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Indonesia is Committed to Realizing Clean Energy Investment

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By : Raditya Rahman )*

Indonesia is committed to realizing clean energy investment. With an increase in net investment, the negative impacts of climate change can be suppressed and people’s welfare can continue to increase.

Clean Energy is the government’s focus to develop an electric car and lithium battery ecosystem. The President of the Republic of Indonesia, Ir. Joko Widodo, invited the G7 countries to contribute to take advantage of investment opportunities in the clean energy sector in Indonesia. This invitation was conveyed during a speech during a working lunch session with the topic of climate change, energy and health at the G7 Summit in Schloss Elmau, Germany.

In front of the world leaders who were present, Jokowi stated that Indonesia’s potential as a contributor to clean energy, both in the bowels of the earth, on land, and at sea, was very large. So Indonesia needs big investments and low-carbon technologies to support a fast and effective transition to clean energy. Indonesia needs at least 25-30 billion US Dollars for the energy transition in the next eight years.
This figure is equivalent to Rp. 370 trillion to Rp. 445 trillion (exchange rate of Rp. 14,800 per US dollar).
The former Mayor of Surakarta said that we can optimize this transition as a motor of economic growth, opening up business opportunities and opening up new jobs. Jokowi also spoke about the very real risks of climate change facing Indonesia and other developing countries. Moreover, Indonesia is an archipelagic country with 17,000 islands.
The risks are not only detrimental to health, but also put farmers and fishermen in trouble.
On the other hand, the leaders of the G7 countries have also held an initial meeting on the first day on June 26, 2022 and reached an agreement. One of them is the global infrastructure financing of 600 billion US dollars called the Partnership for Global Infrastructure and Investment for the next five years. The project was launched for developing countries in favor of China’s infrastructure project called the Belt and Road Initiative. The project launched by the G7 also targets the clean and low-carbon energy sector, which was conveyed by Jokowi.

German Chancellor Olaf Scholz said Germany would contribute up to $8.5 billion over the next three to five years for the G7 project. Olaf also said Germany was committed to providing support for the Emerging Markets Climate Action Fund program with a total contribution of 55 million euros.

In an open statement, Olaf said that his party had discussed how Germany’s global investment in low-carbon energy, including gas, could help him in responding to Russia’s use of energy as their weapon.

Meanwhile, US President Joe Biden also revealed that his country’s contribution will reach 200 million US dollars in the project. This investment project targets the fields of health, digital connectivity, to energy and climate security. So far, the development of clean energy is still facing various obstacles. Starting from the high costs of developing NRE, subsidies and incentives on NRE are limited, the selling price of fossil energy is still cheaper, the market share is still minimal, and regulations are often changing.

Indonesia’s opportunity in implementing clean energy is also great. Mainly because the raw materials for renewable energy in Indonesia are abundant. Call it ocean currents, geothermal, bio energy, wind, water and sun. In addition, exports of high-emission goods have begun to be restricted which will provide opportunities for the development of clean energy.

Indonesia also targets to have clean energy generation of 587 gigawatts by 2060. This is a form of the government’s and stakeholders’ commitment to achieve the domestic carbon neutrality target. It is not impossible that in the future, all electricity will be generated by new renewable energy power plants by focusing on the development of variable renewable energy.

Clean energy is a target for Indonesia so that the government does not play games in the progress of low-carbon energy investment. Of course, the Indonesian government must take a role so that this clean energy investment can be implemented optimally in the country.

)* The author is a contributor to the Press Circle and Cikini Students

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