ARTICLES — July 07, 2021

Unfolding the Potential of Indonesia’s Renewable Energy

Renewable energy has been a major cause in countering climate change. It is perceived to be a more sustainable option than its fossil fuel counterpart. In recent years, Indonesia has made an attempt to utilize its own renewable energy resources and has encountered some challenges.

It is said that Indonesia is aiming for a 23 percent increase in energy mix by 2025. However, based on a report by Moody’s Investor Service, Indonesia may not be able to reach this target in time. This was due to the expensive power generator (solar and wind), the absence of a strong electricity grid on remote islands, and a concern over the impact of declining usage of coal for coal-based businesses. In order to revitalize this development, massive investment and consistent policy in favor of transitioning to renewable energy is needed.

Indonesia is brimming with diverse renewable energy resources ranging from geothermal, wind, solar, hydropower, biomass, to ocean. Cumulatively, the potential energy generated from these resources is equal to 442 GW. If you are seeking to enter the energy market, it would be a major oversight to ignore this potential.

Here is why further investment and development in this sector would likely be beneficial in the long term:

1. Explore the Untapped Potential

Based on a report by McKinsey, Indonesia has only tapped into 2 percent of its potential mixed energy and only 12 percent electricity powered by renewables. The potential energy generated from renewable resources would be able to power more than six times of the current needs. With that being said, harvesting these resources would make for a lucrative prospect. Indonesia has been a net importer of oil, and has the potential to become a net importer of gas. A deliberate effort to cultivate local renewable energy could curtail the reliance for imported resources.

2. Diminish Pollutions

To be fair, renewable energy is not completely free from pollution. Some manufacturing processes still require fossil fuel. Nevertheless, it is still a better alternative to reduce pollution in the long run. In Indonesia, air and water pollution has become a major problem. According to Greenpeace, Indonesia ranked 11th for the worst air pollution in the world in 2018. Another study by Nature Communications in 2017 suggests that four of its rivers are among the 20 most polluted in the world. By transitioning into renewable energy, Indonesia can cut down its carbon emission. One of many ways to resolve this problem is by transitioning to electric transportation. On the other hand, switching to solar powered electricity can decrease dependency of coal usage which was considered to be one of the major causes for water pollution.

3. A Cost Effective Option

Renewable energy can save some cost for everyone. For instance, a report suggests the price of a solar panel has declined by 89% in the last decade. Regarded as high-tech equipment in the past, solar panels did not gain much popularity for some time. But its unique ability to absorb energy from outer space granted a warrant for further research and refinement. As a result, the increasing production of solar panels makes for a progressive price decline. Another study in the United States suggests using renewable energy can have tremendous health benefits for local inhabitants by reducing pollution. Which consequently reduces the cost for healthcare. Combined with the government’s incentives such as tax holidays for renewable energy, it would be beneficial to invest in this energy market.

The advancement in renewable energy technology inevitably goes hand in hand with digitalization. To uncover the value of this technology, it is necessary to conduct an analysis in its utilization. You can take control over your data and gain valuable insight from your energy sources using Telkomsel IoT Envion. With Envion, you can monitor your power sources whether you're using a regular electricity meter, genset, solar panels, and other devices. Click here to learn more about Envion.

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