During two recent missions to Indonesia covering Jakarta and South Sulawesi, experts from UNEP Copenhagen Climate Centre met with key stakeholders to discuss the energy transition process underway and more importantly the role of provinces in energy planning and implementation.
This is particularly crucial as Indonesia is embarking on simultaneous transitions along a low-carbon energy pathway, and economic development in an equitable way. The extent to which the country and regions can benefit from the sustainable energy transition opportunities will depend on governance structures, industrial policies, and absorptive capacities.
UNEP Copenhagen Climate Centre’s Socially Inclusive Energy Transition for Indonesia (SISET) project is supporting two provincial governments in Indonesia, namely South Sulawesi and West Java, in their low-carbon energy transition and implementation. This includes incorporating socio-economic considerations such as strengthening skills and employment, supporting entrepreneurship, capitalizing upon green economy opportunities, and localizing the energy transition process.
Closing the gaps between national and provincial energy transition planning and implementation
While several initiatives are underway at the national level, the provinces are not always an active part of the energy transition visions and dialogues.
Further, each region and province have a different characteristic, some being very coal-dependent while others are more electricity dependent with intersecting variations in development levels and ambitions. The topics around economic diversification, energy security and reliability, energy for productive use, socio-economic dimensions of energy transition, just energy transition, local content, local job creation – are still acquiring a common understanding among the stakeholders.
The mission involved productive discussions with the Ministry of National Development Planning, Ministry of Energy and Mineral Resources, The National Energy Council, Ministry of Workforce, Ministry of Women’s Empowerment. In addition, the team also held consultations with METI (renewable energy association), UK Embassy, SMERU research centre and the JETP Secretariat. The stakeholders expressed strong interest in streamlining the national and provincial collaboration and improving focus on local co-benefits.
Synchronizing energy planning with regional development to maximize co-benefits
The National Energy Council mandates that all provinces develop their own Renewable Energy Development Plans and set renewable energy targets in line with the overarching NDC. The Renewable Energy Development Plans are supposed to demonstrate potential in the provinces, support regional infrastructure and development plans, including those of industrial parks and serve as the basis for provinces to request budget allocation. The Renewable Energy Development Plan process needs to be well synchronized with development objectives. Economic development incentives are crucial for the provinces to fully engage with climate change challenges and adopt renewable energy.
The mission entailed visiting the province of South Sulawesi – which has a complex socio-economic fabric comprising of relatively high electrification rate, dependence on Java-Bali grid system, new industrial parks and zones upcoming, nickel mining and smelting industries relying on captive coal, agriculture-based livelihoods, some rural districts and islands lacking access to electricity, along with a strong interest in transitioning to renewable energy-based independent grid system.
The team conducted meetings with sub-national and local government to determine the kinds of support needed to integrate socio-economic aspects into regional energy and development planning. Additional consultations were held with a Technical and Vocational Institution, a local NGO, women’s organization, among others.
Identifying Interventions for more local and inclusive energy transition outcomes
The varied findings from the two missions underscore the potential need for various localized initiatives and incentives for renewable energy transition along with the need to engage with the what inclusion and equity mean in a provincial and local context.
The mission identified several key areas of interventions which will be pursued as a way forward:
- The integration and feedback loops to allow for a cohesive planning process accounting for multi-sectoral decarbonization.
- Multi-stakeholder forums as a way to enhance dialogues around energy transition at a provincial level bringing in a diverse set of stakeholders and strengthening the linkages of energy planning with equitable development.
- In line with new regulations, budgetary allocations for renewable energy at a provincial level would be an important step forward in allowing more bottom-up planning and implementation.
- Capacity building initiatives around renewable energy demand across sectors, networks linking skills with youth and women, and around policy synchronization.
The above will capacitate provinces and local authorities to create a better foundation to deliver on an equitable energy transition, improve development opportunities, support community resilience and meet climate and SDGs.
UNEP Copenhagen Climate Centre’s work in Indonesia is supported by the Danish Ministry of Foreign Affairs.