Accelerating Indonesia's Renewable Energy Goals

MINISTRY OF ENERGY AND MINERAL RESOURCES
Final Report of
the Task Force for Accelerating the Development of
New Renewable Energy and Energy Conservation

i
Laporan Akhir Satuan Tugas Percepatan Pengembangan Energi Baru Terbarukan dan Konservasi Energi 2016
TABLE OF CONTENT
FOREWORD ii
CHAPTER I:
INTRODUCTION: STRENGTHENING THE FOUNDATION OF ACCELERATION
1
CHAPTER II:
ACHIEVEMENTS AND MOVING FORWARD
5
A. Energy Resillience Fund (DKE) 6
B. Center of Excellence for Clean Energy (CoE Indonesia) 12
C. National Region for Clean Energy Bali (KNEB Bali) 18
D. Program Indonesia Terang (PIT) 22
E. Development of Sustainable Bioenergy Program 26
F. Safeguard and Biofuel Information System 30
G. Policy Breakthrough to Accelerate New and Renewable Energy 34
H. Energy Conservation Campaign 40
I. Situation Room: MEMR Decision Support 44
J. Mission Innovation 50
K. Involvement of Stakeholders in Accelerating the Development of NRE 54
CHAPTER III
SHARPEN OUR FOCUS IN CREATING ENERGY SOVEREIGNTY
61
RECOMMENDATIONS:
A. Policy Breakthrough 62
B. Financial Breakthrough 63
C. Technological Breakthrough 64
D. Capacity Building Breakthrough 65
ANNEX 66

Final Report of the Task Force for Accelerating the Development of New Renewable Energy and Energy Conservation
ii
Indonesia’s energy production must continue to meet
the rise in energy consumption, in line with population
and economic growth. Over a decade ago, Indonesia
moved from being a net oil exporting country to a crude
oil importing country. In the future, to achieve energy
security, Indonesia must reduce its reliance on oil as the
major source for the country’s escalating demand for
energy.
The falling world oil prices benefited oil importing countries
like Indonesia as it reduced the pressure on the current
account and state budget. In addition, it reduced the
urgency to move away from oil production and to finance
the development, production capacity and distribution,
and consumption of clean energy resources. While
consumers enjoyed the low oil prices and their continued
subsidy, consideration of the need for sustainable and
efficient energy development remained off the radar.
The vast new and renewable energy (NRE) resources,
ranging from sun, wind, geothermal, tidal, and biomass,
available in Indonesia have not been developed as primary
energy sources. Current exploration and production is
focused on non-renewable energy sources and, given the
global trend, should now be diverted to renewable energy
development. For Indonesia, prioritizing an acceleration
of the development of NRE will contribute to energy
security in the long term which, in turn, will increase socio-
economic development, and reduce the country’s level of
greenhouse gas emissions (GHG).
FOREWORD

iii
Policy breakthroughs are required for the government to
ensure the availability of energy access for all Indonesian
citizens. To strengthen the nation’s energy security more
effort is required to achieve energy efficiency and to
increase the contribution of NRE in the national energy
mix in accordance with local conditions and capacity. The
government aims to increase the contribution of NRE in
the national energy mix to 23 present by 2025 – a four-
fold increase based on its current contribution. Major
breakthroughs must be achieved by the government
and all stakeholders, both in terms of policy, funding,
technology and human resource capacity building.
It is within this context that this report has been
prepared. This report provides an overview of the various
initiatives launched to realise the target of 23 percent
NRE in the national energy mix by 2025. It explores the
prerequisites to achieve these initiatives including, but
not limited to: breakthroughs in policy and governance,
innovative funding mechanisms, technology diffusion, and
breakthroughs in the implementation of capacity building.
Through this publication, readers will find information
related to the commitments of the Ministry of Energy and
Mineral Resources (MEMR) and the progress made from
2015 until today; the challenges, and recommendations
for government intervention in 2017 to avoid obstacles and
ensure NRE targets are achieved in the near future.
This publication is expected to inspire strategic planning
and concrete programs that will contribute to the MEMR
goal to provide energy access for all Indonesian people,
and promote energy efficiency and the deployment of NRE
nationwide. It is hoped that based on this report, business
leaders, civil society, and our community of young people
will respond to the challenge to accelerate the research,
development, demonstration, and deployment of new and
renewable energy.
Thank you and have a pleasant reading.
Jakarta, August 2016
Task Force for Accelerating the Development of New
Renewable Energy and Energy Conservation (Satgas
P2EBTKE)

CHAPTER I INTRODUCTION:
STRENGTHENING
THE BASIS OF
ACCELERATION

2
Law No. 30/2007 on Energy and Government
Regulation No. 79/2014 regarding National
Energy Policy (Kebijakan Energi Nasional -
KEN) emphasized the need to accelerate the
development of new and renewable energy (NRE).
The relevant elements of these regulations include:
a. Prices, subsidies, and energy incentives;
b. Access to public infrastructure and energy
industries;
c. Research, development, and application of
industrial technology; and
d. Financial institutions.
In general, these four elements fall under the
general categories of policy, technology, financing
and human resource capacity building.
These categories correspond to the vision and
mission of President Joko Widodo and Vice
President Jusuf Kalla, as stated in Nawa Cita
(2014), where the development of renewable
energy is a major component of the realisation of
energy sovereignty through:
a. tLong-term strategy: changing the purchase
price of renewable energy in order that it
accommodated the economic value of the
investment risk associated with this sector; and
b. Short-term strategy: reducing energy subsidies
must be incorporated into the economical
calculation and accompanied by the
development of geothermal and hydro power,
biofuels and biomass along with efficient and
effective governance of renewable energy.
The establishment of a special entity, such
as a Logistics Agency (Bulog), whose task
is to strengthen the biofuel industry and
ensure efficient biofuel trade through effective
governance.
In terms of policy, some aspects of NRE
development face significant challenges including,
among others: securing an exploration license
if the area, for establishing a geothermal power
plant (PLTP), is on forested land; the provision of
land for bioenergy due the lack of clarity regarding
plantation land tenure for bioenergy; investment
restrictions related to the development of many
renewable energy resources; and the scarcity of
domestic companies with the capacity to develop
renewable energy on a large scale.
In terms of technology, the constraints faced
include: limited facilities for certification and
standardization; funding; research, development
and monitoring of NRE; resource mapping of
NRE across Indonesia; and limited infrastructure
including the State Electricity Company’s electricity
network. To reach the NRE target of 23 percent by
2025, an estimated investment of IDR 1.600 trillion
is required. Government funding remains very
limited. In the case of private investment, there
are issues in balancing the perceived high risk and
the financial sector’s constraints to guarantee the
viability of NRE investments.
In terms of capacity building, due to the lack
of development in the NRE sector, there is a
significant lack of technical capacity for NRE
in Indonesia. Despite an enormous work force,
without an increase in the deployment of NRE
nation wide, it remains difficult to attract talented
human resources for the administrative, technical,
financial, and legal requirements for large scale
implementation.
Indonesia’s NRE potential is estimated to be
around 800,000 MW. However, utilisation of this
potential today has reached only one percent.
Based on the ambitious targets outlined in the
National Energy Policy (KEN) and the challenges
KINDS OF ENERGY WATER GEOTHERMAL BIOENERGY
Potential 75,000 MW 29,544 MW 32,654 MW
Installed capacity 5,024.2 MW 1,438.5 MW 1,671.0 MW
Utilization (%) 7.0 5.0 5.1

3
2 General Plan Draft of National Energy (National Energy Board,
2016), p. 14.
across all NRE sectors, it is imperative to transform
the current paradigm into a more integrated and
innovative solution, in terms of policy, technology,
funding, and capacity building. This paradigm shift
is essential and must be supported by accelerating
NRE development in combination with energy
efficiency programs.
The program for accelerating the development of
NRE and improving energy efficiency has been
implemented through a range of initiatives since
August 2015. These initiatives include, among
others:
• Revising regulations that have hindered the
development of renewable energy; develop
incentiveschemestoacceleratethedevelopment
of renewable energy;
• Setting up an Energy Resilience Fund (DKE) as
a financing instruments to provide incentives for
investment in the energy sector;
• Developing a Centre of Excellence (COE) for
Clean Energy as a conduit for a NRE revolution
in information, financing, and technology
development;
• Establishing a pilot region with the capacity to
support a total transformation to clean energy,
like the National Region for Clean Energy (KNEB)
program now established in Bali;
• Supporting policy breakthroughs and
accelerating national strategic programs;
• Overseeing the development of the Sustainable
Bioenergy Program (Bioenergi Lestari Program)
as a pilot project in Central Kalimantan;
• Implementing the Biofuel Information System
(SIB) along with safeguards and governance
mechanisms;
• Conducting a major campaign for energy
conservation;
• Preparing the Rural and Remote Electrification
Program (Indonesia Terang Program, PIT); and
• Encouraging the active participation of Indonesia
in various international fora on energy and the
future development of NRE.
The achievements of each of these initiatives
during 2015 and 2016 should be followed up by
strategic actions in the coming year. This includes,
among others: encouraging the issuing of several
regulations that accelerate the development of
renewable energy; as well as the preparation of
a legal umbrella for initiatives like DKE and PIT.
The Sustainable Bioenergy Program is expected
to be fully implemented and efforts then should
be directed to its replication in other provinces.
Related to the COE Indonesia, in parallel to the
construction of its premises, the strengthening
of its institutional framework and development of
cutting-edge technology will be required.
In 2016 additional initiatives were implemented
to bridge the gap between the Indonesian
community’s awareness and support for energy
efficiency. This was achieved through the energy
conservation campaign “Cut 10%”, and bridging the
investment gap and the support of the international
community through the Bali Clean Energy Forum
(BCEF). The BCEF will become the backbone for
launching other initiatives for the national, regional
and global NRE community.
Essentially, the main requirement in 2017 will be
the commitment and greater support from all
stakeholders to continue and realize the initiatives
to accelerate the development of NRE.
Figure 1. Potential and Utilization of Indonesia’s Renewable Energy Resources
Source: National Energy Plan 2016
SOLAR WIND AND HYBRID TIDAL
532,579 MW (4.80 kWh/m2
/day) 113,545 MW (3-6 m/s) 17,989 MW
78.5 MW 3.1 MW 0.3 MW
0.01% 0.003 % 0.002 %

CHAPTER II ACHIEVEMENTS
AND MOVING
FORWARD

6
“Targeted to be established in 2016, DKE is
planned to raise up to IDR 200 trillion by 2025
with potential revenues from the state budget,
fossil energy depletion premiums, grants, loans,
fees for general services, return on investment,
and other legitimate sources.”
A.ENERGY RESILLIENCE
FUND (DKE)
1. OVERVIEW
A nation’s energy security is a development
objective realized through the policies and
programs of the energy sector. Energy security
includes the availability of energy, access to
energy sources, affordability, and the protection of
the environmental. The state of the nation’s energy,
at this time, is defined by a range of issues that
threaten national energy security including: the
decline in oil production; low utilization of domestic
energy from gas and coal; a limited infrastructure
for energy; fiscal pressure brought about by fuel
imports; and low utilization of new and renewable
energy.
To resolve these issues, policy breakthroughs are
needed along with funding mechanisms facilitated
by the government, especially funding for large-
scale energy projects which can be prone to long-
term risks. It is not plausible to rely on government
budget to fund these projects considering the
limitations of public funding, and the complex and
rigid procurement mechanism. Energy security
can only be achieved through a series of combined
breakthroughs including, among others, policy
improvements; incentives and innovative and
appropriate facilities for fiscal and non-fiscal;
development of technology; and related capacity
development.
There are circumstances that hinder progress
towards national energy security including, among
others:
a. Uncertainty in signing Power Purchase
Agreement (PPA) by PLN due to the limited
funds available to cover the additional cost for
NRE project development;
b. The position taken by the banking industry
which hesitates to take the technical and
financial risks arising from NRE projects;
c. Circumstances where national renewable
energy projects do not meet industry best
practice, making it difficult to secure financing;
d. The need to link investors with technology
providers, financial institutions, project
developers, PLN, and the government, to
bridge and provide assurance to financial
institutions regarding the risk of NRE technology
deployment;
e. There are 12,659 villages without reliable and
affordable electricity, with an estimated 2,519
villages completely without electricity; incentive
mechanisms are needed to enable the private
sector to provide energy services to these
remote and rural areas;
f. Energy security through diversification of
energy by maximizing NRE. 23 percent energy
mix target of NRE requires IDR 1,600 trillion,
while the state budget funds are limited;
g. NRE requires advanced technology, and
Indonesia needs to develop the technical
expertise and capacity to develop/deploy this
technology;
h. Energy Reserves Buffer (CPE) through oil and
gas exploration and stabilization of fuel prices.

7
The Energy Resilience Fund (DKE) is a pool of
funds utilized to provide incentives and financing
facilities for the development of oil and gas
energy and NRE. Specifically aligned to achieving
greater national energy resilience. Targeted to be
established in 2016, DKE is planned to raise up
to IDR 200 trillion by 2025 with potential revenues
from the state budget, fossil energy depletion
premiums, grants, loans, fees for general services,
return on investment, and other legitimate sources.
Law No. 30/2007 on Energy and Government
Regulation No. 79/2014 on National Energy Policy
(KEN) mandated the need for funding facilities
such as DKE. To be able to operate, DKE requires
an appropriate institutional structure in order to
receive, manage, and provides grants, loans,
and equity, and forming bond with financial
intermediaries for the use of financial products
that are flexible and innovative. Recent analysis
concludes that a Public Service Agency (BLU) is
an appropriate institutional model for DKE.
Institutionally, DKE will cooperate with the Centre
of Excellence (COE) for Clean Energy to provide
analysis and technical recommendations for
NRE projects that could obtain financial support
from DKE. DKE also working with banks financial
institutions and non-bank as intermediaries
in channelling financing facility (e.g. to banks
participating in Credit for Community Businesses).
Besides financial products, such as viability gap
fund, guarantees and interest subsidies, DKE
covers payments for Feed-in Tariff (FiT) gaps to
ensure the viability of renewable energy projects.
Based on preliminary analysis, calculated from the
Business Plan for the Supply of Electricity (RUPTL),
the National Energy Plan (RUEN), and additional
information from project developers, following is a
list of funding requirements, both in the form of FiT
gap payments and financing NRE power plants for
selected technologies:
Based on the calculations in the table above, the
total subsidy for the FiT gap payment, which can be
facilitated by the DKE until 2019, is approximately
IDR 1 trillion. This amount secures an output of
an estimated 3,077 MW by 2019 for a 20-year
Purchase Power Agreement (PPA) period, with
projects commencing in 2017.
To accelerate the realization of investment in NRE
projects, DKE may provide a product performance
guarantee in the form of premium payments. The
premium payment required until 2019 amounts to
IDR 1.6 trillion, which could encourage investment
of renewable energy projects with a value of
approximately IDR 80 trillion to 2019. Apart from
the on-grid project with PLN, the DKE facility will
be utilized the Rural and Remote Electrification
Program (PIT) in the form of the gap payment
Figure 2. Fund Source, Management Institution, and DKE Utilization
3 Other prevailing laws and regulations, namely: i) UU 17/2003;
ii) UU 1/2004; iii) PP 1/2008 jo. PP 4/2011; iv) PP 23 of 2005
jo. PP 74/2012.
Utilization
• Fuel Stabilization Fund
: clean energy fund
: oil fund
• Rural and Remote Electrification
Program (PIT) for 12,659 villages
• Energy supply diversification
(maintaining energy mix)
• NRE concession incentives
• Human Resources and
Research and technology
including pilot projects
• Energy Conservation Incentives
• Feed in Tariff margin
• Energy Buffer Reserves
Management Institution
Energy Resilience Fund
Fund Source
q State Budget;
q Fossil Energy (Depletion
Premium);*
q Grants;
q Loans;
q Fees for general services
q Return on investment; and
q Other
• Oil and gas exploration

8
subsidies, subsidized interest margin, assurance
premiums, and other products in accordance with
the business model of PIT.
2. ACHIEVEMENT IN 2015 – 2016
In 2015, the development of the DKE was
completed by analysing issues and conducting
discussions with key stakeholders of the energy
sector, including businesses, financial institutions,
and ministry/institutions. The DKE concept has
been presented on various occasions, both
domestically and internationally, including in a
hearing with Commission VII of the House of
Representatives, at the Investment Forum ConEx
2015, Indonesia International Infrastructure ConEx,
UN Women Workshop, and other various fora.
In addition to mainstreaming the DKE concept,
another activity undertaken in 2015 was to prepare
a Draft Government Regulation (RPP) for DKE’s
establishment which was submitted to President
Joko Widodo to seek approval for the RPP to be
examined in a cross-ministerial meeting led by
the State Secretary. Subsequently, the ministerial
meeting, led by Coordinating Minister for
Economic Affairs, was held on 30 December 2015
with an agreement that a Government Regulation
regarding DKE should be issued in early 2016.
Table 1. Projection of FiT Margin Subsidy Needs Calculation
Year
Capacity (Hydro energy, micro hydro, solar, wind,
biomass power plant)
FiT Margin Subsidy
(in USD)
2017 469 MW $25,770,957
2018 685 MW $54,327,101
2019 1923 MW $82,250,962
2020 562 MW $96,262,067
2021 448 MW $101,653,577
Figure 3: DKE Design
• FiTmargin
o smart building and
smart city
incentives
ENERGY
CONSERVATI
ON
DOMESTIC AND
FOREIGN GRANTS
AND LOANS
FOSSIL ENERGY
DEPLETION
PREMIUM
APBN
(State budget)
Clean Energy
Fund
o Rural and Remote
Electrification Program
o Solar Energy Power
Plant 5,000 MW
o Wind power plant
o biomass and biogas
power plants
o waste to energy micro
hydro power plants
o KNEB
ONGRID
(SEMI COMMERCIAL):
o Sustainable
Bioenergy
Development
Program (biomass,
biodiesel,
bioethanol)
BIOFUEL
o Centre of
Excellence,
Sustainable
Bioenergy
RD & D
OFFGRID
o Rural and Remote
Electrification Program
o Solar Energy Power
Plant 5,000
o KNEB
ENERGY RESILIENCE
FUNDCenter of Excellence Bank/Non Bank
FiT
DKE Products: VGF,
Loan, Grant, Equity,
Credit Guarantee Facility
Oil
Fund o Energy buffer reserve (30
days)
o Oil FuelStabilization Fund
o Oil and gas exploration

9
In 2016, formal meetings on RPP DKE, with
representation from the Ministry of Finance,
Ministry of Justice and Human Rights, and the State
Secretary, were conducted on several occasions.
An outcome of these meetings was that the DKE’s
legal basis would be based on a Presidential
Regulation in accordance with Law No. 30/2007 on
Energy part 5, article 20-22, 25, and 30, as well as
Government Regulation No. 79/2014 on National
Energy Policy article 22 and 27.
Table 2. Simulation of DKE’s general services
SIDE GOALS PROGRAM MECHANISM
Demand Decreasing demand through an
increase in energy efficiency.
1. Energy saved
through the Public
Streets Lighting
Program
Form: Loan
Recipient: Government City or District
Government
KPI: Energy elasticity
decreases less than one
percent in 2025 and energy
intensity decreases one
percent per year.
2. Support program
for Developers of
Energy Saved Tools
Form: Equity or Mezzanine debt
Recipient: Developers
3. Loans and
guarantees
program for Energy
Conservation
Form: interest rate subsidy
Recipient: Micro, Small and Medium-
Scale Enterprises (UMKM) through Credit
for Community Businesses; Medium
industry through PT SMI or Banks
Access/ Supply Electricity supply increases
through renewable energy
alternatives
4. Renewable
Energy Enterprise
Guarantee Program
Form: Performance Guarantee
Recipient: Industry through loan
application to Bank
KPI: NRE development of 8,800
MW until 2019
5. Loan program
for NRE and
loan program
for Sustainable
Bioenergy
Form: Interest rate subsidy
Recipient: Micro, Small and Medium-
Scale Enterprise (UMKM) through Credit
for Community Businesses; Medium
industry through PT SMI or
Increasing electricity access
evenly
6. PLN Network
Expansion Program
Form: Public Service Obligation Service
(PSO)
Recipient: PLN
KPI: Electrification ratio of 96.6
percent by the end of 2019
7. Rural and Remote
Electrification
Program (Program
Indonesia Terang,
PIT)
Form: Interest Rate Subsidy, Assurance,
Grant
Recipient:
1. Community/Cooperation through
Credit for Community Businesses for
PIT
2. IPP through Credit for Community
Businesses for PLTMH < 1 MW
Research and
Development
Capacity increase, information
and technology
8. COE Indonesia
development
program
Form: Grant, loan
KPI: Kapasitas institusi CoE
Indonesia
Recipient: COE Indonesia
3. CHALLENGES
Challenges in the preparation of DKE include the
following:
a. Coordination across ministries/institutions for
harmonisation of revenues, expenditures, and
to ensure the DKE has flexible mechanisms;
b. Regulation related to DKE’s operations
were fragmented across various ministries/
institutions and many of these regulations were
being revised with different dates of expected

10
On 7 April 2016 the Plenary Cabinet Meeting
approved the budget allocation of IDR 1.6 trillion
for DKE and Energy Reserves Buffer (CPE). The
budgetary allocation was divided into IDR 800
billion for clean energy and IDR 800 billion for
CPE. The potential impact resulting from the clean
energy budget allocation include the following:
1. Implementation of the Rural and Remote
Electrification Program (PIT) which aims to
produce an estimated 58 MW for approximately
200,500 households without electricity;
2. Tariff subsidy for the Phase 1 of the 5,000 MW
solar power program which aims to produce
250 MW; and
3. Incentives to support energy efficiency projects.
It is proposed that the DKE established quickly with
initial funding from the State Budget Amendment
(APBN-P) 2016 as this would enable the
implementation of a range of strategic programs
including the government’s NRE targets and
energy services for rural and remote populations.
Table 3. Energy Resilience Fund (DKE) Work Plan 2016
No Output Activities
1 Issuance of Government Regulation
on the Energy Resilience Fund (DKE)
1. Discussions between Minister of Energy and Mineral Resources, Minister
of Finance, Coordinator Minister of Maritime, Coordinator Minister of
Economy
2. FGDs and meetings with:
a. Government: Director General of Treasury (BLU), Director General of
Risk Management, BPHN, Ministry of Law and Human Rights, PIP, PLN,
OJK; and
b. LKB and LKBB including LPEI, Askrindo, and others; and
3. Harmonization and policy issuance on fossil energy depletion premium.
2 DKE’s operational preparation 1. Finalisation and issuance of DKE’s implementation and technical
regulations.
2. Preparing SOPs for the DKE institution - a General Service Agency (BLU).
3. Arranging strategies for funding mobilization.
4. Collecting data for pipeline portfolio.
3 How to integrate DKE with other
initiatives/institution?
Integration of COE Indonesia and DKE
issuance. For example, the Revision of the
Law on Oil and Gas, Revision of the Law and
Government Regulation on Non-Tax Revenues,
Revision of Government Regulation for Public
Service Agencies (BLU), and several regulations
from the Ministry of Finance; and
c. Difficulty to access data and information on
oil and gas projects and NRE to calculate the
funding needs and potential income for DKE.
4. NEXT STEPS
To ensure DKE is established as a provider of
institutional facilities and financing incentives
that are solid, transparent, accountable and
professional, the government regulation for
establishing DKE’s legal basis and supporting
technical regulations need to be finalised and
issued. These regulations are critical to DKE’s
establishment and its implementation mechanisms
required to achieve the targeted impact.
WORK PLAN 2016
In 2016, to achieve the establishment and operation
of DKE, has designed a work plan as outlined in
Table 3.

11
To ensure DKE is established as a provider
of institutional facilities and financing
incentives that are solid, transparent,
accountable and professional, the
government regulation for establishing
DKE’s legal basis and supporting
technical regulations need to be finalised
and issued. These regulations are
critical to DKE’s establishment and its
implementation mechanisms required to
achieve the targeted impact.

12
“COE Indonesia was established with a different approach
to other COEs around the world because in that it is not
only a laboratory for researching new and innovative
technologies, but also as an investment and business
support centre designed to accelerate the development of
clean energy in Indonesia.”
B.CENTER OF EXCELLENCE
FOR CLEAN ENERGY
(COE INDONESIA)
1. OVERVIEW
In relation to technology breakthroughs and capacity building,
there is a need to develop an infrastructure to consolidate
national and international efforts to develop and deploy clean
energy resources. This infrastructure is expected to facilitate
the development of methods and techniques for applying
innovative technology in accordance with the conditions,
characteristics and capacity of each region.
The establishment of Indonesia’s Centre of Excellence
for Clean Energy (COE Indonesia) aims to provide such an
infrastructureforthecountry’stransitiontosustainableenergy.
The design of Indonesia’s Centre of Excellence focuses
specifically on accelerating resource mapping, financial and
institutional facilities, and technology development. Broadly,
and unlike more traditional research and development
laboratories, the Centre will aim to encompass the complete
“cycle” of clean energy development and deployment in order
to contribute to national, regional and international social and
economic development by supporting access to a reliable,
affordable and sustainable supply of energy for all.
This general design of the COE translates into several
underlying objectives, including: decision support;
collaborative learning; and project support. These
underlying objectives are designed to support a
multi-sector and multi-stakeholder environment
through: 1) developing a capacity within the MEMR
for consolidation and analysis of quality data and
information (decision support); 2) establishing
an environment within the COE for enhancing
collaboration between stakeholders from the public
and private sectors (collaborative learning); and 3)
supporting and facilitating stakeholders in project
planning and implementation (project support).
These objectives serve as fundamental principles
underlying the Centre’s more specific objectives
which include, among others, the following:
1. International technology diffusion, addressing
barriers to technology diffusion and sustainable
goods and services, and improving international
technology cooperation and agreements;
2. Human resources and community-based
services, strengthening human resources and
community-based extension services, and
focusing development financing on capacity
development;

13
3. Investment and risk mitigation, accelerating
investment and mitigating risk in clean energy
deployment, and supporting market creation
policy and competitive advantage;
4. Innovative market-based mechanisms,
pioneering innovative policy and regulatory
frameworks, and working together on
strengthening sustainable energy polices and
agreements; and
5. National, regional and international
collaboration, facilitating collaboration
between national, regional and international
communities, and participating in global clean
energy innovation initiatives.
In order for the Centre to achieve its objectives,
a range of functional structures have been
considered and, based on discussions with key
stakeholders, the current concept is to establish
three principle units within the Centre which will
focus primarily on 1) Information; 2) Finance and
3) Technology. In addition, it is envisaged that
these units will function based on a matrix design
that facilitates the horizontal and vertical flow and
interaction of expertise and information. In this
“matrix structure” experts from different functional
disciplines from within the Centre and from other
institutions, including the public and private sector,
will work together as a team on specific research
assignments or planned projects or programmes.
This arrangement will facilitate an open and
collaborative environment for developing solutions
for the advancement and deployment of clean
energy technologies and innovation.
As described in the above Figure, each of the three
basic units: information; finance; and technology,
will be divided into various sub-units. The Finance
Unit will be central to all activities of the Centre
focusing on: feasibility assessments related to RE
development and deployment; the acceleration
of (patient) investment and facilitating business
mobilisation; and market-based mechanisms
supporting a transformation of policy instruments
and the clean energy value chain. The Information
and Technology Units will support these specific
DECISION SUPPORT COLLABORATIVE
LEARNING
PROJECT SUPPORT
Consolidation and analysis of
quality data and information.
Collaboration between
stakeholders from the public
and private sectors.
Facilitation of project planning
and implementation.
International technology
diffusion
• Addressing barriers to technology diffusion and sustainable goods
and services; and
• Improving international technology cooperation and agreements.
National, regional and
international collaboration
• Facilitating collaboration between national, regional and
international communities; and
• Participating in global clean energy innovation initiatives.
Innovative market-based
mechanisms
• Pioneering innovative policy and regulatory frameworks; and
• Working together on strengthening sustainable energy polices and
agreements.
Investment and risk mitigation
• Accelerating investment and mitigating risk in clean energy
deployment; and
• Supporting market creation policy and competitive advantage.
Human resources and
community-based services
• Strengthening human resources and community-based extension
services; and
• Focusing development financing on capacity development.
Access to a reliable
and affordable supply
of energy
Sustainable social
and economic
development
Figure 4. COE’s Key Objectives

14
activities of the Finance Unit. Following is a brief
description of the areas of focus of the proposed
sub-units:
INFORMATION
• Spatial Analysis, collaborating with MEMR’s
Centre for Data and Information (Pusdatin)
and multi-sector geospatial departments both
private and public, the Centre’s spatial analysis
focuses on consolidating tabular and spatial
data to establish resource maps related to,
among others: socio-economic profiles; energy-
demand modelling; and renewable energy
sources;
• Data Modelling, combining a suite of
methodologies and applications for the purpose
of determining broad level speculative analysis
on temporal energy demand and supply; least-
cost network analysis, and socio-economic
and cultural analyses to assist in regional
development and deployment of new and
renewable energy; and
• Monitoring and Reporting, reporting on clean-
energy programmes both national, regional
and international for the purpose of managing
and maintaining an advanced knowledge base
related to the expansion of, and transition to,
clean energy, and to ensure accurate and near
real time data and programme evaluation can be
delivered to decision and policy makers.
FINANCE
• The Finance Unit is central to the COE’s
operations, bringing ideas generated from the
information and technology units, which tend to
be nascent and require further development to
be commercially viable, to the private sector - a
process that involves:
• Feasibility Assessments, conducting feasibility
assessments following a range of screening
processes including probable technologies,
constraint mapping and environmental impact
analysis, and data and network modelling to
determine which combination of renewable
technologies most effectively meet the energy
requirement and goals, and achieve least cost
for the consumer;
• Investment and Business, facilitating investment
by assisting in mitigating financial barriers to
investments in small-to-large scale renewable
energy projects and businesses, assisting
in identifying indigenous renewable energy
resources and translating those potential
resources into a technical and economic feasible
pipeline of projects that attracts the interest of
potential investors and financiers; and
• Market-based Mechanisms, supporting
government initiatives to develop market-based
mechanisms that accelerate the development
and deployment of clean energy, including policy
instruments that provide financial incentives for
consumers and/or producers adopting new
and renewable energy technologies, focusing
on reliable, cost-effective supply chains
Figure 5. Work Scope of COE Indonesia
CENTRE
OF
EXCELLENCE
COLLABORATIVE
LEARNING
PROJECT
SUPPORT
DECISION
SUPPORT
TECHNOLOGY
Basic
Science
Standards
and
Certification
Clean
Energy
Innovation
PROJECT IMPLEMENTATION MONITORING
FINANCE
Feasibility
Assessments
Investment
and
Business
Market-Based
Mechanism
INVESTMENT AND BUSINESS DEVELOPMENT
INFORMATION
Spatial
Analysis
Data
Modelling
Monitoring
and
Reporting
DATA AND INFORMATION MANAGEMENT

15
and promoting the diffusion of clean energy
technologies, and supporting the development
of appropriate core infrastructure including
supporting infrastructure for the harvesting of
renewable energy, and renewable energy assets.
TECHNOLOGY
• Basic Science, developing a basic science
capacity that will focus particularly on renewable
electricity production and use and renewable
fuels formulation and use which will form the
foundation for applied research and development
of advanced technologies;
• Standards and Certification, pursuing non-
discriminatory national standards that apply to
all distributed power technologies and assures
that these systems are properly integrated into
the grid in a manner that addresses critical
safety, reliability, and power-quality issues, and
the development of a certification process for
distributed power and interface equipment; and
• Clean Energy Innovation, facilitating clean
energy innovation through building strong
interdisciplinary research and education
partnerships, enhancing the technology
development interfaces between basic science
and applied research, between integrated
energy systems and the marketplace, and by
identifying, analysing, and developing solutions
to reduce institutional and infrastructural barriers
to the development and commercialisation of
distributed power systems.
2. ACHIEVEMENTS IN 2015 –
2016
As an initial step in the development of Indonesia’s
COE, a Data Analysis Centre has been setup in
MEMR’s Research and Development Agency
(Balitbang). This facility focuses on resource
mapping given the Research, Development and
Demonstration (RD&D) facilities of the Agency.
This initial achievement will form the basis of
the COE’s Decision Support facilities which,
through development support and assistance
from the Asian Development Bank (ADB), World
Resources Institute (WRI), and others, are being
expanded in order to consolidate a broader range
of institutional research concerning Indonesia’s
potential renewable energy sources.
In addition to focusing on the development of the
Data Analysis Centre, other activities that have
been initiated during 2015 include the following:
a. Preparation of COE Indonesia Development
Strategy and Business Plan;
b. Strategy Preparation of Information
Communication Technology (ICT Strategy) for
COE Indonesia;
c. Competition of COE Indonesia eco friendly
building design concept, which will be followed
PHOTO: COE Booth, Bali Clean Energy Forum 2016

16
by a feasibility study and detailed engineering
design (DED) in 2016;
d. Public website for COE Indonesia;
e. Prototype monitoring system for investment
in new and renewable energy and geospatial-
based energy conservation.
3. CHALLENGES
The challenges experienced in establishing
Indonesia’s COE concern access and availability of
data. In this respect, the Centre will need to expand
its cooperation with experts and specialists from
various government organizations, academia, the
private sector, and civil society organizations from
various fields of science related, both national and
regional, and global. In Indonesia, the availability of
spatial information and local characteristics require
the involvement of the Ministry / Agencies, such as
the Ministry of Environment and Forests (KLHK),
Ministry of Agriculture, Ministry of Agricultural and
Spatial Planning (ATR / BPN), National Institute
of Aeronautics and Space (LAPAN), Geospatial
Information Agency (BIG), the Meteorology,
Climatology and Geophysics (BMKG), and the
Centre for Energy Technology at the Agency for
the Assessment and Application of Technology
Table 4 Work Plan of COE Indonesia 2016
1 A non-business-as-usual institution that
works towards the energy sector reform
required to accelerate the development
of new and renewable energy in
Indonesia
1. Identifying function and structure of similar COE institutions abroad.
2. Formulating COE function and structure
3. Compiling presidential decree drafts with related institutions and
ministries.
4. Designing timeline of COE activities until 2025.
5. Identifying legal foundation of an institution establishment.
6. Making of physical masterplan of COE which based on passive energy
building
2 Roadmap:
The achievement of 23 percent NRE in
the national energy mix by 2025
Facilitating the design of NRE programs in Indonesia included:
1. The technical study application of NRE technologies;
2. Design of key performance indicators to monitor implementation of the
program;
3. Modelling of energy systems based on various scenarios to achieve the
target of 23 percent renewable energy by 2025.
3 Virtual COE
operational COE TPP output; is required
as real output and can be felt directly by
the community as early as possible
1. Identify the information that needs to be incorporated into metadata;
2. Make a legal basis draft for the implementation of spatial data in the
MEMR;
3. Identify the required data and collecting data from relevant institutions;
4. Collect metadata from data that has been or will be collected;
5. Build a database structure that is integrated with a Media Centre and
populate the database with data already collected;
6. Develop and design SEOM system;
7. Identify the data that should/should not be accessed or downloaded by
the public;
8. Collect data on projects of NRE which are ongoing, including project
progress status information;
9. Identify the organization flow of NRE projects at the funding stage, pre-
FS, FS, and construction, along with the estimated time on each activity;
10. Mapping the barriers faced by project developers in the implementation
of NRE projects; and
11. Designing reporting lines in order to monitor projects of NRE.
(BPPT).
In terms of technology assessment, COE Indonesia
requires support from academics and other
educational institutions, both in Indonesia and
from countries that develop NRE technologies,
such as the United States, Japan, South Korea,
or China. In addition to access and availability of
data, COE Indonesia also needs the involvement
of the private sector to develop the COE’s business
models, funding mechanisms, and renewable and
clean energy technology dissemination through
their field station to do ground truthing, project
implementation, and monitoring and evaluation.
These field station require interaction with local
government. In essence, the development of
COE Indonesia will be carried out with a phased
approach that evolves with the implementation of
national energy programs.
Challenges and obstacles faced in the acceleration
of investment are different in each technology, but
there are some similarities, including:
a. Tariffs: PLN cannot afford expensive NRE power
plants;
b. Licensing: the length and complexity of the
licensing process, especially for geothermal

17
COE
Figure 6. COE ‘s Field stations across Indonesia.
projects which are generally located in forest
areas;
c. Data: lack of data and information on NRE;
d. Regulations: under developed regulations and
standards specific to NRE investment
e. Electricity Trading Regulation (PJBL): no PJBL
standard for renewable energy;
f. Financial institutions funding: lack of capacity
and interest of local financial institutions in
financing renewable energy projects.
These barriers impact on the realization of new
and renewable energy investments, and cause an
increase in NRE costs which adversely impact on
new and renewable energy investments.
4. NEXT STEPS
The Centre’s target for 2017 is to expand the Data
Analysis Centre for new and renewable energy
to ensure the availability of basic facilities for
investors and the government in its consideration
of policies in support of the transformation to new
and renewable energy.
In addition, the following objectives will form a part
of the 2017 work plan:
a. Setting up a Project Management Unit (PMU)
and a team of researchers who can serve full
time in MEMR’s RD&D Agency (Balitbang)
and a team in Bali to assist in coordinating
the construction of the COE’s premises while
supporting the National Clean Energy Zone
program (KNEB); and
b. Collaborative Learning and Project Support
activities will continue to assist partners in
the field, educational institutions, and other
knowledge centres.
Development of a Virtual COE which concerns:
a. Sustainable Energy One Map (SEOM), a
geospatial resource map;
b. Project Monitoring, to evaluate the progress
of projects that support the acceleration of
investment in new and renewable energy;
c. Clean Energy Marketplace, stakeholder
engagement in order to accelerate investment
in new and renewable energy.
PLANS IN 2016 – 2017
A taskforce for preparing the institutional structure
of the COE was established on 1 April 2016, with
a one-year tenure through to 31 March 2017. This
taskforce is responsible for preparing basic tasks
and functions of the COE. It consists of five working
groups: Administration, Information, Investment,
Technology, and Communications. The work plan
prepared by includes the following activities:
COE Indonesia will have field station in various
parts of the archipelago, to serve as disseminators
of innovation and technology to a wide range of
NRE initiatives in regional areas.
The design of Indonesia’s Centre of Excellence
focuses specifically on accelerating resource
mapping, financial and institutional facilities, and
technology development. Broadly, the Centre will
aim to encompass the complete “cycle” of clean
energy development and deployment in order to
contribute to national, regional and international
social and economic development.

18
“Bali as a National Region for Clean Energy (KNEB) is strategic
for the implementation of regional NRE. It is well placed to
change the mindset and become a new standard for the
community in the utilization of energy. The program is the
starting point for a national movement to realize the utilization
of Indonesia’s sustainable natural resources for NRE.”
C.NATIONAL REGION FOR
CLEAN ENERGY BALI
(KNEB BALI)
1. OVERVIEW
A part from being a pilot region for the development of the
tourism sector, Bali is the designated pilot region for new and
renewable energy as stipulated in MEMR’s ministerial decree
No. 3573.K/70/MEM/2015 dated 14 August 2015 regarding
Bali as the National Region for Clean Energy (KNEB). This
decision complemented Bali’s own declaration as a Green and
Clean Province (Bali Green and Clean) which was announced
by the Governor of Bali at the 11th Global Environment Forum
in Nusa Dua in 2010. At this event the Clean and Green Bali
Road Map was launched. With the establishment of Bali as
the first National Region for Clean Energy, follows the need
to develop the islands NRE potential in accordance with the
needs of the community and in a sustainable manner. This
program was developed as part of acceleration program meet
the targets for NRE’s contribution to the national energy mix,
as stipulated in the National Energy Policy (KEN), Government
Regulation No. 79/2014.
The potential deployment of NRE in Bali is significant and
includes:
a. Hydro power 79 MW;
b. Biomass around 18 MW with current production of 1.5 MW
in Bangli;
c. Solar power 5,263 Wp/m2 which is greater than the
average potential for Indonesia at an estimated 4,800 Wp/
m2;
d. Ocean currents in Toyopakeh approximately 5 GW and 33
GW in the Lombok Strait; and
e. Wind energy which, in Nusa Penida, reaches speeds of
3-12 m/s.
Bali as a National Region for Clean Energy (KNEB)
is strategic for the implementation of regional NRE.
It is well placed to change the mindset and become
a new standard for the community in the utilization
of energy. The program is the starting point for
a national movement to realize the utilization of
Indonesia’s sustainable natural resources for NRE.
THE ENERGY PARADOX AND BALI
Energy and islands
a. Bali is an island province with a population of
4,104,900 million inhabitants;
b. Bali have not achieved energy independence -
of the four gas power plants and a steam power
plant owned by Bali, 100 percent of the energy
resources come from outside the island of Bali,
in the form of cable transmission from Java -
Bali, or the supply of LNG.
Energy and Tourism
a. Bali Province is ranked the second highest in
energy consumption per capita nation wide;
b. There is unequal distribution of electricity -
based on data from BPS in 2015, households
there are 133,673 households that do not have
electricity, or 13.3 percent of the total number of
families in Bali. 72 percent of energy used in the
province is produced in Java, and 70 percent is
consumed in south Bali.

19
ENERGY AND CULTURE
a. Tri Hita Karana, which is the essence of
Balinese culture refers to the three principles of
prosperity which involves maintaining a balance
of the three elements of man’s relationship God,
fellow human beings and the environment;
b. 25% of the energy mix used in Bali is derived
from fossil fuels which are not environmentally
friendly.
Given this paradox and the context of the
above issues, which is a phenomenon that
often occurs in the area of administration of the
islands in Indonesia, Bali seeks to achieve its
vision as a pilot region of NRE.
2016
During 2015, the KNEB program was developed in
stages with the legal framework and cooperation
between the MEMR Provincial Government of Bali,
progressive implemented:
a. MEMR Ministerial Decree No. 3573.K / 70 /
MEM / 2015 in August 2015;
b. The signing of the KNEB Memorandum of
Understanding (MoU) between the MEMR’s
Minister and the Governor of Bali in August
2015;
c. MEMR Ministerial Decree concerning the KNEB
development team issued in September 2015;
and
d. Bilateral meetings between the Minister and the
Governor of Bali, as well as relevant regional
work units (SKPD) and representatives of civil
society organizations in Bali in October 2015,
as a follow-up of KNEB Bali Development NKB;
e. Handover of premises to the KNEB development
team located in Renon, Denpasar, which was
carried out by the Public Works Ministry of
the Provincial Government of Bali and the
Research and Development Agency of MEMR
in November 2015.
In addition, the development team of KNEB Bali
facilitated the formulation of principles, criteria and
indicators of KNEB Bali which included:
a. Principle 1: KNEB Bali and Indonesia COE
implemented by the human resources engaged in
the government sector, community organizations,
and businesses who are competent, have
integrity, and aligned with the people;
b. Principle 2: KNEB COE Bali and Indonesia
upholds the integration of Balinese cultural, social,
and ecological as a key component of supporting
the island’s ecosystems. This is supported by a
comprehensive cutting-edge information system;
c. Principle 3: KNEB Bali and COE Indonesia
organized by policy and regulatory framework
that does not have a negative impact on
the social order, culture, and ecology in its
implementation;
PHOTO: Solar energy power plant, Karangasem, Bali

20
Figure 7. Tier 1 – 3 KNEB Bali.
Clean and Green
2018
TIER 1: On-grid Energy
0 - 18 month
• Large-scale (100 MW and above)
• Conversion of diesel / coal to gas
(PLTG Pemaron, PLTG Gilimanuk
PLTU Celukan Bawang)
• Waste to energy Suwung
TIER 2: Off-grid Energy
12 - 36 months
• Small and medium scale
• Water-based, biomass, trash, solar,
wind, rice husks, etc.
• Availability of energy locally
• Community-based orientation and
strengthening local institutions
• The planning process is bottom-up
• Aims to build self-reliance based
on the potential of local energy
resources
TIER 3: Clean Energy
36 months ahead
• Development of NRE Centre of
Excellence
• Oriented towards applied research
for a clean energy future, especially
marine-based like the waves, algae,
OTEC, and other clean energy
• The main attraction of Indonesian
NRE scientists who are abroad
• Being NRE monitoring centre field
stations throughout Indonesia
• Become a tourist attraction with the
mission of education and increased
awareness of the people on NRE
2015-2016
2016-2017
2017-2018
d. Principle 4: Implementation of the program and
activities of the KNEB Bali and COE Indonesia
are set through a participatory approach;
e. Principle 5: KNEB Bali and Indonesia COE
organized with the support of a transparent
financing and incentive system that ensures
even distribution of prosperity; and
f. Principle 6: KNEB Bali and COE Indonesia
provides appropriate demonstrations to
advance understanding and awareness of clean
energy utilization.
KNEB Bali will not be realized optimally without
the support and approval of the people of Bali.
This support is obtained through community
participation in the study of political, economic,
environmental, social, and cultural elements related
to renewable energy development in Bali. So far
efforts that have been done are the involvement of
representatives from civil society organizations and
young Balinese community groups so that it can be
followed up with the establishment of youth forum
and communities for NRE at the provincial level, and
encourage similar movements at the national level.
ACHIEVEMENTS 2016
KNEB Bali continues to work successfully
with civil society organizations in relation to
legal frameworks, and energy and electricity
stakeholders in Bali:
a. Debottleneck the process of converting large-
scale plants, such as the Pesanggaran gas
power plant and waste-to-heat in Pesanggaran
power plant;
b. KNEB recruitment team based in Bali;
c. KNEB office in Renon, Denpasar, established
and operational for KNEB Bali team’s daily
activities; and
d. Refinement of the work plan of KNEB Bali 2016-
2017.
3. CHALLENGES
It is understood that the KNEB program cannot be
realized in the short term. For this reason, there
needs to be consistent effort to achieve KNEB
through a three-tiered approach as described in
the Figure below.
The challenge, therefore, for KNEB Bali include the
following:
a. Debottleneck the process of converting
large-scale plants, such as Final Disposal
(TPA) Suwung, conversion of coal to gas in
power plants Celukan Bawang, as well as the
process of revitalization of wind power plant
and solar power plant in Nusa Penida that need
information and a comprehensive study as well
as the cooperation of various parties;
b. Development of medium and small scale solar
installations through the revitalization and
restarting of solar power plants (SPP), which are
already established in Bali; support and policy
reform, particularly in order to overcome a long
and complex process of asset hand over;
c. SPP construction of 1-10 MW scale, and to
encourage the installation of a home solar
panel system, there needs to be an integrated

21
approach involving the procurement of
technology, human resources, and finance.
Additionally, more active cooperation with PLN
is required in order to encourage incentives
that support the smart grid system, such
as the implementation of net metering and
implementation of competing feed-in-tariff;
d. Funding schemes that are transparent and fair
and support a wide range of parties, including
industry and financial institutions, require
increased capacity and interest of local financial
institutions in financing NRE projects, and in
securing guarantors;
e. The increase in skilled human resources in the
province of Bali requires close collaboration
between academia, industry, and government,
in particular with regional work units and village
owned enterprise officials.
4. NEXT STEPS
TARGET 2016 – 2017
a. In order to support the conversion agenda
of coal to gas, as well as NRE restoration
projects in Bali, KNEB Bali recommends
a range of measures and policies for the
MERM, the Provincial Government of Bali, and
stakeholders, through a series of research and
academic papers based on the Principles,
Criteria and Indicators of KNEB Bali;
b. Gain consensus and consolidation together
through campaigning and socialization with
the help of communication materials, in
particular with the involvement of civil society
organizations and youth community;
c. Small-scale pilot projects of solar panels on
the roof and strengthening the capacity of the
supply value chain with the involvement of local
communities, industry, and academia;
d. Cadre of technical personnel, experts and
business management of solar panels on the
rooftops from experienced young people;
e. Assistance to the village government in
planning; and
f. Develop funding schemes and innovative and
sustainable financing mechanisms through
cooperation between financial institutions,
guarantee agencies, government, and the
development of Cost Sharing Mechanism
(CSM) with industry players.
WORK PLAN 2016-2017
The work plan of KNEB Bali 2016 is outlined in the
Table below.
Tabel 5. Rencana Pengembangan Cakrawala 1 - 3 KNEB Bali
Action Plan Output (until 2017)
Tier 1 - Fossil energy conversion to gas (Celukan Bawang)
- The utilization of waste to heat in PLTG Pesanggaran
- Waste to Energy (TPA Suwung)
- RE Investment Package - Nusa Penida
- 100% Clean Energy Bali
- Clean Energy Airport
- Reduction function landfill,
- TPS revitalization
- Investor for revitalization RE - Nusa Penida
- gas fuel stations
Tier 2 - The clean energy village
- Consortium for Academics - industry players
- Energy Ambassadors (creation of technical personnel)
- Scientific work competition
- Business Plan competition (involving Village-owned
Enterprises)
- Energy Management Workshops
- 8 NRE villages
- Vocational training curriculum and SHS experts
- White papers and policy briefs
- Community-based Business Planning
- 30 technical experts and 5 SHS experts
- Policy studies & market ecosystems
- Monitoring and evaluation indicators and GIS platform
- Market intelligence
- Database
- Market perception surveys (baseline and progress
report)
- TPS Revitalization (TPA function reduction) - TPS case studies
- TPS-energy prototype
- Finance and CSM - Cooperation with banks, guarantee institutions and
retailers of technology
Tier 3 - Prototyping and evaluation of appropriate technology - Appropriate NRE technology catalogue for strategic
energy sectors.
- NRE Local Competence Centre

22
Tabel 6. Kondisi Ketenagalistrikan Desa
ELECTRICITY SOURCE VILLAGES NATIONAL (%)
NON-PLN 2,009 3
NON-PLN & NO ELECTRICITY 8,041 10
NO ELECTRICITY 2,519 3
TOTAL 12,659 16
Source: Podes BPS 2014
D.PROGRAM INDONESIA
TERANG (PIT)
“Indonesia’s electrification ratio is 86%. There are still 12,659
villages across Indonesia that do not have access to reliable and
affordable electricity. More than 9 million people spread across
remote villages, as well as border areas live without electricity. An
acceleration program to increase the national electrification ratio is
required in order to bring reliable electricity access to villages and
prosperity for all community members.“
1. OVERVIEW
In harmony with National Medium Term Development Plan
(RPJMN) 2015-19, and as a part of increasing the NRE portion
in the national energy mix 23 percent by 2025, the government
initiated a rural and remote electrification program aimed at
increasing the current electrification ratio of 86 percent to
97 percent by 2019. This was to achieved through range of
methods that incorporated off- and on-grid systems.
The areas outside the main electrical power network there are
vast indigenous renewable resources available for providing
off-grid systems, including solar power, micro-hydro, wind,
and biomass. Based on data collected by the Central Bureau
of Statistics (BPS) in 2014, there are 2.8 million households
or more than 9 million people without electricity. There
are 12,659 villages that do not have access to the national
electricity grid, those that are completely without any form
of electricity, and villages burning fossil fuels to
generate electricity (non-PLN), or a combination of
both (without electricity and non-PLN). The villages
are the target of Rural and Remote Electrification
Program, which aims to increase the national
electrification ratio to 97% by 2019, as described
in Table 6 below.
INDONESIA’S RURAL AND REMOTE
ELECTRIFICATION PROGRAM (PIT)
PIT is an acceleration program for village
electrification that focuses on off-grid systems by
utilizing the country’s abundant renewable energy
sources. This program is an initiative of the MERM
that has become a national cross-sector program

23
involving other ministries/agencies, and local
governments.
To achieve implementation and reach the target of
a 97 present electrification ratio, the program will
apply innovative measures including:
a. Shifting from a project concept into a national
program to ensure sustainability;
b. Semi-commercial program management to
enable and increase private sector involvement;
c. Allocate special funding (state budget, private
investment, international grants, etc.); and
d. Focus specifically on the involvement of all
stakeholders, especially the beneficiaries.
In preparation for PIT implementation, the MEMR
has established a Program Implementation Unit
for the PIT program (Unit Pelaksanaan-PIT, UP-
PIT) through a Ministerial Decree No. 5672K/73/
MEM/2016 concerning the Establishment of
a Program Implementation Unit for PIT, which
was launched in 4 May 2016. UP-PIT consists
of representatives from the MEMR’s Directorate
General of EBTKE, Directorate General of
Electricity, Research and Development Agency,
the Implementation Unit of the National Electricity
Development Program (UP3KN), the Task Force
for the Accelerating the Development of New
and Renewable Energy and Energy Conservation
(P2EBT), and PLN.
2. ACHIEVEMENTS IN 2016
UP-PIT has been carrying out various activities
to support the preparation of program
implementation. These activities include:
a. Data collection (field visits, electricity data
consolidation, and electrification program
mapping by the (ministries/agencies);
b. Publications and communications (media
gatherings, PIT declaration activities, and
website design);
c. Stakeholder engagement (PIT regional offices
establishment, intensive coordination with the
ministries/institutions, and local government,
provincial-level coordination meetings, focus
group discussions);
d. Institutional setup (preparing the legal basis,
implementation schemes, and financial
schemes).
PHOTOS: Opening Ceremony of PLTS Daruba, District Morotai Island, North Maluku, April 2016

24
4. NEXT STEPS
2016 TARGET
The achievements which are expected to be
completed by the end of 2016 include:
a. PIT Agency established (in the form of a Public
Service Board) which will coordinate and
manage the electrification program for border
areas, outer islands, and areas that are difficult
to access or not yet covered by the national
electric power network;
b. PIT regional offices establishment in eastern
Indonesia, in the city of Ambon, Maluku;
c. The mapping of PIT target villages based on a
geospatial analysis and agreed to by relevant
parties;
d. The distribution of solar lanterns or mini SHS as
an aid to the community;
e. Revitalization and maintenance of NRE power
plants built by the ministries/institutions and the
regional government which are damaged or not
operational;
f. Development of geospatial-based near real
time monitoring system on the condition of NRE
assets in the village that have been built by the
3. CHALLENGES
There are several challenges in the efforts to
accelerate an increase of the electrification ratio in
villages without electricity, these include:
a. Coordination with PLN in determining PIT
working area;
b. Regular ministerial coordination for the support
of the ministries/institutions in accelerating the
implementation of PIT;
c. Rapid development of supporting data;
consolidating this data through the assistance
of ministries/institutions. This data includes:
1) PLN‘s 20KV Networks and 2016-20 Rural
Electricity Roadmap;
2) Data electrification plan and a list of
village-owned enterprises (BUMDes) from
the Ministry of Rural, Rural Development
and Transmigration (Kemendesa);
3) 3Data of the development planning of outer
islands and the coastal areas through to
2019 from the Ministry of Maritime Affairs
and Fisheries (MMAF); and
4) Data concerning plant management
cooperatives from the Ministry of
Cooperatives and SMEs (KemenkoUKM)
Figure 8. Illustration of Electrification Improvement 2016-2019.
Desa terlistriki 2016
86%
Desa terlistriki 2019
97%

25
Tabel 7. Indonesia’s Rural and Remote Electrification Program Work Plan 2016.
No Keluaran Aktivitas
1 Data Collection 1. Mapping and updating the current status of national electrification;
2. Mapping and updating ministries/institutions electrification program planning;
3. Mapping and updating NRE power plants assets as targets for revitalization;
4. Development of clustering or grouping PIT target villages;
5. The use of geospatial information for the monitoring and evaluation of PIT;
6. Identification of target villages for distribution of solar lanterns and SHS;
7. Identify the renewable energy assets belonging to ministries/institutions and
local governments that are not operational; and
8. Development of real time monitoring system for renewable energy assets in
the village by using available geospatial data.
2 Dissemination 1. Launch of the program’s website;
2. Preparation of publication materials, both printed and digital;
3. Developing branding material for PIT;
4. Media road show; and
5. National and local media Workshops.
3 Stakeholders engagement 1. The opening ceremony of PIT’s regional offices;
2. Regular coordination meetings with ministries/institutions, Provincial/District/
City governments, and other stakeholders;
3. FDGs continued;
4. Village inspections to determine power plants assets which will be targeted
by PIT; and
5. Marketplace Forum.
4 Institutional setup 1. Determination of the legal basis of PIT management body;
2. Initiation of PIT pilot project to test effective business modelling;
3. Finalizing PIT implementation plans and financial arrangements; and
4. Issuance of PIT implementation guidelines.
ministries/institutions and local governments,
or that will be built as part of PIT.
WORK PLANS 2016
In 2016, to achieve the establishment and
operationalization of PIT’s targets, a work plan as
described in the table above has been prepared.
RECOMMENDATION
Since various parties, including the government
and also PLN, have been implementing the project
of constructing NRE power plants at the village
level, the program is expected to be a national
program with the support from the Ministry of
Rural, Rural Development and Transmigration,
Ministry of Interior Affairs, Ministry of Maritime
Affairs and Fisheries, the Ministry of Cooperatives,
as well as collaboration with SOEs, private sector,
civil society organizations, and local governments.

26
“The sustainable bioenergy program will be established on 10 million
hectares of degraded land in Indonesia. The program supports the
initiative to restore and rehabilitate the nation’s forests and degraded
land, improve the economy of local communities, and encourage the
provision of national NRE, which will reduce Indonesia’s dependence on
fossil energy and fuel imports. Degraded land utilization also supports the
development of sustainable land-based energy and avoids competing use
of land for food security.“
E.DEVELOPMENT
OF SUSTAINABLE
BIOENERGY PROGRAM
1. OVERVIEW
Over the past 18 years, Indonesia continuously has been
dealing with the disaster from forest and land fires, and the
smoke haze this causes. Indonesia has been urged to take
systematic action in forest management. However, forest
and degraded peat swamp governance has become a never
ending debate because it cannot neglect the social aspect,
or negatively impact on local people’s access to sustainable
prosperity.
The Sustainable Bioenergy Program will be implemented
on 10 million hectares of degraded land in Indonesia. The
program supports the initiative to restore and rehabilitate the
nation’s forests and degraded land, improve the economy of
local communities, and encourage the provision of national
NRE, which will reduce Indonesia’s dependence on fossil
energy and fuel imports.
The availability of land is one of the issues encountered in the
development of bioenergy in Indonesia. On the other hand,
data from the Ministry of Environment and Forests (KLHK) in
2014 shows that Indonesia has about 70 million hectares of
degraded land. Utilization of degraded lands is recommended
to be combined with sustainable bioenergy development to
open opportunity to support the development of sustainable
land-based energy and avoid competing with land use for
food security.
2016
The MEMR and the Provincial Government of
Central Kalimantan, together with the District
Government of Pulang Pisau and Katingan, have
achieved the first milestone in launching the
Sustainable Bioenergy Development Program.
On 13 July 2015, the four parties have signed
a Memorandum of Understanding (MoU) and
Agreement of Cooperation (MCC) to commit in
developing sustainable bioenergy program on
degraded land with an initial area reserved for
bioenergy of approximately 63,000 hectares.
The agreement aims to realize various benefits
including, among others:
a. Support the achievement of greenhouse gas
(GHG) emissions reduction, the national target
of which is 29 percent by 2030;
b. Meet local energy needs;
c. Rehabilitating degraded lands (including peat
moss);
d. Provide sustainable prosperity for local
communities.

27
The feasibility study that includes the development
site area of approximately 63,000 hectares was
completed in January 2016. Discussions and
consultations have been conducted with the
private sector, both producers of raw materials as
well as off-taker (Pertamina and PLN), for biomass
and biofuel regarding investment possibilities in
the field of bioenergy in the proposed schemes
with significant interest.
3. CHALLENGES
From the social aspect, it is important to increase
knowledge and instil a solid sense of ownership
regarding the sustainable bioenergy program
through socialization so that the community will
become active players in this program. Social
and environmental protection, including the
implementation of FPIC principles (free prior
informed consent), an integral part of this program,
especially in ensuring a sustainable supply chain.
These principles include the concept that the voice
of the people is higher than other powers and
equality to all parties in deciding the implementation
of programs in the field of sustainable bioenergy
(equality before law), by recognizing community
PHOTO: Bioenergi/Jimmy Wilopo.
rights to land and territories to avoid conflict at a
later date.
In general, the development of bioenergy faces
four issues:
a. Licensing and land;
b. Economic feasibility;
c. Sustainable welfare for the community; and
d. Technical feasibility.
For licensing issues and land, the MEMR cannot
work alone. This institution needs to work together
with local authorities and other ministries/
institutions, such as KLHK, to ensure the lands
that have the potential for developing sustainable
bioenergy are not constrained by the licensing
and land status. Then, to ensure local access to
sustainable prosperity, sustainable bioenergy
development management mechanism, and
capacity development at the village level to ensure
the involvement of local communities and to avoid
conflicts of land ownership.
Associated with the technical feasibility and
economics, the land needed for sustainable

28
bioenergy development is quite extensive, the level
of difficulty to realize the ambitious targets of this
program in the future is very high, even if carried
out jointly between the Ministry of ERM, KLHK,
and other ministries/institutions. Therefore, this
program must be very attractive from a business
perspective. Availability of markets, incentives,
business feasibility of the scheme, and the technical
aspects, relevant local bioenergy species in
accordance with the technical machinery, the most
productive, efficient, resistant to disease / pests,
and soil remediation, are considered important.
4. NEXT STEPS
Some of the activities that should be conducted
to ensure sustainable bioenergy development
proceeds well from upstream to downstream are
as follows:
a. Development of a policy package as enabling
conditions for investment in sustainable
bioenergy;
b. Business model development to put the
program as an investment in a viable and
profitable business;
c. Funding for local communities to increase their
involvement in a comprehensive package of
bioenergy plantations;
d. Assistance to local communities for capacity
building in sustainable bioenergy plantation
activities, the development of socio-economic
institutions, creation of business models, and
others; and
e. The study on bioenergy feedstock and market
potential availability in targeted provinces.
In 2015, the development of bioenergy began in the
Central Kalimantan province. Learning from this
experience and the processes applied in Central
Kalimantan, sustainable bioenergy development
initiatives will be extended to other provinces in
Indonesia. Some provinces targeted include was
East Kalimantan, South Sumatra, Bangka Belitung,
East Nusa Tenggara (NTT), West Nusa Tenggara
(NTB), South Sulawesi, Papua and West Papua.
Degraded lands have potential to support
sustainable land-based energy development and
to avoid land utilization competing for food security.
Landutilizationforcommunity/villagedevelopment:
land availability for food, forest/peat moss function
shift, land based energy, ecosystem, etc.
Tabel 8. Achievements in 2015–16 Sustainable Bioenergy Program.
No Achievements in 2015-16
1 Signing MoU and MCC between the MEMR and Central Kalimantan Provincial Government, Pulang Pisau District
Government and Katingan District Government on 13 July 2015; with an initial reserve area for bioenergy of
approximately 63,000 hectares.
2 Establishment of a working group to facilitate the sustainable development of the bioenergy program in Central
Kalimantan:
1. Establishment of Pulang Pisau District Working Team based on a decree issued by the Pulang Pisau Regent No.
317/2015 in 31 August 2015;
2. Establishment of a Katingan District Working Team based on a decree issued by the Katingan Regent No. 050/489 /
KPTS / IX / 2015, dated 10 September 2015;
3. Establishment of a Central Kalimantan Facilitation Team based on a Decree issued by the Governor of Central
Kalimantan No. 188.44 / 581/2015 dated 25 September 2015.
3 Conducted a feasibility study concerning sustainable bioenergy development in Central Kalimantan.
4 Socialisation of the sustainable bioenergy development program in Central Kalimantan at the provincial level in
September 2015, followed by socialization at the district level in the following month, and then at the sub-district level of
Katingan and Pulang Pisau in mid December 2015.
5 Socialisation of the sustainable bioenergy development program at the village level in Katingan and Pulang Pisau in
January 2016.
6 The preparation and finalization of MoU and MCC between the Ministry of Energy, KLHK, Provincial Government of
East Kalimantan, district governments of East Kutai, Kutai Kartanegara, West Kutai, Paser, and Berau on sustainable
bioenergy development program in East Kalimantan.
7 The preparation and finalization of the Joint Regulation of the MEMR and the Minister of Environment and Forestry on
energy development in forests to support national energy security.
8 Development and investment coordination meeting on the sustainable bioenergy development program in Central
Kalimantan in early June 2016 as a form of facilitating the development of the market potential and investment in the
region.
9 Discussions and finalization of Community Forest Plantation backup map in Katingan and Pulang Pisau Districts
between the MEMR and the Ministry of Environment and Forestry as a form of support to guarantee supply of
bioenergy raw materials locally.
10 Establishment of the socio-economic institutions of community in Pulang Pisau as a form of active participation of local
communities on the upstream side of bioenergy plantations.

29
70 million Ha lands are degraded exploiting degraded
landsustainability land-based energy development.
Increase of local community’s prosperity, increase
of national electrification ratio, Biofuel mandatory
implementation, forest and land rehabilitation
intensification, emission reduction/climate change
mitigation, preventing forest fires.
WORK PLANS IN 2016
In order to achieve the target as described above,
the work planned for 2016 include the following:
Figure 9. Sustainable Bioenergy Development Scheme on Degraded Lands.
Tabel 9. Work Plan 2016 for the Sustainable Bioenergy Program.
1 Development of a package
of enabling conditions for
investment in bioenergy.
1. Collaboration between the MEMR and KLHK to allow the development of
bioenergy in degraded forest lands and mine closure; and
2. Preparation of legal products that guarantee market or absorption of bioenergy
feedstock.
2 Business model development
to put the program as an
investment in a viable and
profitable business.
1. Collaboration with organizations / institutions in developing bioenergy
investment business models;
2. Assessment of the potential bioenergy feedstock and economic feasibility at
the local level; and
3. Preparation of bioenergy development implementation guidelines at the site
level.
3 Funding for local communities
to increase their involvement
in a comprehensive bioenergy
plantations package.
1. Synergy with Director General EBTKE in relation to perspectives and budgetary
allocation strategies for the preparation of bioenergy programs in order to
support funding for local communities;
2. Synergies with the related ministries/institutions to seek alternative sources of
funding; and
3. Synergies with related organizations / donor agencies to seek alternative
sources of funding.
4 Facilitate local communities
in relation to strengthening
capacity related to bioenergy
plantation activity, the
development of socio-economic
institutions, creation of business
models, and more.
1. Synergy with organizations / institutions at the national and local levels;
2. Assistance to local communities in the development of social and economic
institutions; and
3. Assistance to local communities in capacity building related activities on
bioenergy plantations.
5 Facilities for bioenergy
feedstock and the market
potential available in the target
provinces.
1. Collaboration with the targeted provinces to identify lands for bioenergy
development;
2. Collaboration with local governments (provincial, district, sub-district and
village level) to ensure clean and clear land tenure status; and
3. Study of the cost of provision of fuel and / or electricity generation at the local
level.
INCREASE LOCAL COMMUNITY
WELFARE
INCREASE NATIONAL
ELECTRIFICATION RATIO
BIOFUEL MANDATORY
IMPLEMENTATION
EXPAND FOREST AND LAND
REHABILITATION AREA
DECREASE NATIONAL EMISSION /
CLIMATE CHANGE MITIGATION
PREVENT FOREST FIRE
þ
þ
þ
þ
þ
þ
REDUCE FOSSIL FUEL IMPORT
þ
The development of
sustainable land-based energy
Being piloting in Central Kalimantan and
East Kalimantan
Land utilization for
the development of
community/ village
Degraded lands have the opportunity to support the
development of sustainable plant-based energy and avoid
competing utilization of land for food security.
Land
availability for
food security
Forest/
peat swamp
conversion
Land based
energy
Ecosystem
And so on
70 million Ha
land is degraded
Utilizing
degraded land
Target
till 2025:
10 mio Ha

30
“The success of the procurement and management
of biodiesel will support the strengthening of national
energy security and will also support Indonesia’s efforts to
contribute actively in reducing the causes and deal with
the impact of climate change.”
F.SAFEGUARD AND
BIOFUEL INFORMATION
SYSTEM
1. OVERVIEW
The importance of NRE became clearer when the MERM
set the policy on national mix of biodiesel and bioethanol
as outlined in its Regulation No. 12/ 2015 on Biofuel Supply,
Utilization and Trading System of alternative fuel. This
regulation requires a mix of 15 percent biodiesel (B15) in 2015
with an increase to 30 percent (B30) by 2025. Through this
regulation, it is expected to intensify the use of biodiesel to
the amount of 5.5 million Kilo Litre (KL) per year by the end
of 2015 and it is projected B20 KL will reach 6.48 million by
the end of 2016. in addition, this regulation is also expected
to monitor the increased availability of crude palm oil (crude
Palm oil / CPO) in the global market including the increase/
fall of the CPO price.
The success of the procurement and management of biodiesel
will support the strengthening of national energy security and
will also support Indonesia’s efforts to contribute actively in
reducing the causes, and dealing with the impact, of climate
change. Ensuring that the procurement and management
of biodiesel is effective, efficient, transparent, accountable,
and sustainable, safeguards are necessary in the overall
social and environmental value chain of procurement and
management of biodiesel. Another indicator is the Biofuel
Information System (SIB) to manage the registration
information, appointment, determination, procurement
monitoring and verification of integrated biodiesel. The
monitoring system for the provision and utilization
of biofuel types of biodiesel within the framework
of Palm Oil Plantation Fund Management Agency
financing is based on the authority of each region
and in integrated manner. This is mandated in
the MEMR’s Regulation No. 29/2015, article 21,
paragraphs 1 and 2, on the provision and use of
biofuels (biofuels) types of biodiesel within the
financing framework by the Palm Oil Plantation
Fund Management Agency. The combination of
safeguards and SIB framework is expected to
support sustainable biodiesel management that
will strengthen national energy security.
Until today, records of monitoring and verification
of the procurement of Biodiesel B15 have not
maintained clear standards, and remain manually
managed, and fragmented in various databases
across the MEMR, procurement actors and users
of biodiesel, such as Pertamina and the Palm Oil
Plantation Fund Management Agency. This causes
difficulties in gaining data and information with
high accuracy, rapid retrieval, precision timing (up
to date), transparent, and integrated. Therefore,
an online-based information system is needed to
close the challenge.

31
2016
During 2015, several important achievements
have been reached creating enabling conditions
for the development of safeguards and SIB. SIB
development itself will be achieved gradually in
order to apply principles of effective, efficient,
equitable, and sustainable development.
The achievements thus far include, among others:
a. Memorandum of security framework concept
for the management of sustainable biodiesel;
b. Memorandum of security framework concept
for a variety of other renewable energy
technologies;
c. Meetings with civil society organizations as part
of the public consultation on the memorandum
of security framework concept for the
management of sustainable biodiesel;
d. The design of business models Biofuel
Information System (SIB) integrated into
MEMR’s One Map and Situation Room; and
e. A database of company registered as a Biofuel
Business Entity (BUBBN), the location of the
plant, procurement quota of biodiesel, the
actual distribution, and distribution locations.
3. CHALLENGES
The main challenges in the development of
safeguards and SIB are:
a. The need for implementation guidelines of
sustainability principles stipulated in the
MEMR’s Regulation No. 29/2015, article 8,
paragraph 2d, outlining national biodiesel
procurement enforcement with due respect to
environmental sustainability and the prevailing
laws and regulations;
b. Mainstreaming principles, criteria and indicators
of the security framework in the national and
regional levels are needed;
c. Clear roles, business model, risk-sharing
mechanism, and the obvious benefits between
the MEMR and local governments;
d. Establishment of a dedicated security
framework executor team based on a decree
at the level of the Director General EBTKE in
priority provinces;
e. Data consolidation and coordination of data
custodians in establishing a SIB;
f. An online data centre or website with regularly
updated data and that can be accessed;
g. Funding schemes, technology, and human
resources; and
h. Consensus and a shared agenda from those
PHOTO: Display of SIB websites.

32
people who will benefit directly from the
safeguards and the SIB.
4. NEXT STEPS
Referring to the achievements and challenges
faced in the development of safeguards and the
SIB framework, the next targets to be achieved
include:
1. Assessment of MEMR’s Regulation No. 29/2015
to include a safeguard components related to
BUBBN registration and supply of biodiesel;
2. Create safeguard implementation guidelines
to ensure the implementation mechanism
of Free Prior Informed Consent and support
the implementation of sustainable bioenergy
management in priority provinces;
3. Decree of Director General EBTKE related to
the implementation team and implementation
guidelines of safeguards for sustainable
bioenergy management in the priority provinces;
4. Launch and operationalization of SIB, integrated
with civil society organizations, Pertamina’s
Biofuel Provision Information Systems, and Oil
Fund Manager Agency’s Information Systems,
and included into the budget of the MEMR;
5. Creation of a database and information
system related to the provision, monitoring,
and management of sustainable biodiesel to
facilitate and strengthen the procurement team
selection and supply of biodiesel;
6. Strengthening the role and functions of the Data
and Information Centre (Pusdatin) of MEMR in
the preparation and management of SIB; and
7. Create policy recommendations for the
development of biofuels other than CPO.
WORK PLANS IN 2016
Work plans of safeguards and SIB development in
2016 are described in the table below.
Tabel 10. Table 10. Work Plans of Safeguards and SIB Development 2016
1 Safeguards for sustainable
biodiesel and NRE management
Facilitating the development of safeguards of Sustainable Biodiesel and NRE,
through a series of activities:
1. Composing safeguards implementation guidelines to support the sustainable
development of bioenergy and renewable energy;
2. Closed discussions with the MEMR and ministries/institutions, along with
stakeholders such as Pertamina, Oil Palm Plantation Fund Manager Agency,
Associations, private sector, academia, practitioners, and civil society
organizations;
3. Trial of safeguard implementation at a national and regional level;
4. The division of roles, business models, risk-sharing mechanisms, and benefits;
5. Issuing a Decree of the Governor for the implementation of safeguards; and
6. Decree of Director General EBTKE related to the implementation team and
implementation guidelines for safeguards in sustainable bioenergy management
in priority provinces
2 SIB After drafting SIB as an integrated monitoring mechanism in 2015, the following is
being carried out:
1. Develop a concept memorandum and SIB business model;
2. Make the technical design of SIB and develop the system which will be integrated
into MEMR’s One Map and Situation Room;
3. Conducting trials;
4. Increasing the capacity of the team responsible for SIB operators;
5. Recommend a MEMR regulation to strengthen budget planning and the
development of SIB in Pusdatin and the Directorate of Bioenergy, MEMR; and
6. Launch and operationalise the SIB as an integrating and public system, so
that this system can be used not only for internal MEMR but also concerned
stakeholders and communities.

33
Ensure that the procurement and management
of biodiesel is effective, efficient, transparent,
accountable, and sustainable, and that social and
environmental safeguards are maintained in the
overall value chain of biodiesel procurement and
management.

34
“In order to prepare enabling conditions to promote new and
renewable energy, policy breakthroughs must be achieved
through strengthening various programs, regulations and
government decisions. These policy breakthroughs made must be
clear, transparent, executable and consistent.”
G.POLICY BREAKTHROUGH
TO ACCELERATE NEW
AND RENEWABLE
ENERGY
1. GENERAL DESCRIPTION
Policy requires continuity and consistency. The development
of new and renewable energy is dependent on policy, not only
on policy of the Ministry of Energy and Mineral Resources,
but also the Ministry of State Owned Companies, Ministry
of Finance, Ministry of Industry and even the National
Standardization Agency, and Agency for the Assessment and
Application of Technology. In order to implement new and
renewable energy policy, all government departments must
emit the same signal. New and renewable energy requires
the cooperation of the State Electricity Company (PLN), and
the support of adequate financing, and a qualified technology
industry.
Investors have been facing barriers for investing in new and
renewable energy. One such barrier is the copious number of
permits require to be a developer, especially for producing
geothermal power which requires complex applications to
utilize the land/forest area. Another barrier is the absence of
special incentive regulation for water power plants and solar
panel power plants. Furthermore, there is no standard or
clear investment guideline for new and renewable energy. All
of these barriers increase the risks for investors.
In order to decrease the risk of investment, innovative enabling
conditions must be created. In order to prepare enabling
conditions to promote new and renewable energy, policy
breakthroughs must be achieved through strengthening
various programs, regulations and government decisions.
These policy breakthroughs made must be clear, transparent,
executable and consistent
2. 2015 AND 2016
ACHIEVEMENTS
1. Publication of a Roadmap for the acceleration of
new and renewable energy. This publication was
initiated to provide guidelines and innovative
solutions to achieve a target of 23 percent new
and renewable energy in the national energy
mix by 2025;
2. Publication of an Investment Guideline for
New and Renewable Energy and Energy
Conservation. This publication was initiated to
assist investors in understanding Indonesia’a
regulations related to New and Renewable
Energy and Energy Conservation;
3. Ministerial Regulation No. 29/2015 regarding
the Supply and Utilization of Biofuel through the
financial framework of the Palm Oil Plantation
Fund Management Agency;
4. Recommendation for the implementation of the
supply of biodiesel in a transparent, effective,
efficient, just and sustainabile manner through
an integrated supervision mechanism involving
the Directorate General of New and Renewable
Energy, and Energy Conservation, Directorate
General of Oil and Gas, and the Palm Oil
Plantation Fund Management Agency;
5. Presidential Regulation regarding Electricity
Infrastructure Project.
This regulation was signed by the President
and in Article 14 support for new and renewable
energy, as a government priority, was included

35
and covered the following:
a. Fiscal incentives;
b. Streamlining permit and non-permit
requirements;
c. Stipulation of electricity power purchase
price for each kind of new and renewable
energy;
d. Establishment of a new and renewable
energy body to extend the State Electricity
Company purchasing options;
e. Provide subsidies with thorough
consideration of the feasibility and
economics of the Electricity Infrastructure
Project;
6. Presidential Regulation on National Strategic
Project.
Regulation on a National Strategic Project,
signed by the President as Presidential
Regulation No. 3/2016. Projects facilitated by
this Regulation are listed in the Business Plan
for Electricity Supply for Electricity Businesses,
in accordance with Presidential Regulation No.
4/2016 on Electricity Infrastructure Project.
In this context, it is important to keep driving
the inclusion of the new and renewable energy
composition in the Business Plan for Electricity
Supply;
7. Draft regulation concerning On-grid 5,000 MW
Solar Power Plant Program.
With the enormous solar energy potential and
the rapidly expanding distribution of solar
power plants, this program is a solution to
increase the renewable energy mix and national
electrification ratio. If this can be achieved on
a large scale it will promote the development
of the solar power industry which, in turn, will
lower the production cost in the future.
The 5000 MW solar power plant program
is defined by premium feed-in tariffs and
the capacity quota for solar power plant
developers. The 5000 MW program quota will
be divided in 5 phases with a first phase of 250
MW. All phases will be reported openly online to
simplify processes and prioritize transparency.
This program is related to Ministerial Regulation
No. 19/2016 on Electricity Power Purchase from
Photovoltaic Solar Power Plant by State the
Electricity Company;
Further recommendations:
The development of this regulation will be
undertaken through open public consultation,
involving more than 50 participants including:
developers; banks; associations; and
Tabel 11. Indonesia’s Renewable Energy Potential and Utilization
No Energy Potential Installed Capacity Utilization
1 Geothermal 29,544 MW 1,438.5 MW 5.0 %
2 Micro hydro 75,000 MW 5,024.2 MW 7.0 %
3 Bioenergy 32,654 MW 1,671.0 MW 5.1 %
4 Solar 532,579 MW
(4.80 kWh/m2
/day)
78.5 MW 0.01%
5 Wind 113,545 MW
(3-6 m/s)
3.1 MW 0.003 %
6 Tidal 17,989 MW 0.3 MW 0.002 %
Total 801,311 MW 8,215.6 1.0 %
Source: National Energy Plan 2016

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