Summary_of_Energy_Program_Consultation_Workshop,_Sept_18,_2019.pdf

USAID Indonesia’s Energy Program Consultation Workshop Jakarta, 18 September 2019

Time : 08.30 – 14.00 Total Invitees : 93 people from 49 institutions Total Attendances : 68 people from 30 institutions, including 23 from Government of

Indonesia (MEMR1, SetNeg2, Bappenas3), 3 from PLN4, and 42 from local private sector, potential IPs5, local financial institutions, and local experts in the energy sector.

Agenda:

● Introduction and Welcoming Remarks from USAID Deputy Mission Director and representative from Directorate General for Electricity of Ministry of Energy & Mineral Resources

● Overview of Agenda

● Asia EDGE Overview

● Breakout Sessions

● Wrap Up

Breakout Sessions:

Time Schedule

Group 1 Group 2 Group 3 Group 4

09:00 - 10:30 Topic 1: Increased Deployment of Advanced Energy

Topic 3:

Transparent and Best Value Procurement

Topic 2: Utility Modernization and Transformation of the Energy Sector

Topic 4: Adoption of Best Practices in Planning and Policy

10:30 - 10:45 Coffee Break

10:45 - 12:15 Topic 2: Utility Modernization and Transformation of the Energy Sector

Topic 4: Adoption of Best Practices in Planning and Policy

Topic 3: Transparent and Best Value Procurement

Topic: Increased Deployment of Advanced Energy

12: 30 – 14:00

Wrap-up Session and Lunch

1 MEMR is the Ministry of Energy and Mineral Resources 2 SetNeg is Ministry of State Secretariat 3 Bappenas is Ministry of National Development Planning 4 PLN is Indonesia’s State Electricity Company 5 IPs refers to USAID’s Implementing Partners

RFI Questions breakdown:

1. Deployment of Advanced Energy Systems

● Advanced energy sources, particularly renewable energy, in Indonesia remain perceived as expensive by many key stakeholders. What concrete actions can be implemented to allow Indonesia to capture the historic global price decreases of renewable energy sources? What priority actions are required for Indonesia to achieve its renewable energy targets detailed in the National Energy Policy?

● What are some of the most promising technologies and practices that could be utilized in Indonesia to establish a modern grid capable of providing affordable and reliable power to all? What are the primary barriers to scaling existing successful smart-grid demonstration projects?

● What regulatory and utility reforms are required for Indonesia to sustainably develop its downstream gas sector and meet its city gas expansion targets?

● What are the opportunities and barriers to government and private sector efforts to create energy efficiency markets and introduce more energy efficient appliances in Indonesia?

2. Utility Modernization and Transformation of the Energy Sector

● In 2018, Indonesia reported an electrification ratio of 98%. However, actual access varies widely throughout the country, with a significant disparity in service quality and reliability between urban and rural residents. What reform actions are needed to expand access and improve the reliability and quality of energy services throughout the country?

● As Indonesia considers pathways for transforming PLN into a modern and efficient utility, what lessons should be considered from other countries recent reform efforts?

● Indonesia has made significant progress in reducing electricity and fuel subsidies in recent years. What support could USAID provide to continue the rationalization of tariffs and focusing of subsidies on the poorest customers?

3. Transparent and Best Value Procurement

● How can USAID promote the growth of Indonesia’s energy markets while addressing procurement practices that are open, fair and transparent and create a level playing field for domestic and international investors and companies to capitalize private sector investment?

4. Adoption of Best Practices in Policy and Planning*

● What actions could USAID support to enable alignment between national and local governments in energy planning and electrification program to optimize government/public resources utilization?

● The global energy sector transformation requires non-governmental institutions with strong analytical capabilities to inform policy and regulatory reform. Which institutions in Indonesia are best positioned to influence these discussions?

● What opportunities exist to strengthen Indonesia’s energy sector through enhanced gender equality and women's empowerment?

Notes from Breakout Group discussions

Topic 1: Deployment of Advanced Energy Systems

● Policy, planning and regulation:

● Tariff revision and incentives

▪ Rate regulation and cost incentive tariffs are critical.

▪ Establishing economic renewable energy zones would help incentivize and increase renewable energy development by reducing the initial development cost (i.e. tax free development zones for ten years).

▪ Life-cycle cost models should be added to policy analysis so that difference technologies can be more realistically compared.

● Ancillary services

▪ Need regulation for ancillary services. PLN pays fixed price for system stability.

▪ Recommend bidding system and competitive procurement for ancillary services similar to U.S. California Independent System Operator (CAISO) model.

● Permitting

▪ Permitting process needs to be streamlined to account for different technologies. Right now it takes about the same amount of time to get a development permit regardless of technology.

● Local content

▪ Make content requirements an incentive rather than a requirement.

Incorporate content regulations into competitive bidding system, bidders with higher local content receive procurement edge.

● Renewable energy roadmap

▪ Indonesia needs better long term energy planning so that renewable energy can compete with coal.

▪ There is not enough deep analysis included in current planning to account for life cycle cost, environmental externalities, enabling conditions, system capacity, resources, and system upgrades.

● Distributed energy

▪ Need a new policy to promote and incentivize net metering (MEMR

Regulation No. 49 isn’t working or isn’t being enforced)

▪ PLN has Board of Director Regulation No. 733 (issued in 2013), however a new regulation was issued by MEMR in early 2019 which regulates residential rooftop for PLN

▪ Potentially need to subsidize PLN to encourage distributed energy resources (DER) so that they don’t view DER and net metering as a threat.

● Coal subsidies

▪ Need a new policy to limit or remove coal (indirect) subsidies (otherwise renewable energy will continue to struggle to be cost competitive)

● New Technology

● In depth cost-benefit analysis should be conducted to assess battery vs thermal flex options for integrating additional VRE (Variable Renewable Energy)

● Distributed technology - Rooftop solar should be a priority

● Floating solar faces a bottleneck in current regulations/permitting

● Storage

▪ batteries for isolated grids are too expensive but batteries can also be used as a smoothing system rather than standalone storage system

▪ Encourage utility-scale storage as an asset of the utility

● Smart Grid

▪ Support PLN with costs and tech associated with upgrading their grid system. Additional transmission/feeder upgrades are needed to absorb new

RE.

● Capacity building

● Build capacity of utility regulators including entities like DJK (MEMR Directorate General of Electricity)

▪ Build DJK capacity via knowledge exchange and technical assistance on things like demand forecast analysis, economic analysis, modeling, and system planning which can then be more heavily incorporated into the RUKN (National Electricity Plan) and RUPTL (PLN’s Electricity Supply Business Plan).

● Scale out existing capacity building partnerships like that of the GE/USTDA partnership (focused on capacity building for engineers), ASEAN government leadership program, and the USAID USEA/NARUC technical exchanges

● Local government infrastructure needs to be built up and better coordinated with central government, i.e. better and more streamlined procurement practices at the local level.

● Energy efficiency

● Incentives and cost benefit analyses are needed for PLN to create/support an energy efficiency program with Minimum Energy Performance Standards (MEPS), incentives, campaign for public (and GOI) knowledge/awareness, and pilot projects (like current street-lighting initiatives).

Topic 2: Utility Modernization and Transformation of the Energy Sector

Summary:

● 3D: Decentralization, Decarbonization, Digitalization + Incentives

● Policy and Sector Governance/Reform

● Open Market

● Pricing Tariff

● Collaboration

● Technology/Alternatives:

● Upgrade infrastructure

● Infrastructure distribution technology

● Private sector engagement:

● New business models

Question 1: In 2018, Indonesia reported an electrification ratio of 98%. However, actual access varies widely throughout the country, with a significant disparity in service quality and reliability between urban and rural residents. What reform actions are needed to expand access and improve the reliability and quality of energy services throughout the country?

Policy and Governance:

● Policy: Primary Energy Policy

● Decentralization: Decentralization of Energy, Decentralized Systems of managing energy, and Affordable and Decentralized Energy

● Community Participation

● Reform action in PLN from system planning to tariff

IPP (Independent Power Producer):

● Support the IPP to get funding

● Easier and Quick Bureaucracy procedure for the IPP

● Independent energy for residential and rural areas

Price and Tariff:

● Tariff Policy

● Establish a pool of fund for Renewable Energy project pipelines

● Set the right price to allow PLN to invest in infrastructure

● Split PLN according to major market / islands

● Feed in tariff (FIT);

● Tariff to support penetration level of the Renewable Energy

Better Infrastructure/Distribution:

● Technology Supported;

● Identify rural residence needed, and put the right solution

● Micro grid development

● Grid extension

● Strengthen the distribution network challenge, e.g. “last mile”, especially in Eastern

Indonesia;

● Develop better transmission system and interconnection

● Building infrastructure in urban or remote areas

● PLN should develop more transmission to fulfill energy needed

● Integrated infrastructure

● Better distribution system / infrastructure

● Distribution Management System (DMS) integration with Micro-grid controllers

● Interoperability

● Infrastructure Upgrading: Strengthening the grid, Upscale the power plant capacity, and Retrofit power plant

Private Sector Engagement

● More private sector involvement

● Involving private sector investment

● Improving cooperation with other countries

Technology and New Renewable Energy

● Develop new renewable energy.

● Increase renewable energy portion to fossil based energy.

● Focus on SAIDI/SAIFI not ER.

○ Note: The System Average Interruption Frequency Index (SAIFI) and System Average Interruption Duration Index (SAIDI) measure the number and duration, respectively, of sustained interruptions experienced in one year by a customer.

● Planning the transition to a power system with high share of low carbon and zero carbon energy technologies and VRE (Variable renewable energy) using techno economic assessment.

● Hybrid Energy Solution that works all over Indonesia from Sabang to Marauke.

● Promote Solar rooftop.

● Increase the utilization of Renewable Energy resources using indigenous resources.

Capacity Building

● Training and continuous learning on improving the knowledge and capacity of PLN to be more efficient in the resources management for renewable energy projects.

New Business Model

● Mapping PLN road map towards new business model

● Scalable pilot project

General

● Further understand barriers to access

● Promoting 3D in energy: Decentralization, Decarbonization, and Digitalization

Question 2: As Indonesia considers pathways for transforming PLN into a modern and efficient utility, what lessons should be considered from other countries recent reform efforts?

Governance, Regulation, and Reform

● Regulatory body, single buyer

● Setting incentive to encourage integration of renewable energy

● Decentralization of energy

● Setup a single buyer market in area which market relatively more mature

● Evaluation on PLN in term of monopoly

● Setting up Independent Regulatory body oversee PLN

● PLN be the state owned Enterprises but independent per region

● PLN reform in Procurement; Structural Reform (generation, transmission, and distribution)

Open Market

● Liberalization of energy market

● Open market for power production (small scale)

Pricing/Tariff/ and Market

● Develop unregulated market

● Competitive tariff

● Affordable tariff

● PLN as aggregator for energy pool (like in Singapore)

● Integrated grid to reduce cost

● Apply regional price to allow cross subsidies

Collaboration

● Collaborate with different stakeholders (Private Sector, Civil Society, and other Donors)

Technology/Alternative Technology

● Technology (supplier of the equipment)

● Net metering and smart grid and pump storage

● Digitalization

● Automatization of the networks

● Lesson learned of technologies applied in other countries (nearby) for better adoption in

Indonesia

● Which countries are comparable to Indonesia and its reality?

● Field mobility solutions

● System upgrade with the latest technology to produce better quality

● Deployment of variable renewable energy (VRE)

● Promote rooftop solar panels and provide incentives for users

New Business Model

● New Business Model

● Business model where the private sector is in the power plant (supply) and the PLN for transmission and distribution

Question 3: Indonesia has made significant progress in reducing electricity and fuel subsidies in recent years. What support could USAID provide to continue the rationalization of tariffs and focusing of subsidies on the poorest customers?

● Not discussed in detail as it was not selected as priority question for discussion within the given time

Topic 3: Transparent and Best Value Procurement

● Policy and regulation

● Link/translate energy planning to procurement

● Initiate/recommend multilateral/bilateral high level policy for establishment of energy market

● Political Will:

▪ Ministry level – political will to upscale renewable energy development (how USAID can map the Ministries – power of authorities (Coordinating Ministries) to get more result

▪ Government position in energy; Self diagnostic for government; new administration commitment

▪ Understanding why/how government can prioritize renewable energy – Change of incentive structure within GOI (Incentives for government to prioritize, between ministries and local government institution) – Political buy in. Need to identify potential sources of financing for incentives.

▪ Reduce corruption to level the playing field - Identification of available incentive mechanism by Ministy of Finance (MoF) as part of efforts to reduce corruption.

● Coordination:

▪ Convening cross-government agencies for better coordination, planning and monitoring

▪ Task force team in the GOI (national and local levels) – convening ability for GOI coordination, many existing task forces are set up with no budget for coordination/convene – USAID to facilitate

▪ Initial development stage: Project development phase is important as many stakeholders are involved - communication between parties – leadership to manage this (Bappenas?) – especially for small projects

● Proposed Priority to be GOI counterparts: MEMR, MoFinance, MoIndustry, MoFisheries and MoJustice

● MEMR Regulation No. 50 (PerMen 50):

▪ PerMen 50 as bottleneck: Direct Appointment vs Direct Selection -

Introduce the concept of best value not just best price

▪ Electricity tariff is capped – PerMen 50 (road block) – affordable electricity. Current implementation of energy trilemma leans more to affordability

● Regulatory reforms – important to be done to get more renewables

▪ Regulation to provide clear information on priority of technology or market to be open (Road Map)

▪ Support regulatory reforms to encourage private investment, domestic and international

▪ Support from Government of Indonesia to set up policy, terms and conditions for procurement process

▪ Regulation to accommodate multi-stakeholders voices when creating regulation: Private sector consultation with GOI for feedback because it is crucial for GOI to accommodate voice of private sectors before regulation is issued

▪ Technical implementation procedure should be made within a reasonable time frame after the regulation issued/in place

▪ In 1998 – World Bank did a survey for the key issues to do engagement (availability of security package, regulation to provide, balance engagement-contract with PLN). Balance engagement – legally, commercially and operationally a long term contract (single buyer), guarantee of return contract, e.g. Take or Pay (TOP) – integrated system

▪ Indonesia Electricity Law –Single Buyer so no options for real time sales.

Focus on the balance for long term contract. Single buyer structure needs reassessment.

▪ Regulation related to human rights for indigenous people where the project is located, e.g. impact of land acquisition, etc., including environment integrity. Environment integrity – important to take into consideration from the start. Environmental impact assessment – take longer time for thorough assessment

▪ Renewable energy needs to also see social impact and other impacts – viability economic analysis

● Standardization/Leveling the playing field:

▪ Different understanding of issues by the local and national level – especially for regulations that are not yet interpret in technical implementation procedure – Standardization. To assure that PLN understand and implement the regulation in practice and that PLN must be more transparent on their internal procedure to the developers

▪ Create a regulation that can level the playing field for all stakeholdersà trade-off between speed and adherence to Environmental and Social safeguards requirement in the regulation. Manage expectations of different developer/stakeholders to undergo the same steps/process, e.g.

environment analysis requirement vs faster process

● Local Content:

▪ Evaluate the cost/benefit of Local Content requirement in solar energy project and others. Optimum alignment with local content requirement regulation, including for geothermal

▪ Geothermal sector: Around 70% imported vs local content (TKDN). Need a fiscal terms like duty import or tax, restriction on certain material importation

▪ Rationalize electricity tariff in the regulation so private investors can cover costs and make profits. Lack of technology expertise and local content requirements should be taken into account.

● Subsidy regulation:

▪ Indonesia’s fossil fuels are subsidized – so the renewable energy seems costly/expensive and not cost competitive. To reduce and eventually eliminate subsidies for coal/fossil fuels, then to gradually shift subsidies from fossil fuels to renewable energy - Limited GOI budget

● Government prioritization:

▪ As an example, geothermal needs 10 years to develop. It is important for the government regulation to consider long term cost-benefit (study) for future development of renewable energy vs fossil fuels

▪ GOI needs to compromise on their commitments: Paris Agreement requirement (GHG emission reduction) vs affordable electricity price for the people

▪ Law no. 16/2016 – ratification of Paris Agreement – Indonesia is still ramping up on emission, can Indonesia do it? – implementation needs to have a road map to achieve this – scenario of the energy sector

● Cost/Financing:

▪ External cost is not yet considered for project decision by the government

(external cost for fossil fuel is low)

▪ OJK Regulation – more than 100% collateral requirement, which is difficult for small scale projects (too high and no compromise)

▪ The current practices by banks are to engage with renewable energy from selective technologies that already proven. The key for improvement, from banks perspective, is government (policy/procedure) and independent party to review applicability of government regulation.

▪ Government guarantee is requested by financial sectors/banks (initially), but nowadays banks do not ask for government guarantee but reliable Feasibility Study (FS) , sponsor (collateral), environmental assessment to ensure cash flow. They rely on calculation of project cash flow based on the FS, which serves as mitigation of financial risk. Based on the cash flow, banks will decide whether to charge higher interest as risk mitigation or not.

▪ BOOT6 scheme – is also seen an issue because when the project facility is transferred to be PLN’s assets at the end of the agreement, the project developer will not be able to account it as part of their collateral. BOOT scheme will need to be re-assess.

▪ SMI7 also still requires collateral – project financing is not yet implementable. Risk mitigation in SMI: Interest rate subsidy, first loss mechanism to reduce the risk

▪ Geothermal – who will cover the upfront risk for exploration, etc.? For government projects, the exploration cost by the government is included in the price. Other project risks include sustainability of water supply for mini-hydro.

▪ Tax reduction from two sides, the country that exports the goods and the country that imports the goods – bilateral cooperation between countries

▪ Funding for initial stage of project development (seed funding, initial risk funding)

● Electricity Tariff/Price:

6 BOOT is Built Owen Operate Transfer 7 SMI refers to PT Sarana Multi Infrastruktur, a state owned company

▪ Basis for determination of electricity price/tariff, e.g. LCOE8 – to be made transparent

● PLN related:

▪ PLN as the implementer of regulation – does not have the capacity to change the regulation. MEMR needs to have better planning prior to issuing regulations, e.g. for solar rooftop PV implementation

▪ PLN is currently considering themselves as a guarantee where they become the risk taker for project developers and banks as they need to absorb risk from the project developer (refers to TOP clause where they need to pay the electricity whether or not the demand exists). This “risk taker” is then reflected in the electricity price.

▪ Better planning on estimation of demand growth is needed so that PLN won’t need to bear the burden of unused electricity that is already supplied by the IPPs. Deregulation, decentralization, decarbonization and digitalization – consumer can choose---> increase the planning risk

▪ Learning from experience from California on solar rooftop PV: Duck curves – Policy to include win-win approach

▪ The current system is that the risks are born by PLN

▪ Solar PV rooftop discussion – To develop a road map that covers grid reliability including social impact, impact to PLN, viability of projects

● Procurement system

● Procurement in PLN/GOI needs to be prudent, clear, consistent

● Auction mechanism vs direct selection/direct appointment

● Balanced procurement process/authority between PLN vs other agencies

● Need independent party to execute procurement process to get transparent – best value procurement

● Process for DPT9 requirement (pre-qualified bidders) from PLN needs to be more transparent - Promoting strategic sourcing, prequalification of suppliers, and supporting small business and women owned enterprises

● Identified reason of failure in achieving financial closing – lack of due diligence process in the government (transparency and capacity)

● PLN to provide clear, reasonable, achievable target on developing renewable energy both by PLN and IPPs. PLN to set timeline on renewable energy development/construction based on RUPTL. Lack of clear timeline undermine the reliability of RUPTL.

● Appropriate/attractive procurement/tender scheme especially for small scale projects

● Simplify procurement process, i.e. by incorporating E-procurement

● Center of information/knowledge sharing:

8 LCOE is Levelized Cost of Energy 9 DPT is Daftar Penyedia Terseleksi or pre-qualified bidders list

● Transparent and reliable data of renewable energy resources and related previous studies, open access database/inventory for investor/public to develop renewable energy projects (IPP can make better planning), e.g. location, permit requirements, resources, etc.

● Transparency for lesson learned about failure of getting financial closure for existing PPA10 for other bidders

● More access to information provided by the government (on the website) including basic data of risk, probabilities, - challenge: limitation of government budget to be able to have big server, etc., to manage the website

● Comments and feedbacks from market for projects – market reference to be made available for public

● Establish a portal to connect project developer to investors

● Lesson learned from MCAI11 project to engage with community for operation and maintenance of renewable energy projects, e.g. BUMDes12

● Study of correlation between electricity supply versus income improvement, which leads to planning of electricity based on demand driven, e.g. study related to home industry for off grid

● Open information related to regulatory reforms – especially on the encouraging / positive news on the improved regulation

● Success stories and lessons learned to be shared publicly, for example about rooftop solar PV – is it benefiting them or not, etc.

● Put procurement information online to increase transparency (basic data – companies need to assess risk and opportunity, bid requirement and criteria for evaluation, scores for all bidders after contract awards)

● Capacity Improvement:

● How to promote transparent procurement by PLN/GOI – Technical assistance/capacity building on procurement method: best value vs best price

● Cross-sectoral ministerial discussion – to be on the same page

● Implement auctions system for renewable energy – good example in Vietnam and other countries

● Limited turbine manufactures and technology competition

● Process improvement:

● Reliable and good quality data on renewable energy projects

● Small scale renewable energy in remote area is more expensive in unit price, needs higher FIT or subsidy

● Increase participation of medium/smaller companies in renewable energy procurement

● Sharing lessons learned from projects that failed to get financial closure (although

PPA has been signed) – data from MEMR

10 PPA is Power Purchase Agreement 11 MCAI is Millennium Challenge Account - Indonesia 12 BUMDes is Village-owned Company

● Procurement process to be held in reasonable timeframe

● Link or translate national energy planning to procurement

● Need to start taking into account the environmental impact

● Short term – To consider sustainability of the resources. Declining fossil fuels reserve needs to be taken into account

● Small scale projects: Business model that involves the community is important.

Small scale project in eastern part of Indonesia is not viable for project developers

● Create demand driven business model; Scheme on bartering goods with electricity services

● Buying power exists for off grid – but how to make it sustainable? Operation and maintenance – ownership of the project and capacity building

● Biomass project improvement – community can provide the feedstocks – policy related to biomass plantation – PLN roadmap already included biomass as potential renewable energy projects

● Waste to energy should be Waste Management instead

● Experience from projects – Technical assistance is important so that small projects can have access to finance

Topic 4: Best Practices in Policy and Planning

Sub-topics:

1. What actions could USAID support to enable alignment between national and local governments in energy planning and electrification program to optimize government/public resources utilization?

2. Global energy sector transformation requires non-governmental institutions with strong analytical capabilities to inform policy and regulatory reform. Which institutions in Indonesia are best positioned to influence these discussions?

3. What opportunities exist to strengthen Indonesia’s energy sector through enhanced gender equality and women’s empowerment?

Summary of Discussion:

● Policy & Planning

○ Integrated energy planning process from national to sub-national level, improve synergy between central and local government.

● Capacity Building,

○ Strengthen central and local government particularly in RUEN/RUED13 development.

● Study/Analysis

○ Integrated study on technical, economic, and legal aspects of energy sector

● Local “think-tank” institutions:

○ Big Five universities

13 RUEN is the National Energy Plan, RUED is the Regional Energy Plan

○ Use of social media to influence energy users

● Gender equality:

○ Engage women’ group at lower level to educate energy saving practices and local wisdom

○ Ensuring women’ leadership in the energy sector

Priority No. 1 What actions could USAID support to enable alignment between national and local governments in energy planning and electrification program to optimize government/public resources utilization?

Input Summary:

1. Integrated energy planning process from local to national level, improve synergy between central and local government.

2. Strengthen central and local government particularly in RUEN/RUED.

3. Integrated study on technical, economic, and legal aspects of energy sector.

Policy and Planning:

● Provide support to GOI in developing better energy regulatory/policy.

● Support local government commitments on renewable energy sector and mainstreaming relevant SDGs target.

● Support local government in developing RUED/local planning.

● Support MEMR in developing electricity planning (on-grid and off-grid).

● Align RUED, RUKD, RAN GRK14, Low carbon development planning and reporting requirements/guidelines.

● Improve regulation for “Power Balancer”.

● Mainstreaming green energy concept on energy planning (e.g., on grid code, power market, best practice for PPA of renewable energy).

● Harmonize regulations and supervision role of Bappenas vs Kemendagri15 in energy sector.

● Promote and prioritize policies alignment in energy sector between national and sub-national level (discussion: many regulations at national to sub-national level are not harmonized or unclear. For example, IPPs need clear guidance whether battery for power balancer is needed on wind power plant).

● Support to MEMR on on-grid and off-grid planning (discussion: integrated planning between all stakeholders is needed (for example, in many remote areas, PLN still runs off-grid system).

14 RAN GRK is the National Plan for Low Emission Development 15 Kemendagri is the Ministry of Home Affairs

● Ensure energy policies at local level are consistent with national policies to attract investments.

● Optimize the mobilization of private sector capital for every dollar of government capital.

● Review the current energy regulations and propose suggestions for improvement.

● Include resilience in energy planning since local government has some interest and concerns on disaster response.

● Facilitate energy planning integration between all regions in Indonesia.

● Promote and support small/mini grid development in Indonesia (especially in 3T16 regions).

● Address and harmonize the KPI of head of local government institutions to link with planning process.

● Socialize the energy planning program to all related parties. Strengthen or promote electronic/digital/web based planning process.

● Assist national government in determining local resources.

● Provide grant to finance renewable energy projects in remote areas.

● Use more transparent and inclusive approach in the planning process.

Capacity Building:

● Strengthen central and local government particularly in RUEN/RUED.

● The new energy project should assist regional governments on RUED development

(discussion: Based on regulation, central government should set up national energy planning (RUEN) based on regional energy planning (RUED), but in reality, only a few regional governments have the capability to prepare RUED due to their lack of capacity).

● Coordination with MEMR, particularly with the Secretary General of National Energy Council (DEN) which has responsibility to develop RUEN, and with local governments which responsible in developing RUED.

● Improve Management Information System at national level. (Discussion: The purpose of this support to improve communication and coordination; and to improve the link between the need of local government and what regulation needed to support).

● Provide more training to local government.

● Support electrification master plan development for each province (PLN + regional governments).

● Strengthen local government competency on technology.

● Support discussion between national/local government with private sector.

● Workshop at national and local level to get a better understanding on energy planning.

● Becoming coordinator or integrator of all stakeholders.

● Become a “hub” for energy planning.

16 3T stands for Daerah Tertinggal, Terdepan, Terluar, which refers to the frontier, outermost and least developed regions villages

● Share best practice or study that relevant to address Indonesia’s geographic challenge to accelerate electrification program.

● Fill in the gaps between central and local government, particularly on the human resources capacity on energy planning and electrification.

● Assist local government to develop bankable small scale energy project especially in remote areas.

● Use the power of social media to influence energy users.

● Increase local government capacity and knowledge particularly, among others, on the importance of renewable energy by providing seminar, sharing session, or focus group discussion. Those efforts will increase the level of knowledge and improve understanding between central and local government (discussion: In many cases, RUED is not aligned with RUEN due to lack of capacity and resources, or different political will/ priority at sub-national level).

● Capacity building for both central and local government officials (e.g., RE, supply and demand, procurement, resources, social inclusion) (discussion: on energy planning at sub-national level, local governments need technical assistance to choose which energy models that are compatible with the local context).

● Gap analysis and workshop to identify the capacity that needed by related stakeholders on energy sector (discussion: More trainings and capacity buildings for PLN technical staff in the regions).

● Support local government to carry out a Feasibility Study by using local resources on renewable energy project.

● Support Feasibility Study for developing biomass power plant to boost economic growth in Indonesia.

Study/Analysis:

● Comparative study from other archipelago country on energy policies and electrification program.

● More in-depth analysis related to the challenges on permit on energy sector (e.g., Ijin prinsip, P2BTL(?), etc.).

● Detail assessment to identify local RE potential at sub-national level (up to district level), and should be synchronized with the current electrical condition in order to optimize those renewable energy resources to become primary supply on site.

● Share the results of studies or assessment to related institutions such as PLN and MEMR.

● Develop clear and viable business models for rural electrification for PLN, local government, private sectors.

● Cost analysis to support renewable energy sector.

● Data and evidence based on energy planning that is available online and accessible for all stakeholders.

● Apply online and real time system to indicate potential renewable energy projects.

● Mapping to showcase electrification access level.

Priority No.2 Global energy sector transformation requires non-governmental institutions with strong analytical capabilities to inform policy and regulatory reform. Which institutions in Indonesia are best positioned to influence these discussions?

Input Summary: Local “think-tank” institutions

● Indonesian Institute for Energy Economics (IIEE)

● Indonesia Energy and Environmental Institute (IE2I)

● Institute for Essential Services Reform (IESR)

● Indonesian Geothermal Association (INAGA)

● Masyarakat Energi terbarukan Indonesia (METI)

● Association of Independent Plant Research Institutes (AIPI)

● Academia (e.g., big 5 universities, credible research institutions)

● Amcham

● PLN

● Banks/Financial institutions who have experience in energy sector

● NGO in energy sector

● Media (including social media and influencers)

● Consultants or other experts in energy sector

● Private sectors or investors (e.g., experienced IPP companies)

● Industrial/companies Association (e.g., Renewable Energy Association, Electric Vehicle

Industry Association, Other association and initiatives on renewable energy and climate change)

● Communities and Community Based Organization (CBO) that aware of renewable energy

Priority No.3 What opportunities exist to strengthen Indonesia’s energy sector through enhanced gender equality and women’s empowerment?

Input Summary:

Engage women’ group at lower level to strengthen Indonesia’s energy sector including ensuring women’ leadership in the energy sector

● Mainstreaming gender issue on Economic development as part of electrification in rural areas.

● Improve the role of women at the house level to educate their family on renewable energy (e.g., concept waste to energy, energy efficiency at house level, etc.).

● Increase small scale renewable energy project, especially at the household or community level (e.g., Biogas, wood pellet).

● Gender equality on energy planning, particularly on remote areas will improve the health quality and livelihood/prosperity.

● Improve rural electrification to support education and productivity will improve livelihood and reduce additional domestic cost for cooking and lighting.

● Enhance women’s contribution in rural areas on energy planning, operational and maintenance, and productive use of energy through technical assistance and capacity building.

● Increase awareness of women (or mothers) on energy planning especially on the benefit of renewable energy.

● Increase the role of small medium enterprise (SME) on waste to energy movement at the household level.

● Address limited number of women’s Board of Director.

● To establish a special association or society for women in renewable energy sector.

● Increase involvement of women’s association on development of energy sector through capacity building for the existing women's association and through grant/financial support.

● Mainstreaming Gender Equality and Social Inclusion (GESI) impact analysis in Banks/Financial institution’s investment package or other relevant reviews.

● Promote GESI in the policy development by OJK17 - focusing on micro finance related to energy for women.

● Improve career path for women who have concern in renewable energy.

● Establish KPIs of women empowerment within the local utilities.

● Capacity building for women so energy knowledge become “common” in every household

● Support business models for agro and food processing mills for off grid areas, owned and operated by women.

● Support engendering utilities program18.

● Increase number of women involved in renewable energy development (e.g., waste-to-energy, Rooftop PV, etc.)

● Promote small and medium developer, build more community level renewable energy project.

● Prioritizing and promoting women’s owned business as potential suppliers for procurement or tender process of energy generation.

17 OJK is Indonesia’s Financial Service Authority 18 USAID’s program that focus on gender in the power sector

● Consultation with female electricity customers to understand their needs and concerns in order to raise awareness.

● Mentorships program for women (professionals or graduates students).

● More training and capacity building for women on energy related matters.

● Utilize local PKK19.

“Parking Lots”

● More focus on energy efficiency

● Promotion campaign – behavior change; Increase socialization and education to children on renewable energy (positive + negative) as well as fossil fuels vs renewables and how we can support green energy

● Why Asia EDGE tackle only procurement side – as it’s only the end of the value chain.

● Public awareness campaign for willingness to pay – behavior change

● Support the government’s institutionalization of initiative started by development partners

19 PKK is the Family Welfare Movement, Indonesia’s nationwide women's organization at all levels of economic status in both rural and urban areas.