Lingga, Ebook Indonesia Post Pandemic Outlook Energy

OPENING REMARKS:
Prof. Dr. Pratikno, M.Soc.Sc.
INDONESIA Minister of State Secretary,

Republic of Indonesia
POST-PANDEMIC OUTLOOK:
INDONESIA
Strategy towards Net-Zero Emissions by 2060
from the Renewables and Carbon-Neutral
Energy Perspectives
C
OVID-19 has disrupted all aspects of human life. To mitigate the impact of
the pandemic, several efforts have been taken, including by Indonesian
scholars abroad. This book entitled Indonesia Post-Pandemic Recovery
Energy Perspectives
Outlook: Strategy towards Net-Zero Emissions by 2060 from the Renewables and
Carbon-Neutral Energy Perspectives explores energy sustainability and climate
change issues and how it can progress further. There are also discussion on the
delays caused by the COVID-19 pandemic to a few major renewable energy
projects that should have been done in 2020-2021.
Comprising of 14 chapters, this book is divided into three sections. The first part,
Indonesia's Current Position and Strategy for Renewable Energy, explores
INDONESIA
Indonesia's current position and strategy on New and Renewable Energy. This
chapter also explores Indonesia's commitment towards Net-Zero Carbon
Emission 2060. Second, Carbon-Free and Renewable Energy in Indonesia,
discusses the status of renewable energy use in the world, elaborate on the
carbon impact of energy shift from fossil to renewable sources, and introduce a
new criterion in renewable energy: carbon-neutral energy. The last part,
Buku ini tidak diperjualbelikan.

Indonesia's New Strategy to Achieve Net-Zero Emission in 2060, explores the
macroeconomic benefits of renewable and carbon-neutral energy deployment
which are increasing energy security, fueling GDP development, creating job
opportunities, enhancing human welfare, and achieving gender equality.
We hope that this book can be a valuable reference for stakeholders,
policymakers, as well as society to recover from the pandemic crisis and find from the Renewables and Carbon-Neutral
better solutions to benefit future generations.
Energy Perspectives
Editors: Harun Ardiansyah
Putty Ekadewi
Published by:
BRIN Publishing
DOI: 10.55981/brin.562
ISBN 978-623-7425-83-0
Editors:
Directorate of Repositories, Multimedia,
and Scientific Publishing
Gedung B.J. Habibie, Jln. M.H. Thamrin No. 8,
Harun Ardiansyah
Kb. Sirih, Kec. Menteng, Kota Jakarta Pusat,
Daerah Khusus Ibukota Jakarta 10340
Whatsapp: 0811-8612-369
Putty Ekadewi
E-mail: penerbit@brin.go.id 786 237 42 583 0
Website: penerbit.brin.go.id
First published in 2022 by BRIN Publishing
Available to download free: penerbit.brin.go.id
This book is published under a Creative Commons Attribution Non-

commercial Share Alike 4.0 International license (CC BY-NC-SA 4.0).
This license allows you to share, copy, distribute and transmit the work
for personal and non-commercial use providing appropriate attribution.
Adaptation or modification to original work must be under the same license.
Further details about CC BY-NC-SA 4.0 licenses are available at

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BRIN Publishing
© 2022 the Overseas Indonesian Students’ Association Alliance (OISAA)
The Directorate of Research and Policy Studies (Ditlitka)
Cataloging in Publication
Indonesia Post-Pandemic Outlook: Strategy towards Net-Zero Emissions by 2060 from the
Renewables and Carbon-Neutral Energy Perspectives/Harun Ardiansyah & Putty Ekadewi
(Eds.)–Jakarta: BRIN Publishing, 2022.
xxiii p. + 306 p.; 14,8 x 21 cm.
ISBN 978-623-7425-82-3 (complete printed number series)
978-623-7425-83-0 (printed)
978-623-7425-86-1 (complete e-book number series)
978-623-7425-87-8 (e-book)
1. Energy 2. Indonesia’s rich resources

3. Renewable energy
531.6
Copy editor : Sarwendah Puspita Dewi

Proofreader : Noviastuti Putri Indrasari & Dhevi E.I.R. Mahelingga
Layouter : Dhevi E.I.R. Mahelingga
Cover Designer : Dhevi E.I.R. Mahelingga
First Print : November 2022
Published by:
BRIN Publishing, member of Ikapi
Directorate of Repositories, Multimedia, and Scientific Publishing
Gedung B.J. Habibie, Lantai 8

Jln. M.H. Thamrin No. 8, Kebon Sirih,
Menteng, Jakarta Pusat,
Whatsapp: 0811-8612-369
e-mail: penerbit@brin.go.id
website: penerbit.brin.go.id
Penerbit BRIN
@penerbit_brin
penerbit_brin
In cooperation with:
Overseas Indonesian Students' Association Alliance (OISAA)
Mayapada Tower 1, Fl. 19,
Jln. Jend. Sudirman, Kav. 28,
Jakarta Selatan 12920
e-mail: kesekretariatan@ppi.id
website: ppi.id
Contents
List of Figures.................................................................................................... vii

List of Tables..................................................................................................... xiii
Publisher’s Note..................................................................................................xv
Opening Remarks
The Minister of State Secretary of the Republic of Indonesia................ xvii
Opening Remarks
Coordinator of OISAA................................................................................... xvii
Opening Remarks
Directorate of Research and Policy Studies OISAA.................................. xxi
Chapter 1 Introduction...................................................................................1
Harun Ardiansyah & Putty Ekadewi

Section 1 Indonesia’s Current Position and Strategy for
Renewable Energy................................................................7
Chapter 2 Indonesia’s National Strategy and Commitment towards
Transition to Renewable Energy................................................9
Elisa Wahyuni & Harun Ardiansyah
Chapter 3 Challenges in Facing Indonesia’s Energy Commitment.......23
Elisa Wahyuni
Section 2 Carbon-Free and Renewable Energy in Indonesia...........41
Chapter 4 Moving from New and Renewable Energy to Renewable
and Carbon-Neutral Energy......................................................43
Putty Ekadewi
Chapter 5 Solar Energy Potentials and Opportunity of Floating
Solar PV in Indonesia................................................................63
David F. Silalahi & Denny Gunawan
v
Chapter 6 Hydropower Technology: Potential, Challenges, and
the Future.....................................................................................89
Harun Ardiansyah
Chapter 7 Wind Power in Indonesia: Potential, Challenges, and
Current Technology Overview.............................................. 109
Taufal Hidayat
Chapter 8 Biomass Energy........................................................................ 133
Matthew Hardhi
Chapter 9 Geothermal Energy in Indonesia.......................................... 159
Ghibran Fahreza Dipayana & Rahmat Agung Ramadhan
Chapter 10 The Case for Nuclear Energy................................................. 181
Harun Ardiansyah
Chapter 11 Unlocking the Potential of Hydrogen in Indonesia........... 209
Denny Gunawan
Section 3 Indonesia’s New Strategy to Achieve Net-Zero
Emission in 2060..............................................................237
Chapter 12 Socio-Economic Impacts of Renewable and Carbon-
Neutral Energy Development................................................ 239
Nevi Cahya Winofa
Chapter 13 Pathways and Recommendations on Energy Transition
Strategy to Achieve Net-Zero Emissions by 2060.............. 267

Chapter 14 Closing Summary: Deploying Indonesia’s Energy
Resources for a National Carbon-Neutral Energy
Ecosystem.................................................................................. 283
List of Abbreviations...................................................................................... 289

Index................................................................................................................. 295
Editors’ Biography........................................................................................... 299
Authors’ Biography......................................................................................... 300
Directorate of Research and Policy Studies
Overseas Indonesian Student’s Association Alliance (OISAA).............. 305
vi
List of Figures
Figure 2.1 The Illustration of Iron Triangle...............................................16

Figure 3.1 Indonesia Primary Energy Mix (Q3 2021) ............................27
Figure 3.2 Primary Energy Supply (Q3 2021) and Final Energy
Demand (Q3 2021) ....................................................................28
Figure 3.3 Annual Emissions Profile of the CFFP in Indonesia............30

Figure 3.4 The Outlook of Indonesia’s energy sector emission in
the Current Policy Scenario 2020–2030............................. 30
Figure 3.5 Geography of Electricity Generation Cost under MEMR
2021................................................................................................31
Figure 3.6 Renewables Share in Electricity Generation, 2015–2020.. 32
Figure 3.7 LCOE of Different Power Plant Technologies in
Indonesia .....................................................................................33
Figure 3.8 Industry Sector Growth, 2019–2021 (%) .......................... 34
Figure 3.9 Industry Sector in GDP, 2019–2021 (%) .......................... 35
Figure 4.1 Energy resources typing and classification.............................46
Figure 4.2 Total World Energy Supply from Various Energy Sources..47
vii
Figure 4.3 Total CO2 Emissions at (a) Global Scale and for (b)
Indonesia .....................................................................................53
Figure 5.1 Indonesia’s Global Horizontal Irradiation Map ....................65
Figure 5.2 Indonesia’s Solar Energy Potential for Its Regions ...............66
Figure 5.3 Indonesia’s Solar Energy Potential Estimation in Recent
Studies............................................................................................66
Figure 5.4 Significant Reductions in Photovoltaic Module Price and
Levelized Cost of Electricity .....................................................67
Figure 5.5 Options for Carbon-Free Energy Storage Solutions..............69
Figure 5.6 Potential 150 GWh Greenfield Off-river Pumped Hydro
Energy Storage Sites in Indonesia ...........................................70
Figure 5.7 Various Recycling Techniques of Solar Panels.......................73
Figure 5.8 Floating PV Cumulative Global Installed Capacity .............74
Figure 5.9 Solar Panels Cost Comparisons................................................75
Figure 5.10 Schematic Diagram of Floating Solar PV System with Its
Key Components ........................................................................76
Figure 5.11 Pure Floats Design (Ciel Et Terre)............................................78
Figure 5.12 Pontoons and Metal Frames Structure by Scotra .................79
Figure 5.13 Floating Solar Technology Based on a Thin Hydro-elastic
Membrane (Ocean Sun).............................................................79
Figure 5.14 Distribution of 5,807 Lakes with a Total Area of 5868 m2 In
Indonesia.......................................................................................80

Figure 5.15 Indonesia’s Wind Speed at 10 M..............................................81
Figure 5.16 The Last 50 Years of Tropical Storms in Asia-Pacific;
1968–2018 ....................................................................................82
Figure 5.17 Floating PV Investment Costs Worldwide (Real and Auction
Results) .........................................................................................83
Figure 6.1 Cross-Section of a Conventional Hydroelectric Dam .........91
Figure 6.2 Racoon Mountain Pumped-Storage Plant...............................99
Figure 7.1 Indonesia’s Global Wind Speed at 50 m Height-Resolution 5
km .............................................................................................. 111
Figure 7.2 Wind Turbine Classification................................................... 115
Figure 8.1 Definitions of Biomass Energy-Related Terminologies..... 135
viii
Figure 8.2 Bioenergy Power Plants Projects Based on National
Electricity Supply Business Plan (RUPTL) for 2019–
2025............................................................................................. 140
Figure 8.3 Steam power plants implementing co-firing method
commercially with 1–5% biomass portion. ........................ 141
Figure 8.4 Biomass Potential per Province ............................................ 146
Figure 8.5 Biomass Potential per Type.................................................... 147
Figure 8.6 3D Representation of Hemicellulose Linking to
Cellulose and Lignin................................................................ 150
Figure 8.7 Direct Biomass Combustion-Diesel Hybrid Power
Generation System................................................................... 153
Figure 9.1 Indonesia Geothermal Potential............................................ 161
Figure 9.2 D CAD Modeling for 8-1/2” PDC bit.................................. 165
Figure 9.3 Relationship between Exploration Results, Geothermal
Resources, and Geothermal Reserves................................... 167
Figure 10.1 U.S. Postal Service Stamp to Commemorate “Atoms for
Peace” Speech ........................................................................... 183
Figure 10.2 Generations of Nuclear Reactors .......................................... 186
Figure 10.3 Calder Hall Power Station in the United Kingdom........... 187
Figure 10.4 Pressurized Water Reactor Schematic Diagram.................. 188
Figure 10.5 Boiling Water Reactor Schematic Diagram......................... 189
Figure 10.6 Schematics of Light Water Small Modular Nuclear

Reactor........................................................................................ 191
Figure 10.7 High Temperature Gas-Cooled Reactor Schematics ......... 192
Figure 10.8 Global Average Capacity Factor of Nuclear Energy........... 194
Figure 10.9 Death Rates from Energy Production per TWh ............... 195
Figure 10.10 Lifecycle Greenhouse Gas Emission Range for
Assessed Technology................................................................ 196
Figure 10.11 Concept of Multi-Barrier Disposal Concept ...................... 198
Figure 10.12 TN24 Cask Produced by Orano TN
(Formerly Areva TN) ............................................................. 199
Figure 10.13 Caorso Nuclear Power Plant Spent Fuel Pool .................... 200
Figure 11.1 Applications for Hydrogen .................................................... 210
ix
Figure 11.2 Indonesia’s Renewable Energy Potential ............................. 211
Figure 11.3 Hydrogen Technology Value Chain ..................................... 212
Figure 11.4 Schematic Diagrams of Alkaline and PEM
Electrolyzers............................................................................... 217
Figure 11.5 Hydrogen Production Cost as a Function of
Electrolyzer Capital Cost, Electricity Price, and
Operating Hours ..................................................................... 218
Figure 11.6 Gravimetric and Volumetric Energy Density of
Hydrogen Compared to Other Fuels.................................... 219
Figure 11.7 Power-To-X Framework for Decarbonizing Hard-To-
Abate Sectors Using Hydrogen ............................................. 224
Figure 11.8 Levelized Cost of Hydrogen Production by Technology
in 2020 and the Estimated Cost in 2030 and 2050
Under the Net-Zero Emissions Scenario ............................ 227
Figure 11.9 Prospective Locations for the Green Hydrogen Hubs
According to Renewable Potential and Installed
Capacity Including Variable Renewables (Solar, Wind,
and Tidal) and Controllable Renewables (Hydropower,
Biomass, and Geothermal) .................................................... 231
Figure 12.1 The Scope of the Chapter....................................................... 240
Figure 12.2 The Relationship between Energy, Economic
Development, and Human Welfare....................................... 241
Figure 12.3 Population and Economic Development (Left) and

Total Energy Use and CO2 Emissions Trend (Right)......... 242
Figure 12.4 The Development of Indonesia’s Energy Mix (Left) and
Comparison Between Current Energy Mix and Target
in 2020 and 2050 (Right)........................................................ 243
Figure 12.5 Indonesia Electricity Energy Mix and Its Target in 2025
and 2030 ................................................................................... 244
Figure 12.6 The Development of Indonesia Structural Economy ........ 246
Figure 12.7 Current and Projection of Indonesia’s Population and
Economic Growth ................................................................... 246
Figure 12.8 Investment Needed to Achieve Net-Zero Emission in
2021–2060 ................................................................................. 254
Figure 12.9 The Comparison Between National BPP and Regional
BPP with Its Population ......................................................... 256
x
Figure 12.10 The Value Chain of renewable and carbon-neutral
energy and Its Level of Skill Required ................................ 258
Figure 12.11 The Value Chain of renewable and carbon-neutral
energy and Its Level of Skill Required ................................ 263
xi
List of Tables
Table 2.1 Scenarios of Assumptions towards Net-Zero Emission...........20

Table 5.1 Summary of the Advantages and Disadvantages of Pure
Floats, Pontoons, and Metal Structure, Membrane, and
Mats Floating Technology..............................................................77
Table 5.2 List of Occupied Area in the Recent Floating PV Projects.....80
Table 6.1 Some Operational Large-Scale Hydropower Station in
Indonesia...........................................................................................92
Table 6.2 Some Locations of Installed Micro-Hydropower Plants .........97
Table 6.3 Installed Micro-Hydropower Plants in 2011–2014................ 97

Table 7.1 Indonesia Wind Power Technical Potential ........................... 111
Table 7.2 The Comparison of HAWT and VAWT.................................. 116
Table 7.3 The Modification of VAWT........................................................ 117
Table 7.4 Optimization Method Algorithm.............................................. 121
Table 7.5 Noise Reduction Techniques for Wind Turbines................... 125
Table 8.1 Generations of Bioethanol.......................................................... 138
Table 8.2 Potential of Biomass Energy in Indonesia ............................. 144
Table 8.3 Author’s Concerns and Implications Toward Types of
Biofuels........................................................................................... 148
xiii
Table 9.1 Top 10 Countries Developing Geothermal Capacity
in 2021........................................................................................... 171
Table 11.1 Selected Five Shades of Hydrogen ........................................... 213
Table 11.2 Selected Characteristics of Alkaline and PEM
Electrolyzers ................................................................................. 217
xiv
Publisher’s Note
As a scientific publisher, BRIN Publishing holds a high responsibility

to enlighten society’s intelligence and awareness through the provision
of qualified publications available to the public at large. The fulfillment
of this statutory obligation is one of the publisher’s roles in promot-
ing the educational and intellectual life of the nation as mandated
by the Preamble of the 1945 Constitution. Furthermore, this book

has encountered quality control mechanisms through the editorial
process, including peer review.
This book is one of the four book series titled Indonesia Post-
Pandemic Outlook written by Indonesian scholars abroad to offer
multidisciplinary strategies for Indonesia to recover stronger post-
pandemic. In the discussions of this book series, the contributors
propose their policy recommendations by referring to the Sustain-
able Development Goals, Indonesia’s Long Term National Develop-
ment Plan (RPJP), and the United Nations Research Roadmap for
COVID-19 Recovery.
xv
Indonesia Post-Pandemic Outlook: Strategy towards Net-Zero
Emissions by 2060 from the Renewables and Carbon-Neutral Energy
Perspectives highlights some key aspects of energy in Indonesia that
can contribute to achieving net-zero carbon emission by 2060. In the
earlier part, this book explores Indonesia’s current position and strat-
egy for renewable energy. This book also offers a new nomenclature
that will accurately describe net-zero carbon emission, carbon-free,
and renewable. Furthermore, this book also covers the technical and
non-technical aspects of energy: the potentials and challenges of
carbon-free and renewable energy technology. Finally, this book sug-
gests several points to re-strategize Indonesia’s energy targets which
help the country stay on track to its vision for a net-zero future by
2060.
On this account, we hope that this book can offer valuable inputs
and great recommendations for policymakers and stakeholders. Be-
sides, it is expected that this book can provide knowledge and insight
for the readers on how we can meet the net-zero carbon emission
target.
As a final note, we would like to deliver our heartfelt gratitude
to everyone taking part in the process of this book.
BRIN Publishing

Opening Remarks
The Minister of State Secretary of
the Republic of Indonesia
Indonesian students and youths have a long history of shaping our

nation. Their fresh and passionate minds have been influential—es-
pecially in supporting the development of Indonesia. In this context,
the Overseas Indonesia Students’ Association Alliance (PPI Dunia)
has emerged as one of the vessels for uniting and organizing them to
directly or indirectly contribute to a better Indonesia. The involvement

of PPI Dunia in various activities has strengthened the bond between
them and their homeland.
This book is the latest evidence of PPI Dunia’s effort to accom-
modate Indonesian students currently studying abroad to express
their insightful thoughts on strategizing Indonesia toward renewable
and carbon-neutral energy through valuable collaboration with the
National Research and Innovation Agency (BRIN). As someone who
used to study abroad, I understand how hard it is to be involved in
this kind of voluntary-based project as you also have to manage your
time between studying or researching, taking care of your family, and
sometimes doing your jobs. Therefore, I highly appreciate all writers,
xvii
as well as all cabinet members of PPI Dunia and BRIN, for their hard
work and dedication to publishing this book which I believe will
provide invaluable insights into our beloved country.
The publishing of this book is timely as Indonesia is being as-
signed to hold the G20 Presidency. It is a historical role that provides
an excellent opportunity for us to lead the global initiative, particu-
larly accelerating the transition toward cleaner and more sustainable
energy. This issue has been chosen as one of three priority issues of
Indonesia’s G20 Presidency, along with establishing the global health
architecture and implementing the digital transformation. As the
impact of climate change has begun to affect local and global develop-
ment, Indonesia believes that an urgent transition toward sustainable
energy is essential. President Joko Widodo has frequently mentioned
that our local farmers and fishermen have already borne the brunt of
climate change. Their output, for example, has begun to decrease as
the weather is becoming increasingly difficult to forecast. Therefore,
a global effort, mainly through the G20 forum, to ensure a transition
to cleaner energy would be critical to avert a more serious climate
crisis in the future.
However, it is evident that chairing this year’s G20 forum will also
pose enormous challenges, particularly in the current global complexi-
ties. The world is still struggling to bounce back from the COVID-19

pandemic. Unfortunately, the geopolitical crisis between Russia and
Ukraine adds an extra layer of uncertainty due to its disruptive impact
on the global supply chain for energy and agricultural commodities.
The impact is significant as the prices of energy and food commodi-
ties, particularly crude oil and wheat, are skyrocketing, threatening
the economic stability of many countries worldwide. For Indonesia,
the current situation is unfavorable since we still heavily rely on fossil-
based energy to run our economy. As a result, the Government is
striving to formulate an appropriate strategy for managing the energy
subsidy without burdening our state budget or jeopardizing our social
and political stability.
xviii
This situation has elevated the urgency of accelerating our
transition to carbon-neutral and renewable energy. Our country has
enormous potential to become a leading renewable energy source,
such as solar, wind, and hydro energy. We, for instance, have ap-
proximately 4,400 rivers across the country that could be utilized to
generate hydropower. Moreover, Indonesia has abundant geothermal
and the wind energy potential in several regions, particularly in South
Sulawesi and West Java. In total, the Government calculates that our
potential capacity for renewable energy could reach 418 gigawatts.
It is then great to know that this book addresses this potential
and provides solutions to boost the competitiveness of our renewable
energy industry in the global market. I believe this book is valuable
in assisting Indonesia’s transition to sustainable energy. This book
provides an independent perspective on developing an action plan
to achieve Indonesia’s net-zero carbon emission goal. The ideas and
contributions of overseas Indonesian students will be an important
part of the building blocks of our future together on this planet. Hence,
I would like to appreciate once again and congratulate PPI Dunia
and BRIN—particularly the Energy Committee of the Directorate
of Research and Policy Studies (Ditlitka), for publishing this book. I
hope this great initiative can be maintained in the future to contribute
to sustainable energy.

Pratikno
The Minister of State Secretary of
the Republic of Indonesia
xix
Opening Remarks
Coordinator of OISAA
The history noted that on October 25, 1908, Indische Vereeniging

was established as an Hindia students’ association in Leiden, Neth-
erlands. In 1922, the name was changed to Indonesische Vereeniging
or Indonesian Students Association, with Mohammad Hatta as one
of its leaders (1926–1930). In Australia in 2007, the Indonesian Stu-
dents Association, which has spread worldwide, agreed to declare

itself as an alliance. Since then, this organization is called Overseas
Indonesian Students’ Association Alliance (OISAA) or Perhimpunan
Pelajar Indonesia Dunia (PPI Dunia), becoming the most extensive
Indonesian students’ organization comprising 60 member countries
spread across three regions: Asian-Oceania, America-Europe, and
Middle East-Africa. In its journey, OISAA has contributed to various
activities such as education, research/study, training/workshop, and
community service as the commitment to achieving Golden Indonesia
2045.
In the OISAA Cabinet of “Cendekia APIK”, we focus on the
strategy and approach called “Penta Helix” strategy and approach
xxi
as a methodology for integrating multi-stakeholder and governance
in response to all the current challenges and issues in Indonesia.
With this model, OISAA has collaborated and synergized with the
government, universities, industries, media, and community. It takes
a strategic synergy between the whole elements of Penta Helix so
that the goals of Golden Indonesia 2045 can be accomplished. These
components are linked to the five directorates and three bureaus; one
is the Directorate of Research and Policy Studies (Ditlitka), which
focuses on facilitating Indonesian scholars to contribute their scientific
knowledge to Indonesia’s development.
The Indonesia Post-Pandemic Outlook series is one of the most
crucial works by Ditlitka of OISAA. The books highlight the persistent
changes and impacts due to the outbreak of COVID-19. Not only that
matter, but the essence of these books will also articulate the mitiga-
tion plans for the future pandemic or crises in Indonesia. Written and
researched carefully by the authors, the books tell various topics within
four categories: “Rethinking Health and Economics Post-COVID-19”,
“Social Perspectives”, “Environment and Technology Role for Indo-
nesia Development”, and “Strategy towards Net-Zero Emissions by
2060 from the Renewables and Carbon-Neutral Energy Perspective”.
Above all, what are the hope and possible solution to this global
super-pandemic for all humanity, especially Indonesia? Those are

the areas we are trying to address in these books, to see the outlook
beyond COVID-19 in Indonesia based on the UN Research Roadmap
for the post-pandemic recovery. These books will be presented and
promoted to the government and related stakeholders such as scholars,
policymakers, and, most importantly, society. This condition will
ensure that the quintessence of these books will positively impact
the nation towards the Indonesia’s greater. I think this book series can
be helpful as a beautiful masterpiece that provides valuable insights
and mitigation plans for crises in Indonesia, in the same manner as
we have learned from this super pandemic that caused the global
disruptions.
xxii
In this opportunity, I greatly appreciate all the parties involved
in finishing this book series, namely the authors, editors, reviewers,
board of directors, commission chairs and members, and the National
Research and Innovation Agency publishing house (BRIN Publishing).
After all, the collaboration from all the parties who worked tirelessly
has enabled the achievement of this critical goal.
Although many possibilities and challenges will happen in the
future, I believe these books will encourage legacy to the scientific
knowledge in Indonesia. Moreover, this legacy is proof of Indonesian
students’ awareness of their country, even though they live and study
worldwide.
Faruq Ibnul Haqi, S.T., M.RgnlUrbPlan., Ph.D. (Cand.)

President of Overseas Indonesian Students’ Association Alliance
(OISAA)
xxiii
Opening Remarks
Directorate of Research and
Policy Studies OISAA
The Directorate of Research and Policy Studies (Ditlitka) of the Over-

seas Indonesian Students’ Association Alliance (OISAA), commonly
known as PPI Dunia, focuses on facilitating Indonesian scholars to
contribute their scientific knowledge to the development of Indonesia
by promoting knowledge translation and evidence-based policymak-
ing.

COVID-19 has ravaged the world’s economy in the past two years,
upended existing social support structures, and strongly impacted
global geopolitics. Written by over 85 scholars from 22 countries,
which are part of the Directorate’s nine commissions, this book
series titled Indonesia Post-Pandemic Outlook aims to present the
perspectives of Indonesian scholars on the current pandemic and
propose multidisciplinary strategies for Indonesia to recover stronger
post-pandemic.
In brief, four books constitute the series as follows:
1. Rethinking Health and the Post-COVID-19 Economy by the
Health, Economics, and Tourism & Creative Economy Commis-
xxv
sions, covering a wide range of topics, including digital health,
virtual tourism, international corporate taxation, and green
bonds.
2. Social Perspectives by the Education, Culture, and International
Relations Commissions, covering a wide range of topics, includ-
ing international relations, social and culture, and education.
3. Role of Environment and Technology for Indonesia’s Devel-
opment by the Environment and Technology Commissions
covering a wide range of topics, including disaster and greening
management, food defense, and security, waste and pollution
management, as well as human resource and public service.
4. Strategy towards Net-Zero Emissions by 2060 from the Re-
newables and Carbon-Neutral Energy Perspectives by the Energy
Commission, covering a wide range of topics, including renew-
able energy and carbon-neutral related strategies in achieving
Net-Zero Emissions in 2060.
Through this book series, the Directorate strongly believes there
are many lessons from the current crisis that provide valuable refer-
ences as the guides for us to anticipate future pandemics and other
crises. The books emphasize the need for comprehensive joint efforts
between government agencies and the various components of our
nation and the need for forward-looking policies to benefit future

generations.
Written with policymakers and the public in mind, the books will
be presented to the Indonesian government and relevant stakeholders
such as academia, NGOs, and the media and made open access to the
public. The authors have also aligned their policy recommendations
with the Sustainable Development Goals, Indonesia’s Long Term
National Development Plan (RPJP), and the United Nations Research
Roadmap for COVID-19 Recovery.
The completion of this series is a testament to what is possible
when individuals work across siloes and push boundaries to support
nation-building. While change and challenges are inevitable for any
xxvi
nation, we hope this series will leave a lasting positive impact on
society and promote a legacy of knowledge translation from OISAA
Cendekia APIK.
On behalf of the Directorate, we extend our deepest appreciation
and gratitude to all the parties involved—authors, reviewers, com-
mission chairs and members, OISAA Cendekia APIK’s President
and Board, national-level Indonesian Student Association chapters,
and the National Research and Innovation Agency publishing house
(BRIN Publishing) that made all of this possible.
Board of Directors, Directorate of Research and Policy Studies

OISAA Cendekia APIK
Muhammad Aswin Rangkuti
Radityo Pangestu
Anthony Paulo Sunjaya
Afifah Muharikah
David Firnando Silalahi
xxvii
Chapter 1
Introduction
“Idealism is the last luxury that only young people have”

-Tan Malaka
The young generation has always been Indonesia's powerhouse since

its formation. Young Indonesians have contributed to many sectors

of Indonesia, and with the bonus demography of youth, soon it is
expected that Indonesia will thrive as part of the big 5 in the world’s
economy. This economic aspiration may not be achievable if Indonesia
lacks a strong energy sector to support economic growth. Without
sustainable energy, Indonesia will always be the market, not the pro-
ducer, on the global stage. Economic growth is interlinked to energy.
On the other hand, the threat of climate change has risen significantly
in recent years, and it has become more evident than ever before. The
H. Ardiansyah & P. Ekadewi

University of Illinois at Urbana-Champaign, e-mail: haruna2@illinois.edu
© 2022 Overseas Indonesian Student’s Association Alliance & BRIN Publishing

Ardiansyah, H., & Ekadewi, P. (2022). Introduction. In H. Ardiansyah, & P. Ekadewi (Eds.), Indonesia
post-pandemic outlook: Strategy towards net-zero emissions by 2060 from the renewables and carbon-
neutral energy perspectives (1–5). BRIN Publishing. DOI: 10.55981/brin.562.c1 1
ISBN: 978-623-7425-83-0 E-ISBN: 978-623-7425-87-8
increased frequency of natural disasters in Indonesia can be attributed
to climate change. Therefore, Indonesia, as a part of the G20, needs to
become a leader in global efforts to tackle climate change.
Indonesian students abroad come together in this book, trying to
contribute from afar to how Indonesia can achieve energy sustainabil-
ity while also strengthening Indonesia’s economic growth. By looking
from an “outside perspective” of Indonesia, we would highlight some
key aspects of Indonesian status to energy sustainability and climate
change and how it can progress further.
The Indonesian Government has some plans to manage Indone-
sia’s rich resources of carbon-free and renewable energy. It can be seen
through the National General Energy Plan (Rencana Umum Energi
Nasional-RUEN). RUEN manages to accommodate all the potential
and develop some energy diversification in Indonesia. Strengthened
by the National Energy Policy Law (UU No. 14 Tahun 2007 tentang
Kebijakan Energi Nasional), Indonesia plans to achieve 23% renewable
energy in the energy mix by 2025. On the other hand, Indonesia has
been hit hard by the COVID-19 pandemic. The pandemic delays a
few major renewable energy projects that should have been done
in 2020–2021. Indonesia needs to increase the rate of renewable
energy deployment. However, the current status of renewable energy
in Indonesia is still around 15%. Indonesia’s primary energy sources

are still heavily dominated by coal, oil, and gas. On the other hand,
pressure from around the world is mounting due to climate change.
Indonesia has pledged to become a net-zero carbon emitter by 2060.
It was written in Indonesia’s Nationally Determined Contribution
(NDC) at the Conference of Parties (COP) 26 in Scotland. Aside
from the critique of whether this pledge is achievable to be done by
Indonesia, one certain thing is that Indonesia needs to circle back on
its plan toward energy sustainability and climate change. Some efforts
need to be accelerated to keep Indonesia on pace to become a net-
zero carbon emitter in 2060. It motivates Indonesian students abroad
through the Energy Commission of Overseas Indonesian Students’
2 Indonesia Post-Pandemic Outlook ...

Association Alliance (OIAA) to contribute their ideas through this
book.
This book is entitled Strategy towards Net-Zero Emissions by 2060
from the Renewables and Carbon-Free Energy Perspectives because we
want to highlight some key aspects of energy in Indonesia that can
contribute to achieve net-zero carbon emission by 2060. We divide
this book into three general ideas/parts. In the first part, we highlight
the policies that have been implemented and how it helps Indonesia’s
effort toward energy sustainability and efforts to tackle climate change.
Specifically, we explore Indonesia’s current position and strategy for
renewable energy. This is an important basis to work on as we already
know what has been decided and done in the past. This part consists
of two chapters. Chapter 2 discusses Indonesia’s current national
strategy and commitment toward the transition to carbon-free and
renewable energy. The discussion includes bills and laws that have
been ratified and implemented throughout the years. We discuss the
impact of those bills on Indonesia’s current energy situation, and the
commitments that have been proclaimed on the world stage. From
the ratification of the National Energy Policy in 2014 to the COP26
in 2021, Indonesia has had a specific target and roadmaps on tackling
climate change and smoothly transitioning from a fossil fuel energy-
dependent country to the hub of renewable energy. However, just
like everything in the world, implementing of the policies may meet

some challenges. Chapter 3 discusses those possible hindrances and
challenges to achieve the net-zero carbon emission target. In this
chapter, we explore many possible angles that could be the hindrances
to achieve the energy transition. Dependencies on fossil fuels and the
reluctance of industries to transition to renewable energy are a few
examples of the challenges in achieving net-zero carbon emission.
These topics are explored more in the chapter.
The second part of the book discusses a new nomenclature that
will accurately describe net-zero carbon emission, carbon-neutral and
renewable energy. The term “carbon-free” energy is used instead of
Introduction 3
new energy because the term new energy still includes some energy
sources that heavily emit carbon. The examples are gasified coal,
methane, and dimethyl ether. Carbon-free energy should be the term
broadly used to describe energy transition. After introducing carbon-
free and renewable energy, we discuss the current status, potentials,
and challenges of carbon-free and renewable energy technology. The
chapters discusses mainly the technical aspect of each technology. The
technology includes solar power, hydropower, wind power, biomass,
geothermal, nuclear energy, and hydrogen energy. Carbon capture
technologies are also rising to push the net-zero carbon emission
target even further. Technologies such as Bioenergy Carbon Capture
and Storage (BECCS) are being made around the world. However,
this book focuses on the primary energy producer technologies from
renewables and carbon-neutral technologies. There are a lot of things
that can be expanded and implemented better in each type of energy.
For example, the use of hydrogen should be boosted because hydrogen
is one of the most versatile types of energy carrier. Energy storage is
still a problem on a renewable energy-based grid, and hydrogen as an
energy carrier can create stability and reliability in the system. Another
topic explored in each technology is the future of the technology and
how it can be improved to tackle climate change. For example, the
idea of floating solar panels has been discussed in several conferences
and academic presentations in solar energy. It is said that it can help

expand without causing any harm. Another example is the use of
pumped-storage hydroelectricity plants in hydropower technology
and small and modular reactors in nuclear technology.
With the background of technical aspects explained in Part 2,
the third part of the book discusses the future of energy transition
and how the existing net-zero carbon emission roadmaps and plans
can be improved to truly meet the target. The discussion is not only
limited to the policy aspect, but also the socio-economic aspect of
the target including improvement of human welfare, gender equality,
and job creation. Lastly, the book concludes with ideas and recom-
mendations from Indonesian students abroad on how we can meet

the net-zero carbon emission target. This recommendation is vital for
us, Indonesian students, because we are the ones that will implement
these roadmaps, plans, and recommendations in the future.
In the last few years, the OISAA has published several books and
recommendations, especially energy. This book is a complement to
those previous books. We hope it creates impacts for the future, as
small as it can be.
Introduction 5
Section 1
Indonesia’s Current Position and
Strategy for Renewable Energy
7
Chapter 2
Indonesia’s National Strategy

and Commitment towards
Transition to Renewable Energy
Elisa Wahyuni & Harun Ardiansyah
A. Overview of Indonesia’s Position on the Global Stage

Indonesia is set to take on global leadership. Furthermore, Indonesia
has been actively engaged on the international stage and getting some
recognition globally. In previous years, Indonesia has been more than

once to become a non-permanent member of the United Nations
Security Council (UNSC) (Ministry of Foreign Affairs, 2019). In
2022, Indonesia hosts the G20, the forum of the world’s 20 biggest
countries to meet and discuss multiple things. It shows that Indonesia
has started showing itself to the world. However, this is not the case
for the problem of climate change. Indonesia has set ambitious plans
to achieve net-zero carbon emission, which is not reflected by the
policies enacted within the country. Indonesia is still one of the larg-
E. Wahyuni & H. Ardiansyah

Technical University of Munich, e-mail: elisa.wahyuni@tum.de

Wahyuni, E., & Ardiansyah, H. (2022). Indonesia’s national strategy and commitment towards transition
to renewable energy. In H. Ardiansyah, & P. Ekadewi (Eds.), Indonesia post-pandemic outlook: Strategy
towards net-zero emissions by 2060 from the renewables and carbon-neutral energy perspectives (9– 9
22). BRIN Publishing. DOI: 10.55981/brin.562.c2 ISBN: 978-623-7425-83-0 E-ISBN: 978-623-7425-87-8
est coal importers in the world. Indonesia is also one of the largest
polluters in the world (International Energy Agency (IEA), 2020).
This chapter explores Indonesia’s current position and strategy
based on the bills and laws that have been ratified. The draft of the New
and Renewable Energy Bill (RUU EBT), National Energy Policy of
2014 (KEN/ PP no. 79 Tahun 2014), National Medium-Term Develop-
ment Plan (RPJMN), and General Plan for Electric Power Supply
(RUPTL) will be part of the references used in the following chapters.
This chapter also explores Indonesia’s commitment toward Net-Zero
Carbon Emission 2060 which President Joko Widodo has announced.
B. Development of National Energy Policy in

Indonesia
The role of government in the energy sector starts from the policy.
Given this importance, developing of policies for the energy sector
in Indonesia has undergone several renewals. Chronologically, the
energy sector got special attention in the 1980s with the General
Policy on Energy (KUBE) publication in 1981. KUBE went through
two renewals in 1987 and 1991. KUBE focuses on the intensification,
diversification, and conservation in the energy sector by consider-
ing energy industry, investment climate, and energy price mapping
aspects (KESDM, 2006). Furthermore, KUBE got its third update by

making the environment and energy prices the main aspects in 1998.
In the next decade, the Government issued Presidential Decree
no. 5 of 2006 concerning National Energy Policy (KEN). The pur-
pose of KEN is the setting of goals and objectives policies as initial
guidelines for the General National Energy Plan (RUEN). However,
KEN cannot stand alone without legal protection from Law, which
then in 2007 Law no. 30 the year 2007 about Energy which is still
used as the primary legal protection related to energy today. That
regulation also determines the establishment of the National Energy
Council (DEN) as a committee assigned to formulating KEN. In 2014,
KEN as Presidential Decree No. 5/2006 was revoked along with the
update of PP No. 79 of 2014 concerning the National Energy Policy

which is used as the foundation for the RUEN (issued as Presidential
Regulation No. 22 of 2017 focused on the General National Energy
Plan). Until now, the 2017 version of RUEN is the main guideline for
deciding the direction of energy development in Indonesia until 2050.
In its implementation, Law no. 30/2007 about Energy, could not
stand alone, which was then supported by the authorization of the Law
No. 30 of 2009 concerning Electricity used as the foundation of the
Plan General Electricity National (RUKN) and Law no. 32 years 2009
on Environmental Protection and Management. Apart from these
two regulations, there are still many other policy instruments related
to the energy sector in Indonesia. Apart from historical aspects, the
complexity of policy and bureaucracy is one of the reasons why invest-
ment in the energy sector is difficult. Renewable energy is developing
in Indonesia; therefore, innovation is needed in policies to facilitate
the development of New and Renewable Energy.
As of March 2022, the House of Representatives of Indonesia
(DPR RI) is still finalizing the New and Renewable Energy Draft Bill.
This bill is supposed to be the comprehensive legal base of Indonesia’s
commitment to new and renewable energy. Current regulations are
still scattered in many bills and presidential regulations. With the
mandate from this bill, it is expected that the investment in new
and renewable energy in Indonesia will become more accessible and

more accommodating. Thus, the energy transition that the Indonesian
Government has planned can become an actual realization.
As a comprehensive bill, this bill includes the A–Z of new and
renewable energy, the road map and transition to new and renewable
energy, and all legal matters that can push the investment of new and
renewable energy in a progressive way. This bill defines new energy as
all types of energy that come from new non-renewable technology or
non-renewable energy sources. This includes nuclear energy and other
types of energy which will be defined by Government Regulation. In
terms of nuclear energy, this bill would provide a legal case to start the
investment on nuclear energy. Nuclear energy is no longer considered
“the last option” of energy to be deployed. In some discussions, new
Indonesia’s National Strategy ... 11

energy includes hydrogen, and carbon-based new energy/storage
systems such as gasified coal, methane, and others.
This draft bill provides a legal case to justify the investment in
renewable energy, which is defined as, among others, solar energy,
wind energy, hydropower, geothermal, biomass, and waste energy.
This bill is intended to create a sustainable climate to invest in re-
newable energy in Indonesia. It includes regulations on the business
permit of renewable energy suppliers, supply and demand regulations,
health and safety environment, renewable energy cost, incentives,
and many more.
One distinct topic that will also be included in this bill is the
renewable energy portfolio standard. It is defined as a standard to
be fulfilled by non-renewable energy suppliers and operators to pro-
duce electricity using non-renewable energy sources. This portfolio
standard will be based on the carbon emission targets defined in the
National Energy Policy and National General Energy Plan (DPR RI,
2021; Rancangan Undang-Undang Energi Baru Dan Terbarukan, 2021).
Carbon capture technologies such as Bioenergy with Carbon
Capture and Storage (BECCS) and Integrated Gasification with
Combined Cycle and Carbon Capture and Storage (IGCC + CCS)
are also potential to be part of the effort to transition from fossil
fuel technologies to new and renewable technology. Undoubtedly,

these technologies will be important to change Indonesia’s energy
mix drastically. However, this chapter focuses on the primary energy
source, as defined in the New and Renewable Energy draft bill.
C. Indonesia’s Nationally Determined Contribution

along the Years
The Copenhagen accord is one of the outcomes of the 15th Conference
of Parties (COP) that highlights the importance of global efforts to
tackle climate change. The accord was drafted by the United States
and the BASIC countries (Brazil, South Africa, India, and China). Al-
though this accord is not legally binding, it underlines the importance

of a strong political will to cut greenhouse gasses with “principal of
commons but differentiated responsibilities and respective capabilities.
This accord also endorses the continuation of the Kyoto Protocol and
the establishment of the “Copenhagen Climate Fund” to support the
efforts to reduce greenhouse gas emissions (UNFCCC, 2009). As a
result, the countries that ratified this accord included their emission
pledges, including Indonesia.
Indonesia, through the National Council on Climate Change,
has pledged to reduce the CO2 emission by 26% to 41% by 2020. To
fulfill such a plan, a National Action Plan would be enacted through
a Presidential Decree, said to be released by March 2010 (Dewan
Nasional Perubahan Iklim, 2010). There are seven major areas to focus
on to reduce CO2 emissions. They are peatland, forestry, agriculture,
energy, industry, transportation, and waste.
In December 2015, the Paris Agreement, a global agreement
adopted by Paris climate conference (COP21), was launched as the
first-ever universal, legally binding global climate change agreement.
Today, 193 parties (192 countries and the European Union) have joined
the agreement. The agreement includes pledges from all countries to
decrease their emissions level and collaborate to adapt to the effects
of climate change, as well as a call for countries to strengthen their
pledges over time. The agreement paves a pathway for developed

countries to assist the developing countries with their climate mitiga-
tion and adaptation efforts while also establishing a framework for
transparent monitoring and reporting of the Governments’ climate
targets. The Paris Agreement set a long-term framework to guide the
global effort for decades. The agreement is the start of a world with
zero emissions. The implementation of the agreement is also very
critical to achieve the Sustainable Development Goals.
Today, the Governments agreed to keep the global average tem-
perature below 2 degrees Celsius compared to pre-industrial levels
and 1.5 degrees Celsius as the maximum increase could be achieved.
To contribute to the agreement's objectives, all parties must submit a
comprehensive national climate plan known as national determined

contributions (NDC). Besides, all countries must come together every
five years to assess their progress to achieve the agreed long-term
goals and upgrade their NDC. Those countries also have to report
transparently to the public how the implementation process works
and track their progress on their commitments under the agreement
through a strong transparency and accountability system.
In this event, the Government of Indonesia pledged its com-
mitment to reduce the emissions to 29% by 2030 unconditionally
(business as usual) or up to 41% conditionally or with international
support. The unconditional target is increased by 3% compared to
2010 in the Copenhagen Accord. In the first term of the Joko Widodo
presidency, the priority actions within the national Nawa Cita (Nine
Priority Agendas) framework was determined and implemented.
These include protecting the Indonesian citizens, encouraging rural
and regional development, improving the quality of life, and increasing
productivity and global competitiveness. These fundamental missions
align with the country’s commitment to a low-carbon, climate-resilient
development path, with climate change adaptation and mitigation
as a central and cross-cutting goal in the National Medium-Term
Development Plan (RPJMN).
According to the agreement, countries should come together five
years later to update their objectives. The 26th session of the conferences

of the Parties or COP 26 was initially scheduled to take place from
November 9–19, 2020 in Glasgow, United Kingdom. However, due to
COVID-19, the event was postponed to October 31–November 13,
2021. This event was attended by 120 heads of state and governments.
On November 13, 2021, all countries in COP26 Glasgow agreed to the
Glasgow Climate Pact to keep the 1.5 degrees Celsius and finalize the
outstanding elements of the Paris Agreement. The Glasgow Climate
Pact also concluded that many countries wish to fully integrate science
into the decision-making process. It recognizes the significance of
the Intergovernmental Panel on Climate Change (IPCC) according
to most recent report. The Pact frames the action in science here and
in later sections, demonstrating that COP26 is responding to what
scientists believe needs to happen to keep 1.5 degrees Celsius in reach.

At this event, Indonesia recognized for the appearance of its
President, Joko Widodo, was attracting global attention. One of the
main issues of COP26 was deforestation and Indonesia was one of
the countries known for this issue. The Indonesian President pledged
during the event that the forestry sector, which contributed 60% of
Indonesia’s emissions, will reach the carbon net sink by 2030 (Suoneto
& Paramitha, 2021). Besides the forestry sector, the energy sector is
the other main contributor to Indonesia’s emissions. In this sector,
Joko Widodo added that Indonesia utilizes new renewable energy,
including biofuels, and develops clean energy-based industries, one of
which is the construction of the world’s largest green industrial area
in North Kalimantan province (Sekretriat Kabinet RI, 2021).
In the updated version of Indonesia’s NDC for COP26, Indonesia
has pledged to reduce carbon emissions and prepared a long-term
strategy (LTS) that defines the pathways to achieve low carbon emis-
sions by 2050. In the energy sector, Indonesia has pledged to increase
the use of new and renewable energy by at least 23% of the total
energy mix in 2025 and at least 31% of the total energy mix in 2050;
reduce the use of oil for energy mix less than 25% in 2025 and less
than 20% in 2050; reduce the use of coal for energy mix by minimum
30% in 2025 and minimum 25% in 2050; and reduce the use of gas
for energy mix by minimum 22% in 2025 and minimum 24% in 2050.
It is a rather ambitious target since Indonesia is one of the main coal

exporters in the world.
D. Stakeholders in Indonesia’s Energy Ecosystem

Energy is a unique topic. The ecosystem consists of many stakeholders
that play a significant role in understanding how Indonesia’s energy
system works in terms of industry and policy making. In United States
politics, there is a concept called the Iron Triangle. Iron Triangle is a
concept of policy making and governance relationship between three
major stakeholders in the United States: the House of Representatives
(Congress), the State/Federal Government (Bureaucracy), and the
interest groups that may consist of the lobbyist, non-governmental

organizations, and many others. The relationships between those three
institutions highly affect the policy-making process in the United
States. Those relationships are shown in Figure 2.1. Meanwhile, In-
donesia is not like the United States, though the relationship between
the energy stakeholders in Indonesia is quite similar to the United
States. These three groups have influenced each other to implement
energy policy in Indonesia.
Indonesia’s electricity grid is centralized. It means that PT PLN
Persero has the control to provide a reliable grid throughout the
country. PT PLN Persero is one of the stakeholders in the bureaucracy
part (PT Perusahaan Listrik Negara, 2021). The Ministry of Energy
and Mineral Resources (MEMR) is also one of the stakeholders of
energy in Indonesia. The role of MEMR is to regulate the energy
industry from the front-end to the back-end.
Source: Hayden (2002)

Figure 2.1 The Illustration of Iron Triangle

The House of Representatives plays the role to oversight the
implementation of energy policies in Indonesia. The House of Rep-
resentatives, in collaboration with the executive branch, has a role to
legislate new rules and policies to be implemented in Indonesia to
foster Indonesia’s energy market.
Another stakeholder that is rarely talked about is the interest
groups. Interest groups are individuals or organizations with the same
concern on energy policy in Indonesia and try to push a specific
agenda on energy to be implemented in Indonesia. In many countries,
interest groups push policies to benefit society. These groups are,
for example, non-government organizations and inter-government
organizations. However, these groups are still very limited in numbers
and influence in Indonesia. It is, in fact, important to have interest
groups control and balance the policies in Indonesia.
E. Energy Distribution from Generators to End Users

PT PLN Persero considers the realization of the power load and the
completion of power plant projects and various indicators affecting
the condition of electricity supply such as economic growth, then
prepares a business plan for providing electricity from 2021–2030. The
main activities in the electricity supply business plan include general
policies and assumptions, demand forecasting, generation planning,

transmission planning, distribution planning, GI planning, isolated
generation planning, and consolidation. The realization of this activ-
ity is divided into several operational areas: Sumatra, Java, Madura
and Bali, Kalimantan, Sulawesi, Maluku, Papua, and Nusa Tenggara
(PT Perusahaan Listrik Negara, 2021). Since energy distribution is
centralized in PT PLN Persero, it plays a huge role in energy transition.
PT PLN Persero has planned the electricity supply in Indonesia
through the Electricity Supply Business Plan (RUPTL). In this plan,
PT PLN Persero has mapped out some plans for adding new renewable
energy producers and the reliability of the transmission grid.

F. Indonesia’s Current Energy Targets
National Energy Policy was introduced by Government Regulation
No. 79 the year 2014. National Energy Policy is an energy management
policy based on a principle of fairness, sustainability, and environ-
mental insight for the independence of national energy and energy
resilience. National energy policy covers both demand and supply
side policy and underlines the need for immediate implementation
of energy conversion in all sectors to reduce the dependence on oil
fuel, diversify energy, alleviate poverty, increase economic growth,
and promote environmentally friendly development. A clear target
is set for each type of energy in 2025: the share of oil will be reduced
to no more than 25%, natural gas to 22%, coal no more than 30%,
new (nuclear energy) and renewable energy (geothermal, biomass,
hydro, solar cell, and wind, coal bed methane, etc.) up to 23%. In
2050, the share of oil will be reduced to no more than 20%, natural
gas to 22%, coal no more than 24%, and NRE will increase by up to
31% (Indonesia, 2014). This regulation has been the legal basis of
Indonesia’s renewable energy target. Since then, the investment in
renewable energy has been boosted. However, in 2019, the National
Energy Council reported that the share of renewable energy in In-
donesia’s energy mix is still less than 15% (National Energy Council
of Indonesia, 2020). It proves that more aggressive regulations and

enforcement are necessary to achieve the carbon emission target.
Furthermore, Indonesia sets new goals for the COP26. Indonesia’s
National Determined Contribution updated 2021 highlights green-
house gas reduction of 26% by 2020 and 41% by 2030; limiting global
temperature rise to 2℃ by 2015–2019 and presses it to 1.5℃ after
2019. In this chapter, we only limited the climate factors to greenhouse
gas (Ministry of Environment and Forestry Directorate General of
Climate Change, 2021). On the other hand, the Ministry of Energy
and Mineral Resources released its roadmap toward net-zero carbon

emission. The plan includes a solar power-dominated renewable
energy mix that will account for 23% of Indonesia’s energy mix by
2025; 42% of renewable energy in Indonesia’s energy mix by 2030; 71%
of renewable energy by 2040; Commercial Operation Date (COD) of
Indonesia’s first nuclear power plant by 2045; 87% of renewable energy
by 2050; and finally, 100% of renewable energy by 2060.
The Ministry of Energy and Mineral Resources (MEMR) made
an Energy projection scenario in Indonesia Energy Outlook 2019
with three scenarios: Business as Usual (BaU), Sustainable Develop-
ment (PB), and Low-Carbon (RK) with any assumption as shown
in Table 2.1. MEMR uses two programs that synergize them to get
optimal results: LEAP for the energy total model and Balmorel for
the electricity model. Based on the projection, the primary energy
mix for the BaU scenario in 2025 is 21% NRE, 24% gas, 34% coal and
21% oil, while the primary energy mix in 2050 is 29% NRE, 23% gas,
32% coal and 16% oil. The energy mix target mandated in National
Energy Policy has not been reached. The primary energy mix in the
PB scenario in 2025 is 23% NRE, 21% oil, 24% gas, and 32% coal.
In 2050, it will become 32% NRE, 15% oil, 24% gas, and 29% coal.
Compared to the target in National Energy Policy, the NRE target in
2025 can be reached and the NRE target in 2050 is higher than the
National Energy Policy’s target. The primary energy mix in the RK
scenario in 2025 is 36% NRE, 19% oil, 21% gas and 24% coal. In 2050,

it will become 58% NRE, 8% oil, 12% gas, and 22% coal. Compared
to the target in National Energy Policy, the NRE share in 2025 and
2050 is very optimistic and higher than the target in National Energy
Policy. In conclusion, the NRE share target of 23% by 2025 and 31%
by 2050 can be achieved by at least by implementing assumptions in
the PB scenario (National Energy Council of Indonesia, 2020).

Table 2.1 Scenarios of Assumptions towards Net-Zero Emission
Assumption BaU PB RK
Economic Growth 5.6% (Based on 2045 Indonesian Vision-Bappenas)
Population Growth 0.7 % (Based on Statistics Indonesia-Bappenas 2045)
Biodiesel Target 2025: 20% 2025: 30% 2025: 30%
2050: 30% 2050: 30% 2050: 100%
Bioethanol Target 2025: 5% 2025: 20% 2025: 20%
2050: 50% 2050: 85%
City gas develop- Year 2025: The development The development of
ment 4.7 million of 1 million house- > 1 million household
household hold connection/ connection/Year
connection Year starting from starting from 2020
2020
Substitution of LPG 2025: 0.5% 2025: 1% 2025: 2%
to Induction Stove 2050: 2% 2050: 5%
LPG substitution 2050: 20% 2025: 20% 2025: 20%
with DME
Electric Car Target 2025: 0.01% 2025: 0.01% 2025: 0.5%
(% toward total 2050: 0.07% 2050: 0.24% 2050: 1.18%
vehicle population)
Electric Motorcycle 2025: 1.38% 2025: 1.44% 2025: 1.18%
Target (% toward 2030: 1.5% 2030: 1.7% 2030: 3%
total vehicle popu-
lation)

Power Plant RUPTL RUEN Emission reduction >
RUEN
Switching 10% Switching 30% capac-
capacity of Steam ity of Steam PP to
PP to Biomass PP Biomass PP
25% of luxury 30% of luxury houses
houses use Roof- use Rooftop solar
top Solar
Source: National Energy Council of Indonesia (2020)
From the calculation of CO2 emission based on IPCC, the total

projection of emission in 2030 will increase to 912-million-ton CO2-eq
(BaU), 813-million-ton CO2-eq (PB), and 667-million-ton CO2-eq
(RK). Thus, the CO2 emission projection in three scenarios is lower

than the emission target in NDC for the energy sector (National
Energy Council of Indonesia, 2020). This questions Indonesia’s com-
mitment to the transition to renewable energy. Moreover, no official
document (other than NDC and its LTS) currently describes and
enforces Indonesia’s plan and strategy toward net-zero carbon emis-
sion. Some presentation documents from several ministries might
be found to address this problem. Still, an official statement from
the government (probably through Presidential Regulations) is also
important to enforce Indonesia’s commitment. A necessary interven-
tion from the Government is crucial to achieve Indonesia’s target of
net-zero carbon emission. More investment in the development and
deployment of carbon-free and renewable energy should be pushed
harder by the Government.
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adminppi/adaptasi/dokumen/Updated_NDC.pdf

Ministry of Foreign Affairs. (2019). Indonesia’s non-permanent membership
to the United Nations Security Council period 2019–2020. https://
kemlu.go.id/portal/en/read/147/halaman_list_lainnya/indonesian-
membership-on-the-un-security-council
National Energy Council of Indonesia. (2020). Indonesia energy outlook
2019. https://www.esdm.go.id/assets/media/content/content-indonesia-
energy-outlook-2019-english-version.pdf
PT Perusahaan Listrik Negara, T. (2021). Rencana usaha penyediaan tenaga
listrik (RUPTL) PT PLN (Persero) 2021–2030. https://web.pln.co.id/
statics/uploads/2021/10/ruptl-2021-2030.pdf
Sekretriat Kabinet RI. (2021). President Jokowi: Indonesia’ s economic
transformation leap starts from developing green industrial area. https://
setkab.go.id/en/president-jokowi-indonesias-economic-transformation-
leap-starts-from-developing-green-industrial-area/
Suoneto, N., & Paramitha, G. (2021). Indonesia’s participation at COP26. The
Diplomat. https://thediplomat.com/2021/11/indonesias-participation-
at-cop26/
The United Nations Framework Convention on Climate Change (UNFCCC).
(2009). COP15: Copenhagen accord. Report of the Conference of the
Parties on its fifteenth session, Copenhagen, 7–19 December 2009.
https://unfccc.int/resource/docs/2009/cop15/eng/11a01.pdf

Chapter 3
Challenges in Facing Indonesia’s

Energy Commitment
Elisa Wahyuni
A. Overview of Indonesia’s Energy Security and

COVID-19
As the largest country in population and geographically among
other ASEAN countries with abundant natural resources, Indonesia
has enormous potential for sustainable energy resources, especially

form an energy perspective. Located on the equator line, this country
has had a constant solar power supply over the year. Indonesia is
an archipelago surrounded by water standing above the ring of fire,
granting this country abundant geothermal energy sources and other
climate-friendly energy sources such as biogas and biomass. Addition-
ally, we shall not forget new kinds of energy that are making trends:
hydrogen and nuclear energy. However, these energy potentials need
to be aligned with proper human resources to meet the supply and
demand and to enforce Indonesia’s sovereignty over energy.
E. Wahyuni
Technical University of Munich, e-mail: elisa.wahyuni@tum.de

Wahyuni, E. (2022). Challenges in facing Indonesia’s energy commitment. In H. Ardiansyah, & P.
Ekadewi (Eds.), Indonesia post-pandemic outlook: Strategy towards net-zero emissions by 2060 from
the renewables and carbon-neutral energy perspectives (23–40). BRIN Publishing. DOI: 10.55981/ 23
brin.562.c3 ISBN: 978-623-7425-83-0 E-ISBN: 978-623-7425-87-8
In the past ten years, the costs of solar and wind energy have
fallen by 90% and 70%, respectively, and this trend will no doubt
continue. Yet today, fossil fuels—coal, oil, and gas—provide 80% of
energy worldwide (Lomba, 2019). With the addition of COVID-19
which has spread since early 2020, the shifting process from fossil-
based energy sources to renewable resources outweighed the existing
effort as the world is focusing on living with it and reducing the fear
inch by inch.
Since World Health Organization (WHO) raised the COVID-19
status from endemic to pandemic at the beginning of 2020 after its
first outbreak in Wuhan, China in 2019, everyone has been forced
to vastly adapt and make quick decisions to put everything under
control. Years afterward, this ambiguous event affected broad sectors
including the energy sector. The urge to shift the energy reliance into
climate-friendly options is getting even higher, as today, Indonesia
is one of the top countries with the highest ecological footprint in
the world along with China, India, the United States, Russia, Brazil,
Japan, Germany, Mexico, and the United Kingdom (Pata et al., 2021).
This chapter highlights five crucial challenges related to the energy
sector that Indonesia is currently facing to actualize its national and
international commitments. Those five challenges are Reviving the
National Economy Post-Covid, Battle of Energy Security and Energy
Transition, The Hardship to Challenge the National Coal Industry,

The Reliance of the Industrial Sector on Fossil Fuel, and Regulating
and Financing the Transition.
B. Reviving the National Economy Post-Covid

It has been more than two years since the World Health Organization
(WHO) officially declared the COVID-19 pandemic on March 11,
2022. A week prior, Indonesia’s President, Joko Widodo announced
the first discoveries of 2 positive cases in Indonesia’s territory on 2
March 2020. Today, we are facing more than the original strain of
SARS-COV-2, but also the mutated variants named Delta, Omicron,
and possible future variants with less overwhelming effect than its
original.

At the end of 2019, the Indonesian Statistics Bureau (BPS) re-
corded economic growth of 5.02% during the year despite the global
situation especially in the trading sector. The economy during this
year was dominated by the domestic demand for government con-
sumptions and investments. This increase in growth has successfully
decreased the unemployment rate and gap while also maintaining
social welfare (Kementerian Keuangan Republik Indonesia, 2019).
Unfortunately, at the beginning of 2020, the world is facing one
of the most unpredicted situations with the outbreak of COVID-19.
Indonesia started the year with a good start in the trading sector after
the US and China finally sealed a deal to end the trade war between
them (Kementerian Keuangan Republik Indonesia, 2020). However,
the dawn of the pandemic has forced people to adapt to the concept
of “new normal” by living in a series of lockdown situations, working
from home, wearing masks daily, and maintaining physical and social
distance. This situation automatically slows down economic activities.
Not only nationally, but also globally. Indonesia’s composite stock
price or IHSG was freefalling instantly for more than IDR 2000 or lost
almost 50% from its initial value compared to December 2019 (Kiky,
2020). Globally, the pandemic forced many businesses to bankruptcy
and sent people home unemployed. Even more, it was recorded for the
first time in history that US crude oil prices fell into negative territory
in late April 2020, which means that the sellers are effectively paying

the buyers to purchase the crude oil.
As a pandemic, COVID-19 hits not a specific country or region
but the whole world. For the economic sector in Indonesia, in 2020,
the BPS officially announced the country was facing its first economic
recession since the financial crisis in Asia in 1998 with economic
growth standing below zero, precisely at -3.49% compared to 2019.
This event forced companies to cut off their employees due to the
lack of economic activity, which consequently impacted the unem-
ployment number to 9.77 million people by August 2020. With all
this disturbance, the Government needs to go the extra mile to keep
national stability and strengthen economic resilience. In this context,
Challenges in Facing Indonesia’s ... 25

the Government has decided to widen the deficit to 6.34% of Gross
Domestic Product (GDP) to handle both COVID-19 situations and
recover the economy. 
In late 2020, the invention of COVID-19 vaccines to fight against
the current pandemic brought an optimistic hope to restore the situa-
tion to the "real normal" gradually. The President, Joko Widodo opened
the national vaccination program at the beginning of 2021, with high
hopes that this stressful event could end soon. Economically speaking,
since having huge contraction by having a negative economic growth
level of 5.32% (year-on-year), Indonesia showed a positive trend as
the growth stood better at -3.49% (year-on-year) in Q3 and closed
the year of 2020 with -2.19% (year-on-year) (Kementerian Keuangan
Republik Indonesia, 2020). BPS stated that the economy grew 3.51%
(year-on-year) in Q3 2021 compared to the previous year, while for
2022 the World Bank predicts Indonesia Economy situation will grow
to 5.2% in 2022 (the base year 2020) under the assumption of the
absence of another massive shock from COVID-19 (Badan Pusat
Statistik, 2020; World Bank, 2021)
C. Battle of Energy Security and Energy Transition

One extensive challenge facing Indonesia during the pandemic from
an energy perspective is balancing energy security while staying on

track with shifting the energy supply to sustainable energy resources.
Since the pandemic hit the country, the domino effects have hit many
sectors, leaving out-of-control situations in multiple sectors. In the
energy sector, these events have disturbed the energy transition agenda
as the Government needed to focus on the health and socio-economic
sector first as a priority.
An unusual event is seen during the pandemic, namely an
unprecedented decrease in carbon emissions since the industrial era
due to the drastic change in the way of life globally. Unfortunately,
this reduction is neither substantial nor long-lasting as carbon emis-
sions are set to surge post-COVID-19 as many countries, including
Indonesia, try to bounce back their economy. As a result, energy

demand is expected to increase dramatically to support simultaneous
global development. Therefore, Indonesia is urged to assess its current
position on energy transition to meet its commitment to have new
and renewable energy at least 23% in 2025 and at least 31% in 2050
on its primary energy supply mix based on the updated NDC 2021.
In a pre-COVID-19 situation in 2019, more than 90% of Indone-
sia’s primary energy demands were supplied from fossil fuels. Renew-
able energy only accounts for approximately 8% of the total energy
supply mix (National Energy Council of Indonesia, 2020). Moreover,
Indonesia has had a relatively unambitious growth in developing
new and renewable energy capacity in the last decades, specifically
at around 334 MW per year, far below our neighbor, Vietnam, which
can achieve 1745 MW per year (Sumarno & Sanchez, 2021). Some
major renewable energy deployment projects were delayed. This
postponement leads to the slower growth of the renewable energy
sector. As seen in Figure 3.1, renewable energy accounts for only
11.2% of Indonesia’s energy mix by Q3 of 2021 (IESR, 2022).
Source: IESR (2022)

Figure 3.1 Indonesia Primary Energy Mix (Q3 2021)

During the recovery process from COVID-19, economic growth
showed a positive trend and the situation is under better control
than in these past years. The energy sector also offers a recovery in
increasing activity after experiencing a massive shock in 2020 due to
COVID-19. As seen in Figure 3.2 below, the energy activity plunged
drastically. Consequently, the Government should ensure the security
of the energy supply to meet these growing demands that are predicted
to keep increasing in the future alongside the peak in economic devel-
opment targets. However, until the third quarter (Q3) of 2021, fossil
fuel still dominates the primary energy mix (IESR, 2022).
Source: (IESR, 2022)

Figure 3.2 Primary Energy Supply (Q3 2021) and Final Energy Demand (Q3
2021)

Additionally, according to the National Economic Recovery
(PEN), fossil fuel is still supported by representing 8% of Indonesia's
total budget in the form of cash in most packages. PEN 2020 also
supports cleaner energy sources, but only biodiesel receives a direct
injection of cash. It appears that investing in fossil fuels is still more
attractive than renewable energy sources. Therefore, the battle
of energy security and energy transition would be very tricky to
implement as the Government was forced to face another dilemma.
A stronger policy and a more attractive package for investors to
accelerate the transition to cleaner energy sources are urgently needed
to keep Indonesia’s climate change mitigation commitment on track.

D. The Hardship to Challenge the Coal Impact of
the Country
It is a fact that fossil fuel is the main energy source until today, with
coal making up the biggest portion of it. Indonesia has around 3%
global coal reserves (bp, 2021). Additionally, this country is the biggest
coal exporter in the world, with 80% of coal being exported and the
rest being used domestically. Almost 20% of the total share of national
final energy consumption is electricity, with 47% of the portion
still dominated by coal in June 2021 (Indrawan, 2021). Domestic
use of coal in Indonesia mostly goes into electricity production
under Perusahaan Listrik Negara (PLN), a state-owned company
monopolizing Indonesia’s power market. As a state-owned company,
PLN has a constitutionally mandated monopoly on transmission and
distribution. They also have a legal obligation to provide “reasonably
priced” power to the citizen, the price of which is set by the Ministry
of Energy (Guild, 2019). This political perspective shows the impact
of PLN is on the country.
Indonesia has four types of Coal-fired Power Plant (CFPP):
subcritical, supercritical, ultra-supercritical, and fluidized bed.
Subcritical is the most common use of CFPP in the country. Based
on a study conducted by ASEAN Centre for Energy (ACE) on CO2
emissions from CFPPs (see Figure 3.3), emissions from CFPPs in

Indonesia are projected to rise between 2017 and 2040, reaching an
accumulative amount of 8623 million tonnes from 2005 to 2040 due
to increased demand for electricity (ASEAN Center for Energy, 2021).
Additionally, coal-fired power plants are major sources of air pollution
in the country and are considered a direct cause of numerous non-
communicable diseases (Sanchez & Luan, 2018). Thus, this sector is
crucial to consider when discussing Indonesia’s energy.

Source: ASEAN Center for Energy (2021)
Figure 3.3 Annual Emissions Profile of the CFFP in Indonesia
According to the United Nations Economic and Social Commis-

sion for Asia and the Pacific (UNESCAP), the report of Indonesia’s en-
ergy sector emission outlook in the current policy scenario 2020–2030
shows that as the energy needs keep increasing, the emission also
follows, following the BAU scenario (see Figure 3.4). The graph shows
how the transformation from electricity generation is the top main
source of emission, and it still dominates until 2030.
Source: UNESCAP (2020)

Figure 3.4 The Outlook of Indonesia’s Energy Sector Emission in the Current
Policy Scenario 2020–2030

In addition, due to the geographical characteristics of the country
with thousands of islands spread across the archipelago, Indonesia
struggles with an uneven electricity generation cost. As shown in
Figure 3.5, electricity generation costs in the eastern part of Indonesia
could be three times more expensive compared to the cheapest cost
in Java Island as the center of economic activity in the country. It is a
huge gap that needs to be filled, especially in the eastern part of the
country, where the development is still low and yet at the same time, it
is rich in mining products. The uneven price of electricity generation
costs is a big reason why renewable energy is a crucial solution for
Indonesia, especially in terms of electricity generation aside from
emission reduction.

Source: Kementerian ESDM RI (2021)
Figure 3.5 Geography of Electricity Generation Cost under MEMR 2021
Figure 3.6 shows very few renewables in Indonesia's electricity

generation share. Until the half of 2020, the share of renewables in
electricity generation is less than 15% (IESR, 2021). From this point
of view, PLN, the main actor in the energy industry, should be active
in decarbonizing its annual emissions to support the Government in
achieving its commitments to reducing carbon emissions.

Source: IESR (2021)
Figure 3.6 Renewables Share in Electricity Generation, 2015–2020
The study conducted by the UNESCAP with the LCOE (Levelized

Cost of Electricity) method shows that the electricity generation using
renewable power plants such as solar photovoltaic, geothermal, hydro,
and on-shore wind, is cheaper than coal-fired power generation which

is used abundantly in Indonesia (Fig. 3.7). The LCOE method sums
up the lifetime costs of an energy system divided by their respective
lifetime energy generation. The use of lifecycle costs of the systems
balances out the disparity among technologies with high capital costs
but low operating costs or vice versa (UN, 2020).

Source: UNESCAP (2020)
Figure 3.7 LCOE of Different Power Plant Technologies in Indonesia
Additionally, with current conditions, international development

agencies and NGOs are actively promoting and spreading awareness
to fight against climate change, particularly in the energy sector as the
most influential source of a global emitter. However, these actors are
seen to be sided and bring no influence on Indonesia’s energy policy. A
growing civil society movement and NGO network that criticizes coal
mining and the construction of new coal power plants have emerged
over recent years and contributed to changing public attitudes and
evaluating and revoking of mining permits (Fünfgeld, 2019).

E. The Reliance of Industrial Sector on Fossil Fuel
The energy sector is responsible for more than 70% of global green-
house gas emissions. Meanwhile, energy use in industries contributes
more than 24% or almost a quarter of total GHG emissions that need
to be decarbonized to keep the global average temperature increasing
below 2ºC from pre-industrial levels, as stated in the 2015 Paris Agree-
ment. As an emerging country whose economic growth depends on
the industrial sector, Indonesia has a huge percentage of energy use in
its total energy consumption. Specifically, this country relies heavily
on gas and coal as the main energy sources in industry, which is
predicted to remain at that level until 2050 in BaU condition (National
Energy Council of Indonesia, 2020).

Source: Badan Pusat Statistik (2021)
Figure 3.8 Industry Sector Growth, 2019–2021 (%)
The industrial sector, specifically the highly intensive energy sec-

tor, has been a crucial driver of growth in the Indonesian economy.
Besides making a big contribution to Indonesia’s GDP, these sectors
also absorb huge workforce, especially those from lower economies.
Figure 3.9 shows a disruption in 2020 (y-o-y), but it keeps increasing
until Q2 2021.

Source: Badan Pusat Statistik (2021)
Figure 3.9 Industry Sector in GDP, 2019–2021 (%)
However, regardless of the pandemic, the Indonesian industrial

sector experienced an insignificant change throughout the year. It
shows how the industrial sector is a strong aspect and an essential
factor for Indonesia’s economic growth. In a recent event, the Gov-
ernment stated they would like to increase their export industry to
support the national economic growth and improve the economic
structure, especially after the COVID-19 event which caused disrup-
tions in many sectors, including the industrial sector. The increase in
export and industrial activity will directly impact on the increasing
GHG emissions, mainly for highly intensive energy use subsectors,
simultaneously with the rise in fossil fuel use and production capacity.

The industrial sector in Indonesia, in particular the non-oil and
gas manufacturing industry, is the country's major user of energy
consumption. Specifically, six industrial sub-sectors highly consume
energy, such as cement, metal, food and beverage, fertilizer, ceram-
ics, and pulp and paper industries (National Energy Council of
Indonesia, 2020). The total energy demand of these six industries
contributes 87% of the total energy consumption in the industrial
sector. Specifically, on the energy source, gas is mainly used to meet
the metal demand, fertilizer (as feedstock), and ceramics industries.
These three industries consume around 83% of gas from the total gas
demand in the industry. While coal is 90% consumed by the cement
industry. Moreover, Decarbonisation Data Portal from Climate Action

Tracker found that the intensity of carbon emission from cement
production in Indonesia is higher than the world average, 657kgCO2/
tonne product compared to 614 kgCO2/tonne product. These facts
put a lot of pressure on decarbonizing and penetrating their energy
use into low carbon energy options due to the high reliance on fossil
fuel energy sources (Climate Action Tracker, 2020).
These dilemmas will indeed become another tough challenge
for the industrial sector in Indonesia as the Government has pledged
to reduce their emission to 29% by 2030 with their effort, or 41%
conditionally with international support. The country must stay on
its commitment to fight climate change, but at the same time, must
increase the production activity in the industrial sector. Therefore,
the Government needs to arrange its deep decarbonization roadmap
from introducing technological innovation to lowering energy use by
increasing efficiency. Moreover, using more sustainable alternative fu-
els such as hydrogen and electrification, or any other climate-friendly
choices in the sector.
F. Regulating and Financing the Transition

Transitioning is not a one-night process, including energy transition,
as people have been living and relying on fossil fuels for decades.
Proper movement on regulating and financing the transition is crucial

to assist the implementation. However, despite the commitment that
Indonesia's leader has stated in the international and national events,
it is seen that fossil fuels still got favoritism in the implementation
process.
Indonesia currently subsidizes fossil fuels as part of its yearly
budget and has offered support to fossil fuel-intensive sectors. In
particular, cash support to PT PLN (state-owned electricity enterprise
that mainly uses coal for power generation), PT Pertamina (state-
owned energy enterprise that operates in the oil and gas sector, both
upstream and downstream), PT Garuda Indonesia (state-owned
aviation enterprise), and PT Kereta Api Indonesia (state-owned rail

enterprise). The budget totals IDR 95 trillion (USD 6.6 billion), also
included in COVID-19 recovery packages (Sumarno & Sanchez,
2021). The “forever existence” subsidy on fossil fuels in the country
encourages energy consumption to lean on cheap energy sources.
Hence, this policy instrument keeps making the conventional energy
source more attractive than cleaner choices.
Besides, from a financing perspective, Indonesia’s current finan-
cial market is relatively small and dominated by the banking sector,
in which the low carbon infrastructure projects in the country would
significantly depend on bank lending (Setyowati, 2020). A recent study
stated that the national bank’s policy is yet to explicitly present a
commitment to moving away from fossil-fuel investment to renewable
energy. The study found that only one national bank obtains a score in
climate change due to transparent disclosure of investment portfolios
toward efficiency and conservation of energy. While foreign banks
dominate others as they have already had policies to mitigate climate
change risks by setting specific targets for reducing carbon emissions
(Perkumpulan PRAKARSA, 2019). The local banks also often opt
to invest in coal power generation rather than in renewable energy
because coal is deemed more economically feasible and they perceive
that investing in renewable energy in a high risk (Setyowati, 2020).
Additionally, the financial services regulator, OJK (Otoritas

Jasa Keuangan), issued a roadmap for sustainable finance in 2014.
Since then, the Ministry of Energy and Mineral Resources has been
experimenting with various incentives for jump-starting growth in
renewable energy since at least 2011. These efforts have included the
feed-in-tariffs (FiT) and government financial guarantees for quali-
fied projects. However, despite years of tinkering, these efforts have
yielded almost no growth. For instance, between 2013 and 2017, FiT
produced almost no increase in solar, wind, or biomass energy due to
poor policy design and regulatory architecture that constantly change,
which drove down investor confidence (Guild, 2019).

Moreover, at the end of 2017, the Ministry of Energy and Mineral
Resources introduced Ministerial Regulation 50/2017. It benchmarks
the price that the state-owned company, PLN (Perusahaan Listrik
Negara), can pay to off-take power from IPP (Independent Power
Purchase) to its local and national costs of production (knowns as
Biaya Pokok Penyediaan or BPP in Indonesia). In other words, PLN
will not pay more to IPPs to purchase power than it costs for the utility
to generate electricity from its plants. In Java and Sumatra, where large
grids are powered mainly by cheap coal-fired plants, more expensive
renewable energies like solar or wind will struggle competitively. With
this regulation, PLN becomes more constrained in what it can pay
as solar is less likely to be financially competitive on Java, where the
demand is at the highest (Guild, 2019).
Regulating and financing the transition is one of the essential
processes in implementing the energy transition. As an emerging
economy country, Indonesia should be able to serve affordable and
accessible energy across the country. In addition, for local sovereignty,
the policymakers need to take their words seriously on their com-
mitment to shifting their energy source to cleaner choices to reduce
emissions and save the planet.
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Section 2
Carbon-Neutral and Renewable
Energy in Indonesia
41
Chapter 4
Moving from New and Renewable

Energy to Renewable and Carbon-
Neutral Energy
Putty Ekadewi
A. Overview of Renewable and Carbon-neutral

Energy
Energy is an essential part of human life. The discovery of woodfires
in the early ages of civilization has helped the human population

survive cold winter days, increased life expectancy, and resulted in
better sanitary practices in nutrition, i.e., no longer eating raw meat. In
the centuries that followed (19th century), we discovered that we were
sitting on years’ worth of energy naturally deposited deep within the
Earth’s crust in the form of fossils. Fossil fuels differ in their forms and
uses. For instance, coals were used to generate steam, while oils were
refined to produce liquid transportation fuels. Our decades of reliance
on fossil sources have led to the technological advancements used in
P. Ekadewi
Nantes Université, e-mail: putty.ekadewi@univ-nantes.fr

Ekadewi, P. (2022). Moving from new and renewable energy to renewable and carbon-neutral energy.
In H. Ardiansyah, & P. Ekadewi (Eds.), Indonesia post-pandemic outlook: Strategy towards net-zero
emissions by 2060 from the renewables and carbon-neutral energy perspectives (43–62). BRIN 43
Publishing. DOI: 10.55981/brin.562.c4 ISBN: 978-623-7425-83-0 E-ISBN: 978-623-7425-87-8
their exploitations. Oil and gas explorations have even shifted from
land to offshore activities, where new deposits have been discovered
lately.
Despite their conveniences, fossil fuels have long been at the heart
of the sustainability debate. Proponents of the climate crisis have put
a share of the blame for global temperature rise on the activities that
involve fossil use. This allegation is not without reason because burn-
ing up fossil fuels releases carbon into the atmosphere (CO2) along
with harmful gasses, such as nitrogen oxides (N2O, NO, and NO2)
and sulfur oxides (SO2 and SO3). In the case of sulfur, the operation
of coal power plants generates around half of the total industrial SOx
emissions in a case study in China (Wang et al., 2018). These gasses
work a range of harmful actions on the atmosphere, partly responsible
for the global warming. The Earth’s global surface temperature has
reached terrifyingly worrying levels, an increase of 1.19 ℃ compared
to pre-industrial levels (Lindsey & Dahlman, 2021). The number is
already close to an agreed limit of 1.5 ℃ set to avoid inciting devastat-
ing effects globally. This phenomenon has not escaped the public's
attention and the world’s governing officials. Most recently, world
leaders around the globe met at the COP26 Climate Change Confer-
ence forum in Glasgow (UK) to convene on global actions required to
halt the progression of looming climate disasters. The COP26 forum
can also be recognized as the five-year check-in of the Paris climate

agreement and our collective progress thus far. This chapter aims to
check on our progress in halting the climate crisis by looking at the
energy transition and outlining a way forward towards our carbon
emission mitigation goals using a mix of low carbon energy sources.
To fulfill its goals, this chapter discusses the status of renewable
energy use globally, elaborate on the carbon impact of energy shift
from fossil to renewable sources, and introduce a new criterion in
renewable energy: carbon-neutral energy.

B. Checking-in on Renewable Energy Sources in
2021
The term ‘renewable energy’ can be loosely assigned to non-fossil-
derived energy sources. The International Energy Agency (IEA)
defines renewable energy as “all forms of energy that are produced
sustainably from renewable sources “ (IEA, 2002 in S.G. Banerjee et
al., 2013). In this case, the agency further elaborated that renewable
energy sources are derived from natural processes with a higher
rate of replenishment than consumption (S.G. Banerjee et al., 2013).
The definition allows for a new type of energy to come in and is
classified as renewables. As far as this chapter concern, we will be
looking at the status of several types of renewables already widely
applied: solar, wind, hydropower, biomass, geothermal, biofuels, and
hydrogen obtained from renewable resources (S.G. Banerjee et al.,
2013). Renewables can be further grouped based on their carbon
status: carbon neutral or carbon-free. The two groups will be discussed
in more detail in the coming section of this chapter.
The classification used in this chapter is presented in Figure 4.1.
We divide the type of energy into two categories of energy sources:
renewable and non-renewable. Non-renewable energy sources consist
of fossil, nuclear, and large hydropower. Fossil sources can be further
divided into several products: oil, coal, and natural gas. Oil is com-

monly used as transportation fuel, while coal is widely known as the
feedstock of coal power plants' electricity generation. Natural gas may
serve several purposes, mainly heating and electricity generation. The
three derivations of fossil sources are targets for alternative energy
sources to replace. The second type of non-renewable energy source
is nuclear. Albeit posing major advantages over other renewables,
especially in terms of carbon emission, nuclear power plants require
feedstocks available in finite amounts on Earth. Hence, it is still
categorized as the non-renewable category. Lastly, large hydropower
is considered non-renewable due to the high environmental risk they
pose that weighs over the technology’s potential for clean energy
generation.
Moving from New and Renewable ... 45

Note: Renewable and non-renewable energy sources are separated by a dash (--) line.
Figure 4.1 Energy Resources Typing and Classification

The second category is renewable energy. In this type, we can find
various energy sources like solar, wind, hydropower, geothermal, and
biomass. The use of solar energy can be divided into two: electricity
from solar photovoltaic (PV) panels or heat from concentrated solar
power (CSP). For biomass, we can separate the product into two:
energy coming from the conversion of biowastes or from a crop
specialized to produce biofuels. We will discuss these energy sources
in detail in this chapter. Finally, Fig. 4.1 divides these energy sources
based on their carbon-emitting characteristics. Those considered
carbon-free are nuclear, hydropower, solar, wind, hydro, and geother-
mal, if we think only the energy sources converted to the end product.
However, considering the project's whole lifecycle, no power plant
is really carbon-free since construction involves carbon emissions.
Biomass is considered carbon-neutral because it requires assimilating
carbon as a principal nutrient for growth, taking up carbon from the
environment.

Note: a. World scale, b. Indonesia
Source: Adapted from IEA (2021a)
Figure 4.2 Total World Energy Supply from Various Energy Sources
1. Solar
Solar energy is one of the most famous forms of renewable energies.
The technology relies on converting sunlight to electricity as a usable
form of energy. Sunlight is captured using specific light-harnessing
panels, called Photovoltaic (PV) panels. The challenge with solar power

lies in the varying amount of sunlight received by a geographical
surface throughout the day due to weather factors and seasonal vari-
ations in a year, which poses a stability challenge in generating steady
electricity output. Moreover, solar panel installations on dedicated
sites require large amounts of land, which pose land use problems due
to the clearing of lands to provide space for the panels. To overcome
this drawback, solar panels can be installed on already functionalized
areas, for example on the roofs of houses in residential areas. The main
advantage of solar power lies in the ability of the panels to be installed
in remote areas with relative ease compared to installations like wind
turbines or dams. Due to this feature, solar energy is one of the most
widely applied types of renewable energy worldwide.
In 2019, solar power generated 680,952 GWh of electricity
worldwide (IEA, 2021a). In Indonesia, solar is underutilized relative
to its potential at 0.04% in an installed capacity of 78.5 MW (Ren-
cana Umum Energi Nasional, 2017). The latest IEA data showed a
significant increase in solar PV electricity generation in the country
at 118 GWh in 2019 (IEA, 2021a). Nevertheless, China has installed
a lot more solar PV in Asia.
2. Wind
Wind power can be converted into electricity using turbines. However,
wind turbines are large in scale and difficult to install due to the

limited availability of materials required to construct them, leaving
environmental footprints in the process. Nevertheless, this drawback
is little compared to its benefits. The carbon footprints of wind installa-
tions can be paid off by themselves in less than six months of operation
(Sayed et al., 2021). Wind power and solar are considered the most
technologically advanced renewables (Sayed et al., 2021). It is also
incredibly eco-friendly in terms of gaseous emissions. In European
countries, wind turbines can be found abundant on land, in contrast to
Indonesia with little to no full-scale prototype installed. This contrast
is often attributed to the characteristics of the region in Indonesia, in
which wind power is considered low in potential compared to solar.

Countries with the most wind power electricity output are usu-
ally characterized by strong regional wind profiles. For this reason,
Indonesia is not geographically strategic to rely on wind power.
Therefore, we need to look to other renewables instead. However,
research on wind power in Indonesia is still necessary to move past
geographical limitations. Exploration of areas with a large potential
for wind power needs to be intensified. Geographical mapping shows
that despite the few availabilities, compared to the total land area, the
country has areas with windspeed above 6 m/s. For instance, though
rare, wind power is slowly implemented in locations such as in the
South Sulawesi region, where the country’s largest wind power plant
project is located, i.e. PLTB Sidrap at 75 MW capacity with plans for
expansion in the future.
3. Hydro
Hydroelectric energy is one of the biggest contributors to the renewable
energy market. Power generated from hydro is bigger than all other
renewables combined. However, its electricity generating potential also
comes with a major drawback. The nature of hydropower installations
involving dams has concerned many. If we look at hydropower from
the perspective of the environment, this type of electricity generator
is not sustainable in the long run. Dams have shifted water flows and
disrupted the seasonal migration of water organisms. To overcome

the drawback, solutions such as micro hydro power generators are
proposed. It is expected that by limiting the scale of the generator,
ensuing detrimental environmental effects can be limited.
Indonesia has planned on developing hydropower in the future.
A cooperation was made between the ministry of energy and mineral
resources (Kementerian ESDM), the state-owned electricity company
(PT PLN Persero), and Japan international cooperation agency (JICA)
to assess hydropower development in Indonesia (JICA, 2009).

4. Geothermal
As the name suggests, geothermal energy is sourced from heat stored
within the Earth. Because of its nature, geothermal energy can be used
directly for heating or converting it into electricity. To use geothermal,
first, users need to overcome challenges like the isolated nature of sites
with geothermal potentials. Luckily for Indonesia, areas with abundant
geothermal potential are widespread. Challenges may lie in the energy
distribution, if we consider the country's archipelagic nature. Another
potential hurdle is the need for large capitals upfront, in contrast to
alternatives like solar and wind. Nonetheless, geothermal energy is
more stable compared to solar and wind.
Indonesia is considered a geothermal powerhouse. As a result
of the country's location, which sits above the Ring of Fire, 276 geo-
thermal sites with abundant geothermal energy potentials have been
identified in the country. It is estimated that around 40% of the world’s
geothermal reserve, the largest in the world, is located in Indonesia
(ADB & Bank, 2015). The country has several working geothermal
power plants, in descending order of production output are: Gunung
Salak (375 MW), Wayang Windu (227 MW), Darajat (255 MW),
Kamojang (200 MW), Dieng (60 MW), Lahendong (60 MW), and
Sibayak (12 MW) (Samyanugraha & Lestari, 2011). The management
of geothermal working areas (GWAs) in Indonesia was previously

managed only by PT Pertamina. PT Pertamina is the Indonesia’s
state-owned oil and gas company, and operates most of Indonesia’s
oil and gas resources. However, GWAs can now be managed by private
entities through tender mechanisms.
5. Biomass
Living matter contains energy in the form of chemical substances. In
principle, biomass is similar in utilization to fossil fuels. However, the
time needed to regenerate usable biomass is much shorter than fossils.
Hence, they are categorized as renewables. The main energy storage
of biomass can be found in the forms of fats and oils. Vegetable oils,
i.e., palm oil, are already utilized as biofuel in the form of biodiesel

through physicochemical conversion processes. Carbohydrates can be
fermented to produce ethanol, another form of liquid biofuel used in
transportation. Biomass’ versatility means that it can be used as solid,
liquid, and gaseous fuels according to demand.
Biomass holds an important position in the energy mix since
adopting electric vehicles will need some time to complete. It is
predicted that in 2050 fuels will continue to contribute significantly
to the global energy mix. Biomass can also generate electricity through
combustion processes, namely direct combustion, co-firing, or con-
verted into biogas. The versatility of biomass to play a role in the
energy sector made this energy source very attractive, both in the
academic setting and industrial.
Indonesia’s share of renewables is also dominated by bioenergy.
Indonesia came second (after Spain at +1.7%) in terms of renewable
energy growth (+1.4%) back in 2018 due to the use of bioenergy for
power generation (IEA, IRENA, UNSD, WB, 2021). Biofuels are an
inseparable part of our current energy transition strategy. At least
in the short term, the Government has planned a complete phas-
ing in of biodiesel to a final mix of 100% termed B100 from B20 or
20% biodiesel mix. Indonesia is a major palm oil exporter. In the
production of palm oil, energy-rich wastes are generated. These wastes
can be converted to obtain energy, for example, biogas, biodiesel, or

bioethanol. The conversion of palm oil waste to biofuels is a hot topic
among Indonesian researchers.
C. The Carbon Impact of Energy Shift

The ultimate goal of shifting from fossil-based energy resources to
renewables is to reduce the anthropogenic impact on the rise of
global surface temperature, which will ultimately lead to a climate
crisis. Carbon is commonly regarded as the ‘currency’ to measure this
impact. The use of carbon to measure environmental impact stems
from the idea that the combustion of fuels generates carbon, often
in the form of CO2. The release of CO2 into the atmosphere leads
to an enhanced greenhouse effect, wherein energy received by the

Earth from the sun is trapped within the atmosphere. Normally, this
radiative energy is only absorbed in 70%, with the rest released back to
outer space (WMO, n.d.), and heat is trapped within the atmosphere
to support organic life. However, human activities have disturbed the
natural CO2 balance in the atmosphere to the degree that the Earth
is warming up abnormally over time.
The energy sector is a major contributor to CO2 emissions. A
shift to renewables is expected to bring carbon emissions down,
coupled with other CO2-targeted measures, which are anticipated to
hold global surface temperature rise at 1.5℃. Collectively, the world
generated 34,156 Mt of CO2 back in 2020, this number is slightly lower
than the year preceding it at 35,966 Mt yet higher by almost 2,000 Mt
CO2 than ten years ago at 32,345 Mt CO2 (IEA, 2021b).
The reduction in emissions in the year 2020 is attributed to the
global emergence of the COVID-19 pandemic. The pandemic caused
a global phenomenon of sudden and drastic decrease in human activi-
ties, which is the main cause behind large CO2 emissions in normal
conditions. To emphasize, global pandemic finally lowered our total
CO2 emissions. Thus, it is hard to imagine the effort required to reduce
CO2 emissions to a level compatible with the sustainable develop-
ment goal of only 28,487 Mt CO2 by 2030 (IEA, 2021b). It is a large
target if we look at the relationship between CO2 emissions, economic

growth, and human activities that tend to go together without special
interventions. The impact of the COVID-19 pandemic on energy shift
is expected to be significant and directly observable in the next few
years. Ever since the pandemic hit, world governments have pledged
a staggering USD 16 trillion in fiscal support to counter the impact
of the crisis. From this number, around USD 380 million is aimed at
the sustainable energy sector (IEA, 2021b).
Global and Indonesia-specific trends of CO2 emissions can be
consulted in Figure 4.3. The differences are stark within the last two
decades (the year 2000 onwards). Indonesia’s emissions are showing
a drastic increase, while world emissions are levelling off between
2010–2020 compared to 2000–2010. Under the current policy sce-

nario (CPOS) model, the Government of the Republic of Indonesia,
will not be able to meet its Paris Agreement target with the CO2
emissions trend expected to continue to increase until after 2030.
The Paris Agreement compatible scenario (LCCP) is expected to meet
Indonesia’s 2050 CO2 emissions level (GOI, 2021).
Source: Adapted from IEA (2021a)

Figure 4.3 Total CO2 Emissions at (a) Global Scale and for (b) Indonesia
Through a long series of analyses and discussions, eventually,

world governments have mostly agreed to a Net-Zero Emission (NZE)
target by 2050. This scenario is the most ambitious to date in terms
of emissions reduction.

1. Inequality in the Global Push for Emissions Reduction
At the dawn of the era of industrialization, the West was leading in
technological developments and innovation. As a direct result of the
intensification of human activities driven by industrialization, CO2
emissions skyrocketed. The lag between Western countries and the rest
of the world was large for the following decades. Only recently have
large and densely populated economies like China and India caught
up in renewable energy growth and reforestation efforts. In recent
years, almost half of the global increase in renewable energy produc-
tion is a Chinese contribution. As the major economy in Southeast
Asia, Indonesia contributes to renewable energy production in the
region, which is not the case as the country still lags behind other
fellow Southeast Asian countries in renewable power generation. On
the other hand, Western countries have mainly developed and are
less dependent on fossil resources. These countries are also the ones
that are vocal in pushing for global emissions reduction. However,
international cooperation is necessary for the rest of the world to
achieve what Western countries have succeeded in decoupling CO2
emissions from economic growth trends.
A carbon budget is a way to gauge carbon emissions limit to
avoid a catastrophic rise in global surface temperature. Much like
its counterpart in finance, it means the acceptable amount of CO2

emitted globally. Using cumulative CO2 emissions puts both large
and small economies responsible for reducing emission. According
to Friedlingstein et. al. (2022), the decrease of global CO2 emissions
in 2020 was at 5.4%, back to the 2012 level, yet it rebounded quite
fast in 2021 by 4.8%, almost on par with 2019 levels at 36.7 ±1.8
Gt-CO2/year). The recent IPCC (intergovernmental panel on climate
change) report suggests that the remaining global carbon budget to
stay under 1.5℃ of surface temperature rise is only 400 billion tons of
CO2 (starting from 2020). This can be paraphrased into a remaining
nine years to evade climate catastrophe and environmental collapse
(IPCC, 2021).

Countries belonging to the organization for economic OECD
group peaked in their fossil CO2 emissions by around 2005 (Friedling-
stein et al., 2022). Still to the same report, in the decades that followed
(2010–2019), 23 countries with significant economic growth (domi-
nated by large economies in the Northern hemisphere) combined
only produced around 25% of the world’s fossil emissions. Hence,
most fossil emissions are produced from non-OECD countries during
the aforementioned timeframe. Knowledge transfer and cooperation
between countries with different technological advancements on
low-carbon technologies and renewables are necessary. This point is
reinforced as one of the target actions of SDG 7 on energy, namely
to promote access to research, technology, and investments in clean
energy by putting forward international cooperation (United Nations,
2018).
2. Emerging Carbon-Neutral Technologies

We have presented an overview of traditionally recognized renewable
and carbon-neutral energy options in the previous sections. Solar,
wind, geothermal, and biomass are well-known energy sources
aimed to feed into our current energy system as fuel, heat source,
or to generate electricity. We have not recently discussed the future
of non-fossil-based sources that are gaining momentum recently. In
this section, we are looking into hydrogen and nuclear, specifically.

Hydrogen is widely dubbed the future of renewables, while nuclear
is a controversial subject with a large potential, yet strong voice of
opposition.
Hydrogen in the energy sector refers to the highly energetic,
combustible dihydrogen (H2) gas. H2 can be derived from fossils or
renewables, in which the carbon footprint of the hydrogen production
process will define the final H2 product as either ‘clean’ or ‘unclean’. In
2018, almost all (99%) of hydrogen obtained from dedicated produc-
tion facilities (a total of 70 Mt) was derived from natural gas or coal,
while 45 Mt was obtained as a by-product of other industrial processes
(Energy Transitions Commission, 2021). The versatility of hydrogen

as energy storage in the power system has gained momentum these
past decades. The hydrogen-based economy is planned on the horizon
by multiple countries, including Japan which started this campaign
in 2017 and France with a big pledge to build the hydrogen economy.
The year 2020 saw world governments seriously planning on integrat-
ing green hydrogen into their national energy strategies, at least 33
countries have committed themselves to this goal (Lee & Zhao, 2021).
All previously identified renewables were identified in the literature
to contain significantly lower power density than fossils and nuclear;
even coal scored higher than solar (van Zalk & Behrens, 2018).
The Hydrogen Council has identified the roles hydrogen could
be a vital aspect in our road to net-zero emissions. These roles are
divided into seven (Hydrogen Council, 2017):
1. Enable large-scale and efficient renewable energy integration,
2. Allow energy distribution across regions and sectors,
3. Function as a buffer to ensure energy supply,
4. Act as a solution for hard-to-transport energy needs (long-range
transport, intensive energy-consuming industries, residential
heating),
5. Decarbonizing feedstocks in coupling with CCU or CCS.
Hydrogen presents a way to bypass challenges faced by renewa-

bles. It allows storage of renewables, reducing intermittency problems.
Additionally, hydrogen is not only energetic, but also used in chemical
industries.
Nuclear energy is often regarded as the hot seat of non-fossil
energy sources. Everyone wants nuclear power plants, but all fear the
occasion of failure that would lead to nuclear disasters. Nuclear energy
relies on specific materials that are only present in finite amounts on
Earth, making it non-renewable by design. The material in question
is uranium isotope 235 (235U), which usually only accounts for 0.711%
of the uranium in nature. Currently the world’s combined identified
recoverable uranium reserves stood at 9.24 million tons of uranium
across all cost categories (OECD & IAEA, 2020). According to the

same report, our current identified resources can sustain our needs
for over 135 years if we base consumption on 2019 data (OECD &
IAEA, 2020).
Discussions on nuclear energy are always polarized. Proponents
of nuclear energy base their arguments on technology's energy genera-
tion potential and low emissions aspect. Meanwhile, the opponents
are more focused on the environmental impact of radioactive waste
and risk avoidance of a nuclear accident. In terms of potential, nuclear
energy came in at the top of the list of other renewables. It is mainly
due to the feedstock's potential stability and energy density.
Australia is the world leader in uranium reserves, accounting for
up to 28% of the global identified resource (OECD & IAEA, 2020).
Indonesia has also reported uranium reserves under the cost catego-
ries of <80 USD/kg-U, <130 USD/kg-U, and <260 USD/kg-U missing
only the lowest cost category in its arsenal (OECD & IAEA, 2020).
D. Renewable Energy from the Carbon and

Environmental Perspectives: Weighing the
Ecological Cost of Renewables
When we talk about carbon-free energy, the term renewable almost
always comes to mind. However, the reality is that carbon-free energy
does not always mean ‘renewable’. For example, in most nuclear power

plants (NPW) energy is released from the nuclear fission of the Ura-
nium atom. As a result, supply becomes the barrier that separates
nuclear from other carbon-neutral renewables, effectively placing
nuclear in the non-renewable category.
Aside from the problem of supply, ecological impact matters.
It is particularly highlighted when discussing the case of large hy-
dropower. To harness kinetic energy from water into a large-scale
electrical energy, the building of dams is required. The problem with
the construction of dams is not limited to the construction phase only,
but the effect is long-term. Water flows are disturbed, affecting aquatic
life and the migratory habits of several aquatic organisms (Gasparatos
et al., 2017). Due to this ecological effect, large hydropower cannot

be classified as renewable, albeit carbon-neutral. Since the energy
generated from this setup is not sustainably produced.
The question with carbon-neutral energy sources can be summa-
rized as “can [a particular energy source] be used to generate energy
sustainably?”. This question is important to consider when assessing
alternative energies since the main motivation for energy shift is to
avoid environmental disasters, including biodiversity collapse. We
need to carefully thread the balance between our energy needs and
environmental protection.
One important backbone of a green economy is energy transition.
Economically, energy transition would open opportunities, ultimately
driving economic growth in the long term through climate change
mitigation, new job opportunities, and better health from a higher
quality of living. Therefore, energy transition from fossil to renewable
resources is non-negotiable. However, transitioning from one source
to another needs to consider its impacts in a multisectoral view that
involves the human aspect, and other living systems, in other words,
biodiversity.
The shift from fossil-based energy infrastructure to renewables
will involve heavy construction and installation in multiple sites
worldwide. The process will undoubtedly leave significant environ-
mental and carbon footprints in the early stages. Carbon emission as

a way to measure environmental impact does not consider parameters
like biodiversity loss. It is the case when land use is shifted, reducing
forest coverage, i.e., plantation and power plants. The drawback of
construction and specific land use can be justified in the long term
if we evaluate the project based on its emission reduction potential.
Although the end goal is still carbon emissions reduction, it is worth
considering another aspect of the environment when aiming for
sustainable energy transition practices, namely biodiversity conserva-
tion. Previous studies have tried to identify the ecological costs of
energy transition for several types of renewables from solar, wind,
hydropower, and bioenergy (Sayed et al., 2021).

Solar energy is generally regarded as environmentally friendly
since the basic principle of harnessing and utilizing solar power gener-
ates no carbon dioxide. Solar panels can also be installed in urban
settings, for example, on the roof of houses. The impact is aggravated
when solar panels are installed on large surface areas as is the case
for the CSP that was initially green areas like forests. In the end, the
ecological impact of solar panels is minimal and does not outweigh
their benefits in fulfilling of the world’s ever-rising energy demands.
We can also examine the case of biomass energy from palm oil
utilization. The problem starts with land use. Deforestation is carried
out to clear out lands to provide space for palm oil trees, usually in
areas that were previously forests. In Indonesia, palm oil industries
thrive on the islands of Sumatra and Kalimantan, replacing rainforest-
covered areas with palm oil plantations. In the land-clearing process,
the ecological impact is significant that palm oil industries are closely
associated with unsustainable business practices. Biodiversity loss eas-
ily occurs due to replacing various vegetation types with a single type
of vegetation. The loss of biodiversity has threatened the extinction of
endemic species in the region. Indonesia, one of the world’s leaders
in palm oil export, is facing this issue head-on since the region is also
regarded as one of the world’s leading biodiversity hotspots.
E. Conclusions

The information discussed in this chapter aims to bring our focus back
to terminologies often used when discussing energy sources. Renew-
able energy is often regarded as a way out of our dependency on fossil
fuels. However, the term renewable energy can vary according to how
we assess energy sources. Classical discussion on renewables almost
always includes solar, wind, geothermal, and biomass energy. While
these renewables are rightly in their spot as contenders to replace
fossil energy, their adoption still has a long way to go to fulfill the
requirement of global energy mix targets.

In this chapter, we have discussed how nuclear energy, despite
being classically considered non-renewable, may provide a lasting
solution to enhance the energy transition rate. In this case, the fact
that its source material, 235U, is present in a finite amount on Earth
can be outweighed by nuclear energy’s carbon-free characteristics
and potential. On the other hand, in the case of large hydropower,
although generally considered carbon-neutral, the environmental
damage of large hydropower installations is not negligible in the
long run. Despite their renewable nature in terms of resources, large
hydropower has been put into the non-renewable category due to its
harm to biodiversity.
The energy transition is a complex goal that involves multi-
sectoral components, including the environment. Environmental
parameters play an important role in pushing for the transition. To
assess impact, carbon (CO2) is most used compared to other param-
eters. CO2 is a well-known greenhouse gas that is involved in the
progression of climate change, so the aim is to lower CO2 released
into the atmosphere in human activities.
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Chapter 5
Solar Energy Potentials

and Opportunity of Floating Solar
PV in Indonesia
David F. Silalahi & Denny Gunawan
A. Overview of the Rapidly-Growing Solar Energy in

Indonesia
Among ASEAN country members, Indonesia has the most abundant
solar energy potential. It is measured by considering the areas of land
mass and water bodies of Indonesia that can be utilized for solar
panel farms. This fact is necessary to be realized by Indonesia because

Indonesia is growing rapidly as the COVID-19 pandemic begins to
become endemic. The growth of Indonesia will be associated with a
demand for energy to power Indonesia’s economy. However, Indonesia
is also one of the highest polluters in the world. Thus, it becomes a
dilemma for Indonesian growth. On one hand, Indonesia needs to
grow its economy. It is expected that Indonesia could become the
world’s fourth-largest economy by 2050, and energy is a crucial part
of it.
D. F. Silalahi & D. Gunawan

Australian National University, e-mail: david.silalahi@anu.edu.au

Silalahi, D. F., & Gunawan, D. (2022). Solar energy potentials and opportunity of floating solar PV in
Indonesia. In H. Ardiansyah, & P. Ekadewi (Eds.), Indonesia post-pandemic outlook: Strategy towards
net-zero emissions by 2060 from the renewables and carbon-neutral energy perspectives (63–88). BRIN 63
On the other hand, Indonesia has also committed to tackling
climate change and contributing to net-zero carbon emissions.
This pledge is written in the 26th Conference of Parties (COP26) in
Scotland, 2021. The Ministry of Energy and Mineral Resources has
also laid out the plan to reach net-zero carbon emission by 2060 in
Indonesia, which includes investments in renewable energy.
Indonesia is blessed with renewable energy. Based on the Na-
tional General Energy Plan, it is suggested that the renewable energy
potential in Indonesia is 443 GW, while 208 GW of it is from solar
energy. This potential is huge and able to power Indonesia if it can
be extracted. Indonesia’s share of renewable energy is only 9.2% by
2019, far from Indonesia’s target of the renewable energy mix, which
is 23% by 2025.
Some efforts need to be performed to extract renewable energy,
especially solar energy potential in Indonesia and increase Indonesia’s
renewable energy mix. However, solar energy is not always perfect.
Technical challenges must be solved to ensure the abundant solar
energy potential does not end to waste.
This chapter discusses the potentials and challenges of solar
energy. Furthermore, this chapter concludes with an overview of
floating solar photovoltaic (FPV) technology that can be a promising
investment in Indonesia.
B. Solar Potential Buku ini tidak diperjualbelikan.

Indonesia is located in the equatorial region which allows the solar
irradiation is relatively evenly distributed (Figure 5.1). Indonesia’s
average global horizontal irradiation (GHI) is 4.8 kWh/m2 per day
(Solargis, 2017). According to the Global Solar Atlas PV study (2020),
it is higher than the daily average GHI in Germany (2.9 kWh/m2),
Japan (3.6 kWh/m2), China (4.1 kWh/ m2), and Singapore (4.5 kWh/
m2).

Source: Solargis (2017)
Figure 5.1 Indonesia’s Global Horizontal Irradiation Map
In the previous Indonesian National Energy Plan (2017), solar

energy is suggested to be 208 GW. However, recently the potential has
been updated to 3,294 GW (Antaranews, 2022). Institute of Essential
Services Reform (2021) studied Indonesia’s solar potential reaching
7,715 GW. Vidinipoulous et al. (2020) reported that Indonesia could
generate 2,5431 TWh per year. A study by Silalahi et al. (2021) shows
that the solar potential is much more immense. By locating the panels
on rooftops and defunct coal mine sites, agricultural sites, and floating
on the calm equatorial inland sea, Indonesia could harvest 190,000

TWh per year. The breakdown of the potential with a significant
fraction of floating PV potential is shown in Figure 5.2.
Solar Energy Potentials ... 65

Source: Silalahi and Blakers (2021)
Figure 5.2 Indonesia’s Solar Energy Potential for Its Regions
The potential is much higher mainly because Indonesia has

a sufficient calm maritime area considering floating PV potential.
Figure 5.3 compares the reported potential in the terawatt hour unit.
The estimates are different in number, but all the studies agreed that
Indonesia’s solar potential is vast.
Figure 5.3 Indonesia’s Solar Energy Potential Estimation in Recent Studies

C. Challenges of Solar Energy
As one of Indonesia's most prominent renewables solar energy is a
great opportunity to act as an effective alternative to conventional
energy sources. Harnessing abundant sunlight to provide on-demand
energy would be vital to meet Indonesia’s climate targets. However,
several challenges to the growth of solar energy utilization exist and
must be tackled.
1. High Capital Cost

One of the most common issues about solar energy is its high capital
expenditure for solar panels. However, this cost-related problem is
likely to be irrelevant now or soon as the price of photovoltaic modules
has dramatically reduced over the past decade, as illustrated in Figure
5.4 (a) (Green, 2019). This cost reduction leads to a substantial drop in
the levelized cost of photovoltaic-generated electricity (Figure 5.4 (b)).

Note: a. Decrease in the average selling price of multi-crystalline photovoltaic modules; b.
Reduction in the Levelized electricity cost over time for photovoltaic and other sources
Source: Adapted from Green (2019)
Figure 5.4 Significant Reductions in Photovoltaic Module Price and Levelized
Cost of Electricity

It is important to note that the drop in the levelized electricity cost
shown in Figure 5.4 (b) is not solely due to the panel cost reductions
but also due to more favorable financing conditions by stakeholders,
including industries and the government (Green, 2019). Therefore,
healthy investment conditions and supporting incentives are essential
to decrease the solar electricity price even further and pursue the
advancement of solar technology.
2. Intermittency of Solar Energy

The major problem with solar energy is its intermittency in terms
of supply and demand. Solar panels require sunshine to produce
electricity. When the irradiation is high, the electricity supply can
exceed the demand. When it is not, solar-generated electricity supply
cannot fulfill the demand, and therefore, fossil fuels are burned to
keep the lights on. The variable nature of solar energy constrains its
utilization as baseload power.
Adequate energy storage solutions are required to tackle its
intermittency problem and ensure the stability of electricity grid. Nu-
merous storage options with varying power capacities and discharge
durations exist, as shown in Figure 5.5. For the short-term, batter-
ies, supercapacitors, and compressed air are among viable storage
solutions to support supply-demand balancing. However, they are
unsuitable for long-term storage due to limited power capacity or

storage timespan.
Pumped hydro provides an alternative solution for long-term
solar energy storage. Typically, when the electricity supply from
solar farms exceeds the demand, the excess energy can pump water
from a lower level to a higher one. The stored energy can then be
converted back to electricity when the solar-generated power is too
little, allowing the water to fall through a hydroelectric turbine into
the lower reservoir. This storage method accounts for more than 95%
of worldwide power storage.

Source: Hydrogen Council (2017)
Figure 5.5 Options for Carbon-Free Energy Storage Solutions
Indonesia currently has no existing PHES systems. However, this

will change soon because Indonesia has included 4000 MW of PHES
in its electricity development plan. The 1000 MW Upper Cisokan
Pumped Storage project, located in Cianjur, West Java, is currently
being financed and approved, and is also planned to operate in 2025

(World Bank, 2021). The Matenggeng pumped hydro storage (943
MW) in West Java is expected to connect to the grid in 2028. The
Grindulu pumped hydro storage (1000 MW) in East Java will operate
in 2030 (RUPTL, 2021). The state electricity company Perusahaan
Listrik Negara (PLN) plans to develop 4x250 MW PHES systems in
Sumatera, which are expected to connect to the grid in 2029–2032
(RUPTL, 2021).

Source: Stocks et al. (2021)
Figure 5.6 Potential 150 GWh Greenfield Off-river Pumped Hydro Energy
Storage Sites in Indonesia
Based on the Australian National University’s Global Greenfield

Atlas, 26,000 off-river PHES potential sites are identified in Indonesia
(Stocks et al., 2021). The atlas includes eight combinations of storage
energy volume (GWh) and storage power capacity, namely 2, 5, 15,
and 50 GWh with 6 hours of storage and 5, 15, 50, and 150 GWh with
18 hours of storage. Figure 5.6 depicts the potential of 150 GWh off-
river PHES. Indonesia has an enormous combined storage potential

of 800 TWh. With so many options, energy planners can afford to
concentrate on those with the lowest likely costs per unit of storage.
A total of 321 TWh of high-class off-river PHES was identified in
Indonesia (Silalahi et al., 2022).
Off-river pumped hydro storage, in contrast to conventional
river-based pumped hydro storage, takes up a relatively small area,
typically 200 hectares. Off-river PHES avoids the environmental
costs of damming rivers, which aids in social acceptance (Silalahi
and Blakers, 2021).
Indonesia could also store excess solar energy in a hydrogen
form. Hydrogen is a novel way to keep energy in a large power
capacity and long storage timespan. The excess solar electricity can

be passed through a water electrolyzer to produce hydrogen during
an oversupply period. When the power generated from solar farms
is underperforming, the stored hydrogen can produce on-demand
electricity using a fuel cell or a gas turbine. As a result, hydrogen
offers a robust long-term energy storage option to maintain the
solar electricity grid stability. More significantly, storing the excess
electricity from solar energy as hydrogen can potentially widen the
reach of renewable energy for deep decarbonization of hard-to-abate
sectors, such as the chemical industry, petrochemical industry, and
heavy transport.
Indonesia could build energy storage in the form of off-river
PHES or hydrogen infrastructure. With a low daily, weekly, and
seasonal variation of solar insolation, Indonesia does not require
seasonal solar energy storage. Energy storage need to be only short
term, mainly for day-night system balancing (Silalahi et al., 2021).
3. Land-Use Footprint of Solar Energy

Although current land use for solar energy is relatively small, it is
predicted that in the future, with a decarbonized electricity grid, solar
energy utilization will require significant land areas to be occupied.
Defining the minimum efficiency standards for solar panels is essential
to reduce land requirements for solar power plants (van de Ven et
al., 2021).

On top of that, rigorous environmental and feasibility analysis
needs to be conducted to determine where to put the solar panels.
Several potential locations for developing solar farms that can mini-
mize the land-use footprint include rooftops, abandoned mine sites,
agricultural lands, and floating on suitable water bodies in Indonesia
(Silalahi et al., 2021; van de Ven et al., 2021).
Rooftop solar panels do not need extra space and can accom-
modate the energy demands of residential, commercial, and industrial
buildings (Silalahi et al., 2021). Co-locating solar panels in agricultural
lands, known as agrophotovoltaic (APV), can be an attractive alterna-
tive in Indonesia as one of the world’s largest agricultural countries.

This APV approach could also benefit farmers by providing additional
revenue streams (Silalahi et al., 2021).
Putting solar panels on former mining sites has also received
significant attention to avoid land competition. With existing trans-
mission lines and infrastructure in the abandoned mining sites, capital
expenditure for developing solar power plants can be significantly
reduced (Silalahi et al., 2021). Last but not least, floating solar pho-
tovoltaic is a promising technological option for Indonesia, with a
huge fraction of water bodies, including freshwater and maritime. For
instance, lakes and inland seas are suitable for floating solar panels as
they typically have low wind speed and relatively calm water surfaces
(Silalahi et al., 2021).
4. Hazardous Solar Panel Waste

Every solar panel has particular lifetime (typically around 20–25 years
of service life) for its proper performance. After that, solar panels
turn into a form of waste that adversely impact humans and the
environment. Some photovoltaic cells contain hazardous chemicals,
such as lead, selenium, tellurium, and cadmium. As an illustration,
it is estimated that 33,205.36 tons of photovoltaic cell waste would
create 62.26 tons of hazardous materials that may pollute soil and
water, and affect human health (Tasnim et al., 2022). To address this
issue, methods to recycle 100% of materials, from the glass, silicon,

and metal frame, are required.
Significant efforts have been performed to develop techniques
for solar module recycling. Moreover, the research predominantly
focuses on silicon extraction and recycling rare metals. Regarding
waste processing, there are three solar panel waste processing tech-
niques: component repair, module separation, and recovery of silicon
and rare metals (Xu et al., 2018). All those steps can be done using
physical, thermal, and chemical processes as summarized in Figure
5.7 (Chowdhury et al., 2020).

Source: Xu et al. (2018)
Figure 5.7 Various Recycling Techniques of Solar Panels
Several regulations regarding this matter are necessary as an ad-

dition to process the technological development for viable solar panel
recycling. Unfortunately, Indonesia has not taken any measures to
regulate waste solar panels. A clear recycling industry standard needs
to be developed for waste management from solar power plants. The
Government must set policies and regulations to encourage recycling
and safe waste disposal.

C. Opportunity for Floating Solar Photovoltaic in
Indonesia
1. Global Capacity and Cost Overview

The quick drop in the price of solar photovoltaics (PV) encourages
worldwide engineers to look forward to new ways to integrate more
PV into power systems. However, the rise in ground-mounted PV
installations could put more pressure on land use, particularly in
locations where land is scarce and costly. Floating PV (FPV) offers a
solution to this land problem and it has gained more attention. The
global capacity of FPV systems grew from less than 1 MW in 2007
to 2.6 GW in 2020 (Cox, 2021). Moreover, it is projected to reach 4.8
GW by 2026 (Prnewswire, 2022). The trend of global FPV can be
identified in Figure 5.8.

Source: World Bank (2019); Ramasamy et al. (2021)
Figure 5.8 Floating PV Cumulative Global Installed Capacity
NREL reported that the U.S. installed cost of a 10 MW FPV system

is $1.29 per watt. It is $0.26 (25%) higher greater than a land-based
PV system ($1.03 per watt). It is mainly due to the structural costs
related to the floats and anchoring system (Figure 5.9 (a)). However,
the larger capacity of the FPV the lower its system costs. The cost of
a 50 MW FPV system is close to a 10 MW land-based PV system, as
shown in Figure 5.9 (b).

(a) (b)
Note: (a) Cost Comparison of 10 MW FPV System and Ground-mounted PV Sys-
tem; (b) Cost of FPV System with Varying System Sizes
Source: Ramasamy et al. (2021)
Figure 5.9 Solar Panels Cost Comparisons
2. Advantages of Floating Solar Photovoltaic

There are several key advantages of floating solar PV compared to
land-based solar PV:
1. No land occupancy. The most significant benefit of floating solar
panels is that the installations do not utilize land space, reducing
land-use competition with agriculture or real estate, particularly

in locations where land is relatively scarce and expensive.
2. Higher solar panel performance. Solar panel performance tends
to decrease as temperatures increase. The water around the float-
ing solar installation helps cool the solar panels, enabling the
panels to generate electricity with higher efficiency. As reported
in studies, the module temperatures are about 3°C to 15°C lower
than land-based PV (Reindl, 2018; Liu et al., 2018; Dorenkamper
et al., 2021). The performance ratio is 10% to 15% higher than
typical rooftop PV systems (Reindl, 2018).
3. Environmental benefits. The floating solar panel structure covers
the water’s surface, reducing evaporation. Advantageous for areas
susceptible to drought, as water loss to evaporation, can add up

over time and contribute to a shortage. The shade reduces the
growth of algae in water bodies. Lastly, it generates low-carbon
electricity.
3. Floating Photovoltaics Technology

Floating solar photovoltaics (FPV) are solar panels mounted on a
designed structure to be able to float on a water surface. The design
of an FPV is similar to a land-based solar PV system, except that it
requires a floating structure to float the panels on the water’s surface.
The key components of FPV are PV modules, inverters, floating
platform, anchoring and mooring system, cabling and combiner box,
and transformer. A schematic of typical FPV is shown in Figure 5.10.

Source: World Bank Group (2019)
Figure 5.10 Schematic Diagram of Floating Solar PV System with Its Key
Components
The floating structure and anchoring system are the main

components that differ from the FPV system to the land-based PV
system. This component is worth reviewing to decide on the suitable
technology for designated floating PV sites. It contributes up to 30%
of the total cost. In this chapter, we only discuss the floating system.
There are three major designs of floating. The designs are pure-floats,
pontoon and metal frame, and membranes and mat (Figure 5.11,

Figure 5.12, Figure 5.13). Table 5.1 summarizes the advantages and
disadvantages of each design.
Table 5.1 Summary of the Advantages and Disadvantages of Pure Floats, Pontoons,
and Metal Structure, Membrane, and Mats Floating Technology
Floating Pontoons and metal

Pure floats Membrane and mats
system structure
Advantages • Systems are easy • The concept is • Conceptually simple
to assemble and simple. and provides an easy
install • Floats are easy to base for installation
• Systems can be make and there- and maintenance
scaled without fore can be easily • being in direct contact
major changes in sourced locally. with water; heat from
design. • Wave move- sunlight is discharged
• Few metal parts ment between into the water, thus
are required, mini- PV modules is lowering the operat-
mizing corrosion. less variable, thus ing temperature of
• Platform adapts to reducing wear and the PV modules and
wave motion and tear on module increasing energy
relieves stress. connection com- yield.
ponents and wires. • possible to float
specially designed
PV panels directly on
water or in a semi-
submerged manner
• suitable for desert

areas to prevent
evaporation losses, to
cover drinking water
reservoir
• able to withstand
typhoon category 4
• able to withstand
water level variation
excess of 30 meters

Floating Pontoons and metal
Pure floats Membrane and mats
system structure
Disadvan- • Modules are • With more rigid • may not be easily
tages mounted very structures, waves scalable
close to water. It cause stress to • more suitable for
reduces air circula- concentrate at smaller-scale systems
tion and cooling certain points. on reservoirs or ir-
effect of evapora- • Structures are rigation ponds up to
tion. It also gener- more difficult to around 100,000 to
ates a high-humidi- assemble. 200,000 m2 in size
ty environment for • Access for main- • Tilting PV panel is not
both PV modules tenance can be possible
and cables. difficult in certain
• It is not cost-effec- designs.
tive to transport • Possibility of cor-
pure floats over rosion
long distances, so
they may need
to be molded in
nearby facilities
• Constant move-
ment may cause
stress and fatigue
to joints and con-
nectors.
Source: World Bank Group (2018); Ocean Sun (2021)
Source: Ciet Et Terre (2021)

Figure 5.11 Pure Floats Design

Source: K-Water Research Institute (2019)
Figure 5.12 Pontoons and Metal Frames Structure by Scotra
Source: Ocean Sun (2021)

Figure 5.13 Floating Solar Technology Based on a Thin Hydro-elastic Membrane

D. Citing Floating PV
The critical question in discussing the development of a solar energy
project is where to locate the solar panels. Is there enough space to
host the required solar panels? Table 5.2 shows several recent floating
PV projects and how large the area is occupied by each project. The
figures vary for each site with an average of 0.8 MW per hectare. This
figure might decrease as the efficiency of solar panels improves with
the advancement of technology. However, it can be referred to as a
conservative figure.

Table 5.2 List of Occupied Area in the Recent Floating PV Projects
Occupied Capacity per
Capacity
Floating PV Projects area (hec- occupied area
(MW)
tare) (MW/hectare)
2021 - Kaohsiung, Taiwan - Ciel et Terre 4.1 8.7 0.5
2021 - Healdsburg, USA - Ciel et Terre 4.8 15.3 0.3
2021 - Xiqian, China - Ciel et Terre 21.6 30.7 0.7
2021 - Changhua, Taiwan - Ciel et Terre 22.8 29.7 0.8
2021 - Changhua, Taiwan - Ciel et Terre 10.3 22.6 0.5
2021 - Marouke Ike, Japan - Ciel et Terre 0.7 2.3 0.3
2021- Yunlin, Taiwan- Ciel et Terre 1.0 1.9 0.5
2021 - Banja, Albania - Ocean Sun 2.0 0.79 2.5
Source: Ciel et Terre (2021) and Ocean Sun (2021)
Finding a space for solar PV deployment in Indonesia is easy, with

a land area of 1.9 million km2 and a maritime area of 6.4 million km2,
the country has limitless possibilities to find unused spaces that can be
transformed into solar farms (Geospatial Information Agency, 2020).
Furthermore, the vast potential of floating PV is available in Indonesia.
It could generate 180,000 TWh per year (Silalahi et al., 2021). The
vast potential is mainly due to Indonesia having an adequate water
surface. Indonesia has 5,800 lakes that can be found with a total area
of 5,868 km2 (Lembaga Ilmu Pengetahuan Indonesia, 2020). It is a

vast space to explore for FPV deployment on freshwater.
Source: LIPI (2020)

Figure 5.14 Distribution of 5,807 Lakes with a Total Area of 5868 m2 in Indonesia

A large portion of Indonesia’s maritime territory is protected by
Sumatra, Java, Kalimantan, Sulawesi and Papua, as shown in Figure
5.15. A recent study reported that Indonesia has 708,000 km2 of calm
maritime area, with waves less than 4 m and wind speed less than 15
m/s (Silalahi et al., 2021). It is an ample space to host FPV. For exam-
ple, the sea area along the eastern Sumatra, northern Java, between
Kalimantan and Sulawesi, and the gulf in Sulawesi have relatively low
wind speeds. As shown in Figure 5.15, the low wind speed at 10 m in
the Indonesian maritime area is blue and green.
Source: Global Wind Atlas (n.d.)

Figure 5.15 Indonesia’s Wind Speed at 10 M
The absence of tropical storms in Indonesia over the last 50 years

raises confidence in the safety of installing solar PV panels (United
Nations Office for the Coordination of Humanitarian Affairs (UNO-
CHA, 2019). Figure 5.16 depicts the paths of tropical storms near
Indonesia from 1968 to 2018. None of these storms has significantly
affected Indonesia, Malaysia, Singapore, or Papua New Guinea.

Source: UNOCHA (2019)
Figure 5.16 The Last 50 Years of Tropical Storms in Asia-Pacific; 1968–2018
E. FPV Development in Indonesia

Indonesia does not have the facilities for commercial floating PV.
However, it is about to change. In early 2020, Masdar (Abu Dhabi-
based renewable energy group) and Indonesian energy company PT

PJB agreed to build a 145 MW floating PV on a 225-hectare section
of the Cirata Reservoir in West Java (PVTech, 2020). It is expected
to operate commercially in 2022. In the mid of 2021, Sunseap signed
a Memorandum of Understanding with the Batam Island authority
to develop a floating PV combined with a battery system on Duri-
angkang Reservoir (Reuters, 2021). The floating PV is projected to
have a capacity of 2.2 GW covering a 1,600 hectares reservoir area,
the largest FPV in the world to date. A portion of the electricity will
be exported to Singapore via a 50 km submarine cable.
The decreasing price of solar panels has lowered the investment
cost significantly. In 2015, the Government set the selling price of
solar PV projects up to 25 cents USD/kWh. Yet, the sales price from

Cirata 145 MW floating PV to PLN (Indonesian utility) is 5.8 cents
dollar per kWh. Further, the recent bid price for Saguling 60 MW and
Singkarak 90 MW floating PV are 3.74 cents USD per kWh and 3.68
cents USD per kWh, respectively (Newsletter, 2021). Saguling is an
artificial reservoir (hydroelectric dam) in West Java, while Singkarak
is a natural lake in West Sumatra with an existing hydroelectric power
plant.
Although floating PV costs might vary due to site-specific design,
compared to several projects in different countries, Indonesia's float-
ing solar PV cost is already competitive compared to several projects
in different countries. For instance, 129 million USD investment (PJB,
2020) in the 145 MW Cirata project equals 0.89 USD per Watt (Figure
5.17). It is lower than Japan’s projects and similar to India’s projects.
This indicates that the floating PV is a promising way to supply low-
carbon electricity for Indonesian.
Source: World Bank Group (2019); PT Pembangkitan Jawa-Bali (2021)

Figure 5.17 Floating PV Investment Costs Worldwide (Real and Auction Results)

F. Strategy for Future Solar Energy Deployment
The capacity factor of solar generation is now the lowest compared
to all other forms of energy generation. By genuinely understanding
the solar energy limits, we can solve the bottlenecks correctly. We can
design our power grid accordingly by knowing the solar nature (no
generation during nighttime). On the other hand, solar PV installa-
tions are much faster to build than fossil-based power plants and can
be completed in months rather than years. It is favorable compared
to coal, gas, hydroelectric, and nuclear plants that might take several
years to complete.
By deploying at a huge scale (in Gigawatts), the cost of solar PV
power in Indonesia is projected to be more competitive. Indonesia
has consistently good solar irradiation. Economies of scale will take
advantage, and there are large areas where deployment costs (includ-
ing land access) will be low—particularly in the calm inland sea of
Indonesia. It can be started by building floating PV in the safest space,
such as existing hydroelectric dams, in the big lakes such as Lake
Toba, and finally on the inland sea surface as the technology advances.
Moving towards the 2060 net-zero emissions target, public or
business parties must participate. Religious leaders can encourage
people about the importance of energy transition to keep the earth
safe (Silalahi, 2022). As a breakthrough, the Government could also

encourage communities to become involved in the renewable en-
ergy project. Community ownership allows high upfront investment
sharing and enables more projects to develop. Community-owned
projects have a specific purpose: focus on creating social benefits.
A community-based renewable energy project has been developed
in several countries like the United States and European countries,
especially Denmark, Germany, the Netherlands, and the United
Kingdom (particularly Scotland). One major benefit of involving the
community is that it creates a sense of belonging that makes local
people less reluctant to the project (International Renewable Energy
Agency, 2020).

G. Conclusion
Indonesia could harness more unexploited renewable energy to
achieve carbon neutrality in the future. Despite its challenges, float-
ing PV technology offers a great opportunity to harness untapped
Indonesia’s solar potential. The abundant freshwater bodies and
large calm maritime areas could host the solar panels. Its vast po-
tential offers more opportunities to create green jobs, green energy,
increasing Indonesia’s role in the region. Not only solar energy for
self-consumption but also exporting its energy for helping its neighbor
to reduce carbon emissions.
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Chapter 6
Hydropower Technology:
Potential, Challenges, and the
Future
Harun Ardiansyah
A. Overview of Hydropower Technology in

Indonesia
As the COVID-19 pandemic started to become endemic, Indonesia’s
economy has been bouncing back and steadily growing. Indonesia is

one of the 20 countries with the largest economy—and is projected to
be the fourth-largest by 2050 (Hawksworth et al., 2017). Along with
economic growth, economic expansion is inevitable. And economic
development needs to be supported by a robust energy infrastructure
that will provide 24/7 energy for Indonesia. The electricity demand
is increasing for household use, but only for manufacturing and
industrial applications. On the other hand, Indonesia is facing a
climate change problem. As one of the most polluting countries in
H. Ardiansyah

Ardiansyah, H. (2022). Hydropower technology: Potential, challenges, and the future. In H. Ardiansyah,
& P. Ekadewi (Eds.), Indonesia post-pandemic outlook: Strategy towards net-zero emissions by 2060
from the renewables and carbon-neutral energy perspectives (89–107). BRIN Publishing. 89
DOI: 10.55981/brin.562.c6 ISBN: 978-623-7425-83-0 E-ISBN: 978-623-7425-87-8
the world, pressure is mounting for Indonesia to reduce—or even
eliminate—its dependence on fossil fuel energy (Ritchie, 2019). As of
2021, Indonesia is still relying heavily on fossil fuel energy. A report
by National Energy Council shows that more than 60% of Indonesia’s
electricity generation comes from fossil fuel energy (National Energy
Council of Indonesia, 2020). This motivates the Government to
introduce new policies to tackle the increasing demand for energy
and electricity and the increasing threat of climate. This includes the
introduction of Indonesia’s national energy plant (Rencana Umum
Energi Nasional-RUEN) by the Ministry of Energy and Mineral
Resources (Kementerian Energi dan Sumber Daya Mineral-ESDM)
and multiple ordinances of National Electricity Supply Business Plan
(Rencana Usaha Penyediaan Tenaga Listrik-RUPTL) by the State
Electricity Company (Perusahaan Listrik Negara-PLTN) (Peraturan
Presiden Nomor 22 Tahun 2017 Tentang Rencana Umum Energi
Nasional, 2017; PT Perusahaan Listrik Negara, 2021). In RUEN, it
is stated that Indonesia’s target 23% of its energy mix comes from
renewable energy by 2025 and 31% by 2050. These targets are backed
up by Indonesia’s Nationally Determined Commitment (NDC) in
COP26 (Humas ESDM, 2021).
These commitments and targets boosted Indonesia’s expansion
to renewable energy technologies, including hydropower technolo-
gies. Hydropower energy means converting the energy of moving

water into electricity. This includes both large-scale and small-scale
hydropower. In 2020, BP Statistical Review reported that hydropower
energy contributes around 7% of all energy mix in Indonesia, con-
stituting almost 20,000 GWh of total electricity production in 2020
(B.P. Statistical Review, 2020). Hydropower energy production has
been Indonesia's most significant contributor of renewable energy.
The electricity generated from hydropower constitutes more than 50%
of the total renewable energy produced in Indonesia. However, this
technology is very far from reaching its highest potential. With the
geography of Indonesia, hydropower should have been one of the
highest electricity sources. On the other hand, every development

always comes with a cost. In this case, the ecological price is one of
the highest costs that should be paid to develop a reliable hydropower
energy infrastructure.
Hydropower has many potential uses for power generation and
sustaining crops through irrigation. The hydro dams can also be used
for water supply, flood control, and navigation improvement. A typical
cross-section of a conventional hydro dam can be seen in Figure 6.1.
It contributes to tackling climate change as a renewable energy source
by generating low-carbon, reliable energy. In the long term, it can
produce electricity at a low cost and adjust electricity demand from
the consumer. This chapter explores Indonesia’s hydropower potential
and what can be done to achieve the goal. Also, this chapter explains
the challenges that make hydropower energy is not reaching its highest
potential. This chapter ends with two types of technology currently
emerging and should be expanded on a larger scale in Indonesia.
Source: Tennessee Valley Authority (2000)

Figure 6.1 Cross-Section of a Conventional Hydroelectric Dam
Hydropower Technology: ... 91

B. The Current Status of Hydropower in Indonesia
The hydropower resources are primarily abundant in Indonesia and
are blessed by divine nature. Indonesia has more than 800 rivers that
can be a potential source of hydropower. It is estimated that Indonesia
has the potential for 75 GW of electricity from more than 800 rivers
(Hasan et al., 2012). These resources make Indonesia the fourth most
significant potential for hydropower. However, because of the high
capital necessary, only around 34 GW of electricity can be exploited
from all the hydropower potential. Hydropower requires massive
and complex infrastructures to extract the power from moving water
into energy. These massive infrastructures are for the dams’ design,
construction, and operation. On the other, potential issues may also
come up due to social, political, and environmental issues.
Although there is no international consensus on the definition
of the scales of a hydropower plant, some suggest that a hydropower
plant that produces more than 10 MW of electricity is considered a
large-scale hydropower plant. Plants that generate power between
2.5 MW to 10 MW are considered small-scale hydropower plants.
Below that range, the mini-hydropower plant produces below 2 MW,
micro-hydropower makes below 500 kW, and the pico-hydropower
plant has electricity below 10 kW (Erinofiardi et al., 2017).
With all these potentials, Indonesia has built hydropower

infrastructures across the country. PT PLN has listed some of the
large-scale hydropower stations in some provinces in Indonesia in
Table 6.1.
Table 6.1 Some Operational Large-Scale Hydropower Stations in Indonesia

Installed Unit Installed Capacity
Hydropower Station Province
(MW) (MW)
Cirata West Java 8 × 126 1008
Saguling West Java 4 × 175 700
Sulewana-Poso III Central Sulawesi 5 × 80 400
Tangga North Sumatra 4 × 79.25 317
Sigura-gura North Sumatra 4 × 71.50 286

Installed Unit Installed Capacity
Hydropower Station Province
(MW) (MW)
Sutami/Brantas East Java 12 × 35 × 3 281
Musi Bengkulu 3 × 70 210
Sulewana-Poso II Central Sulawesi 3 × 65 195
Mrica Central Java 3 × 61.5 184.5
Asahan I North Sumatra 2 × 90 180
Singkarak West Sumatra 4 × 43.75 175
Jatiluhur West Java 7 × 25 175
Larona South Sulawesi 3 × 55 165
Sulewana-Poso I Central Sulawesi 4 × 40 160
Karebbe South Sulawesi 2 × 70 140
Balambano South Sulawesi 2 × 65 130
Bakaru South Sulawesi 2 × 63 126
Koto Panjang Riau 3 × 38 114
Karangkates East Java 3 × 35 105
Source: PT Perusahaan Listrik Negara (2021)
The Government of Indonesia has planned to increase the cu-

mulative capacity of large-scale hydropower plants in some Indonesia
regions. Specifically, the plan includes an additional 20 MW in the
east region of Indonesia, 21 MW in the Java-Bali connection, 11 MW
in Sumatra, and 18 MW in the eastern part of Indonesia (Erinofiardi
et al., 2017).
Besides the large-scale hydropower potential, Indonesia also

has some potential to build smaller-scale hydropower by utilizing
medium-sized rivers around the country. The utilization of small-scale
hydropower has been done since 2005. At that time, 0.45 MW of
electricity was generated by small-scale hydropower. Since then, the
development is not significant in the coming years. From 2006 to
2010, the electricity generated could only be increased to 0.69 MW
(Erinofiardi et al., 2017).
Another example is to utilize micro-scale hydropower. It is
estimated that the potential of micro-hydropower is about 459.91
MW. From that number, 20.85 MW of it has been developed by PLN
to provide electricity for rural areas (Hasan et al., 2012). Small- and

micro-scale hydropower plants might be an excellent option to expand
the utilization of hydropower plants, considering Indonesia’s distribu-
tion of electricity in the islands and the safety of fish and other biotas
in the water.
C. Challenges Facing Hydropower

All types of development must come with some risks and costs. Even
though in the previous section it is said that Indonesia has about 75
GW of electricity potential from hydropower, it is undoubtedly hard
to exploit all those potentials considering the landscape of Indonesia.
Any development would indeed have some impact on the surrounding
areas. These challenges include the engineering and socio-economic
impact of the projects.
1. Geographical Challenges
Although some experts approximated that the hydropower potential
in Indonesia is relatively more enormous than in some countries.
Undeniably, Indonesia’s geography can create challenges that need to
be solved or worked around. Indonesia indeed has many rivers that
flow across the country. However, the rivers are relatively short. This
geographical issue will create problems when a large-scale hydropower
plant is constructed. The construction of a large-scale hydropower

plant is done by blocking the passage of water to build a dam where
the water flow will be directed to the turbines to produce electricity.
Creating this dam will also generate a lot of impact on the plant site.
In a short river, the construction of large-scale hydropower will be
limited to the site constraint (Erinofiardi et al., 2017). It will need an
extensive engineering workaround to be able to make the large-scale
hydropower dams.
Another problem is related to electricity transmission. As an
archipelagic country, Indonesia has more than 17,000 islands. Al-
though some portions of those islands are not inhabited, the inhabited
islands need constant electricity transmission to create better-living
conditions. Electricity transmission has always been a problem for In-

donesia to achieve 100% electrification and balance energy resources.
It is well known that as electricity is transmitted among islands, there
will be some losses. The losses make the consideration of investing
in electricity transmission becomes harder. It also creates gaps in
electricity resources in some regions of the country. Right now, most
of the manufacturers are on the island of Java. This situation is due
to the excessive energy resources accumulated in Java. These gaps
will create inequality in the quality of life of the people in the region.
2. Ecological Challenges
Around the world, large-scale hydropower plants have affected fish-
ing activities and fishery production. These effects include direct and
indirect impacts of the large-scale hydropower project. The immediate
result is that the fish are killed, injured, or physically blocked from
their migration. This consequence is likely to happen, especially in
large-scale hydropower construction, where dams are the way to
generate electricity. Fish can get drawn into the turbines and can
injure the fish. Hydropower plants can also alter the habitat upstream
and downstream of the river. First, the existence of upstream and
downstream will create a barrier effect to the living organisms in the
stream. This separation will affect the population of fish and other
living organisms. These challenges can be avoided by implementing
mitigation measures to the dams. However, it will increase the cost

of hydropower plants cost. Upstream, if the condition is not well-
maintained, the reservoir can cultivate excess algae and weeds, crowd-
ing what has been a challenging environment for the living species
in the reservoirs. While downstream, hydropower dams can affect
the downstream flow regimes through hydropeaking. Hydropeaking
can also alter the upstream habitat as the regime changes from fast-
flowing lotic habitat to a slow-flowing lentic habitat (Baumgartner &
Wibowo, 2018). Therefore, fish and other living organisms face two
types of problems, the existence of dams and turbines create a physical
barrier to migration, and the dams alter the flow regimes and habitat
availability. Both issues can be mitigated. However, it will increase

the cost of building large-scale hydropower plants and make more
complicated investments.
For the fish migration problem, some research suggests that the
construction of fish passages can be considered to solve the problem.
However, some global evidence suggests that the fish passage may
cause more harm than good in some instances. Therefore, many
considerations need to be taken before constructing a fish passage. If
the construction of the fish passage is justified, it will be an excellent
way to maintain the river’s habitat and maximize the hydropower
plants’ value.
3. NIMBY-ism (Not In My Backyard Syndrome)

As mentioned in previous sections, the construction of large-scale
hydropower plants could dramatically alter the livelihood of all types
of organisms, including humans. Some villages might need to be
emptied and sunk to construct a dam. This decision will create socio-
economic problems for the local villagers occupying the villages from
far before the construction. It can make Not In My Backyard (NIMBY)
syndrome. NIMBY often refers to intense, frequently emotional, and
usually organized opposition to siting proposals that local community
residents believe will result in adverse impacts. In this case, if the
approach to the local community is not well-communicated, NIMBY
is inevitable. NIMBY is a common phenomenon that can be seen in

many countries. Furthermore, it does not limit to large-scale power
generation projects. NIMBY can also happen for other projects, such
as constructing Las Vegas-like Casino construction in Canada or
constructing twenty-four homeless shelters in New York City (Wex-
ler, 1996). As a result, it will significantly impact the construction of
hydropower plants. It is challenging for the vendor who builds the
hydropower plants and the regulators.

D. Current and Emerging Hydropower Technologies
With all the potentials and challenges explained in previous sections,
hydropower plants will still considerably affect the landscape of
renewable energy in Indonesia. Technologies have been developed
in hydropower construction to minimize the ecological effects of
hydropower plant construction.
1. Micro-hydropower Plants
As mentioned in previous sections, the geographical landscape is not
always suitable for large-scale hydropower plants. Although large-scale
hydropower plant is essential to provide baseload from renewable
energy, micro-hydropower plants can also be considered to expand to
provide reliable electricity for residential purposes. Micro-hydropower
plants can also be a decent option for delivering electricity and farm-
ing irrigation. Some locations of micro-hydropower plants are shown
in Table 6.2.
Table 6.2 Some Locations of Installed Micro-Hydropower Plants

No Province Number of Location Potential Capacity (MW)
1 South Sumatra 1 9.9
2 West Nusa Tenggara 4 2.02
3 East Nusa Tenggara 8 5.8
4 North Sumatra 1 7.5

5 West Sumatra 3 20.5
Total 45.72
Source: PT Perusahaan Listrik Negara (2021)
Of all these potentials, some of them have been built from 2011
to 2014. The micro-hydro power plants that have been constructed are
listed in Table 6.3. Some other plants are also built out of data provided
in Table 6.3. Some of them are the Van Der Wick irrigation channel
in Yogyakarta (11 kW capacity), Rimba Lestari in West Bandung
(18 kW capacity), Mendolo hamlet in Pekalongan (22 kW capacity),
Pancuang Taba, West Sumatra (40 kW capacity), Muaro Air, Jambi
(30 kW capacity), and Koto Ranah, West Sumatra (30 kW capacity).
The last three micro-hydropower plants are in Pesisir Selatan, West
Sumatra (Erinofiardi et al., 2017).

Table 6.3 Installed Micro-Hydropower Plants in 2011–2014
No. Province Location Capacity (kW)
1 North Sumatra Samosir, South Tapanuli 56.2
2 West Sumatra West Pasaman, Mentawai, Solok 54
3 Riau Kampar 8
4 Jambi Sarolangun 18
5 South Sumatra South Ogan Komering Ulu, Muara Enim 43
6 Lampung West Lampung 80
7 West Java Ciamis 24.4
8 East Java Situbondo 15
9 West Nusa Tenggara Lombok, East Lombok, Sumbawa 350
10 East Nusa Tenggara Ngada, East Manggarai, Central Rote, 273
Central Sumba, South Central Timor
11 West Kalimantan Kapuas Hulu, Landak 450
12 Central Kalimantan Gunung Mas, Lamandau 48.3
13 North Sulawesi Sangihe 14.1
14 Gorontalo Gorontalo, North Gorontalo, Bone 145.2
Bolango
15 Central Sulawesi Lamatoli Morowali 20.6
16 West Sulawesi Mamasa 120
17 South Sulawesi North Luwu 40
18 Southeast Sulawesi North Konawe, North Buton 28
19 Maluku West Seram 30
20 West Papua South Sorong, Maybrat, Manokwari 596
21 Papua Bintang Mountains, Bintuni Bay, 186.36

Yalimo, Jayapura
Total 2,600.75
Source: Kementerian ESDM (2016)
2. Pumped Storage Hydroelectricity Plants

Pumped Storage Hydroelectricity (PHS) Plants use two water reser-
voirs at two different elevations, as seen in Figure 6.2. PHS offers the
flexibility of electricity production based on the electricity demand.
When there is low electricity demand or abundant electricity gen-
eration from other sources, the plant’s power is used to pump up
the water from the lower elevation reservoir to the higher elevation
reservoir. On the other hand, when the electricity demand is at its

peak, the power will be generated through water flows from higher
elevations to lower elevations using a turbine. This generated power is
then transmitted to satisfy the demand. The loop continues depending
on the electricity demand. By this configuration, PHS can balance
the demand and supply of electricity and improve the reliability of
electricity services in an environmentally sustainable way (Stocks et
al., 2019).
Source: Tennessee Valley Authority (2012)

Figure 6.2 Racoon Mountain Pumped-Storage Plant

The concept of PHS is relatively new in Indonesia. As of Septem-
ber 2021, the World Bank has approved a loan to create Indonesia’s
first pumped-storage hydropower plant. This move aligns with the
Government’s pledge toward climate change and energy transition. At
the same time, the financing will be used to construct Upper Cisokan
PHS between Jakarta and Bandung. The expected capacity for this
facility is 1040 MW (World Bank, 2022).
PSH offers a unique opportunity to move beyond the first project,
especially in Indonesia. PSH can be used to store other renewable
energy such as solar PV and wind. PSH is a mature technology that
is cheaper than many alternatives for energy storage. Some PSH can

be put in remote areas far from rivers and residential areas (off-river).
It is possible as PSH can be a closed-loop system and located away
from rivers and residential areas. As long as two reservoirs have two
different elevations (100–1200 m altitude difference), it is possible to
create PSH. The round-trip efficiency is typically about 80%, which
is relatively good compared to other renewable energy sources. With
Indonesia’s topography, PSH can be a good opportunity for reliable
electricity storage at a relatively low cost (Stocks et al., 2019).
E. Conclusion
Indonesia has great potential in hydropower. However, those poten-
tials are limited to Indonesia’s geography and socio-economic issues.
Indonesia’s rivers are typically not ideal for constructing a large-scale
hydropower plant. Also, the ecological problems due to the possible
destruction of the river ecosystem and NIMBY syndrome can af-
fect large-scale hydropower plant projects. Although hydropower
plants are necessary to be the renewable energy baseload, the use of
hydropower can be expanded in different ways. One way is to reduce
the capacity of the hydropower plant and create micro-hydropower
plants. Micro-hydropower plants will be an essential addition to
residential and farming areas. The other way is to use pumped-storage
hydroelectric plants. PSH offers flexibility and reliability to fulfill the

supply and demand of electricity that can also be built far from rivers
and residential areas. In these ways, hydropower can be a renewable
energy backbone for Indonesia.
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Chapter 7
Wind Power in Indonesia:

Potential, Challenges, and Current
Technology Overview
Taufal Hidayat
A. Wind Power Technical Potential

Wind power has been used for more than two millennia since humans
put sails into the wind and continue to grow until now. According
to Global Wind Energy Council (GWEC), 2020 was the best year in

history for the global wind industry, with 93 GW of new capacity
installed, resulting in a cumulative capacity of 743 GW (Lee & Zhao,
2021). China has the largest wind power generation market globally
with a total of 206 GW or equivalent to 36% of the global market,
followed by the USA, Germany, and India with a total capacity of 96
GW, 2.4 GW, and 2.2 GW, respectively. The wind turbine has supplied
almost 6% of the total electricity demand in the world. Some coun-
tries have begun developing wind power as their energy resource in
T. Hidayat
King Abdulaziz University, e-mail: taufalhidayat4690@gmail.com

Hidayat, T. (2022). Wind Power in Indonesia: Potential, challenges, and current technology overview.
Southeast Asia. Vietnam, Thailand, Malaysia, and Indonesia represent
84% of the total installed renewable energy capacity in the Southeast
Asian country. Vietnam has the largest capacity with 24,519 MW
(34%), followed by Thailand, Indonesia, Malaysia, and the Philippines
with 11,860 MW, 9,861 MW, 8,046 MW, and 6,695 MW.
As mentioned in strategic planning in directorate general of
new, renewable, and conservation energy, Ministry of Energy and
Mineral Resources, 2020–2024, the mean annual speed in Indonesia
is only between 3 m/s–6 m/s, only half compared to the country in
the northern and southern hemisphere that have wind speed higher
than 8 m/s. That low speed happens due to the location of Indonesia,
which is on the equator with warm air and low pressure. Based on
that wind speed data, the technical potential of wind power notes in
the ministry of ESDM is about 60.6 GW, with the utilization being
about 0.15 GW until 2020. This utility is still far from the target in
RUEN that in 2020, at least Indonesia is already installing 0.6 GW
of wind power.
Based on the data from RUEN, Nusa Tenggara Timur have the
most significant wind power potential in Indonesia with about 10.18
GW, followed by East Java with 7.9 GW, West Java with 7.03 GW,
Central Java with 5.2 GW, and the South Sulawesi with about 4.19
GW. More detailed research shows that the highest wind speed is in

Sukabumi, West Java, with about 7 m/s, and Sangihe Island, with 6.4
m/s. Indonesia’s largest wind power plant is the District of Sidenreng
Rampang, South Sulawesi, with about 75 MW capacity.
Based on the Institute for Essential Service Reform (IESR) (Pus-
pitarini, 2021), wind power potential in each province in Indonesia
with hub heights of 50m and 100 m are shown in Table 7.1. From the
table, IESR reports that Indonesia has 25 GW wind potential with
50m Height and 19,8 GW with 100m hub height by using a minimum
mean annual wind speed of 7.25 m/s at 50 m and 7.99 m/s at 100 m.

Source: Hesty et al. (2021)
Figure 7.1 Indonesia’s Global Wind Speed at 50 m Height-Resolution 5 km
Table 7.1 Indonesia Wind Power Technical Potential

Province Technical potential
at 50 m hub height (MW) at 100 m hub height (MW)
Aceh 1,104.5 1,211.1
Bali 71.5 20.9
Banten 0.0 0.0
Bengkulu 0.0 0.0
DI Yogyakarta 0.0 0.0
DKI Jakarta 0.0 0.0
Jambi 0.0 0.0

Jawa Barat 780.3 418.6
Jawa Tengah 444.4 185.3
Jawa Timur 488.2 205.3
Kalimantan Barat 0.0 0.0
Kalimantan Selatan 120.4 86.7
Kalimantan Tengah 0.0 0.0
Kalimantan Timur 0.0 0.0
Kalimantan Utara 0.0 0.0
Kepulauan Bangka 0.0 0.0
Belitung
Kepulauan Riau 36.2 0.0
Wind Power in Indonesia: ... 111

Province Technical potential
at 50 m hub height (MW) at 100 m hub height (MW)
Lampung 70.4 0.0
Nusa Tenggara Barat 183.8 34.5
Papua 1,085.2 161.4
Papua Barat 0.0 0.0
Riau 0.0 0.0
Sumatra Barat 11.9 0.0
Sumatra Selatan 15.9 0.0
Sumatra Utara 246.2 38.4
Nusa Tenggara Timur 4,933.0 5,943.8
Sulawesi Utara 0.0 0.0
Sulawesi Tengah 15.2 0.0
Sulawesi Selatan 8,732.7 6,525.0
Sulawesi Tenggara 2.1 0.0
Gorontalo 65.1 9.7
Sulawesi Barat 107.2 0.0
Maluku 6,391.7 4,857.6
Maluku Utara 20.9 0.0
Total 24,926.8 19,698.4
Source: Puspitarini (2021)
B. Wind Power Problem

Although the potential of wind power as a renewable energy source
in Indonesia is growing steadily, there are some problems following
the installation and development of wind power.
1. Noise
Wind farms can cause mechanical and electrical noise. Some reports
and research studies show that the wind farm can produce noise at
sound pressure levels that cause negative emotion, insomnia, and
various symptoms.(Mar et al., 2020; Mittal et al., 2017; Yamani et
al., 2018) According to ISO, the allowable noise level in residential
areas is 45 dB, and for an industrial area up to 50 dB (ISO, 1996).

In certain circumstances, wind turbines can cause electromagnetic
interference with television signal reception or microwave transmis-
sion for communication. The height of the wind turbine is determined
by analyzing wind turbulence and wind strength data. Aerodynamic
noise is a function of many factors such as propeller design, rotational
speed, wind speed, and inflow turbulence.
Moreover, aerodynamic noise is also the main problem caused
by the wind farm. Some scientists argue that the wind kinetic energy
of large-scale wind farms can affect local and global climate change.
Therefore, it is essential to limit the speed of the wind turbine rotor
to below 70 m/s.
2. Ecological Problem
Wind farms also potentially affect the animal population, mainly bird
and bat populations. Some studies reveal that wind farms can disrupt
bird and bat migration. Moreover, the construction of wind farms also
potentially affects soil quality and the surrounding land.
3. Visual Impact
The wind farm requires a large installation area, which is impossible
to hide. The minimum distance of a wind farm is five times the rotor
diameter, which means that for a standard 2 MW wind turbine with
a 40 m blade diameter, the required area is 40 km2 for one turbine.

The critical area can disturb the view and reduce the agricultural land.
C. Wind Power Challenges in Indonesia

The prospect of wind power development is relatively high despite
several obstacles. In Indonesia, there are several obstacles or chal-
lenges, such as:
1. Low Wind Velocity

As a tropical country, Indonesia has a low annual wind speed between
3 m/s–6 m/s. The minimum wind speed required to spin the blade of a
wind turbine is 5 m/s, so as the mean annual wind speed in Indonesia,

the wind energy potential in Indonesia is low. Referring to the report
from IESR (Puspitarini, 2021), compared to solar photovoltaic with
7,714.6 GW potential, wind power has only 194 GW potential for
both onshore and offshore. Therefore, it requires further research to
optimize the wind energy potential, especially regarding the type of
blade that can spin at lower wind speed.
2. High Investment Cost.

The initial investment for a new wind farm is high. In 2017, the initial
investment for the wind farm was around USD 0.02/kWh (Lee &
Zhao, 2021). The primary investment comes from the area and turbine
cost. Therefore, further research is vital to reduce the cost of wind
farm energy.
D. Wind Power Technology

Various researches have been developed to increase performance
and mitigate the problem possibly caused by wind power resources.
Some related research can be adopted to answer the challenge of
implementing wind turbines in Indonesia. In this chapter, three
prominent technologies are detailed in terms of some research done
by the researcher. The researchers can implement the technologies to
improve the performance of wind power and mitigate the problem

caused by the implementation of wind power resources.
1. Wind Turbine Design

As mentioned in the previous chapter, low wind speed is one challenge
to wind power resources in Indonesia. The average wind speed in
Indonesia is around 3–6 m/s, which is not suitable for all types of
blades. The wind turbine will spin at the wind speed called cut-in
speed. For standard wind blades (HAWT), the cut-in speed is 6 m/s
which means that the wind turbine will not spin and start to produce
power below that speed. Scientists have developed some new blades
designed to reduce the minimum wind speed. For example, the im-
plantation of the vertical axis wind turbine can reduce the minimum

wind speed to only 2 m/s, which is more suitable to implement in
Indonesia. To discuss the recent technology related to blade design,
the classification of wind turbines should be detailed first. The wind
turbine design can be classified in the following ways.
As seen in Figure 7.2., wind turbines can be classified into two
main parts: horizontal axis wind turbine (VAWT) and horizontal
axis wind turbine (HAWT). VAWT is a popular type of wind turbine
utilized in many wind farms globally. The blades of this wind farm
have a vertical direction or are perpendicular to the land, while in
HAWT, the edges are parallel with the ground. The comparison of
both types of wind turbines is explained in detail in Table 7.2.
Figure 7.2 Wind Turbine Classification

Table 7.2 The Comparison of HAWT and VAWT
Characteristics HAWT VAWT
Rotor orientation Horizontal Vertical
Weight Heavier Lighter
Wind direction Specific wind direction All win direction
Wind speed range 6–25 m/s 2–65 m/s
Environmental impact Higher chance of bird Lower case of bird
collision collision
Noise level Higher Lower
Starting function Self-starting with high Not-self-starting with
starting torque lower starting torque
Cost and construction Higher Lower
Power produced Higher Lower
HAWT and VAWT have pros and cons, so the implementation of

both should consider the installation area’s requirements and condi-
tions. The standard VAWT should be more suitable for Indonesia with
low wind speed due to the low cut-in rate, but the energy produced is
also lower. Therefore, the researcher should elaborate more research
on improving VAWT to increase the energy produced by the wind tur-
bine. Based on the literature review, VAWT can be classified into two
categories: Savonius-Rotor and Darrieus rotor. Numerous researchers
have also modified each of these types to increase performance. The
detailed configuration of this type of VAWT is detailed in Table 7.3.

Darrieus rotors have excellent aerodynamic overall performance.
However, typically they are not self-starting simultaneously as the
Savonius rotors are self-starting but have low aerodynamic overall
performance. The Savonius rotors will feature with drag forces. A
mixture of them or in different hybrid Savonius-Darrieus rotors will
assist in resolving the self-starting venture for the Darrieus rotor and
the low aerodynamic overall performance of the Savonius rotor.

Table 7.3 The Modification of VAWT
Type Modification Model Benefit Drawback
Conventional Low starting Drag device; Low
(Menet & torque; Low an- efficiency
Rezende, 2013) gular velocity,
Conventional with Increasing Fixed wind direc-

curtain (Altan & power coef- tion; Drag device;
Atilgan, 2010) ficient Low efficiency
Without shaft (Ka- Higher maxi- Negative torque

moji et al., 2009) mum power coefficient;
coefficient Drag device;
Low efficiency
Savonius Elliptical blade Higher maxi- Drop-in perfor-
VAWT (Sanusi et al., mum power mance in the use
2016) coefficient of endplates link-
ing shaft
Double wind tun- Higher voltage Limited wind angle

nels (Promdee & range
Photong, 2016)

Multiple stages A higher power Consume More
with twisted blade coefficient com- material
(Saha et al., 2008) pares to two
blades
Three straight- Exceed Betz Lower average

bladed Darrieus limit 3 times power
rotors with upper during one rotor coefficient
Darrieus and lower surface revolution.
VAWT connectors
(Raciti Castelli et
al., 2011)

Straight-bladed Higher maxi- Specific wind
Darrieus rotor mum power direction;
with upstream coefficient Specific deflector
deflector. (Stout angle
et al., 2017)
Three V-shape higher maxi- energy loss on the

blade Darrieus mum blade tip region
rotor (Su et al., power coef-
2020) ficient
Darrieus Phi rotor Cost-effective Rotor height limi-

(eggbeater/curved tation;
rotor) (Islam et al., Uneven wind
2013) velocity on
the rotor blades
Cross axis helical Collect wind Not suitable for

Darrieus rotor energy from high wind
(Muzammil et al., horizontal and speed areas.
2017) vertical Suitable for small-
Directions. scale
Suitable for low wind turbines
wind speed
areas
Helical twist Dar- Lower noise Lower max. power
rieus rotor (Patel coefficient
& Sapariya, 2017)

Straight blade Aerodynamic Trailing vortices
Darrieus with efficiency; weaker;
wing tip devices Decrease the increase the total
(Mishra et al., induced drag. drag.
2020)
J-shaped straight Improves self- Change the opti-

Darrieus (Zamani starting mum TSR
et al., 2016) ability;
Less turbulence
and noise.
Darrieus Phi rotor Higher Reduce blade wake

(Hilewit et al., max power coef- interactions
2019) ficient;
Higher TSR
range
Lesser cost
Two-bladed Savo- Low TSR; Complex geom-
nius with three- It can function etry.
bladed straight at low wind

Darrieus (Nemati, speed.
2020)
Hybrid
Savonius
Two-bladed Savo- Less starting Lower energy pro-
- Daer-
nius with three- speed; duced compared
rius
bladed helical Self-starting to Darrieus rotor
Darrieus (Pallotta
et al., 2020)

Double stages Self-starting. Lower output
two-bladed power compares
Savonius with egg to the Darrieus
beater Darrieus rotor
(Wakui et al.,
2005)
Double stages Better effi- Lower power coef-

two-bladed Sa- ciency; ficient
vonius with two, Self-starting.
three, and four-
bladed straight
bladed Darrieus
(Ahmedov, 2016)
Three-bladed Self-starting; Complex geom-

Savonius and Better perfor- etry; Costly
thirteen-bladed mance
Darius (Belmili et compared to
al., 2017) Darrieus rotor

Combined Bach- Self-starting Complex model
type and H Dar- and higher cost
rieus rotor
(Hosseini &
Goudarzi, 2019)

2. Optimization in Wind Power Generation
a. Optimization Algorithm
Wind Farm Layout Optimization (WFLO) usually refers to placing a
wind turbine (WT) inside a particular area to maximize or minimize
the objective function while meeting various constraints and consid-
erations. However, the optimization process in WFLO is not an easy
task due to the complexity of the problem, so it cannot be solved by
using classical analytical optimization techniques. Researchers have
developed many optimization methods to solve the problem, includ-
ing heuristic, meta-heuristic, and other evolutionary algorithms—the
primary method described in Table 7.4.
Table 7.4 Optimization Method Algorithm

Algorithm Reference
Genetic Algorithm (GA) Abdulrahman & Wood (2017); Emami & Noghreh
(2010); Gao et al., (2020); Grady et al., (2005); Parada
et al., (2017); L. Wang et al., (2015)
Greedy Algorithm Chen et al., (2016); Ozturk & Norman, (2004); Chen et
al., (2013); Changshui et al., (2011)
Particle Swarm Optimi- Asaah et al., (2021); Chowdhury et al., (2013); Pso et
zation (PSO) al., (2021); Wang, S. M. G., (2014)
Ant Colony Algorithm Eroĝlu & Seçkiner, (2012)
(ACO)

Random Search Algo- Feng & Shen, (2015)
rithm (RS)
Evolutionary algorithm (Gonzalez et al., 2010; Kusiak & Song, 2010; Li et al.,
(EA) 2017; Mora et al., 2007; Pso et al., 2021; Y. Wang et al.,
2018)
b. Objective Function
Several objective functions can be defined in WFLO programming,
some works of literature use a single objective, and others use multi-
objective. The most widely used metrics are the wind farm Annual
Energy Production (AEP), the instantaneous power conversion, and
the Cost of Energy (CoE).

Power Conversion and Annual Energy Production
Four metrics equivalents to the AEP and the instantaneous power
conversion were found in the literature, such as (1) the wind speed
reaching each WT in the wind farm (to be maximized); (2) the wind
speed deficit at each WT (to be minimized); (3) the wind farm capac-
ity factor (to be maximized); and (4) the wind farm efficiency (to be
maximized), defined as the ratio of the wind farm power conversion
to the ideal wind farm power conversion (if no wake and turbulence
effects are taken into account).
AEP can be modeled as cited from Lackner & Elkinton, 2007;
Manwell & Mcgowan, 2014:
(7.1)
Cost of energy (CoE) and Levelized Cost of Energy (LCoE)

The cost of the energy (CoE) wind farm is the cost divided by
the total power production, as shown in Eq. 7.2:
(7.2)
The wind turbine cost is a function of the number of wind tur-

bines that can be modeled in Eq. 7.3 (Mosetti et al., 1994)
(7.3) Buku ini tidak diperjualbelikan.
Two equivalent definitions to the CoE that were identified in the

literature are (1) the Levelized Cost of Energy (LCoE) and (2) the
Levelized Production Costs (LPC). In addition, different definitions
of Financial Balance (FB) (or economic profits) were identified in the
literature. The main difference between FB models resides in which
costs are considered. Some works did not implement any performance
metric, as their objective was to treat a specific issue of the WFLO
problem (e.g., review assignments, derivation of mathematical ap-
proximations, etc.). LPC can be formulated as:

(7.4)
(7.5)
Sales Revenue, Profit, and Financial Balance (FB)

The formula is given as cited from Réthoré et al. (2014):
(7.6)
Where Wp is the sales revenue of the expected electrical energy

conversion over the wind farm operational lifetime, CD is the ac-
cumulated cost of components degradation, CO&M is the cost of overall
operation and maintenance, CF and CG represent variable investment
costs of foundations and electrical infrastructure, rc [%] is the interest
rate, ri [%] is the inflation rate, nL is the number of times interests
of loans have to be paid in a year, and T is the wind farm expected
operational time in years
Net Present Value (NPV)

The Net Present Value (NPV) is a widely used financial metric in

discounted cash flow analysis. It is a standard method implementing
the idea of the time value of money to appraise long-term projects,
such as wind farms. The NPV is similar in definition to the FB. It is
the sum of present values of individual cash flows over finite periods
Formulation of NPV can be given as cited from Gonz & Pay
(2012):
(7.7)

Where Nk represents the net income (or profit, which is the value
of the energy sales revenue minus all variable costs such as O&M
costs) produced by the wind farm during the kth year, ri represents the
equivalent discount rate or interest rate [%], which is an indicator of
the opportunity cost of capital goods (e.g., the higher the discount rate,
the lower the present value of the future cash flows), CINV represents
all the current capital investments during the expected operational
lifetime. VR represents any present residual income/outcome after
the project’s lifetime.
E. Wind Farm Design Variables and Constraints

The WFLO problem aims at defining the best value of the following
set of variables: (1) WTs emplacement locations; (2) WTs type (e.g.,
the technology including the control/operation strategy); (3) WTs size
(e.g., capacity); (4) number of WTs; (5) WTs hub heights; (6) type of
tower, sub-structure, and foundation; and (7) type, size and capacity
of auxiliary infrastructure (e.g., auxiliary roads, power collection
systems (i.e., transformer number/type/size/capacity and other electric
devices), electrical interconnection layout and capacity (i.e., power
lines type and length), repeater stations, etc.).
All variables are naturally bounded and constrained by physical
factors: (1) the WTs emplacement locations are bounded by the con-

sidered wind farm site area and constrained by local terrain aspects,
and environmental and climatological characteristics (e.g., land use,
restricted areas, geotechnical capacity, setback constraints, obstacles,
etc.); (2) the available technology constrains the WTs type; (3) the
size and (4) the number of WTs are constrained by the actual power
system capacity and the expected demand from the energy consumers.
In addition, the theoretical maximum number of WTs can be coarsely
calculated as the ratio of the wind farm site area to the individual WT
area of πR2, assuming that two or more WTs cannot be located within
an area of πR2; otherwise, blade collisions would occur. In practice,
the maximum number of WTs is much lower due to geometrical
and geographical constraints; (5) the minimum and maximum WT

heights are constrained by the rotor radius (R), the national aviation
regulations, and the available technology, respectively; (6) the type
of foundation is a function of the water depth (in the case of offshore
wind farms), the bearing capacity of the terrain, the expected load-
ing and the available technology; and (7) the auxiliary infrastructure
design, often considered an embedded optimization problem, is
constrained by all described variables and the current electric, civil
engineering, and communication system capacity.
F. Noise Reduction
Noise is the next problem of wind power generation that should be
tackled. Numerous experimental and numerical techniques have been
developed for noise mitigation by using the knowledge of the noise
mechanisms, which offer a perception of the aero-acoustic character-
istics of wind turbines. Some techniques and related research that can
be implemented to reduce the noise is shown in Table 7.5
Table 7.5 Noise Reduction Techniques for Wind Turbines

Technique Method Design
Reduction of Used a sinusoidal
influx turbu- leading edge to
lence noise reduce tonal noise
components (Hansen

et al., 2010)
Bio-inspired leading-
edge serrations based
on adaptations of the
barn owl (Chaitanya
et al., 2016)

Sinusoidal leading
edge based on adap-
tations of the barn
owl (Chaitanya et al.,
2016)
Leading-edge slits
over
serrations for the
reduction of aerofoil
interaction noise (Pa-
ruchuri et al., 2018)
With trailing edge
serration (Oerlemans
et al., 2009)
Trailing edge brushes

over serration (Finez
et al., 2010)
Reduction of Buku ini tidak diperjualbelikan.

trailing part
noise
Porous trailing edge

(Geyer et al., 2010)

Ogee type tip shape
using
acoustic analogy
(Geyer et al., 2010)
Reduction of
tip noise Reference tip and
shark tip (Maizi et al.,
2018)
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Chapter 8
Biomass Energy
Matthew Hardhi
A. Overview of Biomass Energy

Biomass energy is one of Indonesia’s forefront options of renewable
energy. Unlike fossil fuels, the net CO2 emission of bioenergy use
is close to 0 as, theoretically, the released CO2 can be reabsorbed

during the biomass growth stage. This condition makes bioenergy a
very lucrative source of efficiently utilized renewable energy. On top
of this, Indonesia is blessed with large forested areas, allowing differ-
ing options for optimizing biomass production capacity to produce
biomass-based energy. In this chapter, we will look at the definition of
biomass energy, how it is utilized, available sources, and its suitability
as one of Indonesia’s pillars of renewable energy to reach the target
energy mix in 2045.
M. Hardhi
IMT Atlantique, e-mail: matthew.hardhi@imt-atlantique.net

Hardhi, M. (2022). Biomass energy. In H. Ardiansyah, & P. Ekadewi (Eds.), Indonesia post-pandemic
outlook: Strategy towards net-zero emissions by 2060 from the renewables and carbon-neutral energy
perspectives (133–158). BRIN Publishing. DOI: 10.55981/brin.562.c8 ISBN: 978-623-7425-83-0 E-ISBN: 133
978-623-7425-87-8
B. Definitions
The terms biomass, bioenergy, biopower, and biofuel are frequently
used when describing this particular form of energy. Biomass is
defined as living or dead biological material and its by-products, in
the form of solid organic matter, which can be burned to provide heat,
electricity, or both (Are Biofuels Sustainable? First Report of Session
2007-08, 2008; Bajpai, 2020). Biomass components may include lignin,
celluloses, hemicelluloses, lipids, proteins, starches, water, ashes, and
other compounds.
Therefore, bioenergy is the renewable gas, liquid, or solid energy
product derived from biomass (Dahiya, 2020; Nyoman & Kumara,
2020). It falls into renewable energy because biomass absorbs the
sun’s power in its growth, converting CO2 into carbohydrates through
photosynthesis and storing them as chemical energy. Historically,
civilizations had heavily relied on biomass to provide them with
energy, usually for heating by burning wood. Today, it is the largest
source of renewable energy use, accounting for 70% of the total world
renewable energy supply and 10% of the total primary energy supply
in 2017 (International Renewable Energy Agency, 2020).
Biofuels are liquid fuels mainly produced from food and fodder
crops. This type of fuel is classified as the first generation of biofuels
and can be differentiated into biodiesel or bioethanol. Biodiesel is

made from oils of palm fruits and rapeseed, while bioethanol is pro-
duced from the fermentation of feedstocks containing high sugar or
starch content. Wheat, barley, sugarcane, and maize are the common
feedstocks used in bioethanol production.
Biopower is the electricity generated from biomass combustion
(Dahiya, 2020), either the sole fuel or combusted with coal, natural
gas, or other fuels. This joint combustion is termed co-firing. Biopower
plants use biomass feedstocks as fuel for the boiler, which is burned
to heat, passing water into steam, rotating the turbine, and producing
electricity. The steam produced can also be directly used for process

heating in industries. A graphical representation of how all these
terminologies interact can be seen in Figure 8.1.
Source: Author documentation (2021)

Figure 8.1 Definitions of Biomass Energy-Related Terminologies
Bioenergy has several advantages compared to traditional fossil

fuel usage. Firstly, biomass burning to produce energy does not release
harmful gases such as sulfur dioxide or lead oxide (Bajpai, 2020).
Burning biomass merely releases the CO2 absorbed by the biomass in
its growth to the environment. As long as the amount of CO2 released
as a fuel matches the amount absorbed during its development, it
is carbon neutral. For further measures, bioenergy can be used in
tandem with Carbon Capture and Storage (CCS) to create a net harm-

ful emission of CO2. In contrast, burning fossil fuel releases the CO2
absorbed a long time ago back into the environment, contributing to
the greenhouse effect.
Secondly, the utilization of biomass fits within the circular
economy scheme. Bioenergy is just one form of biomass that also
supplies humans with various uses such as food, feed, fiber, fertilizer,
and so on (International Renewable Energy Agency, 2020). Production
and processes of this biomass lead to wastes and residues. These wastes
are usually disposed of due to not having any economic value. These
wastes can be used as a potential bioenergy source, allowing to extract
all of the potential energy contained within the wastes, reducing the
Biomass Energy 135

number of wastes released. An example of this would be methane
emission from the wastes, which could be refined into biomethane
through anaerobic digestion or syngas through gasification (Ardolino
& Arena, 2019).
Biomass energy offers the option to decarbonize many sectors.
For example, biofuel can be used as an alternative to fossil fuel in the
transport sector. Bioenergy can power the district heating systems
in housing and building sectors instead of traditional coal boilers. In
some industry sectors, biomass may replace fossil-based feedstocks
(International Renewable Energy Agency, 2020).
C. Feedstocks
Once biomass has been processed through heating, microbial activities,
chemicals, or any combinations of these processes, it will be termed
“bioenergy feedstock.” Biomass needs to be converted to feedstock as
aside from direct combustion. Biomass cannot be directly converted to
electricity. Biomass has a relatively low value in bulk density (weight
per volume) (McKendry, 2002). This means for the same amount of
volume, biomass has a relatively low energy value than other energy
sources. Thus, we need to process more volumes of biomass to obtain
the same amount of energy as the traditional energy source, like fossil
fuel. Still, more logistics are also required to transport the biomass,

which translates to higher costs.
Therefore, it is necessary to convert raw biomass into logistically
feasible forms to transport. There are three processing steps: aggrega-
tion, densification, and palletization. Aggregation gathers up harvested
biomass into easily handled units (such as bales). Densification is the
process of increasing the feedstock's density through pressure and
other means to create a condensed feedstock. Finally, palletization is
the densification of feedstock into pellets. All of these are standard
methods of increasing the energy density of biomass.

D. Generation of Biofuels
Biofuels can be classified as primary or secondary biofuels based
on production. Primary biofuels are obtained from biomass in their
natural forms (wood pellets, firewood, wood chips), while second-
ary biofuels are obtained after biomass processing. These secondary
biofuels can be classified into first, second, or third-generation
biofuels. First-generation biofuels are obtained from fermenting
edible feedstocks (crops high in sugar content) to produce mostly
bioethanol or biobutanol. Since they are obtained from edible food
crops, the production of first-generation biofuels directly competes
with increasing food demand in many parts of the world.
Second-generation biofuels are obtained from mostly ined-
ible biomass through thermochemical and biochemical processes.
Bioethanol and biobutanol are synthesized from non-food, lignocel-
lulosic biomass. Since the main source of biomass is not food crops,
second-generation biomass suffers no competition from increasing
food demands. Lastly, third-generation biofuels are sourced from
aquatic biomass. Commonly used biomass includes microalgae, sea-
weed, or other microorganisms to synthesize biodiesel and bioethanol.
The advantage of this biofuel generation is low land usage, the high
lipid content of the biomass, and high atmospheric CO2 uptake. This
means they have more potential to become a carbon-neutral energy

source.
In the future, we might obtain biofuels from the fourth-generation
biomass, sourced from genetic modification of third-generation
biomass. However, this type of biofuel is still in the research and
developmental phase. Table 8.1 lists a detailed explanation and de-
scription of the various generations of secondary biofuels, bioethanol.
Biomass Energy 137

Table 8.1 Generations of Bioethanol
Generation Source Examples Processing Methods
1 Crops with high sugar Corn sugarcane, a. Direct fermentation with
and starch content Molasses, and microorganisms (generally
Tapiocas with the yeast Saccharomy-
ces cerevisiae) into ethanol
(7–10%)
b. Distillation (up to 96%)
The theoretical yield is 0.51 kg

ethanol.kg glucose.
2 Cellulose Bagasse, EFB, a. Simultaneous saccharifica-
Corn pulp, and tion and fermentation (SSF)
Rice husks b. Batch/Fed-batch
c. Separate hydrolysis and
fermentation (SHF)
d. Consolidated bioprocessing
(GST)
3 a. Microalgae Potential Microal- a. Harvesting (flocculation +
Rapid growth, gae Species: centrifugation)
Requires relatively Chlorella vulgaris b. Extraction (homogenization
smaller production area Spirulina maxima + hexane solvent)
Botryococcus sp. c. Biodiesel production with
b. Bacteria Chlamydomonas transesterification
Rapid growth, sp.
The metabolic pathway
can be genetically

engineered
Source: Amrullah & Hambali (2021)
E. Current Conditions in Indonesia

According to the latest National Energy General Plan (RUEN) (Presi-
dential Regulation No. 22/2017), Indonesia plans to achieve a 31%
energy mix from New and Renewable Energy (NRE) in 2050. Just last
year, the National Development Planning Agency (Bappenas) plans to
achieve a 70% NRE mix in 2050 to meet the goal of a carbon-neutral
Indonesia in 2060, where 100% of energy resources are projected
to come from NRE (CNN Indonesia, 2021). In contrast, the NRE
mix reached only 11.2% of the total energy mix in 2020. Naturally,

concerns were raised due to several challenges that complicate the
implementation of such directives in Indonesia. As follows:
1. Shortage of available land for production of NRE;
2. Relatively high investment costs in NRE still deter investments
in the sector;
3. Government subsidy makes fossil fuels cost cheaper, hence slow-
ing the transition to NRE;
4. Lack of knowledge and research in NRE technology, as well as
lack of human resources;
5. High-interest rate from the banking sector for NRE investments
due to high risk associated;
6. Intermittent energy supply from NRE power plants demands an
efficient energy storage facility.
However, despite these facts, numerous efforts have been made
to integrate more biomass sources into the total energy mix. The
Ministry of Energy and Mineral Resources’ 2020–2024 Strategic Plan
(Ministry of Energy and Mineral Resources, 2021a) had set several
directives as follows:
1. Develop bioenergy power plants with a total capacity of 1,295
MW in the five years between 2020 and 2024, utilizing crude
palm oils (CPO) (Figure 8.2).
2. Implement co-firing method in existing coal-based steam power

plants, where the co-firing feedstocks would come from garbage
pellets, wood pellets, and wood chips (Figure 8.3).
3. Develop small-scale biomass power plants (with a capacity rang-
ing from 20–200 kW) to be distributed strategically. Biomass
wastes used as fuel include palm fibers, rice husks, and sugarcane
bagasse.
4. Develop bio-based Compressed Natural Gas (CNG) utilizing
>95% purity biogas consisting of methane (CH4) to replace
fossil-based natural gas.
5. Develop the market for waste-to-energy power plants.
6. Implement the B30 program to increase biofuel mixture in diesel
fuel (30% instead of the previous 20%) to reduce imports.
Biomass Energy 139

140
Indonesia Post-Pandemic Outlook ...
Source: Ministry of Energy and Mineral Resources (2021a)
Abbreviations are as follows: PLTBm-biomass power plant, PLT Bio-bioenergy power plant, PLTBg-biogas power plant, PLTSa-waste-to-energy
power plant, PLTBn-biofuel power plant
Figure 8.2 Bioenergy Power Plants Projects Based on National Electricity Supply Business Plan (RUPTL) for 2019–2025

Source: Ministry of Energy and Mineral Resources (2021b)
Co-firing is predicted to contribute as much as 18 GW to steam power plants in 2024.
Figure 8.3 Steam power plants implementing co-firing method commercially
with 1–5% biomass portion.
Indonesia comprises 188.20 million hectares of land area with

various soil and climate types in terms of land use. Agricultural
farming of different kinds of valuable plant commodities is possible,
including bioenergy plants such as palm oil, sugarcane, cassava, and
others. According to Hambali et al. (2016), around 76.40 million
hectares are suitable for growing these valuable crops, which gives

plenty of potential for biomass utilization. However, efficient biomass
utilization requires the maintenance of a stable feedstock supply.
An established supply chain of biomass feedstock can be selected
by having local governments construct roads in rural areas. Cur-
rently, farm roads exist within biomass plantation areas for in-plant
transportation needs. However, they are seldom connected to district
arterial roads. Connected routes will allow easier transport of biomass
feedstock into a centralized refinery location (Zhou et al., 2020). Both
national and local governments must work on logistics laws to build
better road infrastructures. These will assist in reducing the cost of
biomass production, in which transportation and pre-processing can
make up to 43% of the total production cost (Labriet, 2013).
Biomass Energy 141

F. Biomass and Indonesia
Due to being an archipelago with many scattered, isolated islands,
perfectly distributed energy access is difficult due to technical issues
related to electrical transmission and distribution (Haryana, 2018).
As such, small islands in remote areas need to be equipped with
the capacity to self-produce and supply their energy demands. As
fossil fuel reserves are not available to most islands, biomass energy
becomes a suitable source of energy resources. It is relatively simpler
to process (combustion is sufficient) and is located near the equator;
the year-long solar irradiation allows the year-long cultivation of
biomass sources.
Therefore, as biomass sources are accessible even to households
and small-scale farms, it is an important energy resource for Indo-
nesia. One accessible option for biomass utilization is processing the
biomass of agricultural residues, either wood waste or crop waste
(herbaceous, fruit, etc.) (Brunerová et al., 2018). Currently, this waste
biomass utilization in developing countries is relatively low, represent-
ing an untapped sector that could be developed further to fill the total
energy demand (Brunerová et al., 2017).
As such, utilizing biomass as an energy source is an attractive
proposition, especially considering the potential to reach a net-zero
emission from its utilization, as long as the amount of carbon absorbed

equals or is less than the amount emitted from its usage. While crop
residues are large and have a significant energy potential, many
residues must be left on-site to protect soil productivity and prevent
erosion (Scarlat et al., 2010), ranging between 15–60% for most crops.
However, the remaining amount still leaves a potential for further
processing and use.
1. As with other Southeast Asian countries, Indonesia is one of the
top producers of agricultural commodities. These commodities
include rice, sugar, cane, palm oil, coconut, and rubber, with
the most promising residues for biomass energy being rice husk,
sugarcane bagasse, oil palm residue, and wood residues. Cur-

rently, applicable technologies to extract this energy source are
direct combustion/biomass co-firing: direct heat and electricity
production (Tun et al., 2019).
2. Anaerobic digestion: For animal wastes to produce biogas
(methane/CH4).
3. Pyrolysis: For bio-charcoal, gas, and oil production.
4. Gasification: For agricultural waste and woody residues (sawdust,
wood chips, etc.)
The following table (Table 8.2) represents the total potential of
biomass energy in Indonesia as of 2019.
Based on this data, there are ten total types of biomass sources in
Indonesia, with palm oil dominating the potential for energy produc-
tion. According to Nyoman & Kumara (2020), the meat and kernel
of palm fruits can be converted to biodiesel oil, while their shells
can be used as fuel in co-firing coal power plants (PLTU). We could
extract methane from livestock waste, landfill garbage, and palm oil
mill effluent to power biogas plants (Figure 8.5).
Until 2019, the total installed capacity of bioenergy power plants
amounts to 1,890 MW (Ministry of Energy and Mineral Resources,
2021a). The estimated total potential for biomass in Indonesia is
around 32 GW (Figure 8.4). Therefore, the gap between actual capacity
and estimated potential can still be utilized to increase Indonesia’s

NRE energy mix.
The rest of the biomass types, namely sugarcane bagasse, non-
producing rubber tree trunks, coconut shells and fibers, rice husks,
corn cobs, and cassava stems, can be converted into biofuel power
plants. In general, as long as the waste biomass is plenty, possesses
good sugar content, and comes from easy-to-grow crops (Amrullah
& Hambali, 2021), it can be a potential source of biofuel production.
Biomass Energy 143

144
Table 8.2 Potential of Biomass Energy in Indonesia
Energy Potential (in MW)
Province Palm Sugar Rubber Rice Total by
Coconut Corn Cassava Wood Livestock Garbage
Oil Cane Wood Husk Province
Aceh 646 - 233 3 240 13 1 - 17 21 1,174
Bali - - - 4 131 10 1 - 23 22 191
Bangka Belitung 214 - - - 3 - - - - 5 222
Banten 41 - - 3 297 3 1 - 2 117 464
Bengkulu 434 - 108 - 79 11 1 - 4 8 645
Central Java - 138 - 10 1,431 262 39 3 70 278 2,231
Central Kalimantan 1,234 - 140 4 99 1 2 18 2 10 1,510

Central Sulawesi 117 - - 11 158 18 1 1 8 11 325
DKI Jakarta - - - - 1 - - - - 126 127
East Java - 630 - 11 1,476 460 35 4 140 367 3,123
East Kalimantan 837 - 43 1 58 2 1 5 3 15 965
East Nusa Tenggara - - - 3 90 64 17 18 28 20 240
Gorontalo - 20 - 3 42 54 - - 7 4 130
Jambi 840 - 687 6 96 4 1 148 4 15 1,801
Lampung 179 326 114 6 448 217 89 6 27 57 1,469
Madura - - - 3 120 90 5 - 32 31 281
Maluku - - - 4 13 2 1 3 3 7 33
North Kalimantan 118 - - - - - - - - - 118
North Maluku - - - 14 9 2 1 1 2 5 34
North Sulawesi - - - 15 88 45 1 - 4 10 163

Energy Potential (in MW)
Province Palm Sugar Rubber Rice Total by
Coconut Corn Cassava Wood Livestock Garbage
Oil Cane Wood Husk Province
North Sumatra 1,927 30 220 5 472 111 11 4 16 99 2,895
Papua 42 - - 13 16 1 1 9 2 12 96
Riau 2,888 - 430 24 88 5 1 962 6 32 4,436
Riau Islands 10 - - 1 - - - - 1 3 15
South Kalimantan 574 - 386 2 281 9 1 13 5 19 1,290
South Sulawesi 25 22 - 5 696 119 7 18 36 33 961
South Sumatra 1,187 43 70 3 492 10 4 91 9 62 1,971
Southeast Sulawesi 47 - - 2 69 11 3 1 8 10 151
West Java 22 62 - 6 1,772 90 28 4 15 558 2,557
West Kalimantan 758 - 285 4 205 19 3 7 6 23 1,310
West Nusa Tenggara - - - 3 315 31 1 1 25 28 404
West Papua 33 - - 1 4 - - 12 3 2 55
West Sulawesi 134 - - 2 56 5 1 - 3 5 206
West Sumatra 485 - 55 5 337 36 2 1 12 23 956
Yogyakarta - 15 - 3 126 30 9 - 14 27 224
Total
Total by Type 12,792 1,286 2,771 180 9,808 1,735 269 1,330 537 2,065 Potential:
Biomass Energy
32,773
Source: Nyoman & Kumara (2020)
145

Figure 8.4 Biomass Potential per Province
146
Figure 8.5 Biomass Potential per Type
As of 2019, the provinces of Riau, East Java, and North Sumatra

ranked top three for potential biomass energy production. This is
because Riau province possesses many palm oil plantations, contribut-
ing to a potential of 2,888 MW production. In East Java province,
widespread rice farming contributes to the prospect of 1,476 MW out

of 3,123 MW total potential. Lastly, for North Sumatra province, 1,927
MW out of 2,895 MW can be attributed to palm plantations. Palm
oil and rice husk dominate Indonesia's potential energy production
resource.
A very productive crop, the palm can produce oil seven times
higher than rapeseeds and eleven times higher than soybean (per hec-
tare) (Hambali & Rivai, 2017). Fresh fruit bunches (FFB) are harvested
and converted into crude palm oil (CPO), producing an abundant
amount of waste such as empty fruit bunches (EFB), mesocarp fiber
(MF), palm kernel shell (PKS), palm kernel meal (PKM), and palm
oil mills effluent (POME). The amount of waste is significant as palm
Biomass Energy 147

oil plantations can be found in 65% of the provinces in Indonesia and,
therefore, are a substantial source of biomass.
POME, for example, can be used as a feedstock for biogas produc-
tion. The remaining liquid waste from this activity can still be used
as a fertilizer and medium for microalgae growth as it is still rich in
nutrients. Both mesocarp fiber (MF) and palm kernel shell (PKS)
can still be utilized as boiler fuel to produce process heat in the palm
oil mill, while PKS can also be processed as bio-pellets to be used
as fuel. Empty fruit bunches (EFB) and tree trunks can be utilized
as mulching material to help maintain soil humidity, inhibit weed
growth, compost raw material, and be a source of fiber for various
composite products. These qualities make the utilization of palm oil
wastes an interesting proposition.
G. Suitable Biofuels for Indonesia

Simply under volume alone, as represented by the data in the previous
section, rice husks and palm oil are seemingly the prime candidates
for valorization into biomass energy sources. Rice husk can either be
fermented into bioethanol or converted to solid biofuels, while palm
oil wastes can be converted into solid or gaseous biofuel. POME can
be treated before being discharged into the environment to produce
biogas. Palm waste’s mesocarp fiber (MF) and palm kernel shell (PKS)

can be converted to solid biofuel.
Based on current challenges facing NRE implementation in Indo-
nesia, the source of biofuels must meet several criteria for successful
implementation, which can be seen in Table 8.3 below.
Table 8.3 Author’s Concerns and Implications Toward Types of Biofuels

Concerns Implications
Shortage of available land It must be sourced from abundant sources without
requiring extra land clearance.
High investment costs Biofuel production processes selected must be
deter investors relatively cheap.

Concerns Implications
Government subsidy on The biofuel selected must be common and well-
fossil fuels known to ease the transition from fossil fuel
subsidy to NRE subsidy.
A well-known biofuel type among the public will
help ease implementation and integration.
Lack of research and hu- Biofuel production processes must be kept simple.
man resources The processes must not require too high of an ex-
pert to run and rely on too specialized technology.
High-interest rate from fi- Technology for biofuel production must already be
nance sectors for high-risk on commercial-scale.
technology It must also already be established for a long time.
Intermittent energy supply The biofuel must always be readily produced
requires an efficient energy without delay.
storage facility
H. Rice Husks
Rice husk is the main biomass by-product of rice harvesting, amount-
ing to almost 20% of the total cereal production in the rice industry
(Cacua et al., 2018). It has a low density at around 122 kg/m3. Cur-
rently, rice husks possess close to zero economic value and are often
thrown away post-rice harvesting. Rice husks waste contributes to a
significant part of total biomass waste generated from rice cultivation.
Moreover, rice husk contains low nutrients yet a high level of silica.
Thus, it is not suitable to be processed as fodder. Instead, it is com-

monly used to produce porous sorbents, concrete with rice husk ashes,
solid fuel, and feedstock in biofuel production (Nanda et al., 2020).
Unlike corn grains- (starch) or sugarcane- (sucrose) based bioethanol
(first-generation), rice husk is inedible, lignocellulosic biomass. It
is not used as a food source and thus does not compete with the
increasing demand for food in many parts of the world (Madu &
Agboola, 2018).
However, Brunerová et al. (2017) and Bakker (2000) found
that rice husks possess significant ash content (19–21%), alkali, and
potassium which cause agglomeration fouling and melting in the com-
ponents of boilers during combustion. High ash level is also reflected
Biomass Energy 149

in the low calorific value of rice husks at around 14–16 MJ/kg. A high
ash content leads to clogging in combustion device grates due to the
presence of bottom ash, obstructing the pathway for combustion air
(Malaťák & Passian, 2011).
Furthermore, its components (cellulose and hemicellulose)
are hard to ferment/degrade biologically into ethanol. Proper pre-
treatment methods and enzyme selections for the saccharification and
fermentation steps are required to convert bioethanol from rice husk
efficiently. The reason for this is that rice husks contain a combination
of cellulose (28.6–41.5 wt%), hemicellulose (14–28.6 wt%), and lignin
(20.4–41.5 wt%) (Nanda et al., 2020). Together, they form a stable
3-dimensional structure known as lignocellulose in the cell walls,
making the individual monomers difficult to separate (Figure 8.6).
The stability of these structures impedes access of cellulolytic enzymes
to hydrolyze cellulose, the carbon source that will be fermented to
ethanol by yeast. Therefore, the lignocellulose needed to be delignified
by pre-treatment processes that available in various ways, including
physical, physicochemical, chemical, and biological pretreatment.
Source: Goodman (2020)

Figure 8.6 3D Representation of Hemicellulose Linking to Cellulose and Lignin

Pre-treatment of biomass is usually done to alter its physical and
chemical properties to aid in processing and transport. Preliminary
pre-treatment steps usually taken include size reduction, leaching
(washing), compaction (agglomeration), briquetting, and palletiza-
tion (Nanda et al., 2020). They increase the low density of untreated
rice husks complicating the transportation and subsequent biomass
utilization.
Altering the chemical properties of the rice husks, i.e., the ligno-
cellulosic structure, requires physical, physicochemical, chemical, or
biological pre-treatment methods. All the pre-treatment processes have
their specific advantages and disadvantages. Chemical pre-treatment is
very accessible as no specialized equipment is required in the process,
and the chemicals used are usually acid, alkali, sulfur dioxide, ammo-
nia vapors, and lime (Nanda et al., 2020). Alkali-based treatments are
the most effective because they break the ester bonds between lignin,
hemicellulose, and cellulose (Goodman, 2020). However, chemical-
based pre-treatment is relatively more expensive. Biologically based
pre-treatment is often slower, while environmentally pre-treatment
tends to be inefficient. All these pre-treatment processes have been
extensively studied and can be applied commercially.
I. Re-evaluation of Investment and Subsidy Priority

As stated in previous sections, one of the major hurdles in utilizing the

maximum potential of Indonesia’s biomass energy resources lies in the
lack of interest in the financial and economic sectors. Skepticism from
investors, banks, and entrepreneurs toward renewable energy projects
contributes to the relative lack of interest in transitioning to NRE.
While regrettable, these concerns are valid due to the government’s
lack of incentives and push towards funding NRE projects. Currently,
the Government is occupied with recovering economy hits by the
pandemic. The amount the government plans to subsidize towards
fossil-based energy rises to 134 trillion Rupiah in 2022, compared
to 128.5 trillion Rupiah in 2021 (Ridwan, 2021). This huge number
of investments can be partitioned to boost incentives towards NRE
utilization, for example, by subsidizing biofuel prices in the market
to become more competitive than fossil-based fuels.
Biomass Energy 151
However, the issue related to government subsidy is more than
just a reluctance towards transitioning towards NRE. The 134 tril-
lion Rupiah subsidy planned for 2022, for example, comprises a
77.5 trillion-rupiah subsidy towards LPG (3-kg) and fuel oil prices.
These subsidies are meant to alleviate the rise in oil prices, impact the
economy due to the pandemic, fluctuations of the currency exchange
rate, and improve the livelihood of many people. All layers of society
use fuel oils for various economic activities, and thus, disruption
towards the price would impact heavily, thus explaining the need for
subsidy for fuel oil. The same applies to LPG (3kg); they are a typical
household and economic goods used by most societies. These include
households, small-and-medium businesses, and street vendors. The
subsidy is warranted to ensure that people’s livelihood tied to this
goods is not affected, which will impact the economy in various ways
(increased LPG price would increase the price of goods too, reducing
incentives of doing economic activities).
Therefore, subsidy allocation is sensitive and requires prudent
planning from many sectors and stakeholders. Looking from a pure
energy or environmental viewpoint would be tantamount to folly.
However, considering only the welfare of the general society without
feeling the burden the subsidy puts on the State Budget is also unwise.
As of 2022, state spending exceeds state income by 868 trillion Rupiah,
or about 4.5% of the GDP of Indonesia (Tim Kementerian Keuangan,

2022). To bring the deficit below 3% of the GDP in 2023, there is a
limit on subsidies that can be allocated from the state budget.
An interesting point would be to discuss the remaining fraction
of the 2022 energy subsidy, in which a 56.47 trillion-rupiah subsidy
has been allocated towards assisting electricity costs. As of June
2021, out of 73.341 MW installed power plant capacity in Indonesia,
coal-based steam power plant still dominates electricity production
at 47% of total installed capacity (Indrawan, 2021). This implies at
least half of the total investments are allocated to lowering the cost
of electricity produced from coal power plants. Suppose this amount
is instead redirected towards reducing the electricity price from NRE
sources. In that case, this will help keep the electricity price affordable

to the general public, while increasing the incentives for investments
in NRE-based power plants. While the burden on the state budget
may stay similar, the overall carbon emission would be reduced due to
relying on carbon-neutral/carbon-negative NRE to produce electricity.
Source: Jena (n.d.)

Figure 8.7 Direct Biomass Combustion-Diesel Hybrid Power Generation System
A lucrative investment option would be small-scale power

generation in rural communities situated in Indonesia’s archipelago’s
remote, scattered part. Utilizing the cheap yet abundant agricultural
wastes commonly produced on rural farms, biomass-based power
plants can be alternative to diesel power generators widely used in
remote areas. The biomass can be processed into electricity through
direct combustion, gasification, or anaerobic digestion. All are well-

known commercially mature technologies. A micro-gas turbine will
be coupled with a generator to produce the required electricity. From
the environmental side, the utilization of agricultural residues does
not heavily affect the food supply in the region and can contribute to
a net-zero CO2 emission. The biomass generator system could even
be coupled with a diesel generator to form a biomass-diesel hybrid
system. When the electricity demand rises during peak load times,
diesel generators could be activated to meet the extra demand from
residents.
The main advantage of this setup of a hybrid system is the reduc-
tion in the Levelized Cost Of Electricity (LCOE) production from
biomass resources. LCOE represents the average revenue per unit
Biomass Energy 153

of electricity generated required to recover the building costs and
operate a generating plant during an assumed financial life and duty
cycle. The higher the LCOE, the higher the price required to produce
said electricity. A techno-economic study regarding biomass-diesel
hybrid system implementations was done by Dejucos et al. (2019) on
thirteen off-grid islands in the Philippines. This study is fascinating
as the area they surveyed was more or less similar to the numerous
remote islands not connected to the electricity grid. They found that
the LCOE of such a hybrid system can achieve an average reduction
of 4.57%. Up to 25% reduction is possible in the case of low energy
demand and high biomass availability and a moderate decrease in
diesel fuel consumption of 5%. The LCOE of the hybrid system is
lower than a purely diesel-based power generation system, implying
the cost of producing electricity with an integrated biomass utilization
is cheaper. With a high biomass availability in the individual islands
due to farming activities and low energy demand due to low popula-
tion density and lack of energy-intensive infrastructures, this hybrid
system can be the solution for powering remote areas in Indonesia.
Aside from the reduction in LCOE, there are at least four non-
technical advantages to implementing said systems. Firstly, we avoid
connecting every island to the national electricity grid by producing
locally on each remote island. This represents a major saving in costs.
Secondly, implementing such systems gives extra stimulus to the local

economy. By providing a value for the wastes produced from farming
activities, we can increase the total income made by the locals by
paying them a price to deliver their agricultural biomass for electricity
production use. Thirdly, local electricity production alleviates locals'
need to rely entirely on the national electricity grid. A localized
electricity production means an uninterrupted supply of electricity
as all the electricity produced by the plant, assuming sufficient genera-
tion capacity, is only used for the localized area. Excess electricity
usually sent to the grid can be stored in storage systems (batteries)
used in emergencies. Lastly, directly related to the reduced LCOE of
the hybrid system, electricity prices would go lower, thus ensuring
that electricity is available for all parts of the population, improving

their life quality. By building numerous energy-independent remote
areas, we could reduce the state budget required to subsidize electricity
use in these areas and thus alleviate the economic burden caused by
energy subsidy.
The last point of discussion would be to benchmark the current
investment climate abroad toward green funding projects. Looking
at France as one of the forerunners among EU countries toward a net
carbon emission, there are at least three central institutions related to
climate commitments in the French financial sectors: banks, insurers,
and asset management companies. All banks and insurers, with the
majority of asset managers, have adopted a thermal coal exit date
in 2030 for OECD countries and 2040 for the rest of the world. In
addition, an increasing number of participants are now excluding the
financing of companies developing new coal projects. In contrast, for
oil and gas projects, the financial actors are still reluctant to complete
the phase-out from oil and gas financing (ACPR & AMF, 2021). While
improvement in commitments is still warranted from these financial
actors, some entities like La Banque Postale, one of the prominent
banks in France, have decided to stop financing oil and gas projects by
2030. Another major bank, Société Générale, has also signed an agree-
ment with the European Investment Bank for a collective risk-sharing
and funding participation for a total of EUR 240 million dedicated to
supporting renewable energy projects. Such agreement is an example

of financial institutions’ commitments toward energy transition.
Taking note of the above example, it is natural that Indonesia’s
financial sectors need goodwill to follow suit with their actions.
To support the commitment toward clean and renewable energy
transition, it is imperative to concentrate investments, loans, and
projects in the NRE sector, leaving behind a portfolio of fossil-based
energy. While a radical change is warranted, progress can be made
in small steps. This change includes improving the attitude against
NRE projects, from one that is purely economical and cost/benefit
concentrated to a more holistic approach. That is to say, to have a
future for everyone, it is dire to switch to NRE as soon as possible,
and that means looking beyond mere investment returns.
Biomass Energy 155

In closing this chapter, it is also essential to consider the need for
talented human resources and researchers to fully integrate biomass
energy into the national energy mix. Fresh graduates, professionals,
and academic researchers all contribute to successfully implement-
ing a feasibility study, all the way into the commercial application of
biomass energy. When we all work together, united under a common
cause of alleviating climate change, we can achieve our goal of sustain-
able clean energy accessible to all Indonesians. Therefore, academic
lecturers need to ensure that young students and fresh graduates are
aware of the urgency of climate change. Without haste, there will be
no incentive for action.
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Chapter 9
Geothermal Energy in Indonesia

Ghibran Fahreza Dipayana & Rahmat Agung Ramadhan
A. Overview of Geothermal Energy in Indonesia

Many countries have committed to decreasing fossil energy con-
sumption and transforming their energy mix into cleaner and more
sustainable energy. This means that the use of renewable energy is

going to rise significantly. Indonesia has signed and joined other
countries in Paris Agreement. However, some questions remain.
The most common question can be the type of renewable energy
suitable for Indonesia’s geological and geographical conditions. Argu-
ably, the answer to that question is geothermal energy. Geothermal
is classified as renewable energy because no emissions are released
during production. Geothermal energy is derived from the flow of
the Earth’s internal thermal energy to the surface, which includes
G. F. Dipayana & R. A. Ramadhan

Ufa State Petroleum Technological University, e-mail: dipayanaghibran@yahoo.com

Dipayana, G. F. & Ramadhan, R. A. (2022). Geothermal energy in Indonesia. In H. Ardiansyah, & P.
Ekadewi (Eds.), Indonesia post-pandemic outlook: Strategy towards net-zero emissions by 2060 from
the renewables and carbon-neutral energy perspectives (159–180). BRIN Publishing. 159
thermal energy from the original formation of the planet and the
heat-producing radioactive decay of elements in the Earth’s mantle
and crust (Berrizbeitia, 2014). Indonesia is located among three active
tectonic plates, leading to Indonesia’s strategic position as one of the
wealthiest countries in geothermal energy. To produce heat below the
surface, Indonesia needs to build a production well and integrate it
with other infrastructures such as steam gathering facilities. Finally,
the subsurface heat can be easily transferred to the surface with a
fracture system.
From a geological point of view, Indonesia has 76 historically
active volcanoes, making Indonesia one of the countries with the
most significant number of active volcanoes (Volcano Discovery,
2022). The data also shows that the heat flow of geothermal energy
in some regions of Indonesia to the surface is up to 100% greater
than the average heat flow at the surface at around 120 milliwatts per
square meter compared to the usual value of 60 milliwatts per square
meter (Southeast Asia Research Group/SEARG, 2002). This potential
provides excellent conditions for developing geothermal energy. Indo-
nesia is listed as one of the wealthiest countries in geothermal energy.
Almost 40% of geothermal resources are in Indonesia, according to
mapping done by several institutions. These resources and geothermal
reserves can be one solution, among others, to eliminate fossil energy
as a baseload as it is estimated equal to 219 million BEO and can

generate almost 27.00 GW of electricity (Suharmanto et al., 2015).
The Minister of Energy and Mineral Resources of the Republic of
Indonesia has published data on geothermal sites in Indonesia, with
almost 80% of geothermal sites in Indonesia located in isolated active
volcanic systems such as Sumatra (81 locations), Java (71 locations),
Bali and Nusa Tenggara (27 locations), Maluku (15 locations), and
North Sulawesi (7 locations). There are also some regions with active
non-volcanic environment: Sulawesi (43 locations), Bangka Belitung
(3 locations), Kalimantan (3 locations), and Papua (2 locations). The
total composition of the geothermal potential of 252 locations in

Indonesia is 27,357 MW, which is consisted of 14,007 MW of resources
with 13,350 MW of reserves (Wahyuningsih, 2004).
Indonesia has made a long history of developing the geothermal
industry. The first main project was built and started at Kamojang,
West Java, in 1983 (Radja, 1995). Pertamina and PLN, the state-owned
electricity company, have constructed 140 MW of steam gathering
facilities and power plants. The first private contracts were signed
in 1982–1984. Afterward, several companies also signed contracts
on joint operations with Pertamina for ten contract areas between
1994 and 1997. As a result of these contracts, geothermal energy
generated an additional 480 MW in regions such as Salak (220 MW),
Wayang Windu (110 MW), Darajat (90 MW), and Dieng (60 MW)
in Java. Pertamina also developed other geothermal working areas in
Indonesia at Sibayak (2 MW) in North Sumatra and Lahendong (20
MW) in North Sulawesi (Fauzi et al., 2005).
Source: Suharmanto et al. (2015)

Figure 9.1 Indonesia Geothermal Potential
Geothermal Energy in Indonesia 161

Geothermal possesses many advantages compared to other fossil
energy sources; an example can be found in the reliability of electric
power generated from geothermal energy that can be sustained as
a long base (more than 30 years). In general, the capacity factor of
geothermal power plants may reach 90% per year if we look at the
examples of PLTP Kamojang (93% capacity factor), Tiger Puppet (94%
capacity factor), and Darajat (93% capacity factor). So, geothermal
energy can be used as a baseload in electricity systems at a higher ca-
pacity than other energy sources, especially since geothermal energy is
available steadily throughout the year. The productivity of geothermal
resources is relatively unaffected by climate change, making it different
from renewable energy sources such as wind or solar and the annual
hydropower season. Another advantage of geothermal energy is that
it does not require large tracts of land.
The use of geothermal energy can reduce our dependency on
fossil fuels significantly. To illustrate the comparison of geothermal to
other powers, 1 kWh generated electricity assumption requires 0.28
liter of fuel, or 1 MWh requires 280 liters or approximately 2 barrels.
B. Drilling
The first step in developing geothermal resources is exploration activi-
ties. This activity aims to confirm the size of reserves below the surface

or in a reservoir. One of the most critical activities is exploration
drilling. Many data have shown that exploration drilling costs almost
40% of the total investment in the project or capital expenditure of a
company for a new high-temperature geothermal project (Kipsang,
2013). The data from historical drilling costs show that the depth
of the well is the main reason and parameter explaining its overall
cost. It is calculated that 56% of the investment costs of geothermal
wells are linked to depth (Cedric, 2010). The data also shows that
many factors must be considered during drilling operations, such as
the well configuration and duration. Almost all geothermal sites are
located in deep and ultra-deep wells; the deeper the target we want to
reach, the more problems we may face. These problems are ultra-high

temperature, high pressure, high sulfur, multiple pressure systems,
poor drillability, and impurities contents, making it more difficult to
reach the target and bringing more challenges to the exploration stage
(Wu et al., 2020). There are a few challenges regarding drilling and
completion engineering of exploration. They are (1) high-temperature
instrumentation and seals; (2) Geothermal logging instruments and
tools must be modified regarding the high temperature in geothermal
wells; (3) Due to high temperature, thermal expansion is possible,
affecting the buckling and collapse of the casing; (4) The property of
drilling fluids and mud coolers. Mud coolers are one of the most im-
portant parts during drilling operations; they can prevent bad things
such as high mud temperature; (5) The loss circulation of geothermal.
This phenomenon happens in geothermal and oil and gas; the reason
is similar due to faults associated with the zones.
There are two fundamental physical requirements for producing
geothermal power from the subsurface. These are high geothermal
heat flow and high permeability of the geothermal fluid for its migra-
tion to the surface (Raymond et al., 2012). The basic principles of
a drilling operation in the geothermal industry are the same as oil
and gas. However, there are differences in some aspects. Almost all
geothermal fields consist of complex layers or hard abrasive rocks
such as granites and volcanic or metamorphic rocks. However, some
geothermal reservoirs consist of soft layers or rocks such as sedimen-

tary or carbonate rocks.
Consequently, a drilling bit degrades shortly due to large loads
and impacts in such severe geological conditions. A high-performance
drilling bit commonly has a high drilling speed and high durability
(Miyazaki et al., 2019). There is a project on geothermal drilling wells
that tested two off-the-shelf polycrystalline diamond compact (PDC)
bits in a geothermal drilling project in the Chocolate Mountains of
Southern California. It is reported that the PDC bits exhibited higher
drilling speeds and longer lifetimes than those expected with roller-
cone bits (Raymond et al., 2012). Another experiment tried to evaluate
the effects of the cutter geometry, material composition, and process-

ing conditions of PDC drag cutters on the drilling efficiency, abrasion,
and impact performance in hard rocks. There are many reasons to
explain the failure of the drill bit to drill the geothermal formation,
but the main reason is the cutters of the drill bit are challenging to
face the complex abrasive rock formation. The forces on the drill bit
are unevenly distributed during drilling, leading to poor working
stability and abnormal vibration (Wise et al., 2005). To increase the
PDC bit stability and cutter density, selecting cutter types is essential
to improve the wear resistance of drill bits.
Japan Oil, Gas, and Metals National Corporation (JOGMEC)has
focused on drilling techniques and established a research and develop-
ment project on the PDC bit with both high drilling efficiency (speed)
and long drill length (durability) in 2015 (Imaizumi et al., 2019). In
the project, they studied the manufacturing technique of PDC cutters
and have succeeded in developing ones with high wear resistance
and impact toughness. The process of manufacturing PDC cutters
has been accomplished by sintering diamond powder on a cemented
carbide substrate with cobalt as a binder by applying high pressure
and high temperature (HPHT) to the component. The cutters have
been developed by using coarse diamond grains to increase impact
toughness and abrasion resistance using fine diamond. They have used
PDC bits with eight blades to place as many PDC cutters as possible
on the bit to face hard abrasive rocks with heterogeneous geological

fractures and to reduce the load (reaction force) on individual PDC
cutters. It was confirmed that the reaction forces were ever-increasing
outward from the bit center, but those on the adjacent cutters were
almost equal.
Cost is another thing that needs to be considered by the engineer
during drilling operations on geothermal wells. The associated costs in
Turkey are the cheapest amongst the costs of wells in Australia, France,
Germany, Iceland, Kenya, Netherlands, and the United States (Gul &
Aslanoglu, 2018). There are many reasons why Turkey is listed as one
of the countries with the lowest cost for drilling geothermal wells.
First, they have successfully reduced the daily operating costs of rigs
and third-party services since Turkey’s labor costs are more affordable

Source: Imaizumi et al. (n.d.)
Figure 9.2 D CAD Modeling for 8-1/2” PDC bit
than other countries. Second, the most critical equipment of the wells,
the casings, are chosen from the lowest cost option. Third, Turkey has
more competence and experience in drilling activities, resulting in a

competitive market producing better-optimized wells with shorter
project lead time (Gul & Aslanoglu, 2018). From data published by
Baker Huges, as of January 2017, almost 40% of total drilling rigs in
the world are used in Turkey for geothermal well drilling. Turkey is
also the leader in the drilling activity, with 32 of 98 drilling activities
in Europe located in the country (Huges, 2017). The geothermal
gradient in Turkey ranges between 8.33°C/100 m to 11.10°C/100 m
in thermally active regions (Njolnbi, 2015). Therefore, Indonesia may
copy Turkey’s strategy to operate geothermal wells by reducing daily
drilling costs since the associated costs have affected the total project
investment or capital expenditure. It also can be concluded that Turkey
is currently a market leader in geothermal drilling activities, thanks
to a very low-cost operating strategy.

C. Technical Data
The Australian code has been used in many countries and has gained
international acceptance. This code includes three key principles:
transparency, materiality, and competency. These three principles
are important as a guide for determining the success of the geother-
mal project. Exploration practitioners in Indonesia need to adopt
the Geothermal Play Fairway Analysis method. The United States
Department of Energy developed this method to decrease uncertainty
during geothermal exploration activities. The method evaluates a
range of geological, technical, and socioeconomic factors, which
are subsequently integrated to narrow a basin or regional-scale area
down to smaller areas of interest for further study and prospecting
(Garchar et al., 2016). There are many differences between Indonesian
and Australian codes. The Australian codes explain and consider not
only the technical aspects (geosciences or engineering), but also socio-
economic aspects related to marketing, legal, regulatory factors, and
environmental. While it may be questioned whether the Australian/
Canadian codes are applicable to Indonesia, the fact remains that they
have been employed in three geothermal feasibility studies at Lumut
Balai, Ulubelu, and Tompaso (Adams et al., 2011). To conclude, there
are lacks in quantity and quality of data provided by the Indonesian
government that needs to improve.

Indonesia needs to make a database that can be accessed by com-
panies participating in regular tender conducted by the Government.
Indonesia can also implement an open-data policy in geothermal
exploration, which has been instigated in Indonesia’s oil and gas
industry with membership schemes for providing more accessible
data and developers also can analyze not only in one basin but also
regional. A further principle in the code is the demarcation of a
reserve instead of the resource, considering commercial viability. A
‘Geothermal Resource’ is a Geothermal Play that exists in such a form,
quality and quantity that there are reasonable prospects for eventual
economic extraction (Williams et al., 2010). A ‘Geothermal Reserve’
is that portion of an Indicated or Measured Geothermal Resource

which is deemed economically recoverable after considering both the
Geothermal Resource parameters and Modifying Factors (Williams et
al., 2010) The classification between these two terminologies’ reserves
and resources is important because it provides explicit understand-
ing. The Indonesian standard codes also use resources classification
called ‘Cadangan Terduga’. This word usually is meant as Contingent
Reserves. However, the criteria do not include well testing and drilling
wells. Reserves are used as the highest classification of petroleum and
mineral exploration. For comparison, the Australian code enters well
deliverability as one of the obligations to declare “reserves” and also
different sources such as Joint Ore Reserves Committee Mineral code
require an economic analysis such as bankable feasibility study to
declare “Reserves.”. The Geothermal Reporting Code recognizes three
levels of Geothermal Resource (Inferred, Indicated, and Measured)
based upon increasing levels of geological knowledge and confidence
(Williams et al., 2010)
Source: Williams et al. (2010)

Figure 9.3 Relationship between Exploration Results, Geothermal Resources,
and Geothermal Reserves

In addition, many entities have won bids with insufficient techni-
cal and financial capacity (Asian Development Bank, 2015). There
are many alleged deficiencies, including a lack of technical ability of
the tender committee (resulting in poor prequalification screening),
tiny bid bonds, and performance bond requirements that are not
imposed (Asian Development Bank, 2015). There is a requirement
for posting their bid bond based on their total investment project
rather than just their exploration budget for first-year and no less
than US$ 10 million. The bid bond also should reflect the company’s
work and program funding (WP&B), and can be converted into a
performance bond as evidence of exploration activities or drilling.
The tender process should also follow the best international practice
for more investments from domestic and multinational companies.
There are no possibilities to reach the target the Government has made
on geothermal without the participation of international or foreign
developers and practitioners in the geothermal industry.
Some specific issues with the current version of the Indonesian
standard are as follows (Asian Development Bank, 2015):
1. The Indonesian standard uses an anumerical simulation process,
but there is no guidance on how that simulation can be used to
determine the capacity of the resources.
2. Many investors and developers use a probabilistic approach or
estimates. This method is used for determining stored heat estima-

tion. However, in the Indonesian standard reporting code, there
are no explanations regarding this method without considering
this method. Indonesia is in a position by the recommendation
that World Bank has given.
3. The Indonesian standard permits using the volumetric method
(stored heat) and numerical simulation to estimate reserves and
resources, which is appropriate. For stored heat, the 2000 revision
of the standard lists preferred or defaulted single values (within
broad reservoir temperature bands) for various parameters such
as recovery and conversion factors at diverse resource and reserve
categories and does allow the use of other values. It does not guide
how those values should be selected. In contrast, for example, the
Australian code lexicon provides default values.
D. Policy
1. Analysis of Geothermal Policy in Indonesia

Geothermal developments in Indonesia have fluctuated due to legal
uncertainty for entrepreneurs, accompanied by an economic crisis
impacted by COVID-19 and others that affect the commercial as-
pect, thereby increasing the risk of investing. Other factors related
to geothermal power development include capital intensive, risk of
security in the country, the floating Rupiah payment system, low basic
electricity tariff, low public purchasing power, fiscal policy, consistent
contract sanity, and strict sanctions. From these parameters, we still
find things that have not been realized in the field or irregularities
that often occur.
Indonesia has several policies in managing geothermal resources
from 1974 to 2009 until finally, the Indonesian government in 2003
issued the first law that provided a robust legal basis for the develop-
ment of geothermal energy, which is the issuance of Law Number 27
of 2003 and its derivative rules. Law Number 27 of 2003 is a regulation
that regulates all geothermal exploitation activities. This law states
that the flow of geothermal exploitation in Indonesia consists of five
stages: a preliminary survey, exploration activities, feasibility studies,
exploitation activities, and optimal geothermal utilization.

Law Number 27 of 2003 states that local governments have full
authority regarding licensing and geothermal legislation. With this
authority, local governments can create and provide quality human
resources in geothermal processing, from technical to administrative
capabilities. This authority can significantly impact local communities
where their abilities are increasing. These qualified human resources
aim to present accurate and detailed data and information related to
the potential of geothermal energy in their area to developers who
can facilitate the research process by themselves. This can affect the
price quote for geothermal steam or electricity and plans for future
geothermal energy projects.

The Indonesian Government has issued many policies related to
geothermal energy. However, in the field, we still find some problems.
Problems that usually arise are the quality of the human resources of
the regional auction committee, which is not yet competent enough.
There are many cases where the existing workers cannot handle this
job. Resolving the problem requires an increase in the competence
of human resources. This increase can be in education, training, or
certification activities from related parties. The role of the Govern-
ment and educational institutions is vital to creating quality human
resources.
The next problem is the overlapping boundaries of the allocated
geothermal working area. Most of the geothermal working areas are in
conservation forests. This issue has been the subject of much debate.
The Government responded to this issue by issuing PP (Government
Regulation) Number 28 of 2011, which explains that geothermal is an
environmental service business so that geothermal activities can be
carried out in conservation forests. In implementing this regulation,
it is necessary to coordinate with several parties, such as the Ministry
of Energy and Mineral Resources with the Ministry of Forestry and
other parties involved, so that it will not produce big questions about
the placement of the geothermal working area.
Furthermore, recently there have been many permits for geother-

mal energy development, from the inventory of geothermal working
areas to the commercial. The geothermal business licensing process
takes a long time; for exploration, it takes about 2 to 3 years; for
exploitation activities up to commercial, it takes 3 to 5 years. So,
the total time required is about 5 to 7 years from initial inventory to
operation. With this problem, to shorten the time required, regula-
tions are needed regarding the certainty of licensing times from the
relevant ministries and the Government so that many developers are
interested in developing the existing geothermal potential.
Lastly is the problem of inter-sectoral coordination, which is still
constrained. A more detailed and precise clarity of authority is needed
between the central government, provincial governments, and local

governments related to geothermal development. Articles 5, 6, and 7
of Law Number 27 of 2003 have stated the authority regulation, but it
is not detailed and can cause confusion. The problem in the field is the
emergence of disorder about which party is responsible for solving a
problem. Therefore, more detailed and clearer derivative regulations
from existing regulations are needed.
2. Geothermal Policy Analysis in the United States, New

Zealand, and the Philippines
The trend of developing clean, renewable energy is hotly discussed
worldwide. One of the renewable clean energies that can be produced
at any time regardless of time and has excellent potential is geothermal
energy. In some countries, this potential is utilized as much as possible
to create clean and sustainable energy. The efforts carried out by gov-
ernments in the world vary widely from financial support, technology
transfer between countries, training related to geothermal processing
and utilization, and geological surveys supported by the Government.
The trend of geothermal development, which is constantly increasing
drastically, has made countries serious about utilizing it, such as the
efforts made to form policies and regulations regarding the use of
geothermal energy.
Table 9.1 Top 10 Countries Developing Geothermal Capacity in 2021

Rank Country Installed Capacity (MW)
1 United States 3,722
2 Indonesia 2,276
3 Philippines 1,918
4 Turkey 1,710
5 New Zealand 1,037
6 Mexico 963
7 Italy 944
8 Kenya 861
9 Iceland 754
10 Japan 603
Source: Pristiandaru, D.L. (2020)

Countries in the world included in the global top 10 in developing
geothermal energy and have high innovation related to geothermal
processing are the United States, New Zealand, and the Philippines. In
this part, we will discuss the existing policies in those three countries
that can be compared with those policies in Indonesia.
a. Geothermal Policy in the United States
The United States has the most installed capacity of geothermal energy
globally. The amount of installed capacity of geothermal energy is
high, so the United States has a detailed policy stated in the legislation.
The United States government has two of the most important laws
that govern the authorization and guide the Department of Energy
(DOE) in managing and conducting geothermal energy research. The
two laws are the Energy Independence and Security Act of 2007 and
the Geothermal Energy Research, Development, and Demonstration
Act of 1976, which contain regulations for geothermal exploitation
such as on mineral lands and mining, project management, loan
guarantees, until the protection against environment on geothermal
energy management.
In addition to these two crucial laws, other policies are applied
in the United States in the management of geothermal energy, such
as tax incentive policies, geothermal energy research, development
policies, financial incentive policies, and geothermal energy policies

regarding leasing and resource management laws.
Geothermal Energy Association (GEA), an association of US
companies engaged in geothermal energy, which supports the de-
velopment of geothermal energy and geothermal energy resources
around the world to generate electricity from geothermal energy,
issued several priority policies to support geothermal energy develop-
ment in 2012.
The first policy is to provide tax incentives for a longer term
to support geothermal energy development and industrial stability.
The second is to facilitate the permission and construction of the
transmission capacity needed to support geothermal energy develop-

ment. Third, minimizing delays in geothermal energy contract permits
that has been a challenge in geothermal energy development. Fourth,
the policy is aimed to issue new national regulations to support the
exploration, quantification, and development of geothermal energy
projects. Lastly, it supports energy policies for developing geothermal
energy through the clean energy base standard mechanism set by the
Government. The sixth policy is to help GEA member companies to
collaborate to create geothermal energy and increase their contribu-
tion to the global market.
b. Geothermal Policy in New Zealand
Geothermal utilization is proliferating in New Zealand, as evidenced
by the increasing number of geothermal installed capacities in this
country. With the expanding number of geothermal plants, the New
Zealand government has a policy to regulate geothermal exploitation.
The first policy made by the New Zealand government to control
geothermal energy was The Geothermal Energy Act of 1953. Still, it
was replaced through the regulation of The Resource Management
Act (RMA), 1991. RMA 1991 integrated environmental manage-
ment regulations into one statute for managing natural and physical
resources, including air, water, land, geothermal, minerals, and coastal
area resources up to 12 nautical miles. The purpose of establishing
the RMA 1991 is to promote the sustainable management of natural

and physical resources. RMA 1991 applies rules and governance to
exercise control over resource use by delegating decisions and plan-
ning and resource management policies to the regional council until
the new district council in New Zealand. RMA 1991 explains that
geothermal management is further integrated into control and water
permits, which are an inseparable part of development planning and
regional policies within an integrated development framework. If the
regional council cannot yet manage geothermal energy, the central
government can assist in geothermal management (Hollroyd & Dagg,
2011). To facilitate the central government in managing geothermal
resources following the scale, capacity, and designation for national
energy development, the regional council that cannot yet manage

geothermal resources must make plans to divide geothermal potential
into five categories. It includes the geothermal can be developed, lim-
ited development, research, protection, and small geothermal systems.
Other policies governing the exploitation and management of
geothermal energy in New Zealand are the Building Act (BA) 1994,
which regulates building work, establishes a licensing regime for
building practitioners, and sets building performance standards.
The following policy is the Electricity Industry Reform Act (EIRA)
1998, which was implemented in the renewal of the New Zealand
national electricity policy. The electricity supply is hoped to be man-
aged efficiently process to provide outstanding long-term benefits for
consumers (IEA, 2011). The last is Regional Policy Statements and
Plans (RPSP), which is a regional council policy instrument under
RMA 1991 that explains regional resource management and basic
guidelines for environmental management in each region (EMSL,
2011).
c. Geothermal Policy in the Philippines
The Philippines, the third largest country that uses geothermal energy
in the world, has regulated the management of renewable energy, es-
pecially geothermal energy. The first policy is the Geothermal Service
Contract Law, Presidential Decree 1442, issued in 1978, regarding the
control and regulation of exploration, development, and utilization

of geothermal energy. The second policy is Executive Order 215,
published in 1990, which effectively eliminates the NPC monopoly
system and allows private sector participation in the construction,
ownership, and operation of geothermal power plants. The third policy
is the 2008 renewable energy law, which benefits developers, including
a 7-year tax holiday, a tax-free carbon credit program, and a standard
for meeting domestic electricity needs of 60%. The fourth policy is
An Act to Promote the Exploration and Development of Geothermal
Resources 1978 regarding incentives. The fifth policy is the Resource
Management Act 1991 regarding managing resources such as land,
air, and water for sustainable use.

From the Philippines’ existing policies in attracting geothermal
development, the Philippine government provides an example to the
world, which was supporting investment in equipment capital and the
entry of foreign experts, as well as sending Filipino workers abroad
to learn about geothermal development. Then depreciation of capital
equipment over ten years. Next is recovery from operating costs that
come from government funds. Then, the service fee is up to 40% of
the net result. Next is the exemption from all taxes, except individual
liability income tax and the exemption from payment of duty rates
and compensation tax on geothermal energy operational equipment.
d. Summary of Policy Analysis
In conclusion, the policy analysis between Indonesia has been
compared to the United States, New Zealand, and the Philippines.
Considering all the policies from the countries mentioned above, the
first step is to improve the laws and regulations governing geothermal
utilization and management so that they can provide certainty more
comprehensively while not conflicting with other laws and regulations.
This will make the geothermal business environment more conducive
and attract investors to invest in geothermal development.
Furthermore, the Government’s role must be expanded from
policy discourse to a more concrete and implementable policy com-
mitment to pique investors’ interest. This solution can be done through

research and development financing incentives, incentives for reduc-
ing or eliminating duties and taxes related to the pre-construction
process, and incentives for installation construction.
Lastly, the requirement is clarity of authority in applying rules and
governance to exercise control over geothermal utilization and man-
agement through delegation and division of power between central
and regional governments, while maintaining a balance between local
and national interests in allocating appropriate resources. These rules
should be exist in a way that is both sustainable and environmentally.

E. Conclusions
Geothermal industry development is still facing many challenges,
primarily related to the participation of international or domestic
companies in investing their money and taking a risk in Indonesia’s
geothermal sector. The characteristic of the geothermal industry is
high-risk, high capital, and high technology, which means there are no
possibilities to reach the target that Indonesia’s government has made
without the support from international companies. There are many
recommendations for encouraging the development of the geothermal
industry in Indonesia:
1. Applying and implementing a new fiscal term to support the
economic viability of the project called cost recovery in the
upstream development of the geothermal industry. These fiscal
terms also have been used in Indonesia’s oil and gas industry and
have proven their success in accelerating the industry develop-
ment. There are many reasons for these issues because of many
similarities between geothermal and oil and gas.
2. Indonesia needs to adopt or use Australia’s standard reporting
code to accommodate investors’ interests because many interna-
tional companies have used those codes and gained international
recognition.
3. More investigations and studies are necessary to get proven and

mature data, especially exploration drilling. Indonesia needs to
conduct a Government Drilling Program; based on advice given
by investors, the lack of quality and quantity data is one of the
concerns and needs improvement. By presenting the Govern-
ment Drilling Program or offering it through auctions or regular
tender, the Government can provide more attractive and proven
data. Thus, the climate of investment in Indonesia’s geothermal
industry will be more attractive because the Government has
successfully decreased the uncertainties by providing proven,
mature drilling data, which is one of the most important things.

4. Indonesia should decrease the total investment of project or
capital expenditure by selecting and applying new technologies
suitable for geothermal layers or lithology formations and char-
acteristics of the geothermal reservoir. The geothermal building
is known for hard rocks such as metamorphic or volcanic rocks.
It means many instruments and tools need to be modified the
drilling bit significantly by applying Polycrystalline Diamond
Compact (PDC) bit to replace the conventional roller-cone bit.
The data have proven that the PDC bit results in higher drilling
speed and longer lifetimes, and it can reduce large amounts of
the total investment in the geothermal project.
5. It is necessary to improve the laws and regulations related to
geothermal utilization and management so that it is more com-
prehensive and does not overlap with other rules. The Govern-
ment must also play a more active role from just policy discourse
to a more concrete and implementable policy that can attract
investors, as well as more clarified authority in applying rules
and governance to control the utilization and management of
geothermal.
6. To boost the development of the geothermal industry in Indo-
nesia, one of the most important parts is the electricity price. By
implementing the regulation called Feed-in tariff, the producers

will be able to sell the electricity they generate at a cost set in
advance by the government under a long-term contract; also,
these policies can support the economy of geothermal power
generation in the downstream industry.
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Chapter 10
The Case for Nuclear Energy

Harun Ardiansyah
A. Nuclear Energy, The-Once-Antagonist

Nuclear energy is not something that is particularly new in Indonesia.
Indonesia is one of the first few countries that ratified the International
Atomic Energy Agency (IAEA) Statute, legalizing the establishment of

IAEA as the world’s nuclear watchdog. Mr. Soedjarwo Tjondronegoro
served as one of IAEA’s first board of governors (IAEA Statute, 1956).
Since then, Indonesia has progressed so well in nuclear technology.
Indonesia has three research reactors, namely TRIGA Mark II in
Bandung, Kartini in Yogyakarta, and G.A. Siwabessy Multipurpose
Reactor in Serpong. These reactors have served public interests since
their first operation (Sugiawan & Managi, 2019). However, after the
three reactors were built, advancements somehow stopped in terms
H. Ardiansyah

Ardiansyah, H. (2022). The case for nuclear energy. In H. Ardiansyah, & P. Ekadewi (Eds.), Indonesia
post-pandemic outlook: Strategy towards net-zero emissions by 2060 from the renewables and carbon-
neutral energy perspectives (181–208). BRIN Publishing. DOI: 10.55981/brin.562.c10 181
ISBN: 978-623-7425-83-0 E-ISBN: 978-623-7425-87-8
of nuclear reactors, especially to construct of nuclear power plants for
energy mix. There is no significant progress in Indonesia in pursuing
nuclear energy as part of its national energy mix (Cho et al., 2021).
On the other hand, the urgency of using nuclear energy has grown
significantly over the last five years. Nuclear energy can be part of
Indonesia’s energy mix as the baseload, to fulfill the fluctuations from
wind, solar, and other renewable energy sources. This chapter will
explore the concept of nuclear energy, how it works, unresolved topics
in nuclear energy, misinformation surrounding nuclear energy, and
how nuclear energy can significantly help Indonesia tackle climate
change.
B. Brief History of Nuclear Energy

Nuclear energy has been around for more than seventy years. Since
the first nuclear fission reaction happened in Chicago Pile-1 (the first
self-sustaining nuclear reactor on December 2, 1942), nuclear energy
has transformed how humans can extract energy from the tiniest
things in the universe (Atomic Heritage Foundation, 2016). However,
the first “official introduction” of nuclear energy to the world came
when Hiroshima and Nagasaki in Japan were bombed with atomic
bombs in 1945, creating devastation and prolonged misery in the cities
of Hiroshima and Nagasaki. This “introduction” creates a horrible

perception of nuclear energy (Rhodes, 2012).
As the follow-up of the Manhattan Project—the project that
created atomic bombs but was dismissed in 1946, the United States
government created an Atomic Energy Commission. The mission of
this organization was to develop nuclear energy further so that it could
be used for peaceful purposes. Subsequently, these efforts started to
come to reality as the Experimental Breeder Reactor-1 (EBR-1) in
Idaho managed to produce electricity for the first time in 1951. This
started a chain of rapid developments of nuclear reactors not only in
the United States, but also around the world (Michal, 2001).
Seeing the progress of nuclear energy, President of the United
States Dwight Eisenhower called for the use of “atoms for peace”.

He delivered the speech at the UN General Assembly of 1953. This
move was then propagated until 1957, when the IAEA was established.
The wave of support for nuclear energy continued when the Nuclear
Nonproliferation Treaty (NPT) was ratified in 1968 (United Nations,
1968). This marked the wake of the “nuclear golden age” when nuclear
reactors were developed very rapidly around the world (Hewlett &
Holl, 1989).
The first sign of the “nuclear golden age” is the Obninsk Nuclear
Power Plant (NPP) startup in the Soviet Union. Established in 1954,
the Obninsk NPP was the first commercial nuclear power plant oper-
ated in the world (Semenov, 1983). This story continued with the
establishment of more than 150 nuclear power plants in 20 years.
The peak of the golden age was in 1974 when the Prime Minister
of France, Pierre Messmer, launched a new initiative to build more
nuclear reactors in France. This initiative was implemented as the
answer from France to tackle the oil crisis that haunted Europe in
the 1970s (Funding Universe, 1996).
Source: United States Postal Service (n.d.)

Figure 10.1 U.S. Postal Service Stamp to Commemorate “Atoms for Peace”
Speech
The Case for Nuclear Energy ... 183

Then the tables turned. On April 26, 1986, a devastating disaster
happened in the Chernobyl Nuclear Power Plant. This accident was
the biggest nuclear accident in the world up until now. The Chernobyl
plant was a graphite-moderated, pressure tube of channel-type boiling
water reactors (BWR) of the RBMK (Reaktor Bolshoy Moshchnosty
Kanalny)-1000 design with a large core (12 m x 12 m) cross-sectional
area and height of 7m. The accident happened during a test of tur-
bogenerator coast down, which was to provide power to feedwater
pumps and the emergency core cooling system (ECCS). This type
of experiment was not an urgent case to be done. The decision to
perform a non-nuclear-focused test on a large civil power reactor
facility reflected the lack of safety culture (Ripon et al., 1986).
The Chernobyl accident shocked the nuclear industry and the
whole world. Calls to improve or even shut down nuclear reactors
grew in public. This resulted in public perception of nuclear energy
hitting its lowest point. As an effect, mistrust from the public created
project delays in many reactors around the world, causing the cost of
nuclear energy to skyrocket and not economically feasible to build new
reactors. Nuclear energy entered its “dark age” due to all the pushbacks
that came to the industry. In early 2000, after 16 years without any
accident, nuclear energy started to gain its footing again with the
emergence of Generation-III, III+, and IV reactors. Generation-III,
III+, and IV reactors are new types of nuclear reactors that employ

new safety features for better and safer nuclear reactors. Research and
development have been growing for this new type of reactor that was
told to be the future of nuclear reactors.
The rapid progress is again facing an obstacle after another ac-
cident happened on March 11, 2011. A 9.0-magnitude earthquake
shocked the east coast of Japan. This event was followed by a tsunami
with waves around 10 to 14 meters. In the Fukushima Prefecture, a
nuclear reactor complex was operated by Tokyo Electric Company,
Co. (TEPCO) called the Fukushima Daiichi Nuclear Complex. This
complex consisted of 6 BWRs of General Electric design and started
operation between 1971 and 1979 with power between 439 to 1067

MWe. Seconds after the earthquake, reactor units 1, 2, and 3 were
directly shut down as expected. It was followed by the trip of the
turbo generator and the main steam valve was closed. Then the
tsunami waves hit the nuclear complex causing the electrical diesel
generator to malfunction resulting in a station black-out (SBO) for
units 1 through 4. Some additional batteries were still used to cool
down the reactors. However, as time passed, the batteries started to
be depleted and the core temperature started to increase. Eutectic
reactions of fuel and zirconium also melted the fuel rod and eventually
damaged the core. A significant number of radionuclides were also
released into the atmosphere (Japan Nuclear Emergency Response
Headquarters, 2011).
After the Fukushima accident, the nuclear industry once again
went into another dark age. Public perception of nuclear energy was
hit once again to an all-time low. From an engineering view, this
pushed innovation towards better safety and the ability to passively
remove the decay heat, which drives more support for nuclear energy.
The existence of climate change and its effect on future generations
also prompted younger generations to support nuclear energy to
tackle climate change. Much research done by non-governmental and
intergovernmental organizations shows that nuclear energy can help
tackle climate change effectively and efficiently. This is an ongoing
pursuit, especially since some organizations are still indecisive on

nuclear energy. On the other hand, support for nuclear energy is
growing larger, reaching more audiences, especially in Europe and
Asia (Lovering et al., 2016).
C. Generations of Nuclear Reactors

Since the existence of nuclear reactors in the 1950s, innovations
have driven the nuclear industry to produce electricity at the highest
capacity (Figure 10.2). Innovations and improvements of nuclear
reactors are made to reach better cost, safety, security, and fuel cycle,
among other things. These improvements are classified into several
“generations” of nuclear reactors.

Source: Goldberg & Rosner (2011)
Figure 10.2 Generations of Nuclear Reactors
1. Generation I
The first generation of nuclear reactors, usually referred to as Genera-
tion I, refers to the prototype and power reactors that launched civil
nuclear power. This generation of reactors consists of early prototypes
of commercial reactors that started commissioning in the 1950s and
1960s. These reactors were early proof that the concept of nuclear reac-

tors was validated and could operate safely. Examples of reactors in the
generation I category are Shippingport (1957–1982) and Dresden-1
(1960–1978) in the United States, and Calder Hall-1 (1956–2003) in
the United Kingdom (UK) (Figure 10.3). The last remaining com-
mercial Gen I plant, the Wylfa Nuclear Power closed on December
30, 2015, after nearly 45 years of successful and safe operations. This
closure marked the conclusion of Magnox reactor generation in the
UK (Goldberg & Rosner, 2011).

Source: U.S. Department of Energy (n.d.)
Figure 10.3 Calder Hall Power Station in the United Kingdom
2. Generation II

Generation II refers to a class of commercial reactors mainly deployed
around the 1970s to 1980s. After proving that nuclear reactors were
reasonably deployed, engineers, and designers innovated to create
more economical and reliable nuclear power plants. These reactors
were typically designed to be operated for forty years. Regarding
technical aspects, Generation II reactors have matured some critical
components on safety-related issues. For example, active and passive
safety features are used to operate the reactors safely and function
without operator control or loss of auxiliary power. Generation II
reactors include pressurized water reactors (PWR) (Figure 10.4),
Canada Deuterium Uranium reactors (CANDU), boiling water reac-
tors (BWR), advanced gas-cooled reactors (AGR), and Vodo-Vodyanoi
Energetichesky Reactors (VVER) (Goldberg & Rosner, 2011).

Until now, Generation II reactors have the largest fleet in the
world, especially PWR and BWR. PWR is by far the most common
civilian nuclear reactor in the world. This type of reactor was originally
developed for nuclear submarines. Water is circulated in a pressure
vessel to cool the reactor core and extract the heat from the core. The
pressure inside the pressure vessel is around 150 bar. Thanks to the
pressure, the water stays in its liquid state even at a high temperature.
Water passes downward through an annulus between the reactor core
and the pressure vessel and then flows up over the fuel elements. It
then leaves through a series of pipes to the steam generator. In the
steam generator, hot water from the reactor core passes through a
heat exchanger. Current PWR technology commonly uses four loops
of steam generators to maximize the steam generated in the system.
Water at lower pressure is fed to the other side of the heat exchanger.
The exchange of heat creates steam that is then passed to the turbine,
then to the condenser (Hewitt & Collier, 2000).
Source: United States Tennessee Valley Authority (n.d.)

Figure 10.4 Pressurized Water Reactor Schematic Diagram
BWR is the world's second most common civilian nuclear reactor

(Figure 10.5). BWR differs from PWR, where the steam generation
process is done directly on a single cycle. BWR generates steam di-

rectly with the core without a separate steam generator. The pressure
inside the core is about 70 bar. Water passes through the core, and
about 10% is converted into steam. The steam is then separated from
water molecules in the upper region of the core. The separated water
is pumped back to the core using a circulating pump. Then, the steam
goes to the turbines and condenser and the water goes back to the
core to continue the cycle (Hewitt & Collier, 2000).
Source: United States Tennessee Valley Authority (n.d.)

Figure 10.5 Boiling Water Reactor Schematic Diagram
3. Generation III

Generation III reactors are technologically similar to Generation
II reactors. However, evolutionary state-of-the-art design improve-
ments are added to the reactors. These measures are added to prevent
Fukushima-like accidents from happening. Improvements are added
in fuel technology, thermal efficiency, modularized construction,
passive safety system, and standardized design. These improvements
aim is to extend the operational lifetime of a nuclear reactor up to
sixty years without compromising the safety and security of nuclear
reactors (Goldberg & Rosner, 2011). Generation III reactors include
the Westinghouse 600 MW Advanced PWR (AP-600), GE Nuclear
Energy’s Advanced Boiling Water Reactor (ABWR), and Enhanced
CANDU 6. These technologies are not massively employed around
the world yet.
4. Generation III+
In between Generation III and Generation IV, Generation III+ reac-
tors are designed as a development from Generation III reactors,
providing more significant safety improvements. The most significant
improvement is the passive safety features that do not require any
active controls and only rely on gravity and natural circulation to
mitigate the impact of abnormal events. Generation III+ reactors
include South Korea’s Advanced Power Reactor (APR), European
Power Reactor (EPR), Japan’s Advanced Pressurized Water Reactor
(APWR), Russia’s VVER-12000, and the United States’ AP-600 and
AP-1000 (Juhn et al., 2000).
Small and modular reactors (SMR) is one of the nuclear technolo-
gies in this category (Figure 10.6). IAEA defined SMRs based on the
power and size of the reactors. SMRs typically produce up to 300 MWe
(International Atomic Energy Agency, 2014). However, the smallness
of its size is not the only advantage of SMRs. SMRs are designed to be
modular, which means that the reactor consists of standardized units
that are easy to be constructed. It is important that each individual
component can be altered or replaced without any significant effect
on the overall system. The modularity of nuclear reactors will solve
one problem: the inability to standardize any design to simplify
reproducibility. Ultimately, this innovation will lead to cheaper and

faster construction of nuclear power plants (Hussein, 2020).

Source: U.S. Government Accountability Office (n.d.)
Figure 10.6 Schematics of Light Water Small Modular Nuclear Reactor
5. Generation IV
The next generation of nuclear reactors, Generation IV, is a brand-new
generation that expands nuclear power technology. All Generation

IV technology identified by the Generation IV Forum (GIF) is cur-
rently in the development phase and seeks to be deployed shortly
(The Generation IV International Forum & U.S. DOE Nuclear Energy
Research Advisory Committee, 2002). Generation IV offers major
improvements in some key areas: economics, safety, sustainability, and
proliferation resistance. There are six new nuclear technologies with
the potential to fulfill these goals and are currently under development
in many countries. Those reactors are the high-temperature gas-cooled
reactor (HTGR), the sodium-cooled fast reactor (SFR), the gas-cooled
fast reactor (GFR), the lead-cooled fast reactor (LFR), the molten salt
reactor (MSR) and the super-critical water-cooled reactor (SCWR)
(Abram & Ion, 2008).

HTGRs and MSRs are leading the innovation of Generation IV
reactors (Figure 10.7). Multiple startups and companies have designed
a lot of new nuclear reactors to be deployed in the near future. For
HTGRs, the Chinese HTR-PM reactor, a 2 x 210 MWe HTGR, has
been generating electricity since late 2021. This is significant progress
to prove that Generation IV reactors are coming sooner or later
(World Nuclear News, 2021).
Source: Zhang et al. (2009)

Figure 10.7 High-Temperature Gas-Cooled Reactor Schematics

D. Benefits of Nuclear Energy
Nuclear energy has a lot of benefits to society. Not only as a clean
energy source, but also for the livelihood of people around nuclear
energy. This part will explain some features to argue that nuclear
energy benefits the future.
1. Energy Density
Energy density is the amount of energy produced per unit volume
of fuel. Nuclear energy is the densest energy source in the world. A
comparison by IAEA stated that a chicken-egg-sized amount of ura-
nium fuel provides more than enough power for a lifetime of energy
use for an average person. This is because each individual atom of
Uranium-235, the isotope commonly used for thermal fission inside
a reactor core, can produce energy as much as 200 MeV (equivalent
to 3.2044 x 10-11 Joule) in every fission reaction (Lamarsh & Baratta,
2001). Though the number seems very small, 200 MeV is energy
produced by each atom in a single fission reaction. This equates to
around 85,000,000 MJ/kg, compared to other energy sources such as
coal (24 MJ/kg) and natural gas (50 MJ/kg). A nuclear power plant
that generates 1,000 MW of electricity will only consume around
3.5 kg of Uranium-235 per day. This means that electricity can be
generated using considerably fewer resources than any other source

of energy (Williams, 2016).
2. Capacity Factor
The capacity factor is the ratio of actual energy output over the maxi-
mum possible electrical energy output in a given period. This measure
shows how often the energy source is running at maximum power
and is used to measure the reliability of an energy source. The capacity
factor is a unitless ratio and usually computed over a year. In 2019,
the capacity factor of nuclear energy was 83.1%, which means that
on average, nuclear power plants produce 83.1% of their maximum
possible energy output in a year. Nuclear energy has maintained a
capacity factor of around 80% for the last twenty years (World Nuclear

Association, 2021). This value is the largest among other renewable
energy sources such as hydropower (40.2%), solar energy (13.4%),
wind energy (25.9%), and geothermal energy (79.9%) all in 2019
(International Renewable Energy Agency, 2020).
Source: World Nuclear Association, IAEA PRIS (2021)

Figure 10.8 Global Average Capacity Factor of Nuclear Energy
3. Health Effects of Energy Production

Numerous measures can be used to measure the safety of energy
production. One parameter that can be used is the health effects of
energy production, measured in the number of deaths per energy

produced by a given energy source. From this perspective, nuclear
energy is among the safest energy sources. The death rate from nuclear
energy is 0.07 death per Terawatt-hours (TWh) of energy produced
(Markandya & Wilkinson, 2007). This calculation already included
death estimation from the Chernobyl disaster (4,000 deaths), death
estimation from the Fukushima disaster (one worker death, and 573
indirect deaths from the stress of evacuation), and death estimation
from mining and milling activities. This value is very close to re-
newable energy sources such as wind energy (0.04 death per TWh),
hydropower (0.02 death per TWh), and solar energy (0.02 death per
TWh) (Sovacool et al., 2016). This shows how nuclear energy can be
used worldwide as a safe electricity source.

Source: Our World in Data (2020)
Figure 10.9 Death Rates from Energy Production per TWh
4. Greenhouse Gas Emissions

The United Nations Economic Commission for Europe (UNECE)
examines the carbon lifecycles of multiple technologies to produce
electricity. The report shows that nuclear energy has the lowest
greenhouse gas emissions among all electricity sources. Nuclear

energy produced on average 5.5 g CO2 eq./kWh of greenhouse gas.
Greenhouse gas is mainly produced during the front end of the nu-
clear fuel cycle, which includes mining, milling, and fuel fabrication
processes. Nuclear energy is among the lowest in other categories
such as freshwater eutrophication, human toxicity, land occupation,
and fuel resources. This shows that nuclear energy is important to
balance the increase in energy demand with greenhouse gas reduction
(Gibon et al., 2021).

Source: Gibon et al. (2021)
Figure 10.10 Lifecycle Greenhouse Gas Emission Range for Assessed Technology
5. High-Paying Jobs
The nuclear energy industry has created long-lasting, high-paying
jobs for future generations. In the era of post-COVID-19 recovery,
the nuclear energy sector has supported economic recovery, keeping
the pace of energy transition, creating jobs, and leading the effort
towards a more sustainable future. For example, the refurbishment of
six reactors by Bruce Power in Canada will provide low-cost, reliable,

and carbon-free energy until 2064. These reactors will also provide
long-lasting 22,000 jobs during their operation of the reactors (NEA
Policy Brief, 2020). A technical report by World Nuclear Association
shows that nuclear energy provides about 25% more employment per
unit of electricity than wind energy. Nuclear employment also includes
comparatively good-paying, long-term job security, and a high degree
of localization in the host country (Emsley, 2020). These jobs are not
only high-skill technical jobs, but also secondary jobs such as sales
and administrative support, construction, management, business and
financial occupations, cleaning and maintenance, production, health
care, transportation, installation, maintenance, and repair (Berkman
& Murphy, 2015).

E. Unresolved Problems in Nuclear Energy
Like technologies, nuclear energy kept improving in many aspects,
such as safety, security, and safeguard. However, two particular aspects
of nuclear energy considered unresolved until now, namely nuclear
waste and cost and time of construction. These aspects are considered
unresolved due to technical and engineering problems or policy and
political problems as discussed below.
1. Nuclear Waste
Nuclear waste is the most common topic when nuclear energy is being
discussed. Some would argue that nuclear waste is why nuclear energy
should not be implemented, due to the high level of radioactivity and
radiological impact on the future. However, some information and
news about nuclear waste might need to be clarified.
Nuclear energy waste is generally classified into three categories:
low-level, intermediate-level, and high-level waste. These categories
are divided based on how radioactive the waste is. Low-level waste
is waste that is exposed to low-level of radiation. These are generally
common things that can be found not only in a nuclear facility, but
also in laboratories. For example, gloves, laboratory coats, and labora-
tory equipment. Low-level waste contributes up to 90% of all nuclear
waste, yet it can be disposed in near-surface repositories without

having any consequences on the nearby environment (IAEA, 2018)
Intermediate-level waste has a higher level of radioactivity com-
pared to low-level waste. This waste is usually found in the form of
chemicals, fuel cladding, and some amounts of concretes surrounding
the reactor core. About 7% of total wastes from nuclear power plants
are accounted for as intermediate-level waste. This type of waste might
have some heat deposited within. Should the heat deposit occur, it
must be contained in a specific container that can cool down the
waste's temperature. The container is specifically designed to maintain
its integrity in any situation. The container has multi-barriers to pre-
vent radioactive waste leakage. This type of technology has already
been implemented in all nuclear power plants worldwide.

Source: Posiva (2014)
Figure 10.11 Concept of Multi-Barrier Disposal Concept
Lastly, high-level waste is the spent nuclear fuel. Spent nuclear

fuel is the most radioactive material inside the core. It still generates
heat due to delayed fission. Therefore, special treatments are necessary
for spent nuclear fuel. After the spent nuclear fuel is taken out of the
reactor core, it is placed in a special spent fuel storage pool for about
five years. This pool serves two purposes, to cool the spent nuclear
fuel and to reduce the number of radioactive materials through the
decay process. This process reduced up to 95% of the radioactivity
from short-lived isotopes. After five years, the spent nuclear fuel is
compacted and placed in a special container. This method of contain-
ment has been designed to sustain any type of disturbance. The spent

nuclear fuel remains in the container forever (IAEA, 2018).
Although the engineering side of handling nuclear waste is con-
sidered resolved, there many debates on where to permanently store
high-level wastes. So far, the spent nuclear fuel that has been cooled
and contained is placed within the nuclear power plant area. However,
it is not considered a long-term solution for high-level nuclear wastes.
A deep geological repository, a facility deep down the Earth to store
all the containers of high-level nuclear wastes, is the ideal solution.
However, debates on this topic are harsh. In the United States, a deep
geological repository was proposed in Yucca Mountain, Nevada in
early 2000, but it is still not approved (Bowen, 2021). A sign of hope

Source: Orano TN (n.d.)

Figure 10.12 TN24 Cask Produced by Orano TN (Formerly Areva TN)

Source: World Nuclear Association (n.d.)
Figure 10.13 Caorso Nuclear Power Plant Spent Fuel Pool
in this topic is the construction of deep geological repositories in

Finland (Gil, 2020) and Sweden (Kombrink, 2022). Hopefully, this

can start of progress in the deep geological repository.
2. Cost and Time of Construction

Non-technical problems, namely the costs and construction times
of nuclear reactors, are also discouraging arguments used to reject
nuclear technology. Nuclear power plants generally take up to ten
years from construction to operation. It needs to be realized that the
nuclear industry, like any other industry, is constantly adapting. It is
worth noting that the construction of nuclear power plants is more
effective and efficient than 20 years ago.
On average, nuclear power plants currently being built around
the world can be completed and operational within 86 months from
the previous 120 months (World Nuclear Association, 2021). It uses

Generation III+ technology that has been standardized and cost-
effective. If a small modular type of nuclear power plant is used, a
nuclear reactor can be built in as short as 2–3 years.
Regarding the cost, several types of financing schemes can also
be used as examples if Indonesia wants to build nuclear power plants.
Many countries have carried out these schemes, either in the form
of government-to-government agreements, such as South Korea
with the United Arab Emirates, and Pakistan with China, or in a
government-to-business model, i.e., the British government with the
Rolls Royce company. To push for innovations, policies such as incen-
tives or acceleration programs to speed up the nuclear power plant
construction process can also be a solution to boost the use of low-
emissions energy around the world. Some examples of those policies
can be adopted from countries like France, the UK, Ukraine, Japan,
China, and the United States. Those countries have recently started the
development of new nuclear power plants, as well as restarting units
that were previously turned off. The United States supports developing
nuclear power plants through a grant program for the development of
prototypes of nuclear power plants with the latest technology (World
Nuclear Association, 2020).
F. How Nuclear Energy Can Help Indonesia

After examining the ups and downs of nuclear energy around the

world, this part will focus on whether Indonesia should give attention
to nuclear energy and the role of nuclear energy in the future. Two
major problems Indonesia faces are climate change and economic
recovery post-COVID-19.
On the climate change part, the Indonesian government has
targeted net-zero carbon emission in Indonesia in 2060, with the share
of renewable and new energy (including nuclear energy) gradually
increasing from 23% by 2025 to 100% in 2060 (Humas ESDM, 2021).
This scenario would be possible if there is a good replacement for
fossil energy that accounts for 60% of Indonesia’s energy mix and
becomes the baseload of energy in Indonesia. A just transition is
necessary, including justice to consider all types of energy that have

the potential to help Indonesia thrive. Until now, Indonesia's nuclear
energy is still considered as the last energy option. With the con-
tinuous threat from climate change, that consideration is no longer
relevant. Nuclear energy can be used to replace fossil fuels to become
the baseload of energy in Indonesia. With consistently more than 80%
capacity factor, nuclear energy is reliable. A reliable electricity grid is
necessary for Indonesia, which still needs to industrialize and speed
up development. Collaborations between nuclear energy and other
renewable energy sources such as wind, solar, hydro, and geothermal
are necessary for Indonesia to tackle climate change. Nuclear energy
can be the baseload, and renewable energy can be the adjustable
energy depending on necessity at a given time. This collaboration
will result in more reliable electricity for homes and industries, which
will ultimately boost Indonesia's productivity and economy.
Another way for nuclear energy to contribute to Indonesia’s
economy is through job creation for nuclear power plants. Post-
COVID-19, Indonesia needs to economically bounce back to levels
seen in previous years or even better. Nuclear energy can also create
many new and sustainable jobs for the current and future genera-
tions. These jobs are not only highly skilled jobs like engineers and
doctors, but also a lot of secondary jobs such as administrative jobs,
affecting all levels of society. Since licenses for nuclear power plants
are generally valid for forty years, these jobs will always be part of

the neighborhoods.
Calls for support on nuclear energy also resonated in the COP26
in Scotland, UK. These calls came from many clean energy advocates
around the world. Those energy advocates, including Indonesia,
questioned nations’ commitment to net-zero carbon emission. The
nationally determined contribution (NDC), the official document
that has been submitted by the Indonesian government explaining
Indonesia’s pathway to net-zero carbon emission, has mentioned the
important role of nuclear energy. However, based on the pathway,
nuclear will be part of the energy mix in Indonesia by 2049, which
is too long considering Indonesia’s pathway (Humas ESDM, 2021).

Indonesia can also look for examples in Asia. The center of excel-
lence in nuclear energy has already been shifted to the East. Countries
like China and South Korea have done or pledged to include more
nuclear energy as part of their strategy to tackle climate change. The
unresolved nuclear problems, especially cost overruns and delays in
construction, have been solved by using design standardization.
However, a concrete strategy must exist to deploy nuclear energy
in Indonesia. Based on the Integrated Nuclear Infrastructure Review
(INIR) Mission from IAEA in 2009, Indonesia almost fulfills all 19
infrastructure points in Milestone 1 of the nuclear infrastructure
necessary to build the first nuclear reactor. Three key areas were
not fulfilled: the national position, management, and stakeholders
involved. These areas can be completed by establishing the nuclear
energy implementation organization (NEPIO) (Forsström et al., 2009).
NEPIO is an organization tasked to prepare and organize all necessary
infrastructures in a country to build its first nuclear power plants.
NEPIO is also responsible for preparing the plan for future nuclear
energy implementation. NEPIO will directly be responsible to the
head of government of the country. NEPIO will coordinate with all
the nuclear energy stakeholders to ensure that all the necessary poli-
cies and instruments are fully equipped to launch the nuclear energy
program (IAEA, 2015).

NEPIO is the first step to ensuring a national position exists
on nuclear energy. This step will have a crippling effect on inviting
all the stakeholders to get involved in the national nuclear energy
program. Local- and state-owned companies can see the opportunities
to get involved in the project. Foreign investment will possibly come
to Indonesia to build nuclear reactors. Three key issues that need to
be considered in foreign investment are the financial scheme of the
investment, the transfer of knowledge, and the national participation
scheme. The financial scheme of the investment needs to consider
Indonesia’s economy and future prospects. The transfer of knowl-
edge and national participation scheme is important to ensure that
Indonesia’s sovereignty over the technology is achieved and to limit
dependency on foreign experts if things go wrong with the reactors.

NEPIO also can select technologies to be used as the first nuclear
power plant in Indonesia. Many options are available around the
world. Indonesia can take advantage of the development of current
nuclear fleets. When the technology is chosen, Indonesia can start
its nuclear energy program as soon as possible. Recent projections
from the Ministry of Energy and Mineral Resources stated that the
first nuclear power is targeted to be operational by 2045 (Humas
ESDM, 2021). If all necessary infrastructures are met, including the
establishment of NEPIO and all the milestones necessary to achieve
it, the target can be pulled to earlier than 2045.
Arguably, a nuclear reactor is one of the world's most complicated
types of machinery. Adding the known risk of radiation, the safety,
and security level of nuclear power plants should have been one of
the toughest and most over-engineered of all the technologies made
by humankind. Consequently, this makes the overall cycle of nuclear
power plants longer than any other technology. Those tough measures
and over-engineering are being placed to ensure the robustness and
the highest safety standard, especially during the first construction
of a nuclear power plant known as First-of-a-Kind (FOAK). Just like
any technology, construction will be the most expensive part. This is
due to a lack of experience and the dependence on importing all the
technologies. This was what happened to South Korea in the 1970s. At
the time, South Korea constructed its first nuclear power plant with

the help of the United States. Eventually, South Koreans gained experi-
ence building their nuclear power plants, and now they are exporting
their nuclear power plants design (Lovering et al., 2016). Another
reason that makes nuclear power plant construction slow is that there
is no standardization of the design of the nuclear power plants. Every
nuclear power plants are unique and designed specifically for the site
where they are about to build. This makes the cost of construction
rise. Some designs have accommodated the standardization of nuclear
power plant design. It is expected that with this standardization, the
high cost due to the site's uniqueness can be reduced significantly
(Raetzke, 2010).

Nuclear energy is not the perfect technology, just like anything
else. However, it is arguable that nuclear power plants can provide a
significant societal impact on their existence. The secondary part of
nuclear power plants is very common for any generating power station.
This makes the job created by nuclear power plants not very unique
to nuclear engineers. The existence of nuclear power plants—which
are 40 years in minimum and can be extended up to 60 years—will
create long-lasting, high-paying jobs at all levels. This will create a
huge economic impact on the society surrounding nuclear power
plants. Nuclear energy should be part of Indonesia’s energy mix, and
must be installed as soon as possible.
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Chapter 11
Unlocking the Potential of

Hydrogen in Indonesia
Denny Gunawan
A. Overview of the Importance of Hydrogen

The ever-increasing global population and economic development
continue to intensify worldwide energy demand and greenhouse car-
bon dioxide emissions. To mitigate climate change driven by the large

amounts of carbon dioxide gas released into the atmosphere, the world
is now embarking on the switch from fossil fuels to alternative clean
energy. Hydrogen is expected to play a crucial role as a versatile clean
energy carrier and industrial feedstock with numerous applications as
illustrated in Figure 11.1. More importantly, clean hydrogen generated
using low or zero-emission sources can enable deep decarbonization
across the energy and industrial sectors.
D. Gunawan
University of New South Wales, e-mail: denny.gunawan@unsw.edu.au

Gunawan, D. (2022). Unlocking the potential of hydrogen in Indonesia. In H. Ardiansyah, & P. Ekadewi
(Eds.), Indonesia post-pandemic outlook: Strategy towards net-zero emissions by 2060 from the
renewables and carbon-neutral energy perspectives (209–235). BRIN Publishing. 209
Source: Adapted from Bruce et al. (2018)
Figure 11.1 Applications for Hydrogen
As one of the world’s largest greenhouse gas emitters, Indonesia

has committed to achieving a 29–41% reduction in carbon emissions
compared to the business-as-usual scenario by 2030 (Dunne, 2019).
In this context, hydrogen is one in a suite of technology options to
help Indonesia meet its climate targets. Moreover, the abundant

renewable resources across the country, including solar, hydropower,
wind, biomass, geothermal, and tidal as presented in Figure 11.2 could
enable Indonesia to be a worldwide clean hydrogen powerhouse. The
global market for hydrogen is projected to reach US$201 billion by
2025 (H2X Global, n.d.). Indonesia holds a huge opportunity to create
new revenues by exporting renewable resources from hydrogen and
its derivatives, such as ammonia and methanol.

Source: Adapted from Kementerian ESDM (2021)
Figure 11.2 Indonesia’s Renewable Energy Potential
Despite the enormous potential of clean hydrogen, Indonesia is

facing a number of challenges associated with the adoption of hydro-
gen across its value chain. The high cost of renewable hydrogen pro-
duction technologies is among the top challenges for clean hydrogen
to be cost-competitive with fossil hydrogen. Extensive infrastructure

requirements to ensure robust and reliable hydrogen storage and
delivery is another concern revolving around the implementation of
hydrogen. On top of that, the absence of any hydrogen-related policy
and roadmap as well as the slow growth of renewable energy mix
in Indonesia are also several potential factors that may hinder the
widespread uptake of clean hydrogen in the country.
The overarching aim of this chapter is to provide a strategy rec-
ommendation for developing clean hydrogen industry in Indonesia.
This chapter is expected to be a reference for various stakeholders,
including government, industry, and research community to build
Indonesia’s hydrogen economy in a coordinated manner. The first few
sections discuss the opportunities and challenges of clean hydrogen
Unlocking the Potential of ... 211

in Indonesia from both technical and economic perspectives. The
following sections take the analysis further by synthesizing a national
hydrogen strategy recommendation on how those opportunities can
be realized within Indonesia while tackling the associated challenges.
B. Hydrogen Value Chain

The key challenge for the widespread growth of the hydrogen market
is the scale-up of its value chain with affordable costs. The technologies
underpinning the hydrogen value chain can be classified as produc-
tion, storage, transport, and utilization as illustrated in Figure 11.3.
Source: Adapted from Bruce et al. (2018)

Figure 11.3 Hydrogen Technology Value Chain
1. Hydrogen Production

Hydrogen can be produced via several technological processes using
different sources at varying greenhouse gas emissions. Currently,
global hydrogen production is predominantly made from fossil fuels
through steam methane reforming (SMR) and coal gasification.
These two conventional pathways to produce gray hydrogen emit
substantial amounts of carbon dioxide. Therefore, it is important to
note that hydrogen may exhibit different cleanliness levels depending
on its production. Based on the raw materials, synthesis methods,
and carbon emissions, hydrogen is classified into numerous shades.
Several hydrogen shades, currently or potentially utilized in Indonesia,

include gray, blue, turquoise, pink, and green hydrogen as presented
in Table 11.1.
Table 11.1 Selected Five Shades of Hydrogen

Source: Adapted from IRENA (2020) with additional information obtained from IEA (2021),
Sánchez-Bastardo et al. (2021), and World Nuclear Association (2021a)
a. Gray Hydrogen
Gray hydrogen is produced from fossil fuels via SMR or coal gasifica-
tion. This shade of hydrogen accounts for 96% of current worldwide
hydrogen manufacturing (Taibi et al., 2018). In SMR, natural gas reacts
with steam at elevated pressure and temperature to generate syngas
(a mixture of hydrogen and carbon monoxide gases). On the other
hand, coal gasification involves a reaction between coal with oxygen
and steam at high temperatures and pressure to produce hydrogen
and carbon monoxide gases. SMR and coal gasification are mature

hydrogen production technologies that exist on a large scale across
the world. The current levelized cost of hydrogen from natural gas and
coal are approximately US$0.50–1.70 and US$1.20–2.10/kg hydrogen,
respectively (IEA, 2021).
In the context of Indonesia where natural gas and coal resources
are abundant, the existing hydrogen manufacturing plants across the
country are dominated by SMR and coal gasification. Indonesia’s gray
hydrogen is commonly produced in the national oil and gas refinery
facilities. Subsequently, hydrogen is supplied to oil processing units,
ammonia plants for fertilizer industry, and methanol manufactur-
ing plants. However, using gray hydrogen in various industries in
Indonesia entails significant carbon dioxide emissions and therefore
is unsuitable for achieving net-zero emissions targets.
b. Blue Hydrogen
Blue hydrogen is gray hydrogen coupled to carbon capture and storage
(CCS) technology. This shade of hydrogen could assist in the reduction
of carbon footprints from existing hydrogen plants during the early
phase of energy transition while minimizing the pressure on renew-
able energy growth to produce green hydrogen. The current levelized
cost of blue hydrogen is estimated to be around US$1.00–2.00 and
US$1.50–2.80/kg hydrogen for CCS-coupled SMR and coal gasifica-
tion, respectively (IEA, 2021). With the improved CCS technology

and carbon pricing policy, future forecasts suggest that blue hydrogen
could be more cost-competitive than gray hydrogen by 2030.
Indonesia is pursuing this shade of hydrogen to reduce carbon
dioxide emissions from hydrogen manufacturing. For example, the
Indonesian state-owned oil and gas enterprise, is now assessing
the integration of CCS technology into its gray hydrogen produc-
tion facilities. However, blue hydrogen has several limitations that
make it inappropriate as a long-term solution. First, blue hydrogen
is produced from finite resources and therefore is not sustainable.
Second, the efficiency of CCS is expected to be approximately that
85–90%, implying 10–15% of the carbon dioxide is emitted (Leung et

al., 2014). Although blue hydrogen significantly reduce carbon dioxide
emissions, it should not be seen as the ultimate solution as it does not
meet the requirements of a net-zero future.
c. Turquoise Hydrogen
Turquoise hydrogen is generated via natural gas pyrolysis with no car-
bon dioxide emissions. Through the pyrolysis process, the carbon in
methane is solidified into carbon black, providing additional revenue.
Turquoise hydrogen is still at the pilot stage in the United States. The
challenges are its higher capital cost than blue hydrogen, particularly
at a small scale, and the possibility of carbon coke in decreasing the
catalyst lifetime and clogging up the reactor. The levelized cost of
turquoise hydrogen is US$3.10–3.80/kg hydrogen (Sánchez-Bastardo
et al., 2021). Resolving technical issues and scaling up the production
could help reduce the cost and make it more competitive.
Indonesia could potentially pursue the production of turquoise
hydrogen as a strategy to decarbonize its natural gas resource utiliza-
tion. Noting that Indonesia’s natural gas reserve is abundant, turquoise
hydrogen production is a potential technological route to continue
using natural gas with zero carbon emissions. In addition, the black
carbon byproduct could generate additional revenues by selling it as a
reinforcing material to local and foreign rubber product manufactur-
ers, especially automobile tire producers.

d. Pink Hydrogen
Hydrogen from nuclear-powered electrolysis is known as pink
hydrogen. Although nuclear is not classified as a renewable energy
source, the electricity derived from nuclear is carbon-free and hence
is attractive to producing clean hydrogen. Furthermore, the heat
generated from the nuclear reactor can be potentially harnessed to
generate hydrogen via the thermal splitting of water or the thermal
electrolysis process. The levelized cost of pink hydrogen is estimated
to be US$2.50–3.23/kg (World Nuclear Association, 2021a).

With Indonesia’s abundant uranium resources in Kalimantan
and possibly West Papua (World Nuclear Association, 2021b), pink
hydrogen is attractive zero-carbon hydrogen to be produced in the
country. However, the realization of pink hydrogen largely depends
on the social and political acceptance of nuclear energy which is
currently considered low in the context of Indonesia. Overcoming
these social and political issues revolving around nuclear energy can
make pink hydrogen appealing to be incorporated into Indonesia’s
clean hydrogen mix.
e. Green Hydrogen
Green hydrogen means hydrogen generated from renewable energy. It
is considered the most suitable form of hydrogen for energy transition
toward net-zero emissions. Water electrolysis powered by renewable
electricity has received tremendous attention for producing green
hydrogen. The process involves two electrodes in the electrolyte
solution and is connected to the renewable power supply. When a
sufficient potential difference is applied between the electrodes, water
is split into hydrogen on the cathode and oxygen on the anode.
To date, alkaline and proton exchange membrane (PEM)
electrolyzers are the most advanced electrolyzer technologies with
their advantages. Figure 11.4 depicts the setups of alkaline and PEM
electrolyzers and selected characteristics of alkaline and PEM electro-

lyzers are presented in Table 11.2. Alkaline electrolyzers, which use a
potassium hydroxide electrolyte, are the most commercially available
and mature method for water electrolysis with lower capital costs.
However, PEM electrolyzers, which are currently more expensive,
offer a much smaller footprint, higher current density, and output
pressure (Bruce et al., 2018; Schmidt et al., 2017).

Source: Esposito (2017)
Figure 11.4 Schematic Diagrams of Alkaline and PEM Electrolyzers
Table 11.2 Selected Characteristics of Alkaline and PEM Electrolyzers

Alkaline Electrolyzer PEM Electrolyzer
Electrolyte Aqueous KOH Polymer membrane
Current density (A cm-2) 0.2–0.4 0.6–2.0
Cell pressure (bara) <30 <70
4.5–6.6 4.2–6.6
System efficiency (kWh )
Lifetime (h) 60,000 50,000–80,000
Capital cost for the entire system,
500–1000 700–1400
>10 MW (US$ kW-1)

Source: Schmidt et al. (2017) & Taibi et al. (2020)
Major barriers to green hydrogen production are its high

capital and operational costs. Green hydrogen is still much costlier
(US$3.00–8.00/kg hydrogen) compared to gray and blue hydrogen
(IEA, 2021). The production cost of green hydrogen is influenced
by renewable electricity price, electrolyzer cost, and operational
capacity as shown in Figure 11.5. The largest cost component for
hydrogen production is the price of renewable electricity to power the
electrolyzer system. Consequently, a low electricity cost is necessary
to make green hydrogen production more competitive with other

shades of hydrogen. However, declining renewable electricity cost
alone is likely insufficient to reduce green hydrogen costs to the fossil
hydrogen range. Lowering the cost of the electrolyzer and increasing
its efficiency is also essential. Shortly, green hydrogen could be on
par with blue and even gray hydrogen if continuous improvements
in renewable power and electrolyzer technologies, as well as rapid
process scale-up, are made.
Source: IRENA (2020)

Figure 11.5 Hydrogen Production Cost as a Function of Electrolyzer Capital
Cost, Electricity Price, and Operating Hours
2. Hydrogen Storage
Hydrogen storage is a crucial technology if widespread applications

of hydrogen are expected. As a result, establishing robust and reliable
hydrogen storage is of importance. Although hydrogen exhibits high
gravimetric density, the volumetric density of hydrogen in either
gaseous or liquid state is relatively low as illustrated in Figure 11.6.
Consequently, efficient hydrogen storage with low space requirements
and inexpensive cost is challenging. In general, hydrogen storage
techniques can be classified into two main categories: physical- and
material-based storage (Moradi & Groth, 2019).

Source: U.S. Department of Energy (n.d.)
Figure 11.6 Gravimetric and Volumetric Energy Density of Hydrogen
Compared to Other Fuels
a. Physical-Based Storage
The physical-based hydrogen storage system comprises compressed

gas, cryo-compressed, and liquid hydrogen storage (Moradi & Groth,
2019). In unpressurized gaseous form, hydrogen has a low volumetric
density and requires a huge storage space. Thus, keeping large volumes
of hydrogen in an unpressurized system is not economically viable
due to space limitations and high capital costs. Compression of
hydrogen gas is the most common and mature technique to improve
its volumetric density. The compressed hydrogen can then be stored
in pressure vessels at dedicated facilities.
If large volumes of hydrogen are required, hydrogen can be
injected into underground geological formations (Osman et al.,
2021). For example, depleted hydrocarbon reservoirs are appealing
sites to store hydrogen underground due to their storage capacity.

Salt caverns are another potential underground storage medium.
The key advantages of hydrogen storage in salt caverns are their high
impermeability and flexibility of hydrogen discharge rate, duration,
and volume (Osman et al., 2021).
Hydrogen can also be physically stored in its liquid or supercriti-
cal phase through liquefaction or cryo-compression. Compared to gas
compression, these two processes exhibit higher capital and operation
costs, mainly due to the extensive energy requirements for cooling
to cryogenic temperature and expensive materials for cryogenic stor-
age vessels. However, both technologies could be more viable if the
hydrogen demand is very high.
b. Material-Based Storage
Although physical-based hydrogen storage offers volumetric density
improvement, the space requirement is still considered large compared
to other fuels. Converting hydrogen into its material derivatives with
higher volumetric energy densities is attractive to improve storage
efficiency. Ammonia, methanol, and metal hydrides are appealing
candidates for material-based hydrogen storage.
Ammonia is a promising material-based hydrogen carrier be-
cause of its high hydrogen density and flexibility in its utilization.
Conventionally, ammonia is produced via the Haber-Bosch process
where nitrogen reacts with hydrogen at high temperature and pressure

in the presence of a catalyst. The facilities for ammonia production
exist widely in Indonesia. Therefore, storing hydrogen as ammonia
does not require a high capital cost to build new infrastructures. Am-
monia can be utilized by extracting its stored hydrogen or directly
used as fuel. More importantly, ammonia can be easily liquefied and
its storage, as well as delivery methods, are well-established. However,
liquid ammonia has a higher gravimetric density than compressed and
liquid hydrogen, thus leading to heavier storage (Aziz et al., 2020).
In addition, releasing hydrogen from ammonia requires a relatively
huge amount of energy, and a separation process is necessary to obtain
high hydrogen purity.

Methanol is also a promising candidate for liquid organic
hydrogen carriers that could enable carbon dioxide utilization via
hydrogenation. Since methanol is liquid at ambient temperature and
pressure, storage and transport are easy with the existing infrastruc-
ture. Methanol can be used directly as liquid fuel or split to release
hydrogen via thermolysis, steam reforming, and partial oxidation with
a low energy requirement.
Metal hydrides have recently emerged as a solid-state hydrogen
storage option. The key advantage of metal hydrides is their much
higher volumetric densities compared to the gaseous and liquid
forms of storage. In addition, storing hydrogen as metal hydrides
could minimize the hazards of pressurized hydrogen gas or liquified
hydrogen. Unfortunately, the use of metal hydrides is mainly limited
to stationary applications. Metal hydrides are deemed challenging to
apply for mobility uptake because of the temperature requirements,
the weight of storage units, and poor kinetics of hydrogen release
(Bruce et al., 2018).
3. Hydrogen Transport
The delivery of hydrogen from the producers to end users is essential
for a viable hydrogen infrastructure. Currently, hydrogen is typically
produced near industrial facilities that use hydrogen as the feedstock.
For instance, SMR and coal gasification plants in Indonesia are pre-

dominantly located within oil and gas refineries or petrochemical
industries to serve as reagents for hydrotreating, hydrocracking, hy-
drogenation, or ammonia production. In this case, hydrogen transport
is relatively simple and inexpensive due to the short distance and low
or moderate quantity. Since hydrogen is emerging as an energy vector
and feedstock for decarbonizing a number of major economic sectors,
transporting hydrogen at a longer distance and in higher quantity is
important. The key challenge is the investment cost required to build
the appropriate infrastructure. In the context of Indonesia, hydrogen
transport is even more challenging due to its geographical conditions.

Generally, hydrogen may be transported using land transports
such as trucks and rails with inexpensive costs for short-distance
delivery and low volumes of hydrogen. If delivery across islands
and international export is required, hydrogen transport by ship is a
transport mode that can be used. In addition to those three modes
of hydrogen transport, pipeline offers simultaneous distribution
with greater delivery distance (Bruce et al., 2018). Although pipeline
distribution is considered a suitable delivery method to support
widespread hydrogen uptake, transport of hydrogen via pipeline
is complex. To reduce the pressure on new pipeline infrastructure
installations, injecting hydrogen into the existing natural gas pipeline
is an attractive option that can also help decarbonize the gas sector.
If pure hydrogen is demanded, new pipelines or upgraded existing
natural gas pipelines are necessary due to the gas property differences.
The delivery of hydrogen in its physical-stored form is difficult
due to the lack of perfectly suitable infrastructure. Storing hydrogen
as chemicals or material derivatives with more mature infrastructure
(e.g., ammonia, methanol, and synthetic natural gas) can be a promis-
ing solution during the transition period toward hydrogen economy
while further expanding pure hydrogen transport infrastructure.
Indonesia is one of the largest ammonia and methanol producers
in the world. Consequently, Indonesia has sufficient capability to
distribute those material-based hydrogen carriers.
4. Hydrogen Utilization Buku ini tidak diperjualbelikan.

For years, hydrogen has been extensively used as a reagent in numer-
ous industries. Today, the top three uses of hydrogen are petroleum
refining (33%), ammonia production (27%), and methanol synthesis
(11%) (IEA, 2019).
In a petroleum refinery, hydrogen is predominantly required for
hydrotreatment and hydrocracking processes. Hydrotreatment uses
hydrogen to remove sulfur, nitrogen, and other contaminants from
petroleum oil to create a cleaner fuel. Hydrocracking is a process
that cracks long-chain heavy hydrocarbons to form valuable products

such as gasoline, kerosene, diesel, and avtur. In addition to fossil
refinery, hydrogen plays a key role in biorefinery as a reagent in the
hydrodeoxygenation process to produce biofuels.
The chemical sector takes the second and third places for the
largest sources of hydrogen demand including ammonia and methanol
manufacturing. Ammonia is produced via a mature Haber-Bosch
process by reacting nitrogen with hydrogen at high temperature and
pressure in the presence of a catalyst. Currently, ammonia is mainly
adopted as a feedstock for agricultural fertilizer production. More
recently, ammonia is also seen as a highly potential carbon-free fuel.
As the third-largest industry using hydrogen, methanol synthesis typi-
cally proceeds via carbon dioxide or carbon monoxide hydrogenation.
Approximately 65% of methanol is consumed for chemicals and fuel
additives production (Dalena et al., 2018).
As the world races to decarbonize, green hydrogen is expected
to have broader applications. Through power-to-X (P2X) framework,
hydrogen could enable deep decarbonization of hard-to-abate sec-
tors, which is widely known as sector coupling (Figure 11.7). P2X is
defined as a method of converting renewable electricity into liquid or
gaseous chemical energy via electrolysis (Gunawan, 2022). Producing
hydrogen through water electrolysis is at the core of P2X due to the
versatility of hydrogen across different sectors.

Source: Schnettler (n.d.)
Figure 11.7 Power-To-X Framework for Decarbonizing Hard-To-Abate Sectors
Using Hydrogen
The primary challenge of integrating renewable energy into the

existing grid in the electricity sector is its intermittency. At times, the
energy supply is higher than the demand, while the generated power
is too little at other times. For instance, solar electricity production

depends on the amount of sunlight reaching the solar panels and wind-
generated power depends on wind velocity and air density. Therefore,
adequate storage solutions are essential to resolve intermittency and
ensure grid stability. Even though battery is the most common storage
solution, its capacity and storage timespan are limited (Hydrogen
Council, 2017). On the other hand, hydrogen offers a promising solu-
tion for long-term storage, facilitating the resilience of the grid system.
Excess renewable electricity can be converted through electrolysis into
hydrogen gas during oversupply. The produced hydrogen can then
be transformed back to electricity using a fuel cell or a gas turbine
during power deficits.

In terms of power distribution, hydrogen represents a promising
energy carrier thanks to its high energy density. Hydrogen can be dis-
tributed over long distances via pipelines with nearly 100% efficiency
(Hydrogen Council, 2017). In the national-level energy system, this
could enable a centralized or decentralized primary or backup power
source. Furthermore, in the context of global energy supply, hydrogen
is a powerful enabler to exporting renewable electricity at competitive
pricing, potentially ramping up national revenue.
As a versatile energy vector, hydrogen can link heat and electric-
ity sectors (Gurieff et al., 2021). Nowadays, heating applications for
domestic and industrial purposes are dominated by petroleum oil,
natural gas, or coal as fuel. For example, liquefied petroleum gas (LPG)
and liquefied natural gas (LNG) are typical cooking gases utilized in
Indonesia. Coal or natural gas are burned to produce heat in industries
requiring high thermal energy input (e.g., petrochemical and cement
manufacturers). Hydrogen can help decarbonize the heat generation
process through two different scenarios. The first scenario is the
natural gas enrichment with hydrogen. Blended 10–15% hydrogen
with natural gas can be applied using the existing infrastructures and
appliances, thereby reducing the cost needed for system upgrades
(Bruce et al., 2018). The second scenario, deemed more consistent
with the net-zero targets, utilizes pure hydrogen to replace fossil fuels
for heating applications. However, this approach will require replacing

or upgrading of the existing infrastructures and appliances, rendering
high capital costs.
Hydrogen can also power vehicles using a fuel cell generating
electricity to run the car. Fuel cell electric vehicles (FCEVs) offer
numerous key benefits such as long travel distances without refueling
along with a fast-refueling rate (Hydrogen Council, 2017). Although
past attempts to switch to FCEVs were baffled by the presence of
battery electric vehicles (BEVs) mainly due to the lack of hydrogen
refueling infrastructure, the benefits of FCEVs render them neces-
sary in decarbonizing passenger cars, heavy-duty transport, and
public transport (buses and trains). In Indonesia, for instance, the

state-owned Indonesian Railways Company (PT KAI) submitted a
memorandum of understanding (MoU) to Alstom on a project for
hydrogen-powered trains in 2019 (Aditiya & Aziz, 2021).
As an industrially important feedstock, hydrogen is essential in
manufacturing chemicals and fuels, as described earlier. Replacing
the existing gray hydrogen with green hydrogen can significantly
reduce carbon footprints. In addition, carbon dioxide from emission
points or the atmosphere can be processed using green hydrogen to
produce valuable chemicals and fuels via methanation, hydrogenation,
or Fischer-Tropsch, thereby helping close the carbon loop in heavy
sectors (Daiyan et al., 2020).
C. Existing Barriers for Hydrogen Uptake in

Indonesia
Hydrogen is a compelling energy carrier and industrial feedstock,
and mainly green hydrogen offers a promising pathway toward a net-
zero future. In Indonesia, numerous green hydrogen initiatives have
appeared in recent years by state-owned and private companies. The
highly abundant renewable resources, ranging from solar, hydropower,
wind, biomass, geothermal to tidal, are the main driver for the green
hydrogen industry in Indonesia. Nevertheless, a number of barriers
that may limit the uptake of hydrogen-related technology in Indonesia

exist and need to be tackled before the full benefits of hydrogen are
manifested.
1. High Production Costs

At the moment, green hydrogen produced using renewable electricity
is costlier than gray and blue hydrogen. In addition, utilizing green
hydrogen for new downstream applications can be more expensive
than its fossil counterparts. In terms of production, the major con-
tributors to the green hydrogen price are the costs for renewable
electricity generation and electrolyzers. Nevertheless, the levelized cost
of green hydrogen is expected to fall by 2050 thanks to the continuous
improvements in cost and performance of renewable and electrolyzer

technologies. More importantly, the cost of green hydrogen could be
more competitive compared with gray and blue hydrogen, as presented
in Figure 11.8, if supporting policies are implemented.
Source: IEA (2021)

Figure 11.8 Levelized Cost of Hydrogen Production by Technology in 2020 and
the Estimated Cost in 2030 and 2050 Under the Net-Zero Emissions Scenario
2. Lack of Hydrogen Infrastructure

Up to now, most of the hydrogen in Indonesia is produced near utiliza-

tion sites, such as petroleum refinery, biorefinery, and petrochemical
manufacturing plant. Consequently, dedicated hydrogen transport
infrastructures are limited, especially for long-distance delivery. For
fuel cell electric vehicle applications, hydrogen uptake is also currently
hindered due to the absence of refueling stations. Therefore, invest-
ments in hydrogen infrastructure with a long horizon are needed.
3. Absence of National Hydrogen Strategy

Developing a hydrogen economy requires a coordinated effort by the
government, industry, and research community. A national hydrogen
strategy, which comprises a roadmap and a set of policies, is essential
to synergize all stakeholders. The lack of a clear national strategy

indicates the poor commitment made by the government on hydrogen
and eventually discourages potential investors.
4. Insufficient Recognition of Hydrogen Value

Today, the hydrogen capability to reduce carbon footprints in various
sectors is recognized as a concept but does not receive enough valu-
ation. In Indonesia’s energy statistics, hydrogen is not listed in the
total final energy consumption (Kementerian ESDM, 2020). While
the government continues to increase cash subsidy for fossil fuels
which accounts for 8% of Indonesia’s total budget in 2020 (Sumarno
& Sanchez, 2021), the incentives to promote the use of green hydrogen
are lacking, thereby restricting potential markets for green hydrogen.
D. Indonesia’s Pathway to a Hydrogen Economy

The hydrogen economy decarbonize hard-to-abate sectors such as
cement, steel, chemicals, and heavy-duty transportation. These sec-
tors are difficult to electrify directly using renewable electricity due
to the nature of the processes, high-temperature heat requirements,
and/or high-density energy source requirements. As nearly a third
of global carbon dioxide emissions are attributed to these sectors, a
viable alternative solution to decarbonize hard-to-abate industries is
vital. Hydrogen, particularly green hydrogen, appears to be the most

promising decarbonization pathway for these sectors.
Implementing green hydrogen as a widespread energy carrier
in Indonesia will require meticulous national strategies and a set of
comprehensive national policies to overcome existing barriers. Un-
fortunately, Indonesia has not formulated any hydrogen roadmap and
policies yet. To stimulate the development of the hydrogen industry
in Indonesia, herein, a national hydrogen strategy, which comprises
a detailed national hydrogen roadmap and enabling policies, is pro-
posed according to Indonesia’s current position and existing barriers
in hydrogen uptake across the country.

1. Establishing Indonesia’s National Hydrogen Roadmap
Developing a sustainable hydrogen economy in Indonesia to achieve
net-zero emissions targets can be daunting without comprehensive
early planning. While many countries have published their hydrogen
strategies, Indonesia has not drafted any step-by-step roadmap to
incorporate hydrogen in its energy policies. To accelerate the uptake
of hydrogen across different applications on the path to net-zero emis-
sions, the following national roadmap is proposed to the Indonesian
government. Indonesia’s national hydrogen roadmap should aim for an
integrated system across the hydrogen value chain. To meet net-zero
emissions by 2060, the roadmap has to focus on green hydrogen as
the ultimate target due to its suitability to combat climate change. This
proposed national hydrogen roadmap adopts a step-by-step approach
including five transition phases. Electrolyzer capacity milestones in
each phase are set by considering the best policy scenario proposed
by Tampubolon et al. (2021).
Phase 1 (2022–2025)
Indonesia shifts from gray/black hydrogen to blue hydrogen by deploy-
ing CCS technology in the existing gray/black hydrogen production
facilities. The initial focus is to reduce carbon footprints in industrial
applications that already use hydrogen as the feedstock. Hence, the
existing hydrogen storage and transport infrastructure can still be

used. At the same time, the government has to facilitate the uptake of
hydrogen in new downstream applications (e.g., fuel cell power plants,
fuel cell electric vehicles, and heating appliances) through project
collaborations with stakeholders.
Phase 2 (2026–2030)
Indonesia continues to generate and utilize blue hydrogen while
starting the green hydrogen initiative by developing demonstration
plants with at least 10 MW capacity each. For instance, the govern-
ment could build a water electrolyzer for hydrogen production in

the North Kalimantan Green Industrial Park (Gunawan, 2022). This
steppingstone is expected to encourage state-owned and private heavy
industries to build green hydrogen production facilities and gradually
phase out fossil hydrogen. At this stage, hydrogen is also likely to
expand its applications to public transport (e.g., fuel cell electric buses
and trains) in major cities. If possible, the existing facilities provide
infrastructure and a number of refueling stations are built to supply
the hydrogen demand from fuel cell electric public transport.
Phase 3 (2031–2040)
Indonesia develops five green hydrogen hubs in its major islands
including Sumatra, Java, Kalimantan, Sulawesi, and Papua with a
total capacity of at least 100 GW (Tampubolon et al. (2021) proposed
138.7 GW capacity as the best policy scenario in 2040). Prospective
locations for the green hydrogen hubs are presented in Figure 11.9
based on each renewable energy potential. All industries are expected
to use green hydrogen as the feedstock and energy source by building
hydrogen power plants. Blue hydrogen can still be used in limited
quantities to ensure sufficient supply to meet the demand while ramp-
ing up national green hydrogen capacity. The hydrogen applications
are further extended to private vehicles (e.g., fuel cell electric cars) and
gas networks using natural gas enrichment scenario. In addition, at
this crucial phase, Indonesia has to focus on developing the hydrogen

infrastructure, including large-scale storage systems (e.g., pressurized
vessels and underground storage) and hydrogen pipelines across the
country for long-distance delivery.

Source: Adapted from IESR (2018)
Figure 11.9 Prospective Locations for the Green Hydrogen Hubs according
to Renewable Potential and Installed Capacity Including Variable Renewables
(Solar, Wind, and Tidal) and Controllable Renewables (Hydropower, Biomass,
and Geothermal)
Phase 4 (2041–2050)
Indonesia scales up its electrolyzers to a total capacity of at least 200
GW (Tampubolon et al. (2021) proposed 229.1 GW capacity as the
best policy scenario in 2050) by upgrading the facilities in selected

sites with huge potential for renewables and land availability such
as Kalimantan and Papua hubs. The production of blue hydrogen is
phased out, but natural gas may still serve as raw material for turquoise
hydrogen production if viable. At this phase, Indonesia is expected to
continue the construction of hydrogen infrastructures to ensure a just
energy transition while developing a capability to export hydrogen
and its derivatives.

Phase 5 (2051–onward)
Indonesia becomes a global hydrogen powerhouse in which green
hydrogen reaches maturity and is deployed across various sectors.
Green hydrogen, ammonia, and methanol are exported to resource-
constrained countries in Asia-Pacific such as Singapore, Japan, and
South Korea, thereby generating additional revenues.
2. Establishing Supporting Policies to Overcome

Barriers
In addition to a national roadmap, the government should support the
development of a green hydrogen economy through enabling policies
to overcome existing barriers. The policies reflect the government’s
commitments to integrating hydrogen into the national energy system
toward a net-zero future across all sectors.
Regarding hydrogen production, green hydrogen currently suffers
from higher costs due to expensive renewable energy technologies and
electrolyzers. Numerous policies can help reduce the cost of green
hydrogen. First, the government should set optimistic yet realistic
targets for national renewable energy share and electrolyzer capac-
ity. The proposed national hydrogen roadmap targets could attract
domestic and foreign investors. Second, cutting taxes and providing
incentives for the installations of renewable energy infrastructures

and electrolyzers will increase capacity growth rate, thus reducing
the price as well as ramping up revenues and the rate of return. Sup-
port for research to improve electrolyzer efficiency via funding and
international collaborations are also essential to lower the capital costs.
Another significant challenge of hydrogen is the lack of infra-
structure for storage and transport. To overcome financial issues for
infrastructure developments, the government has to collaborate with
developed countries through global trading agreements. In addition,
green policies need to be formulated to encourage private sectors to
develop hydrogen infrastructure. For instance, a carbon taxing policy
where carbon dioxide emissions are priced as the environmental cost
could stimulate industry to phase out fossil fuels and build the capacity

to produce, store, and transport green hydrogen. More importantly,
a national timeline to phase out high-emission technologies will
push industries to develop end-use technologies that align well with
hydrogen, thereby creating a new market for green hydrogen.
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Section 3
Indonesia’s New Strategy to
Achieve Net-Zero Emission in 2060
237
Chapter 12
Socio-Economic Impacts of
Renewable and Carbon-Neutral
Energy Development
Nevi Cahya Winofa
A. Overview of Socio-Economic Impact of

Renewable and Carbon-Neutral Energy
Development
Energy is the input of nearly all economic activities. Having the fourth

largest population in the world and Southeast Asia’s largest economy,
Indonesia has the largest energy consumption in the Southeast Asia
Region, accounting for 40% of the total energy consumption. Hence,
Indonesia’s energy supply structure is critical for determining eco-
nomic development. In COP26, Indonesia has pledged to achieve
a 29% reduction in greenhouse gas emissions by 2030 and net-zero
emission by 2060. One of the mitigation measures in the energy sector
is increasing renewable energy shares by 23% in 2025 and 31% in 2050.
N. C. Winofa
Rice University, e-mail: neviwinofa@rice.edu

Winofa, N. C. (2022). Socio-economic impacts of renewable and carbon-neutral energy development.
240
Table 12.1 The Scope of the Chapter

While meeting the environmental objective, energy transition
also impacts the social and economic aspects. This chapter reveals
a full range of macroeconomic benefits of renewable and carbon-
neutral energy deployment: increasing energy security, fueling GDP
development, creating job opportunities, enhancing human welfare,
and achieving gender equality. Several challenges need to be tackled
to maximize the benefit of the energy transition, such as uncom-
petitive renewable and carbon-neutral energy cost to conventional
energy, lack of renewable and carbon-neutral energy investment,
gap in achieving positive net employment, and low participation of
women in renewable and carbon-neutral energy jobs. Some policies
and recommendations are also proposed to address the challenges
of renewable and carbon-neutral energy development in Indonesia.
Figure 12.1 summarizes the scope of discussion in this chapter.
B. An Overview: Energy Structure, Economic

Development, and Human Welfare
The energy structure has a high impact on economic and human
welfare. Figure 12.1 shows the relationship between how changes in
the energy sector will influence economic and human welfare. Energy
contributes to each component of GDP: consumption, investment,
government income, and net export. Although the impact of energy
structure on human welfare is already reflected in GDP, energy has

additional impacts such as carbon emission, source of income, and
electrification, which also has a derive impact on the quality of health
and education.
Source: modified from IRENA (2016)

Figure 12.1 The Relationship between Energy, Economic Development, and
Human Welfare
Socio-Economic Impacts of ... 241

1. Current Indonesia’s Energy Structure, Economic
Development, and Human Welfare
With a population of 277 million which is constantly growing by
1–2% per year between 1990 and 2020, Indonesia has become the
fourth most populous country in the world (Worldometers, 2022).
Regarding economic development, Indonesia has had a remarkable
economic growth of 5% on average GDP growth per year for more
than thirty years (BP Statistical Review, 2021). Therefore, the country
becomes the largest economy in Southeast Asia and the tenth-largest
global economy in terms of purchasing power (World Bank, 2021).
This impressive development is also reflected in Indonesia’s energy
consumption. Figure 12.2 shows that the primary energy consump-
tion has a similar trend with the GDP. Energy demand grows as the
economy develops. However, it also can be seen that CO2 emission
also increases as energy consumption increases.

Source: World Bank (2022) & BP Statistical Review (2021)
Figure 12.2 Population and Economic Development (Left) and Total Energy Use
and CO2 Emissions Trend (Right)
Looking into more details, the energy supply in Indonesia is

still dominated by fossil fuels which are coal, oil, and natural gas.
Figure 12.3 (left) shows the development of Indonesia’s energy mix.
Although the share of oil consumption has declined, the share of coal
has soared especially in the last ten years. Undoubtedly, CO2 emission

has increased as energy use increases because it was mainly supported
by fossil fuels. This condition was the opposite of the country’s com-
mitment to reduce greenhouse gas emission by 2030 and to achieve
net-zero emissions in 2060. Figure 12.3 (right) shows that fossil fuel
contributed 93% to total energy consumption in 2020 (coal: 40%),
(oil: 35%), and (natural gas: 18%) while renewables only contributed
7%. It is still far from the country’s energy mix transformation target
to increase the renewable shares from 23% in 2025 to 31% in 2050
as stated in the Government Regulation No. 79/2014 on National
Energy Policy.
Source: BP Statistical Review (2022)

Figure 12.3 The Development of Indonesia’s Energy Mix (Left) and Comparison
Between Current Energy Mix and Target in 2020 and 2050 (Right)

The demand for coal mostly came from electricity consumption.
The electricity generation still heavily relied on coal. Coal utilization
in electricity generation has consistently increased by 2% over the last
five years. Accounting for 64%, coal is the main resource of electric-
ity generation in 2020, followed by natural gas at 23%, renewables
at 9%, and oil at 5%. According to the National Power Generation
Plan in RUPTL 2021–2030, the power generation will continue to be
dominated by coal for the next ten years (Figure 12.4). The increase in
the share of renewables is from replacing the diesel power generation
only from 3T (front, outermost, and disadvantaged) regions. Knowing
that fossil fuel is less expensive, the state electricity company (PLN)
faces conflicting challenges between increasing the share of renewables

and keeping the rate of BPP (electricity generation cost). Although the
PLN applied co-firing to reduce the environmental damage of coal, it
will continue to be a major supplier of electricity.
Source: PT PLN (2020)

Figure 12.4 Indonesia Electricity Energy Mix and Its Target in 2025 and 2030
2. How COVID-19 Changes Energy Demand and

Economic Structure
Despite impressive economic progress, the sudden shock due to the

COVID-19 pandemic has shrunk Indonesia’s economic growth by 6%
in 2020 (World Bank, 2022). This condition was the biggest falling
since the financial crisis in 1998. The rapid spread of the virus has
significantly reduced productivity, increased unemployment, loss of
life, and closed businesses. This made the government of Indonesia
concentrate its effort on the health and economic recovery.
The pandemic has also impacted the energy sector with a decline
by 7% in total energy demand. To mitigate the massive spread of the
virus, travel restrictions were imposed, leading to a cut-off on gasoline
and diesel fuel consumption by 15–20% and jet fuel consumption by
30–0% (McKinsey & Company, 2020). The large-scale restrictions
in major cities resulted in a delay in several energy projects, affect-

ing energy companies’ profit and reducing the new investment. PT
Pertamina (state oil company) and PT PLN reported experiencing
US$768 million loss and almost no profit in the first half of 2020, re-
spectively (McKinsey & Company, 2020). Several under-construction
projects need to be delayed in renewable and carbon-neutral energy
development. Some funding distribution also got delayed because of
the concern of project sustainability during the pandemic. As a result,
this condition has pushed back the target from the original plan.
Although the country suffers from the shock, its economy will
gradually come back as large-scale tracing, tracking, and vaccina-
tion of COVID-19 has been widely applied. The World Bank (2021)
estimates that Indonesia’s economy will continue to recover in 2021
and accelerate in 2022. It is known that economic development will
drive an increase in energy demand. The significant growth of energy
demand post-COVID-19 is an opportunity to promote renewable and
carbon-neutral energy to supply additional energy demand.
3. Projection of Economy and Energy Demand in 2030

and 2060
As energy efficiency improved, the economy moved from the indus-
trial sector (highly energy-intensive sector) to the service sector (less
energy-intensive sector). Figure 12.5 shows the changes in structural
economic activity over three decades. It is projected that the service

sector will be continuing to grow in the future. Even though Figure
12.6 shows that this is projected to increase until 2030 and even until
2060, energy demand will increase at a slower rate in line with slow
growth in population compared to GDP. This is a momentum for
renewable and carbon-neutral energy to take over the energy market.
While the preparation is underway, consistent energy policies and
regulations must be introduced to ensure that Indonesia does not
miss the momentum to strengthen the green economy.

Source: World Bank (2022)
Figure 12.5 The Development of Indonesia Structural Economy
Source: World Bank (2020) & OECD (2018)

Figure 12.6 Current and Projection of Indonesia’s Population and Economic
Growth

C. Socio-Economic Benefit of Renewable and
carbon-neutral Energy
While achieving greenhouse gasses reduction targets, the deploy-
ment of renewable and carbon-neutral energy has multiple benefits
to economic and social development. This subchapter discusses how
increasing renewable and carbon-neutral energy share in the energy
mix can improve economic and human welfare.
1. Energy Security
Maintaining an adequate and stable supply of energy at a reason-
able price has become a serious problem when facing the possibility
of economic upheaval. This concept refers to energy security. It is
known that energy is the input to economic activity. An inadequate
and unstable energy supply potentially disrupts economic activity,
leading to macroeconomic dislocation. The probability of disruption is
higher when the country relies on other countries to meet its national
demand. Any political action restricting the energy supply can be
a major national threat. Indeed, by engaging in international trade,
the country must face the uncertainty of the world price of energy.
In addressing energy security, the idea of diversification of energy
sources and reducing imported energy has been echoed. It is known
that energy transition plays an important role in those areas while

also achieving environmental objectives.
a. Diversifying energy sources
Renewable and carbon-neutral energy can contribute to ensuring a
stable energy supply through energy resource diversification. Increas-
ing the share of renewable and carbon-neutral energy in the energy
mix gives an ability to substitute among other energy sources, which
help to reduce the risk of disruption in the energy supply. It is known
that oil and gas prices, sometimes, can be extremely volatile. Thus,
the availability of renewable and carbon-neutral energy as a substitute
can help avoid price uncertainty. It was seen in Japan when they were
facing the oil shock in the 1970s. They tried to diversify their energy

source for electricity generation by increasing nuclear energy, gas and
coal and promoting energy efficiency and conservation. Therefore,
energy policy needs to be made to reduce the cost of renewable and
carbon-neutral energy to benefit energy security.
b. Reducing reliance on imported energy
Increasing renewable and carbon-neutral energy shares can make
the country more independent in supplying energy. It is known that
Indonesia currently imports 50% of its energy use. The country is net
importer of crude oil with more than 236,000 bpd of imported crude
oil in 2020 (EIA, 2021). Already net imported crude oil, Indonesia is
also predicted to be net imported natural gas for the next five years
(McKinsey & Company, 2020). This condition makes local energy
production critical to reducing the reliance on energy supply from
foreign countries. Deploying renewable and carbon-neutral energy
can increase domestic energy production, reducing energy import.
While increasing local production, it also pushes the risk of disruption
in energy supply from external factors. In this case, an energy policy to
increase renewable and carbon-neutral energy investment is valuable
to increase its contribution.
2. Boosting Economic Growth

Energy drives economic growth. The changing structure of the en-

ergy supply will directly impact the economic development shown
in national GDP growth. A reliable, secure, and most importantly
environmentally friendly energy resource is equally important in
stimulating economic growth. Bappenas (2021) predicted that the
economy will grow 6.1–6.5% on average per year between 2021 and
2050 through a low-carbon growth path. The robust increase in GDP
is mainly caused by an increase in renewable and carbon-neutral
energy investment and a reduction in energy import.

a. Increasing investment
An increase in renewable energy investment will trigger economic
growth. It is known that the characteristic of renewable energy de-
velopment is capital-intensive. In other words, it has a high upfront
investment (physical asset) while having a low operational cost (fuel
cost). An increase in the share of renewable energy in the energy mix
will increase the demand for investment in infrastructure. Therefore,
renewable and carbon-neutral energy investment needs to be scaled
up to meet the growing demand.
b. Accelerating domestic industries growth
Another important renewable and carbon-neutral energy role in rais-
ing economic development is growing domestic industry. Renewable
and carbon-neutral energy development will activate the construction
and manufacturing sectors. This can be a source of national income,
directly giving additional value to GDP. While stimulating activity
in the construction and manufacturing sector, it also contributes to
ensuring energy supply and increasing job opportunities. It still does
not count the positive impact of the increase in the electrification rate,
which also encourages economic productivity. Thus, it is reasonable
that renewable and carbon-neutral energy significantly contributes
to enhancing economic growth.

3. Job Creation
Job creation is always a national concern because it benefits from skill
acquisition, gender equality, and reducing social conflict. Increasing
the employment rate is also indirectly related to increasing GDP and
improving human welfare. With a well-designed policy, deploying
renewable and carbon-neutral energy can result in positive net em-
ployment. By pursuing net zero-emission, Indonesia potentially cre-
ates 1.8–2.2 million jobs in 2030 in renewable energy, electric vehicle
technologies, energy efficiency, land use interventions, and improved
waste management (Bappenas, 2021). The increase in employment
rate results from the growing renewable and carbon-neutral energy
technology industry and its related infrastructure.

Renewable and carbon-neutral energy development will activate
a broad range of industries starting from equipment manufacturers
industries, the construction and installation, operation and mainte-
nance, and fuel supply until its infrastructure. All these sectors are
labor-intensive. It not only needs more workers, but also results in
new roles in energy industries that are more specialized. Although
there are job losses from conventional energy abandonment, a sup-
ported energy transition policy can achieve positive net employment.
Therefore, education and skill matching are required to maximize the
benefit of renewable and carbon-neutral energy employment.
4. Human Welfare
While decarbonizing the economy, the impacts of renewable and
carbon-neutral energy on welfare are equally important. Even though
GDP measures country’s standard of living, it does not show the full
impact on the human welfare of the country. IRENA (2016) reveals
that the benefit of an energy transition to human welfare can surpass
the GDP growth. Human welfare also needs to consider the effect of
the natural resource depletion and health and environmental cost
associated with energy resource extraction. Therefore, to understand
the impact of renewable and carbon-neutral energy on human welfare,
it can be seen from economics (increase in real income and household
consumption), social (increasing life expectancy by improving air

quality), and environment (reducing greenhouse gas emission).
a. Increased household consumption, income, and
improved air quality
Renewable and carbon-neutral energy growth will positively impact
the economy. An increase in renewable and carbon-neutral energy
investment will encourage the domestic industries to grow, which
correlates positively with real income due to the increased employ-
ment. Increasing renewable and carbon-neutral energy access also
contributes to rising household income. Moreover, increasing the
electrification rate helps provide a better health service and improve
teaching and learning process. Indeed, deploying renewable and

carbon-neutral energy in the region can give additional revenue to
develop a better health and education infrastructure. Most impor-
tantly, renewable and carbon-neutral energy contributes to reducing
greenhouse gas emission and improving air quality. Bappenas (2021)
projects that a net-zero emission path will reduce 87–96 billion tons
of CO2 over 2021–2060, potentially save 40,000 lives in 2045 alone
from air pollution reduction.
b. Gender equality
Renewable and carbon-neutral energy development offers a broad
range of employment opportunities. It is important to ensure these
opportunities are equally accessible to get equal benefits. As an ac-
tive economic agent, women’s contribution can give a more diverse
perspective in the workplace, increasing overall energy industry
performance. However, perception of gender in terms of social and
cultural norms, inadequate skill and education, and lack of gender
equality policy are major barriers for women to step up in the energy
industry.
Having a multidisciplinary field, renewable and carbon-neutral
energy will increase women’s contribution to energy sectors. It is
reported that renewable and carbon-neutral energy has women
representation accounting for 32%, which is 10% higher than con-
ventional energy at 22% (IRENA, 2019). Therefore, renewable and

carbon-neutral energy is important in making the energy sector more
gender-balanced. Gender perspective in energy policy and preparation
for women to be qualified talents for energy transition becomes even
more crucial.
D. Key Challenges of Renewable and carbon-

neutral Energy Development
While the transition is underway, some challenges need to address
to achieve the benefit of renewable and carbon-neutral energy de-
velopment. This sub-chapter shows the key challenge that needs to
be tackled.

1. Uncompetitive Renewable Energy Cost to
Conventional Energy
To penetrate the energy market, renewable and carbon-neutral
energy must be cost-competitive to conventional energy. Low-cost
renewable and carbon-neutral energy can also be the backbone of a
decarbonizing economy. Regarding the technology, renewable and
carbon-neutral energy have shown a remarkable decline globally over
the past decade. For instance, IRENA (2020) reported that the cost of
electricity generated from utility-scale solar photovoltaics (PV) has
sharply decreased by 85% between 2010 and 2020. Albeit its low cost
of technology, renewable and carbon-neutral energy still cannot take
over the electricity market in Indonesia. It is seen from the National
Power Generation Plan in RUPTL 2021–2030 that power generation
will continue to be dominated by coal. Apart from improving technol-
ogy, the barriers come from an unsupported regulation framework
and unrepresented externalities in market price.
a. Unfair competition with subsidized fossil fuel
To be the main player in the electricity market, renewable and carbon-
neutral energy needs to be compared head-to-head with conventional
energy. As a net coal exporter, Indonesia has a much cheaper electric-
ity generation cost than other energy sources. It is reported that it only
costs US$3 cent/kWh from existing coal plants and US$7 cent/kWh

from new coal plants (Umah, 2021). Accounting for US$5.8 cent/kWh,
the largest solar PV in Indonesia and Southeast Asia, Floating Solar
PV Cirata, West Java, still cannot reach the below range of coal cost
(Rahman, 2020). The low-cost coal results from government policy
that subsidizes coal as input for power generation. Since 2018, the
government of Indonesia has required the coal miners to supply 25%
of their annual production to the PT PLN at a maximum price of
US$70 per metric ton. The purchasing price is so much lower than
the market price. It is less than half the market price in January 2022
at US$158.50 per metric ton and a third of market price in November

2022 at US$215.01 per metric ton (ESDM, 2022). This condition has
made renewable and carbon-neutral energy less attractive compared
to coal.
b. Unseen positive externalities
Another challenge is that the positive externalities of renewable energy
are still not reflected in its market price. It is known that renewable
and carbon-neutral energy is a reliable energy source that saves peo-
ple’s health and the environment. As stated before, Bappenas (2021)
projects that a net-zero emission path will reduce 87–96 billion tons
of CO2 over 2021–2060, potentially saving 40,000 lives in 2045 alone
from air pollution reduction. Therefore, the value of positive exter-
nalities can reduce the cost of renewable and carbon-neutral energy.
Likewise, the negative externalities from burning and producing fossil
fuels also need to be shown in its market price. IRENA (2015) shows
that if externalities associated with CO2 emission are valued in terms
of price (assuming US$20 to US$80/ton of CO2), the price of electric-
ity generation from fossil fuel increases by US$1 cent to US$13 cent
/kWh (depending on country and technology). Giving a value for
externalities will dramatically change renewable and carbon-neutral
energy competitiveness.
c. Lack of renewable and carbon-neutral energy
investment

Renewable and carbon-neutral energy is a high-cost investment since it
requires high upfront capital. However, once tapping into the field, the
marginal cost of renewable and carbon-neutral energy is almost zero.
A sharp decline in the cost of renewable and carbon-neutral energy
is supposed to be an opportunity to drive its investment. Bappenas
(2021) forecasts required investment to achieve net-zero emission
starting from around US$20 billion per year in 2021–2022 (about
Rp291 trillion) and an average of US$150–200 billion (Rp2.2–2.9
quadrillion) per year as shown in Figure 12.7.

Source: Bappenas (2021)
Figure 12.7 Investment Needed to Achieve Net-Zero Emission in 2021–2060
However, Indonesia’s renewable and carbon-neutral energy

investments are still mainly below the country’s target. Accounting
for US$1.17 billion in September 2019, the investment was 65% of
the target of US$1.8 billion (IESR, 2019). Half of the total invest-

ment comes from geothermal energy, while a meager contribution is
from other renewable energy sources. It is shown that renewable and
carbon-neutral energy is still lacking its investment. Regulation uncer-
tainty is a major issue in reducing investor confidence in Indonesia's
renewable and carbon-neutral energy investment.
While dealing with resources and technology risks, renewable
and carbon-neutral energy investors also need to deal with risk from
inconsistent regulation and the effect of market structure. Survey
taken by PwC in 2018 indicates that 94% of investors in the Indonesian
power sector agree that uncertainty in regulation is a major barrier
to new large-scale power generation investment. The regulation un-
certainty includes a lack of transparency and low predictability in
procurement, risk allocation, and unattractive tariff systems.

d. Lack of transparency and low predictability in
procurement
In terms of the electricity market, Indonesia adopts a vertically inte-
grated market structure where PT PLN is the only market player in
electricity generation, transmission and distribution, and electricity
retailing. This structure gives PT PLN a powerful market power to
determine the price in the electricity market. The procurement process
by PT PLN can be conducted in three different ways: (1) Direct Ap-
pointment, PT PLN directly appoints an IPP to conduct the project.
(2) Direct Selection, PT PLN selects a project proposal from more
than one submitted IPPs proposal. (3) Competitive Tender, if only
the IPPs project is not eligible for direct appointment or selection.
The main concern is that the direct selection by PT PLN does not
always reach financial closure and is time-consuming (OECD, 2021).
In addition, PT PLN agreed to purchase the electricity tariff if the
price is less or equal to National BPP. When it is higher, the price
will be discussed business to business between PT PLN and IPP. The
closed-door negotiation between IPPs and PT PLN gives an impres-
sion of a lack of transparency and predictability in procurement. The
company takes this as a risk, which also increases the required rate
of return of the project. As a result, the price of electricity generation
will be higher.

e. Unattractive tariff system
The current tariff system adopted by Indonesia does not give a strong
incentive to invest in renewable and carbon-neutral energy develop-
ment. Under MEMR Regulation No. 31/2009 on Purchased Electricity
Tariff by PLN (Persero) from small- and medium-scale renewable
energy power generation or excess electricity, the renewable and
carbon-neutral energy tariff cap is set based on the average cost of
electricity production in each region. The tariff cap is well designed
to make it a competitive alternative to renewable and carbon-neutral
energy in regions dominated by diesel generation. However, it is too
low for other regions dominated by coal plant generation. Figure 12.7

reveals that the price cap is too low, especially for regions with high
populations. This potentially discourages investors from investing in
renewable and carbon-neutral energy with a high population, while
the energy demand is high.
Source: OECD (2021)

Figure 12.8 The Comparison between National BPP and Regional BPP with Its
Population
f. Gap in achieving positive net employment

While accelerating the transition to renewable and carbon-neutral
energy will create more jobs, it also results in job losses in the conven-
tional energy industry and its supply chain. PT PLN has pledged to
cut coal-fired generation and stop building new coal plants after 2023

and start to abandon coal after 2055 to achieve the net-zero emission
target of 2060. As one of the largest producers and net exporters of
coal, Indonesia had more than 121,000 employees in the coal sector
in 2019 (Laird, 2021). It still did not include the number of workers
in its supply chain, local economy, retail, food services, and other
dependent sectors. If the coal generation is stopped, there will be
a reduction in the employment rate, which also impacts the GDP
and human welfare. To achieve the benefit of the energy transition,
it is important to ensure that the gain from renewable and carbon-
neutral energy development exceeds the loss from the reduction in
fossil fuel use, which results in positive net employment. It is known
that fostering energy transition potentially creates 1.8–2.2 million

jobs in 2030 (Bappenas, 2021). Therefore, to maximize the potential,
several challenges need to be tackled such as worker dislocation and
education and skill gap.
Dislocated Workers
The total new jobs created from renewable and carbon-neutral energy
might surpass the job losses from conventional energy. However,
where new jobs growth is not always the same as a place with job loss.
Most jobs associated with fossil fuels are geographically concentrated
and integrated with the local economy. Compared to 1.8–2.2 million
jobs created by renewable and carbon-neutral energy, the loss of
121,000 employees seems insignificant. However, it will deteriorate
the local economy and community. Currently, it happens in the United
States and China. Although the coal industry only represents 0.06% of
the United States workforce and 0.4% of the Chinese workforce, the
disruption of coal mine closure to the regional and local economy is
inevitable (World Bank, 2018). Therefore, a strategic energy policy is
required to ensure that energy will not severely impact not only the
workers but also the local economy and community associated with
the industry to achieve a “transition for all.”
Shortage of high-skills workforce
While deploying renewable and carbon-neutral energy creates job

opportunities, it still faces a challenge in finding qualified talents. Un-
deniably, the renewable and carbon-neutral energy industry requires
high-skilled level laborers. Figure 12.8 shows that highly skilled work-
ers dominate each value chain stage of renewable and carbon-neutral
energy development. For example, the development of solar PV under
the RUKN scenario for Indonesia needs high-skill workers such as
engineers and management professionals at 52% while the demand for
medium to low-skill workers such as technical and non-professional
workers at 48% (GGGI, 2020). It can be an opportunity for workers
who lost their jobs in the fossil fuel industry because education and
skills from conventional energy can also be transferred to renewable
and clean resources. However, the rapid development of renewable

and carbon-neutral energy results in a higher future demand for new
talents. Therefore, preparing the new talents is necessary to benefit
from energy transition.
Source: OECD (2021)

Figure 12.9 The Value Chain of Renewable and Carbon-Neutral Energy and Its
Level of Skill Required
g. Low women participation in renewable and carbon-

neutral energy job
Mostly in charge of fulfilling their family’s energy needs, women
have a major role in the decision-making of household energy con-
sumption. However, they are still underrepresented in energy policy-

making and the energy industry. Women face challenges from internal
and external factors. While most women internally lack training
opportunities in science, technology, engineering, and mathematics
(STEM) programs, they also must face cultural and social challenges.
Cultural, social norms, and stigma
A cultural and social norm is the most common challenge for women
when contributing to energy sectors. The perception of gender roles
that women have full responsibility in household work and childcare
(and even elderly care) has limited women’s participation in overall
economic activity. Allocating their time to household work, women

have limited time to fully engage in formal education and work.
Another perception is that the energy sector is dirty, too technical,
and unsafe. It is far from what society expects from a women’s job,
which is mostly related to secretary and administration. The dynamics
of conventional energy politics give the impression that energy is a
“dirty” business. Then, having low participation in STEM programs
deteriorates women’s confidence to pursue careers in energy sectors
that seem too technical. Lastly, the safety and remoteness of field
location issues also contribute to low energy sector jobs.
Low participation in STEM field
It is undeniable that renewable and carbon-neutral energy sectors
are STEM-intensive fields. The low participation in the STEM field
makes women underrepresented in renewable and carbon-neutral
energy sectors. International Labor Organization (2017) reported
that only 24.4% of Indonesian women studied a program related to
STEM compared to men at 50%. Having time constraints linked to
household responsibility, women also have limited access to educa-
tion and training in the STEM field. Women are likely presented in
minor income-generating activities such as administrative sectors and
underrepresented in more technical sectors. This condition makes
households less likely to invest in women’s education, narrowing
women’s education access. The confidence gap between men and

women in math due to the myth of the math brain makes STEM
programs less attractive to women.
E. Policy and Recommendation to Maximize Socio-

Economic Benefits of renewable and carbon-
neutral energy
Although it has a broad range of benefits for social and economic,
some barriers still need to be addressed. Some policies and recom-
mendations are proposed to tackle the barrier and foster the transition.

1. Competitive renewable and carbon-neutral energy
Costs
In line with cost reduction in renewable and carbon-neutral energy,
supporting policies are required to ensure it can fairly compete head-
to-head with fossil fuel.
a. Removing fossil fuel subsidy
While cutting greenhouse gas emissions, removing fossil fuel subsidies
in electricity generation can increase the competitiveness of renewable
and carbon-neutral energy in the electricity market. By cutting off
the subsidy, the fences of market barriers for renewable and carbon-
neutral energy will disappear. Hence, renewable and carbon-neutral
energy can enter the market and actively compete with fossil fuels. As
the subsidy is eliminated, it is faster to reach the backstop price and
provide an opportunity for renewable and carbon-neutral energy as an
energy substitute. Indeed, subsidies to fossil fuels give a wrong price
signal to the user to consume more of the commodity. It is contrary
to the country’s decarbonization objectives.
b. Carbon pricing
Carbon pricing is the key solution to increase the competitiveness
of renewable and carbon-neutral energy by revealing the actual cost
of renewable and carbon-neutral energy and fossil fuel. The practice

of carbon pricing has been widely adapted to achieve mitigation
targets. The implementation of carbon pricing can vary from one
country to another. Carbon pricing can be a tariff on per tons emis-
sion produced. It is reported that The High-Level Commission on
Carbon Prices projects that carbon prices will be at least in the range of
US$40–80/tCO2 by 2020 and US$50–100/tCO2 by 2030 to achieve the
temperature limit in the Paris Agreement (World Bank, 2020). Besides
helping renewable and carbon-neutral energy competes with fossil
fuels, carbon pricing also can increase government revenue. Indonesia
also has decided to implement carbon pricing as a mitigation measure
in the NDC commitment. It can be a big step for Indonesia to achieve
net zero-emission 2060.

2. Accelerate Investment in renewable and carbon-
neutral energy
The deployment of renewable and carbon-neutral energy requires
a huge amount of investment. A strong policy is needed to attract
potential investors to invest in Indonesia's renewable and carbon-
neutral energy projects.
a. Reforming tariff cap
The BPP is set as a price cap for renewable and carbon-neutral energy.
Understandably, that the government wants to ensure the affordability
of electricity generation. However, the BPP reference in some regions
does not reflect the actual price of electricity generation. For example,
in the regions of Java and Bali, electricity generation is dominated by
coal. It is known that PT PLN still received subsidies to purchase elec-
tricity from coal plants. Using cheap coal as a price cap for renewable
and carbon-neutral energy in this region is unfair. It would be better
if the tariff cap is set based on the marginal cost of each technology.
By combining this approach with the auction program, renewable and
carbon-neutral energy prices can be lower, which is an incentive to
invest in renewable and carbon-neutral energy projects.
b. Renewable and carbon-neutral energy auction program
While reducing the cost of renewable and carbon-neutral energy, an

auction is the best instrument to facilitate transparent and predictable
electricity procurement processes. One of the auction's objectives is
to alter market barriers for the new market entrants. The auction
mechanism can be different from one country to another. Mostly,
the project development participates in the auction by submitting
the electricity price per unit. Then, the government will evaluate the
offer document with the price and sign an agreement with the auction
winner. In terms of the evaluation project, it is almost the same as
the procurement process adopted by PT PLN. However, it is more
open to the public.

3. Achieving Positive Net Employment
As the transition toward renewable and carbon-neutral energy contin-
ues to create new jobs, job losses from fossil fuels are not inevitable.
Dislocated workers and a shortage of high-skilled level workers are
challenges to achieving positive net employment from renewable
and carbon-neutral energy. Some recommendations are reskilling,
upgrading fossil fuel workers and building skills for new entrances.
a. Reskilling and upgrading skill for fossil fuel workers
A closely related skill between fossil fuels and renewables technol-
ogy and its supply chain makes the skill interchangeable, which will
benefit the workers. Recognizing the transferable skills from the fossil
fuels industry to the renewable and carbon-neutral energy industry
is important to assist the workers dealing with job losses. Figure 12.9
shows interchangeable skills between fossil fuels and renewables. Sup-
plementary education and training will give provision for the workers
to encounter job losses. However, the employment losses impact not
only the workers, but also the local economy and community, which
strongly rely on fossil fuel production. Long-term engagement and
social dialogue between stakeholders, workers, businesses, and local
communities are needed to understand how the change in energy
structure will impact their income and how to deal with it soon.

b. Building the skill of new entrants
Planning and preparation for new talent are required of a high
demand for high skill levels. Early exposure to climate change and
how renewable and carbon-neutral energy contribute are important
to increase awareness and drive problem-solving skills to prepare
youth to be future energy professionals. Integrating renewable and
carbon-neutral energy knowledge in STEM programs, social studies,
etc. will attract youth interest in pursuing renewable and carbon-
neutral energy career. A well-designed curriculum structure addresses
the demand for cross-disciplinary skills, emerging skills (technology,
storage, resource), and innovation and entrepreneurship will elevate
the new talent skill.

Source: Ferris (2021)
Figure 12.10 The Value Chain of Renewable and Carbon-Neutral Energy and Its
Level of Skill Required
4. Balancing Gender Participation in Deployment of

renewable and carbon-neutral energy
The equitable participation of women and men will improve the
overall sector’s performance. However, the barriers such as cultural,
social norms, stigma, and inequality in education access can result
in a slow rate of sector development. Therefore, a strong policy is
required to ensure women’s participation so that the benefit of a

diversified workforce can foster the development of renewable and
carbon-neutral energy. Some recommendations include integrating
gender in each renewable and carbon-neutral energy sectors value
chains and improving access to STEM education and training.
a. Integrating gender perspective in each value chain of
renewable and carbon-neutral energy
To ensure gender equality in renewable and carbon-neutral energy
sectors, all genders should be included in each value chain. It is im-
portant to recognize the roles and potential contribution of gender in
those areas to maximize the overall sector performance. According
to the role and potential contribution, human resources policies
for equal opportunity and quotas for gender parity are needed to

be implemented. Equally important, a supporting working environ-
ment is necessary to increase gender equality. Imposing a human
resource policy tackling gender discrimination and sexual harassment,
and guaranteeing the safety of the employees is critical to gender
participation.
b. Improving access to STEM education and training
Having low participation in STEM programs, women are underrep-
resented in energy sectors. Improving STEM education and training
access can potentially increase women’s participation in energy sec-
tors. Highlighting women role models who pursue careers in STEM
programs can give self-esteem to other women to choose the same
pathway. This also can increase people’s awareness that women have
potential in STEM programs and start to invest in women’s education.
Investing more in women’s education will give more access to women
to be engaged in STEM programs. A supportive environment is also
needed to increase women’s participation in the education system. It
can be done by designing curricula that maintain gender interest in
STEM programs.
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Chapter 13
Pathways and Recommendations

on Energy Transition Strategy to
Achieve Net-Zero Emissions by
2060
A. Indonesia’s Path towards a Net-Zero Future:

Identification of Necessary Actions
Indonesia is the biggest economy in Southeast Asia. The power behind
Indonesia’s massive economy is the size of the country and its popula-

tion, which is advantageous in the country’s case with a population of
more than 270 million. Economic growth always goes together with
energy consumption. As an effect, Indonesia’s final energy demand is
expected to shoot up in the near future to 388 MTOE (million tons
of oil equivalent) with 1.2 TOE (tons of oil equivalent) per capita in
2050 (APEC, 2019). The growth in demand is double the country’s
energy demand in 2020, which means in a span of 30 years Indonesia
must be ready to double its energy supply. Talking about energy sup-


Ardiansyah, H., & Ekadewi, P. (2022). Pathways and recommendations on energy transition strategy to
achieve net-zero emissions by 2060. In H. Ardiansyah, & P. Ekadewi (Eds.), Indonesia post-pandemic
outlook: Strategy towards net-zero emissions by 2060 from the renewables and carbon-neutral energy 267
perspectives (267–281). BRIN Publishing. DOI: 10.55981/brin.562.c13 ISBN: 978-623-7425-83-0
E-ISBN: 978-623-7425-87-8
ply, the country is currently relying on fossil fuels, especially coal to
generate electricity from coal power plants. Coal power plants are
widespread in the country, one of the reasons being the abundance
of coal, making Indonesia one of the world’s most important coal
exporters. In fact, coal export in 2018 was more than three-fourths
of the total production (IESR, 2019a).
Contrary to the current situation, in the future fossil fuels are
expected to be abandoned in favor of cleaner energy sources. The drive
behind this transition is mainly environmental. The Earth is facing
its biggest climate crisis if it stays on its current track of dependence
on fossil resources. The environmental effect is so detrimental that
it may topple down our current living systems: introducing famine,
infectious diseases, biodiversity collapse, and deaths from major
natural disasters.
Aside from the environmental factors, overall drastic growth in
population is also threatening the Earth’s ability to supply energy equal
to the human population if world governments continue to rely on
fossils. Fossil fuels are considered non-renewable since they took a
long time to renew themselves, so these resources are finite in nature.
If we continue to rely on fossils, it is just a matter of time before we
deplete the earth’s natural deposit of fossils. The consequences will
be grave in the society as governments fight over fossil fuels, leading

to wars.
Collectively, we are aware of these threats. World governments
have crafted plans, goals, associations, and planned actions together
to start the transition to non-fossil-based renewable energies. In
Indonesia, the guideline to base energy transition was set on the
National Energy Plan (RUEN-Rencana Umum Energi Nasional) in
2017. The aim is to gradually increase renewables proportion in the
national energy mix to 31.2% by 2050 while reducing fossil propor-
tions (Rencana Umum Energi Nasional, 2017). The target is set quite
loose for renewables, as all forms of renewables are grouped into
the same category. Globally, renewables already make up 29% of the
global share of electricity generation in 2021 (IEA, 2021). However,

the latest data in Indonesia show that renewables make up only 11.2%
of the national energy mix in 2020 (Ditjen EBTKE, 2021). In the
Southeast Asian region, Indonesia is trailing behind Vietnam, which
generates more than twice the amount of Indonesia’s renewable energy
production (IRENA, 2020).
Indonesia’s path towards a net-zero future can only be achieved
if we successfully transition to renewables, focusing on carbon-free
renewables. Aside from pushing for energetic transition, the country
also needs to take care of other aspects as outlined in this chapter.
1. Investing in Carbon Capture and Offset Technologies

The Indonesian government holds power to develop carbon capture
and carbon offset technologies through state-owned companies like
PT Pertamina or PT PLN. Using state-owned enterprises to achieve
national directives makes coordination easier to jumpstart the process,
which will help the country speed up its efforts to reduce carbon
release into the atmosphere. Technologies to take up carbon exist and
are ready to be deployed. Carbon capture and storage (CCS) work by
taking up CO2 released from a power plant before it is emitted. The
amount of removed CO2 can reach 85–95% for a thermoelectric plant
(Eldardiry & Habib, 2018). However, the use of CCS technology to
complement existing power plants must not serve as a justification
to continue burning coals to generate electricity.

Since state-owned companies already hold the biggest share of
electricity generation in the country, nationwide government-backed
installations of CCS units will substantially impact the country’s emis-
sions rate, pushing ahead the country in reducing CO2 emissions.
Another important technology, especially for the Indonesian
energy sector, is bioenergy with carbon capture and storage (BECSS).
The advantage of BECSS over CSS is the ability to reach negative net
carbon emissions. In BECSS, bioenergy crops are grown to naturally
take up environmental CO2, CSS technology is applied at the end
to take up released CO2 from the use of the bioenergy crops, i.e., in
combustion processes. By itself, bioenergy is already considered car-
Pathways and Recommendations ... 269

bon neutral. As the country is already putting its vision on bioenergy,
adding CSS technology would complete the cycle, in line with the
country’s net-zero emissions target.
2. Reforestation and Restoration of Green Areas in

Urban Settings
Forests are known to be the natural carbon sink. Indonesia has lost
18% of its natural forest areas (a reduction from 74% to 56% for-
est coverage) in the 3–4 decades leading up to 1990 due to urban
developments (Indrajaya et al., 2022). The loss of natural carbon
sink has affected the natural balance of carbon (CO2). Reforestation
and green area restoration will help offset the carbon released from
human activities thanks to their ability to carry out photosynthesis.
Moreover, the presence of green areas in urban settings increases the
livelihood of the surroundings by providing benefits like shading,
aesthetic improvements, restoring mini-ecosystem, and function as
recreation sites among others.
3. Strengthening and Equalizing Access to Public

Transport Friendly Infrastructure
Indonesia’s public transport sector is developing little by little. Reforms
have been carried out in several parts of the country, notably the Ja-
karta Metropolitan Area (Jabodetabek), in various modes of transport.

Jakarta has been equipped with a bus rapid transit system (BRT) called
TransJakarta since 2004. The system can now reach satellite areas to
help daily urban mobility, reducing both congestion and individual
carbon footprints of its users. The regional train system has also been
updated to increase user comfort, enticing middle-upper class citizens
to use the system. In 2019, the city installed a line of mass rapid transit
(MRT) and light rail transit (LRT) lines, further increasing urban
mobility. This level of accessibility is still limited to the capital city
and its suburbs. In most parts of the country, public transport is still
weak. To reduce carbon emissions from the transportation sector,
accessibility of public transport needs to be improved to equal that
of Jakarta.

4. Biodiversity and Environmental Protection
Indonesia is a known biodiversity hotspot, which existence is threat-
ened by the rapid rise of global surface temperature and the looming
climate crisis. Biodiversity collapse can have widespread effects af-
fecting agricultural supply chains. For example, the dwindling bee
population is already identified as a potential threat to food industries
(UNEP, 2010). Therefore, Indonesia’s efforts to achieve a net-zero
future must not disregard biodiversity and the ecological cost of the
energy transition as discussed in a previous chapter.
5. Developing Policies to Incentivize Low-Carbon

Industries and Enforcing Carbon Tax in Manufacturing
Sectors
Incentives help attract new actors into the scene; developing a low-
carbon industry from scratch requires large capital and technologies,
often resulting from the result of intense research and development
(R&D) activities. The presence of incentives helps build up investors’
confidence in the project by lowering risks and opening economic
opportunities. On the other hand, the enforcement of carbon tax work
to disincentivize large carbon emitters due to a real economic conse-
quence of CO2. Carbon taxes have been successfully implemented in
Sweden, Canada, and France since this policy decouples the economic
growth (GDP) trend from carbon emissions (Criqui et al., 2019).
6. Simplifying Investments and Bureaucracy on Buku ini tidak diperjualbelikan.

Renewable Energy Projects
Similar to putting incentives on low-carbon industries, the simplifica-
tion of bureaucracy and investments in renewable energy projects
aims to bring private actors to the scene, which will drive innovations
and increase market competitiveness. Complicated bureaucracy has
been identified as one of the causes behind the stalling of Indonesia’s
growth in the renewable energy sector, making this problem urgent
to solve (IESR, 2019b).

7. Regulating Costs Between Conventional and
Renewable Energy in the Market to Maintain
Competitiveness
Still related to the economics of transition, the price is one common
factor preventing the Indonesian public from preferring low-carbon
energy. Indonesia’s demographic is highly price-sensitive, especially
on fuel costs. Government-subsidized petrol, albeit at lower octane
numbers (88 and 90) than the others offered (92 and 95), is highly
popular in the field. To ease the transition, not only does the govern-
ment need to monitor pricing, but programs intending to reduce
capital costs need to be considered, for example, solar PV subsidy or
a reduction in tax on electric vehicles.
8. Public Education on the Importance of Energy

Transition and Carbon Offset Activities
Finally, the most important point is to build awareness of the public on
the importance of renewable energy with an emphasis on transition-
ing to a net-zero future. Public awareness helps bridge the inevitable
economic gap to push forward renewable, carbon-free energy while
pulling back economic support for fossil energy. Failure to communi-
cate the country’s vision and policies are detrimental to the success of
reaching Indonesia’s net-zero target by 2060. After all, it is part of the
government’s job to communicate well with the public it represents.

We must realize that energy transition alone cannot entirely
reduce human activities' carbon emissions. However, energy drives
human activities; as such, we need to start a carbon-free future by
transitioning to renewable and carbon-free energy. The transition itself
is affected by social, economic, and political factors. It also needs
to take care of the environmental and sustainability aspects. All ac-
tions identified previously are all interlinked to achieve a net-zero
future. The following section in this chapter summarizes and presents
recommendations for Indonesia to implement each energy source
and technology.

B. Recommendation for Carbon-Free and
Renewable Energy Implementation
From the previous sections, options for carbon-free and renewable
technologies have been explored. Each technology has its uniqueness
and challenges. However, they have one similarity, the potential for
deployment in Indonesia is extremely likely. To deploy these technolo-
gies, some recommendations can be implemented.
1. Investment and Market Climate

In an industry, investment and market climate is important to ensure
that the industry can grow and survive, including in the energy sector.
The government should invest more to ensure that the energy market
creates a conducive sector and can grow. This can be done by policies
that will benefit the energy market. However, the government should
also concern about the citizen. It is not ideal if the government is only
concerned with the market and investment, and not with the well-
being of the citizen. In this case, NIMBY (not-in-my-backyard)-ism
could grow rapidly, and hold up Indonesia's growth.
2. Solar Energy
Indonesia has a large potential for solar energy deployment. Even
among ASEAN members, Indonesia has the largest solar energy po-

tential. Located in the equatorial region, solar irradiation in Indonesia
is relatively evenly distributed along the countries. Indonesia’s global
horizontal irradiation is also better than some countries that invest
heavily in renewable energy. The question is then shifted to the sites
and locations to put these solar panels to achieve their maximum
potential. Currently deployed technology is mainly the land-based
solar panels, which took much of Indonesia’s land area. According
to data from the Geospatial Information Agency (BIG), Indonesia
has a land area of 1.9 million km2 and a maritime area of 6.4 million
km2. On top of the land area, 5800 lakes and reservoirs can be found
with a total area of 5,868 km2. Indonesia needs to explore other solar

panel technology that can be optimized in Indonesia. One of the
technologies is floating solar PV.
As the name suggests, floating solar PV or floating solar panel
requires no land space to generate electricity. This works best with
some water bodies such as lakes and reservoirs. Current technology of
floating solar PV technology has also been optimized to reach higher
performance than rooftop solar PV. The performance ratio is 10% to
15% higher than typical rooftop PV systems. Floating solar panels are
also able to reduce water evaporation. This is useful for areas that are
susceptible to drought.
Like other technology, some aspects of solar energy need to be
optimized to generate electricity effectively. Some challenges remain
become questions that researchers need to solve. Some of them include
the capital cost of solar panels which is still higher than conventional
energy producers. Intermittency of solar energy has also been a limit-
ing factor in optimizing solar panels. Other challenges also involve
the land use of solar panels and the waste generated by the retired
solar panels.
3. Hydropower
Indonesia has a great potential in hydropower. However, those
potentials are limited to Indonesia’s geography and socio-economic

issues. Indonesia’s rivers are typically not ideal site for constructing
a large-scale hydropower plant. Also, the ecological issues due to the
possible destruction of the river ecosystem and NIMBY syndrome can
affect large-scale hydropower plant projects. Although hydropower
plants are necessary to be the renewable energy baseload, the use of
hydropower can be expanded in different ways. One way is to reduce
the capacity of the hydropower plant and create micro-hydropower
plants. Micro-hydropower plants will be an essential addition to
residential and farming areas. The other way is to use pumped storage
hydroelectric plants. PSH offers flexibility and reliability to fulfill the
supply and demand of electricity. PSH can also be built far from rivers

and residential areas. In these ways, hydropower can be a renewable
energy backbone for Indonesia.
4. Wind Energy
As mentioned in strategic planning in Directorate General of New,
Renewable and Conservation Energy, MEMR, 2020–2024, the techni-
cal potential of wind power notes in the MEMR is about 60.6 GW,
with the utilization being about 0.15 GW until 2020. This utility is
still far from the target in RUEN that in 2020, at least 0.6 GW of wind
power is already installed in Indonesia.
Several locations have been developed into PLTB, such as in
Jeneponto and Bantul. The Jeneponto PLTB, located in Jombe Village,
Turatea District, Jeneponto, will contribute around 70 MW to the
Sulselrabar PLN System. Meanwhile, the PLTB Bantul is the larg-
est PLTB in Indonesia and is part of the Electricity Infrastructure
Program (PIK), better known as the 35,000 MW Electricity Program.
With 30 wind turbines installed, 50 MW of electricity can be harvested
later. Other PLTB locations are in Bangka Belitung, Bali, and Nusa
Penida, each with one unit, Selayar Island with three units, and North
Sulawesi with two units (2007 status). In addition, the government also
plans to build PLTB in various areas, such as Sukabumi, West Java.
Some solutions can be implemented to advance the development

of wind energy sources in Indonesia. First, it can be built in the middle
of the sea so there is no need for land acquisition. It is well known
that land acquisition has become a complicated issue in several areas.
Second, it can be built in remote areas to meet the needs of people in
remote areas of the country, including in the outermost, underdevel-
oped, and remote areas. This can increase the national electrification
ratio and provide equal distribution of electricity.

5. Biomass
As an archipelago located on the equator, Indonesia is uniquely blessed
with bountiful sunlight all year. This leads to a plentiful growth of veg-
etation and crops, translating to a high biomass yield over all corners
of the country. This presents a prospect and a challenge in itself. With
such high biomass yield, Indonesia has enormous potential for its
biomass to be used as an energy source. On the other hand, being an
archipelagic nation means many scattered islands must be connected
to the grid to allow electrical access to all parts of the society.
Currently, two types of major waste biomass are found to have the
highest potential for conversion to bioenergy: rice husks and palm oil
wastes. They are produced as by-products of rice cultivation and palm
oil production. Both are high in volume and represent a significant
untapped portion of biomass energy that can be utilized for energy
production and converted to the proper form of biofuel based on
needs. Rice husks can be fermented into bioethanol and solid biofuels
for combustion. Palm oil mill effluents (POME) can be utilized to
produce biogas as an alternative to natural gas resources.
However, there are two issues hampering progress in biomass
utilization. The first issue is the relatively high price of electricity from
New Renewable Energy (NRE) sources. Currently, energy subsidy
is concentrated in minimizing fuel oil, LPG, and electricity price.

Electricity price reduction comprises 42% of total subsidy, and as of
2021, 47% of total electricity production comes from coal-based steam
power plants. Therefore, it is interesting that this subsidy portion
can be potentially redirected towards reducing the price of electricity
from NRE sources, making them more competitive in general and
incentivizing investments in NRE-based power plants. The second
issue is the relatively high-interest rate for NRE projects from the
financial sectors, which is unfortunately true. To realize the transition
to NRE from fossil-based energy quicker, cooperation from all sectors
is required to convince the financial sector that investments in NRE
projects are the way forward.

6. Geothermal
The development of the geothermal industry is still facing many
challenges, especially related to the participation of international or
domestic companies in investing their money and taking a risk in
Indonesia’s geothermal industry. The characteristic of the geothermal
industry is high risk, high capital, and high technology, which means
there are no possibilities to reach the target that Indonesia’s govern-
ment has made without support from international companies. There
are many recommendations for encouraging the development of the
geothermal industry in Indonesia:
1. Applying and implementing a new fiscal term to support the
project’s economic viability. It is called cost recovery; these fiscal
terms also have been used in Indonesia’s oil and gas industry and
have proven their success in accelerating the development of the
industry. There are many reasons for these issues because there
are many similarities between those two industries geothermal
and oil and gas.
2. Indonesia needs to adopt or use Australia’s standard reporting
code to accommodate investor’s interests because many interna-
tional companies have used those codes and gained international
recognition.
3. Doing more investigations and studies to get proven and mature

data, especially through exploration drilling. Indonesia needs to
conduct a Government Drilling Program, based on advice given
by investors, the lack of quality and quantity data is one of the
concerns and needs to improve. So, the climate of investment in
Indonesia’s geothermal industry will be more attractive because
the government has successfully decreased the uncertainties by
providing proven and mature drilling data, which is one of the
most important things.

4. Decreasing the total project investment or capital expenditure, by
selecting and applying new technologies suitable to geothermal
layers or lithology formations and characteristics of the geother-
mal reservoir.
5. It is necessary to improve the laws and regulations related to
geothermal utilization and management so that it is more com-
prehensive and does not overlap with other regulations. The
government must also play a more active role from just policy
discourse into a more concrete and implementable policy that
can attract investors and clarify authority in applying rules and
governance to geothermal.
7. Nuclear
Nuclear energy has been developed for more than 70 years. However,
there are still a lot of controversies surrounding the technology. This
is because the first introduction of nuclear energy to the world was
through atomic bombs in Hiroshima and Nagasaki in 1945. Since
then, nuclear energy has experienced its ups and downs. Just like
any other technology, nuclear energy is not perfect. Few things need
to be resolved by the nuclear energy industry and the government,
mainly nuclear waste and financial problems with investing in nuclear
energy. Some steps have been taken to solve this problem, from an
engineering and public policy standpoint.

Right now, nuclear energy is gaining back its momentum. There
has been a massive support for nuclear energy, especially from the
young generations. Nuclear energy has everything necessary to tackle
climate change: low carbon emissions, safest energy source, and cre-
ates high-paying jobs. For Indonesia, nuclear energy is the key to
tackling climate change and economic recovery post-COVID-19.
Nuclear energy can be the baseload of energy in Indonesia to pro-
vide carbon-free and reliable energy all the time. Nuclear energy can
also accelerate the economy by creating new and sustaining jobs for
families within the localities of the nuclear reactor.

To achieve this, Indonesia first needs a national strategy for
deploying nuclear energy. If the strategy is settled and all the infra-
structures are prepared, Indonesia’s first nuclear power plant can be
operational earlier than 2045. This strategy will reflect Indonesia’s
national position on nuclear energy. Indonesia has all the infrastruc-
ture needed for nuclear energy but the national position. Nuclear
energy program implementing organization (NEPIO) is one step
necessary to ensure the national position. NEPIO will ensure that all
the infrastructures and organizations necessary to build Indonesia's
first nuclear power plant are fulfilled and run well.
8. Hydrogen
Hydrogen plays a crucial role as a versatile clean energy carrier and
industrial feedstock in decarbonizing hard-to-abate sectors. As one
of the world’s largest greenhouse gas emitters, Indonesia could har-
ness the benefits of hydrogen to meet its climate targets. The main
driver for developing an economically sustainable hydrogen industry
in Indonesia is its abundant renewables across the country, includ-
ing solar, hydropower, wind, biomass, geothermal, and tidal. As the
global hydrogen market is estimated to reach US$201 billion by 2025,
Indonesia has a huge opportunity to export renewable resources in the
form of hydrogen and its derivatives, such as ammonia and methanol,
thus ramping up national revenues.

Despite the enormous potential to be a global clean hydrogen
powerhouse, Indonesia is facing a number of challenges associated
with the adoption of hydrogen across its value chain. At the moment,
green hydrogen produced using renewable electricity is costlier than
gray and blue hydrogen. In addition, utilizing hydrogen for new
downstream applications can be more expensive than its fossil coun-
terparts. Another critical challenge is the lack of dedicated hydrogen
infrastructure for large-scale storage and long-distance transport. The
absence of a national hydrogen strategy exacerbates the hydrogen
uptake as it reflects the low commitment made by the government on
hydrogen and ultimately discourages potential investors. The govern-

ment gives insufficient recognition of hydrogen value to reduce carbon
footprints in hard-to-abate sectors.
To stimulate the development of the hydrogen industry in In-
donesia, a national hydrogen strategy, which comprises a national
hydrogen roadmap and enabling policies, is proposed based on In-
donesia’s current position and existing barriers in hydrogen uptake
across the country. Indonesia’s national hydrogen roadmap should
aim for an integrated system across the hydrogen value chain. The
roadmap must focus on green hydrogen as the ultimate target due to
its suitability to meet net-zero targets. A step-by-step approach for the
transition from gray to green hydrogen is adopted. In the early stage,
gray hydrogen has to be phased out and replaced with blue hydrogen
which is equipped with carbon capture and storage technology while
facilitating green hydrogen uptake at the same time. In the middle
stage, the crucial decision has to be made where Indonesia needs to
start the development of green hydrogen hubs across the country
and build the required infrastructure. As a result, Indonesia could
become a global hydrogen powerhouse beyond 2050 with deployment
across various sectors and export capability to resource-constrained
countries such as Singapore, Japan, and South Korea.
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Chapter 14
Closing Summary: Deploying

Indonesia’s Energy Resources for
a National Carbon-Neutral Energy
Ecosystem
This book is the melting pot of the minds of Indonesian students

who are currently pursuing higher education abroad. The authors
are spread into different backgrounds, all with the same intent and
focus: as students, what can we do and how can we help Indonesia
achieve its energy targets?

When we think of energy and electricity in Indonesia, the first
things to come to mind are coal mines, oil and gas economies, and
electricity outages. The public has fewer ideas about Indonesia’s pro-
gress in renewable energy or even the country’s strategies to integrate
renewables into the mix. Failure of the public to comprehend the
country’s energy vision, in some way, has affected the way the public
view strategic energy projects and policies. For example, our high
reliance on fossil resources is driven by various cost subsidies from the


Ardiansyah, H., & Ekadewi, P. (2022). Closing summary: Deploying Indonesia’s energy resources for a
national carbon-neutral energy ecosystem. In H. Ardiansyah, & P. Ekadewi (Eds.), Indonesia post-
pandemic outlook: Strategy towards net-zero emissions by 2060 from the renewables and carbon- 283
neutral energy perspectives (283–287). BRIN Publishing. DOI: 10.55981/brin.562.c14
ISBN: 978-623-7425-83-0 E-ISBN: 978-623-7425-87-8
government that makes renewable options seem costly, thus unable
to compete economically. This book tries to close this knowledge
gap by summarizing the ecosystem of Indonesia’s energy sector
and outlining the general ideas behind several alternative energies:
solar, wind, hydro, geothermal, and biomass. This book tries to go
beyond the ‘classics’ by introducing new technology like hydrogen
as energy storage and nuclear energy, bringing the debate closer to
the Indonesian public.
Energy is at the core of human existence alongside primary neces-
sities like water and nutrition. It is one element that could make or
break a country's global status in the modern post-industrialization
world. Indonesia is one of the world’s highly populated countries.
As a result, the energy needs of the country is expected to grow
significantly along with the rise in population and globalization.
The COVID-19 pandemic has seen workplaces and classes moved
to a ‘from home’ setting. A direct impact of this phenomenon is the
highlight of inequality in the country. Students living in rural areas
find it difficult to have stable access to electricity and internet con-
nections necessary to support their at-home studies. The effect of the
pandemic on energy industries is phenomenal. Almost equally across
all sectors, activities are lower or even suspended, putting existing
projections and scenarios off track. It is important to evaluate, assess,
and re-strategize Indonesia's plans for a net-zero future by 2060 to stay

on target despite the pandemic's disturbances and new opportunities.
We have discussed several points concerning renewable, carbon-
free energy, and energy transition strategies for Indonesia based on
selected alternative energy sources in the book.
A. Status and Challenges of Indonesia to Achieve

Net-Zero Emission by 2060
From policy developments to the global shift in perspectives, it is clear
that Indonesia is moving towards a net-zero future albeit slowly, one
of its strategies being energy transition from fossil-based resources
to renewable energy. We are still far from targets loosely written on

paper on various policy instrumentations in the field. There is an
urgent need to speed up energy transition if Indonesia is still aiming to
reach its targets by 2025 and 2050 as written in the RUEN or by 2060
as stated with regards to the recent COP26 meeting in Glasgow, UK.
B. Redefining Nationally Defined “New and

Renewable Energy” to International Standards of
Carbon-Neutral and Renewable Energy
The term renewable energy has always been loosely defined, relying
on the characteristics of the energy source, which leaves room for the
identification of new non-fossil-based energy into the group. However,
sustainability does not only rely on the ability of the source material to
renew itself as sustainability revolves around the complex interaction
between living and non-living systems on Earth (ecology). We have
seen in this chapter the need to further clarify our future energy
source by adding another characteristic: carbon-free. Moreover, the
ecological cost of energy transition must also be considered when
choosing alternative energy. These costs are often associated with land
clearing, construction, and system startup, but will be offset later by
the installations as it runs.
C. Potentials and Challenges of All Possible

Carbon-Free and Renewable Energies
Classic renewables like solar, wind, hydro, biomass, and geothermal
energies are already installed worldwide, including Indonesia, in vary-
ing proportions. Thanks to the characteristics of the energy source
itself, geographical factor plays a big role in determining the type
of alternative energy adopted by each country. In Indonesia, wind
power installation is less popular because the country has an overall
low wind speed. Instead, the country chose to adopt biomass to be
used as biofuel, which drastically increases biomass energy utilization
in the national energy mix compared to solar, although the latter is
equipped with energy potential several magnitudes over the former.
In the future, solar energy is expected to grow exponentially.
Closing Summary: Deploying ... 285

Moving on from ‘the classics’, nuclear and hydrogen emerge as
new technologies for the Indonesian energy market. Nuclear energy
in the world has developed over time, each time with better safety
protocols and lower risks of disaster. However, not all countries in the
world can use this energy source, debates revolving around nuclear
are still rolling since the energy source is regarded as a hot ball today.
Indonesia's commercial nuclear power plant number is still at zero,
meaning nuclear energy has not contributed to the national energy
mix. The government needs to launch the debate on nuclear power
potentials versus concerns in order to position itself on the topic,
keeping in mind of both future energy and environmental security.
On the other hand, hydrogen emerged recently as the solution for
energy storage, which can be coupled with various types of renewables
to maintain energy stability.
D. Multi-Sectoral Approach to Deploy Renewable

and Carbon-Neutral Energy in Indonesia
Indonesia is a country with a large and socioeconomically diverse
population. Energy is the drive behind the daily economic activity
of the citizens. To successfully deploy renewables in Indonesia, the
challenges rely on consumer demand and its sensitivity on energy
pricing. Therefore, to launch a transition campaign successfully, the

government needs to either drive up consumer demand for renewables
over fossil-based energy or take on energy transition's economic
load to minimize the consumers' economic burden. The first option
requires mass education of the people, which is problematic given
our current timeline. The second option is better suited for the first
phase. Government incentives could increase renewables uptake in
the first phase of transition. Along the way, better education and an
economically rising population could push for better government
actions and industrial sector accountability to commit to their climate
protection pledges.

E. Impact of Carbon-Free and Renewable Energy
Deployment on Society
The energy transition is reflected in other aspects, besides fossil-
based consumption and alternative energy generation. We can see
the impacts of energy transition in: reduced CO2 emissions, less
environmental pollution, decreased rate of global surface temperature
increasement, increased health and well-being of the society, better
equality between genders, increased proportion of skilled workers
in the energy sector, and increased economic growth in the renew-
able sector among others. The first and most direct impact of energy
transition can be felt by eliminating of coal power plants in favor of
non-polluting wind or solar generators. Coal power plants are widely
known to bring detrimental health effects to surrounding populations,
which is dismal because now coal still plays a big role in the energy
sector. After a while, the global increase in surface temperature can
be halted because of lower CO2 emissions, known to contribute to
the greenhouse effect, the power behind a rapid rise in Earth’s surface
temperature. Finally, by developing the renewable energy sector, jobs
will open. This will lead to an overall increase in skilled workers and
a better opportunity to close the gender gap, affecting the economy
positively. The effect of the energy transition is significant, which is
why Indonesia needs to catch up in developing this sector, not only

to target the national energy mix, but also to improve the livelihood
of its citizens.
Finally, we hope that by aiming to close the knowledge gap on
renewables and alternative energies as well as suggesting several points
to re-strategize Indonesia’s energy targets, we can help the country
stay on track to its vision for a net-zero future by 2060.
Closing Summary: Deploying ... 287

List of Abbreviations
Abbreviation Description
AEP Annual Energy Production
AGR Advanced Gas-Cooled Reactors
APV Agrophotovoltaic
BaU Business as Usual

BEVs Battery Electric Vehicles
BOE Billion Oil Equivalents
Biaya Pokok Penyediaan Tenaga Listrik (Electricity
BPP Generation Cost)
BPS Central Bureau of Statistics
BWR Boiling Water Reactor
B30 Biodiesel 30 (%)
CANDU Canadian Deuterium Uranium Reactor
CCS Carbon Capture & Storage
CFPP Coal-fired Power Plant
CH4 Methane
COD Commercial Operation Date
289
CoE Cost of Energy
COP Conference of the Parties
CO2 Carbon Dioxide
CPO Crude Palm Oil
CSP Concentrated Solar Power
DME Dimethyl Ether
EBR Experimental Breeder Reactor
EFB Empty Fruit Bunches
EU European Union
FPV Floating Solar Photovoltaic
FB Financial Balanced
FCEVs Fuel Cell Electric Vehicles
FFB Fresh Fruit Bunches
GEA Geothermal Energy Association
GDP Gross Domestic Product
GHI Global Horizontal Irradiation
GW Gigawatt
GWh Giga Watt-hour
HAWT Horizontal Axis Wind Turbine
HPHT High Pressure High Temperature
HTGR High Temperature Gas-cooled Reactors
H2 Dihydrogen

IAEA International Atomic Energy Agency
IEA International Energy Agency
INIR Integrated Nuclear Infrastructure Review
IPCC Intergovernmental Panel on Climate Change
IPP Independent Power Producer
JOGMEC Japan Oil, Gas, and Metals National Corporation
JORE Joint Ore Reserves Committee
KEN Kebijakan Energi Nasional (National Energy Policy)
KESDM Kementerian Energi dan Sumber Daya Mineral
KOH Potassium Hydroxide
Kebijakan Umum Bidang Energi (General Policy
KUBE
on Energy)

kW kilowatt
kWh kilowatt-hour
LCoE Levelized Cost of Energy
LNG Liquefied Natural Gas
LPC Levelized Production Costs
LPG Liquefied Petroleum Gas
MEMR Ministry of Energy and Mineral Resources
MeV Mega-electron-Volt
MF Mesocarp Fiber
MoU Memorandum of Understanding
MSR Molten Salt Reactors
Mt Mega ton
MW Megawatt
NDC Nationally Determined Contribution
Nuclear Energy Program Implementation Organi-
NEPIO
zation
NIMBY Not-In-My-Backyard
NPV Net Present Value
NPP Nuclear Power Plant
NRE New & Renewable Energy
Organisation for Economic Co-operation and
OECD Development

Pembangunan Berkelanjutan (Sustainable Develop-
PB
ment)
PCD Polycrystalline Diamond
PEM Proton Exchange Membrane
Pemulihan Ekonomi Nasional (National Economic
PEN Recovery)
PSH Pumped Storage Hydroelectricity
PKM Palm Kernel Meal
PKS Palm Kernel Shell
PLN Perusahaan Listrik Negara
PLT Bio Bioenergy Power Plant
PLTBg Biogas Power Plant
List of Abbreviations 291

PLTBm Biomass Power Plant
PLTBn Biofuel Power Plant
PLTSa Waste-to-Energy Power Plant
PLTU Coal-Fired Power Plant
POME Palm Oil Mill Effluent
PT KAI Indonesian Railways Company
PV Photovoltaic
PWR Pressurized Water Reactor
P2X Power-to-X
RBMK Reaktor Bolshoy Moshchnosty Kanalny
RK Low Carbon (Rendah Karbon)
RMA Resource Management Act
Rencana Pembangunan Jangka Menengah Nasional
RPJMN (National Medium-Term Development Plan)
Rencana Umum Energi Nasional (National Energy
RUEN General Plan)
Rencana Umum Ketenagalistrikan Nasional (Na-
RUKN tional Electricity Master Plan)
Rencana Usaha Penyediaan Tenaga Listrik (Na-
RUPTL tional Power Generation Plan)
Rancangan Undang-Undang Energy Baru dan Ter-
RUU EBT barukan (Draft of New and Renewable Energy Bill)

SBO Station Black-out
SMR Small and Modular Reactor
SMR Steam Methane Reforming
STEM Science, Technology, Engineering, and Math
TJ Terra Joule
TRIGA Training, Research, Isotopes, General Atomics
TWh Terawatt-hour
UN United Nations
UNECE United Nations Economic Commission for Europe
UNSC United Nations Security Council
US$ United States Dollar
US DOE United States Department of Energy

VAWT Vertical Axis Wind Turbine
VVER Vodo-Vodyanoi Energetichesky Reaktor
W Watt
WFLO Wind Farm Layout Optimization
WHO World Health Organization
Wilayah Kerja Panas Bumi (Geothermal Work
WKP Area)
WT Wind Turbine
W&PB Work and Program Budget
3Gs Geology, Geophysics, and Geochemistry
List of Abbreviations 293

Index
Advantages, 75, 77 carbon neutrality, 85

ASEAN, 23, 29, 30, 38, 63, 88, 273 Carbon pricing, 260
Auction Program, 261 Challenges, 23, 50, 67, 89, 94, 95,
109, 113, 233, 252
Benefits, 193, 259 Cirata, 82, 83, 86, 92, 252
Biofuel, 148, 149, 292 CO2 emission, 13, 20, 133, 153,

Biogas, 291 242, 253
Biomass, 20, 47, 50, 51, 133, 134, Community ownership, 84
135, 136, 139, 142, 144, COP, 2, 13, 14, 290
146, 147, 153, 156, 157, Cost, 31, 32, 40, 57, 67, 74, 75,
158, 231, 276, 292 87, 114, 116, 118, 121, 122,
Business-as-Usual (BaU), 210 154, 164, 178, 201, 218,
BWR, 184, 187, 188, 289 227, 233, 235, 252, 260,
265, 289, 290, 291
calm maritime area, 66, 81 COVID-19, 2, 14, 23, 24, 25, 26,
27, 28, 35, 37, 52, 63, 89,
Capacity, 74, 80, 92, 97, 98, 171,
169, 196, 202, 207, 235,
193, 194, 231
244, 245, 265, 266, 278,
Carbon capture and storage, 269 284
Carbon-free, 4
295
Data, 35, 39, 61, 106, 166, 195, global horizontal irradiation, 64,
207, 266 273
Disadvantages, 77, 78 greenhouse gas emissions, 13, 34,
Drilling, 162, 176, 178, 179, 277 195, 212
Green hydrogen, 216, 232
Ecological Problem, 113
Economic growth, 1, 267 hard-to-abate sectors, 71, 223, 228,
Electricity, 11, 18, 31, 32, 67, 90, 279, 280, 301
94, 140, 154, 158, 174, 206, horizontal axis wind turbine, 115
207, 218, 244, 255, 265, HTGR, 191, 192, 290
275, 276, 289, 292, 300 Human welfare, 250
Electrolysis, 235 Hydro, 49, 70, 79, 87
Electrolyzer, 217, 218, 229 hydro dam, 91
Energy storage, 4, 71 Hydrogen, 55, 56, 60, 61, 69, 70,
Energy transition, 287 86, 209, 210, 212, 213, 214,
Exploration, 49, 102, 128, 166, 215, 216, 218, 219, 220,
167, 174 221, 222, 224, 225, 226,
externalities, 252, 253 227, 228, 229, 231, 233,
234, 235, 279, 301
fission, 57, 182, 193, 198 hydrogen economy, 56, 211, 222,
227, 228, 229, 232
floating solar photovoltaic, 64, 72
hydrogen value chain, 212, 229, 280
Footprint, 71
fossil energy, 56, 60, 159, 160, 162,
202, 272 IAEA, 57, 61, 181, 183, 190, 193,

194, 197, 198, 203, 204,
fossil fuel, 3, 12, 28, 29, 35, 36, 90,
206, 207, 290
135, 136, 142, 149, 156,
243, 252, 253, 256, 257, industrial feedstock, 209, 226, 279
260, 262 Intermittency, 68, 274
Investment, 62, 83, 114, 129, 151,
G20, 2, 9 155, 177, 254, 261, 264,
265, 273
Gender equality, 251
Iron Triangle, 16
Geothermal, 50, 60, 62, 159, 161,
162, 163, 166, 167, 169,
171, 172, 173, 174, 177, job losses, 250, 256, 257, 262
178, 179, 180, 231, 277, job opportunities, 58, 241, 249, 257
290, 293

KEN, 10, 11, 290 Policy, xix, 2, 3, 10, 11, 12, 18, 19,
30, 39, 40, 62, 169, 171,
Lakes, 80 172, 173, 174, 175, 196,
large-scale hydropower, 92, 93, 94, 205, 206, 207, 234, 243,
95, 96, 97, 100, 274 259, 264, 265, 290, 301
levelized cost, 67, 157, 214, 215, POME, 147, 148, 276, 292
226 Pontoons, 77, 79
Power-to-X, 233, 292
Micro-hydropower, 97, 100, 274 Pumped hydro, 68
MSR, 191, 291 pumped storage, 86, 275
Pure floats, 77
national hydrogen roadmap, 228, PWR, 187, 188, 189, 292
229, 232, 280
NDC, 2, 14, 15, 20, 21, 27, 90, renewable and carbon-free energy,
203, 260, 291 55, 272
net employment, 241, 249, 250, Renewable energy, 11, 27, 60, 61
256, 262 Rice husks, 138, 149, 276
net-zero emission, 142, 239, 243, RUU EBT, 10, 292
251, 253, 256, 284
new and renewable energy, 11, 15, Saguling, 83, 92
27, 285 small-scale hydropower, 90, 92, 93
Noise, 104, 112, 116, 125, 130 Solar, 20, 47, 55, 59, 63, 64, 66,
Noise reduction, 104, 130 67, 68, 71, 72, 73, 74, 75,
Nuclear, 12, 56, 61, 107, 181, 182, 76, 79, 86, 87, 88, 231, 252,

183, 184, 185, 186, 189, 273, 290, 300
191, 192, 193, 194, 195, Solar energy, 47, 59
196, 197, 200, 201, 202, solar energy potential, 63, 64, 273
203, 205, 206, 207, 208, Solar panel, 75
213, 215, 216, 235, 278,
STEM, 258, 259, 262, 263, 264,
279, 286, 290, 291, 299
292
Storms, 82, 88
Palm, 144, 148, 157, 276, 290, 291,
292
tariff cap, 255, 261
Paris Agreement, 13, 15, 34, 53,
159, 260 Tender, 255
Photovoltaic, 67, 74, 75, 86, 87, Transition, 9, 24, 26, 36, 39, 40,
290, 292 86, 103, 107, 234, 235, 266,
267, 272, 281
Index 297
vertical axis wind turbine, 103, 107, Waste, 72, 88, 156, 157, 158, 197,
115, 129, 132 206, 207, 292

Editors’ Biography
HARUN ARDIANSYAH
Harun Ardiansyah earned his bachelor’s
degree in Nuclear Engineering from
Universitas Gadjah Mada, Indonesia in
2018 and his master’s degree in Nuclear
Engineering from University of Michigan,
United States in 2021. He is currently a
PhD student at the Department of Nu-
clear, Plasma, and Radiological Engineer-
ing in the University of Illinois at Urbana-
Champaign, United States. His current

research areas include nuclear reactor
physics and safety analysis for advanced reactors, nuclear code development,
and power reactor neutron noise analysis. Aside from his academic pursuit,
he actively campaigns for nuclear energy in Indonesia through Bicara
Nuklir Podcast and Siwabessy Initiative, a nuclear energy think-tank focused
on research, dissemination, and advocacy of nuclear energy in Indonesia.
He is also the Internal Vice President of Indonesian Students’ Association
in the United States (PERMIAS) at the University of Illinois at Urbana-
Champaign, Co-director of PERMIAS Nasional, and chair of energy com-
mission in Overseas Indonesian Students’ Association Alliance. Mail:
haruna2@illinois.edu
299
PUTTY EKADEWI
Putty Ekadewi is working as a doctoral
student in Laboratoire GEPEA, Univer-
sité de Nantes, France since 2019. Her
current research work is aimed at opti-
mizing biobased hydrocarbon production
as biofuel candidate using a novel photo-
enzyme. Prior to the doctoral work, she
received her master’s diploma in Micro-
algae Bioprocess Engineering from Poly-
tech Nantes (2019). Her undergraduate
degrees were each from Universitas Indo-
nesia in Bioprocess Engineering (2020) and Indonesia International Institute
for Life Sciences in Biotechnology (2018). Her interest and personal research
focus on renewable energy and biofuels have led to her contribution to this
book. Mail: putty.ekadewi@univ-nantes.fr

Authors’ Biography
DAVID FIRNANDO SILALAHI
David Firnando Silalahi completed his
bachelor’s degree in Electrical Engineer-
ing at Universitas Gadjah Mada in 2007.
With funding from Indonesian Ministry
of Education, he continued to the ‘Sus-
tainable Resource Engineering’ master
program—a joint program among Uni-
versitas Gadjah Mada (Engineering Sys-
tem), Institut Teknologi Bandung (Mining
Engineering), University of Karlsruhe
Germany (Resources Engineering). After
completing his master’s degree in 2009, he joined the Directorate General
of Electricity, Ministry of Energy and Mineral Resources of the Republic of
Indonesia as a government official. With funding from LPDP, he is pursuing
a Ph.D. in Solar Energy at the Australian National University. His research area
of interest is 100% renewable energy integration in Indonesia. Mail: david.sila-
lahi@anu.edu.au
DENNY GUNAWAN
Denny Gunawan received his bachelor’s
degree in Chemical Engineering from the
University of Surabaya, Indonesia in 2017.
He is currently a Ph.D. candidate in the

Particles and Catalysis Research Labora-
tory within the School of Chemical Engi-
neering at the University of New South
Wales (UNSW), Sydney, Australia under
the supervision of Scientia Professor Rose
Amal. He is also affiliated with the Austral-
ian Research Council (ARC) Training
Centre for the Global Hydrogen Economy. His current research focuses on
harnessing solar energy through photocatalysis to transform waste biomass
into hydrogen and value-added chemicals. In addition, he has a strong inter-
est in advocating renewable hydrogen as key for decarbonizing hard-to-abate
sectors. Outside his studies, he is also active as co-director of partnership in
Indonesian Students’ Association of Australia and member of energy commis-
sion in Overseas Indonesian Students’ Association Alliance. Mail: denny.
gunawan@unsw.edu.au
Authors’ Biography 301
ELISA WAHYUNI
Elisa Wahyuni graduated as a Bachelor of
Economics from Universitas Sumatera
Utara. Currently, she is pursuing Master of
Science in Sustainable Resource Manage-
ment program specializing in Environ-
mental Economics and Policy, and Re-
newables at TU Munich, Germany. Her
interest in the sustainable development
area started in 2016 after leading an SDG
project with an international youth orga-
nization. The experience leads her to the
energy sector, the biggest global emission contributor. Her willingness to
contribute actively to the energy sector and her love to home country, Indo-
nesia, are the main motivations to be part of the writing team of this book.
She is also a member of Overseas Indonesian Students’ Association Alliance
(OISAA). Aside from her serious side, she is just a Real Madrid big supporter
who loves to wander and get lost in new places. You may find her sitting in
the corner in the middle of the crowd with her headphones on. Mail: elisa.
wahyuni@tum.de
GHIBRAN FAHREZA DIPAYANA

Ghibran Fahreza Dipayana is currently
studying for a bachelor’s degree at Russia’s

Ufa State Petroleum Technological Uni-
versity, with oil and gas engineering
specialists. He obtained the opportunity
to study in Russia with scholarships
provided by the Russian Government for
foreign students. In organization’s world,
he once served as Chairman of Permira
Ufa, Secretary of the Ministry of Educa-
tion Permira, until now as Chairman of
the Permira Education Department. In his free time and semester break, he
travels to new places and new destinations. Mail: dipayanaghibran@yahoo.
com

MATTHEW HARDHI
Part-time student and full-time anxiety-
laden couch potato, Matthew Hardhi is
currently attending the Master program in
IMT Atlantique, Nantes, France. His major
is Process and Bioprocess Engineering
(PBPE) with a track in Project Manage-
ment for Energy and Environmental En-
gineering (PM3E). Previously, he obtained
his undergraduate degree from Universitas
Indonesia in 2014, majoring in Bioprocess
Engineering. His current topic of interests includes recent advancements in
the renewable energy sector, especially in hydrogen as the future of energy
storage and distribution. In addition, he is also attracted to the prospect of
microorganisms as a literal Swiss knife to solve society’s issues, ranging from
energy production to environmental remediation. These interests arose from
his fear of the imminent eco-disaster if the transition to a net-zero economy
is delayed even further. Being sunlight and sweat averse, he does not spend
too much time exercising. Instead, you can find him socializing among his
batchmates and participating in light discussions of character flaws found
among societies. Aside from being a student, he is also a member of the en-
ergy commission in Overseas Indonesian Students’ Association Alliance
(OISAA) for the stewardship year of 2021–2022. Mail: matthew.hardhi@
imt-atlantique.net

NEVI CAHYA WINOFA
Nevi Cahya Winofa received her bachelor’s
degree in Petroleum Engineering from
Institut Teknologi Bandung. She is cur-
rently a master’s student in Energy Eco-
nomics Program at Rice University,
Houston, United States. She has a strong
interest in renewable energy, carbon pric-
ing, and energy economics. Before joining
Rice University, she focused on research
in the techno-economic analysis of geo-
thermal development in Indonesia. While being a full-time student, she also
active as a human resource and development officer in Indonesian Students’
Association in the United States (PERMIAS). Mail: neviwinofa@rice.edu
Authors’ Biography 303

RAHMAT AGUNG RAMADHAN
Rahmat Agung Ramadhan is a bachelor’s
student in Chemical Energy at the School
of Chemical and Energy Engineering
from University of Technology Malaysia,
Johor Bahru. He has a strong interest in
the study of energy, such as renewable,
sustainable, and clean energy. Aside from
his academic pursuit, he became the 1st
place winner of the International Business
Case Competition, with the topic “Be-
tween Oil and Renewable Energy” pro-
vided by Energy Company (MinasSupply Corp.) and Balca Group in Ecua-
dor. He is also active in several student organizations as chairman of
department law and advocacy in Indonesian Students’ Association of Ma-
laysia (PPI Malaysia), Mid Former of Muslim Students’ Association (HMI)
in Malaysia, and staff of energy commission in Overseas Indonesian Students’
Association Alliance (PPI Dunia). Mail: ramadhan@graduate.utm.my
TAUFAL HIDAYAT
Taufal Hidayat received the B.Eng. degree
in electrical engineering from Universitas
Indonesia in 2012 and the M.Eng. degree
in electrical engineering from the same
university in 2013. He is currently a Ph.D.

student in Department of Electrical and
Computer Engineering of King Abdulaziz
University (KAU), Saudi Arabia. He is
also a lecturer in the Department of
Electrical Engineering, Institut Teknologi
Padang, West Sumatra, Indonesia. His
research interests include renewable and alternative energy. Mail: taufalhi-
dayat4690@gmail.com

DIRECTORATE OF RESEARCH AND POLICY STUDIES
OVERSEAS INDONESIAN STUDENT’S
ASSOCIATION ALLIANCE (OISAA)
No. Position Name Origin of PPI University

1 President of OISAA Faruq Ibnul Haqi, PPI Australia University of South
ST., M.RgnlUrbPlan., Australia
Ph.D (cand)
2 Director of Research Muhammad Aswin PPI Denmark University of
and Policy Studies Rangkuti, M.Pd., Copenhagen

Ph.D (cand)
3 Vice Director Radityo Pangestu, PPI Jepang Kobe University
of Special Affairs M.Eng
4 Vice Director dr. Anthony Paulo PPI Australia University of New
of Health & Sunjaya, SM, Ph.D South Wales
Economics (cand)
5 Vice Director Afifah Muharikah, PPI Australia Griffith University
of Social Sciences S.S., M.Hum., Ph.D
(cand)
6 Vice Director David Firnando PPI Australia The Australian
of Technology & Silalahi ST, M.Eng National University
Environment
7 Chair of OISAA Journal Khairul Anam, ST., PPI Austria Vienna University of
MT., MSc Technology
305
No. Position Name Origin of PPI University
8 Chair of Student Tiara C. Gusman, PPI Australia Monash University
Protection Study Team S.I.Kom
9 Chair of the Middle Ahmad Luqman PPMI Arab King Abdulaziz
East Studies Hakim, M.A Saudi University
Commission
10 Chair of the Health Gabriele Jessica PERMIAS Harvard University
Commission Kembuan, MBBS
11 Chair of the Riani Sagita, SE PPI Jepang National Graduate
Economics Institute for Policy
Commission Studies (GRIPS)
12 Chair of the Tourism Dwi Sulihati Sri PPI Australia James Cook
& Creative Economy Sugiharti SE, M.Ec. University
Commission Dev, M.Ec.
13 Chair of the Education Budy Sugandi, M.Sc PPI Tiongkok Southwest University
Commission
14 Chair of the Irawan Jati, S.IP., PPI Australia The University of
International M.Hum., M.S.S Queensland
Relations Commission
15 Chair of the Social and Muhammad Ammar PPI Australia The University of
Cultural Protection Hidayahtulloh, M. Queensland
Commission Dev. Prac., PhD
(Cand)
16 Chair of the Fefi Eka Wardiani, PPI Taiwan Chung Yuan Christian
Environment M.Sc Unversity
Commission

17 Chair of the Energy Harun Ardiansyah, PERMIAS University of
Commission S.T., M.S Illinois at Urbana-
Champaign
18 Chair of the Rahmat Trialih, PPI Irlandia University College
Technology, S.Kom., M.Kom Cork
Information and
Public Communication
Commission
306
Indonesia Post-Pandemic Outlook Buku ini tidak diperjualbelikan.
COVID-19 has ravaged the world’s economy, upend existing social
support structures, and strongly impact global geopolitics.
Written by over 85 scholars from 22 countries, in collaboration with

BRIN Publishing, this book series titled Indonesia Post-Pandemic Outlook
aims to present the perspectives of Indonesian scholars on the current
pandemic and propose multidisciplinary strategies for Indonesia to
recover stronger post-pandemic.
We hope that this book can be valuable reference for stakeholders,

policymakers, and society to recover from the pandemic crisis and find
better solutions to benefit future generations.
Indonesia Post-Pandemic Outlook
Strategy towards Net-Zero Social Perspectives

Emissions by 2060 from the Editors: Muhammad Ammar
Renewables and Carbon- Hidayahtulloh, Irawan Jati, & Dadan
Neutral Energy Perspectives Sumardani
Editors: Harun Ardiansyah & https://doi.org/10.55981/brin.536
Putty Ekadewi
https://doi.org/10.55981/brin.562
Environment and Technology Role Rethinking Health and

for Indonesia Development Economics Post-COVID-19
Editors: Rahmat Trialih, Fefi Eka Wardiani, Editors: Anthony Paulo Sunjaya,
Rendy Anggriawan, Cendra Devayana Yoko Brigitte Wang, Riani Sagita, &
Putra, & Ahmad Said Dwi Sugiharti
https://doi.org/10.55981/brin.538 https://doi.org/10.55981/brin.537
OPENING REMARKS:
Prof. Dr. Pratikno, M.Soc.Sc.
INDONESIA Minister of State Secretary,

Republic of Indonesia
INDONESIA
Energy Perspectives
C
OVID-19 has disrupted all aspects of human life. To mitigate the impact of
the pandemic, several efforts have been taken, including by Indonesian
scholars abroad. This book entitled Indonesia Post-Pandemic Recovery
Energy Perspectives
Outlook: Strategy towards Net-Zero Emissions by 2060 from the Renewables and
Carbon-Neutral Energy Perspectives explores energy sustainability and climate
change issues and how it can progress further. There are also discussion on the
delays caused by the COVID-19 pandemic to a few major renewable energy
projects that should have been done in 2020-2021.
Comprising of 14 chapters, this book is divided into three sections. The first part,
Indonesia's Current Position and Strategy for Renewable Energy, explores
INDONESIA
Indonesia's current position and strategy on New and Renewable Energy. This
chapter also explores Indonesia's commitment towards Net-Zero Carbon
Emission 2060. Second, Carbon-Free and Renewable Energy in Indonesia,
discusses the status of renewable energy use in the world, elaborate on the
carbon impact of energy shift from fossil to renewable sources, and introduce a
new criterion in renewable energy: carbon-neutral energy. The last part,

Indonesia's New Strategy to Achieve Net-Zero Emission in 2060, explores the
macroeconomic benefits of renewable and carbon-neutral energy deployment
which are increasing energy security, fueling GDP development, creating job
opportunities, enhancing human welfare, and achieving gender equality.
We hope that this book can be a valuable reference for stakeholders,
policymakers, as well as society to recover from the pandemic crisis and find from the Renewables and Carbon-Neutral
better solutions to benefit future generations.
Energy Perspectives
Editors: Harun Ardiansyah
Putty Ekadewi
Published by:
BRIN Publishing
DOI: 10.55981/brin.562
ISBN 978-623-7425-83-0
Editors:
Directorate of Repositories, Multimedia,
and Scientific Publishing
Gedung B.J. Habibie, Jln. M.H. Thamrin No. 8,
Harun Ardiansyah
Kb. Sirih, Kec. Menteng, Kota Jakarta Pusat,
Whatsapp: 0811-8612-369
Putty Ekadewi
E-mail: penerbit@brin.go.id 786 237 42 583 0
Website: penerbit.brin.go.id

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OPENING REMARKS:

Prof. Dr. Pratikno, M.Soc.Sc.

INDONESIA Minister of State Secretary,

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This book is published under a Creative Commons Attribution Non-

Further details about CC BY-NC-SA 4.0 licenses are available at

1. Energy 2. Indonesia’s rich resources

Copy editor : Sarwendah Puspita Dewi

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List of Figures.................................................................................................... vii

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List of Abbreviations...................................................................................... 289

Figure 2.1 The Illustration of Iron Triangle...............................................16

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Table 2.1 Scenarios of Assumptions towards Net-Zero Emission...........20

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As a scientific publisher, BRIN Publishing holds a high responsibility

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Indonesian students and youths have a long history of shaping our

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The history noted that on October 25, 1908, Indische Vereeniging

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Faruq Ibnul Haqi, S.T., M.RgnlUrbPlan., Ph.D. (Cand.)

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The Directorate of Research and Policy Studies (Ditlitka) of the Over-

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Board of Directors, Directorate of Research and Policy Studies

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“Idealism is the last luxury that only young people have”

The young generation has always been Indonesia's powerhouse since

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H. Ardiansyah & P. Ekadewi

© 2022 Overseas Indonesian Student’s Association Alliance & BRIN Publishing

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2 Indonesia Post-Pandemic Outlook ...

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4 Indonesia Post-Pandemic Outlook ...

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Indonesia’s National Strategy

A. Overview of Indonesia’s Position on the Global Stage

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E. Wahyuni & H. Ardiansyah

© 2022 Overseas Indonesian Student’s Association Alliance & BRIN Publishing

B. Development of National Energy Policy in

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10 Indonesia Post-Pandemic Outlook ...