Energy Transition Takes into Account Supply-Demand Balance, Says Energy Minister

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 469.Pers/04/SJI/2021

Date: 21 December 2021

Energy Transition Takes into Account Supply-Demand Balance, Says Energy Minister

The development of new, renewable energy power plants must take into account the balance between supply and demand, system readiness, economics, and be combined with domestic capability to encourage new, renewable energy industry," Minister of Energy and Mineral Resources (EMR), Arifin Tasrif, has said in a webinar titled Indonesia Energy Transition Outlook 2022 held by the Institute for Essential Services Reform in Jakarta, Tuesday (21/12).

Arifin went on to say the reliability of developing a domestic new, renewable energy industry will make Indonesia a major player in the field. This way, Indonesia will not become an importer of renewables technologies. "Such development is projected to reduce emissions significantly, especially in 2040 when fossil energy contracts expire," explained Arifin.

One of the efforts made by the government to develop new, renewable energy is by applying a carbon tax at a rate of Rp30 per kg of CO2e. The tax will become effective on April 1, 2022 for coal-fired power plants under a cap and tax scheme. "This regulation is expected to create a better climate for business and investment (in the new, renewable energy subsector)," said Arifin.

The Ministry of EMR has continuously encouraged innovative collaborations in order to accelerate the energy transition. "We hope all stakeholders will continue to strengthen cooperation on the development on policy solutions that can support the energy transition towards net zero emissions," said Arifin.

Arifin revealed that the projected investment on energy transition in the electricity subsector alone reached USD1 trillion by 2060, or USD25 billion annually. "The support of competitive technologies is expected to reduce investment amount," concluded Arifin.

On various occasions, Arifin has emphasized that new, renewable energy potential and technology are the main capital to carry out the energy transition, by prioritizing the use of solar energy, hydrogen, storage technology, electric stoves, electric vehicles; development of smart grid interconnection and natural gas networks as well as gradual phase down of coal-fired power plants. (IY)

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