G-20 host Indonesia parades climate agenda in coal-powered Bali

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NUSA DUA, Indonesia – The streetlights that line the highway from Bali’s airport are powered by the sun. Police patrol the streets on electric motorcycles, and drivers shuttle dignitaries back and forth in luxury electric SUVs.

The global climate crisis is one of the main concerns of this week’s G20 summit and host Indonesia has made every effort to demonstrate its commitment to reducing carbon emissions. However, as world leaders travel across the sun-kissed island of Bali, they are plugging into an energy grid that runs predominantly on fossil fuels.

Endowed with a wealth of renewable energy sources, Indonesia has done far less to realize this potential than most countries of its size. Climate activists say the Indonesian government has been too slow to move away from fossil fuels and abandon archaic policies that subsidize dirty energy sources. Analysts say Indonesia’s experience illustrates some of the most difficult challenges faced by developed countries in the green energy transition.

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In 2015, after Indonesian President Joko Widodo was elected, he mandated a number of projects that would generate 35 gigawatts worth of new energy – most of it from coal-fired power plants. At that time, 16 percent of the population still had no access to electricity, and officials were confident that the country’s economic growth would soon see demand for energy skyrocket.

By the time it became clear that Indonesia’s growth was not keeping pace with forecasts, it was too late. Dozens of new power plants had gone online, and more were under construction. The country’s network was oversupplied with coal energy, which accounted for more than the half of electricity generation — twice what it was a decade ago, according to the Institute for Essential Services Reform, an Indonesian think tank. Renewable energies had no room to grow.

“It’s like an excess baggage that the Indonesian government carries around,” said Elrika Hamdi, a Jakarta-based energy finance analyst. It was “a mistake of the past” for which the country is still paying, she added.

At the same time, clean energy regulations have been inconsistent, burdensome and often poorly enforced, proponents say, leaving Indonesia behind other developed countries like Vietnam and the Philippines. After a decade-long “solar boom,” Vietnam’s installed solar capacity is nearly 80 times that of Indonesia, despite having only a third of the potential, according to the International Renewable Energy Agency (IRENA), an intergovernmental organization helping countries transition to cleaner energy helps .

Although Bali receives enough sunlight to multiply its electricity needs, its energy needs are met almost entirely by fossil fuel power plants on the island and on the neighboring island of Java. Renewable energy accounts for less than 2 percent of electricity generation, provincial officials say.

In northern Bali, fishermen have been fighting the planned expansion of a coal-fired power plant for years, accusing it of threatening their existence. “We will accept any power plant that does not harm the air, sea and water,” said Supriyadi, a fisherman in Celukan Bawang village. “We just don’t want any money.”

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Indonesia’s leaders urging G-20 to secure a multi-billion dollar energy transition loan, have often identified their dependence on fossil fuels as a problem of insufficient funding for alternatives. Coal, which is plentiful in Indonesia, was the cheapest way to electrify the country for decades. Even now, dealing with the climate crisis cannot replace development needs, said Investment Minister Luhut Binsar Pandjaitan.

“In everything we do, we don’t want to stop our economic growth,” Pandjaitan said in an interview from his Jakarta office last month. “Even as we implement this new program, we should see revenue for the government and for the people of Indonesia.”

But analysts say that view is outdated and that money in Indonesia is only part of the problem.

“It’s frustrating because the technological solutions are there. Economically and financially there are no longer any barriers,” says Nicholas Wagner, researcher at IRENA.

The average amount of solar power Indonesia receives per square meter is almost double that of some countries in Europe. research showsand Indonesia has them largest geothermal reserves in the world. These conditions are positioning the country for one of the most dramatic energy transitions in the world, although it is not currently on track.

Last year the government banned the development of new coal-fired power plants but said the rule would not affect those 13.8 gigawatts of additional coal energy – enough to provide electricity 10 Balis – that was already in the pipeline. Two months ago, the government announced another set of exemptions to its ban, allowing new coal-fired power plants that support “national strategic projects” such as battery minerals smelters.

In addition, since 2009, the government has required all coal mining companies to sell a certain amount of their output to the state utility at below market value. This regulation, the The World Bank has pushed Indonesia towards scrapping, effectively subsidizing the price of coal and distorting the energy market towards renewable sources, analysts say.

Even when the government tries to push clean energy deployment, it sometimes falls short of implementation, said Hamdi, the energy finance analyst. In 2018, for example, a ministerial decree to encourage rooftop solar panels resulted in people paying more to use them. “On paper,” Hamdi said, “it’s not the same as the reality on the ground.”

Bali has long aspired to become energy self-sufficient, and locals increasingly believe that goal can be reconciled with their ambitions to reach net-zero emissions by 2045, 15 years ahead of the rest of Indonesia. A Study 2017 from the Asian Development Bank found that Bali needs to use just 5 percent of its renewable energy resources to meet its entire electricity needs.

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But without proper support from the national government, progress has been icy, residents say. From 2012 to 2015, the government opened eight small solar parks in Bali and handed them over to local authorities. Only four are still operational, a provincial official said. The rest is left to decay. Meanwhile, plans are underway to build a new terminal for liquefied natural gas, a type of fossil fuel, in southern Bali.

“We have high ambitions,” said Ida Ayu Dwi Giriantari, a professor at Bali’s Udayana University, who wants to see more renewable energy. “But we can’t do this alone.”

Fabby Tumiwa, executive director of the Institute for Essential Services Reform, said that while he agrees Indonesia has been slow to move so far, the push for renewable energy is increasing.

In September, Widodo a regulation This paves the way for the country to shut down coal-fired power plants prematurely. And on Monday, Indonesia’s state-owned utility Perusahaan Listrik Negara announced the early closure of its first coal-fired power plant. Tumiwa, a vocal PLN critic in the past, attended the company’s press conference in Bali. “I’m ready to be surprised,” he said.

Not all advocates are so optimistic, especially those in Bali. Most of the 600+ electric vehicles used for the G-20 were brought in from Java and will be shipped back after world leaders depart. It’s not clear who will be maintaining the solar panels put up for the summit – or if there are plans to help the local government replicate them across the island.

“The real challenge,” said Ida Bagus Setiawan, head of Bali Province’s energy department, “comes after the summit.”

Winda Charmila in Bali contributed to this report.

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