Ministry of Energy and Mineral Resources (ESDM) Number: 271.Pers/04/SJI/2021 dated August 11, 2021. Then, what are the policies set by the government to achieve net zero-emission?
Plan to Achieve Zero Emission
1. Developing New and Renewable Energy (EBT)
The Government of Indonesia will develop more new and renewable energy (EBT). Through several existing policies and provisions, Indonesia will begin to focus on developing the energy sector by including more EBT base power plant such as wind, solar photovoltaic, geothermal, biomass, hydrogen, nuclear, and battery storage systems.
2. Infrastructure Support
In addition, as a complementary to the development of the EBT power plant development, Indonesian government will develop three major electricity infrastructure which are the transmission, smart grid, and interconnection.
3. Gradual Transition
The Government of Indonesia has made regulations related to the use of electric stoves, cessation of fossil energy. It is targeted that the EBT will reach 23 percent in the total energy supply by 2025. Starting from 2027 to 2031, Indonesia will start to gradually increase the share of EBT to 57 percent.
How is the NRE Energy Sector Infrastructure Development Process?
As means to reach the desired target, the Government of Indonesia have published several strategic policies by 2060, through the Draft of Law (RUU) on EBT, Ministry of Energy and Mineral Resources Regulation, and Presidential Regulation. These policies will be the legal basis in order for the process of funding and development.
The source of funds for the development will come from private investment, the State/Regional Budget, and State/Regional-Owned Enterprise. As means to attract more investment, the Government of Indonesia has taken fiscal and non-fiscal incentive measures, including tax holidays, tax allowances, and facilitation of import duties.