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Takeaways from the Indonesia-Singapore energy transition partnership

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JAKARTA, INDONESIA — Indonesia and Singapore held a virtual meeting last week focusing on an energy transition partnership.

The former’s Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif stressed that international cooperation is needed to support energy transition.

Mr Arifin discussed bilateral and regional cooperation issues with Singapore delegates, represented by Dr Tan See Leng, Minister in the Prime Minister’s Office, who is also Second Minister for Trade and Industry and Second Minister for Manpower.

Here are three key points from the two Southeast Asian nations’ deal.

Deal in the geothermal sector

Both nations have agreed to develop the geothermal sector in Indonesia’s Sumatera Island. Indonesia’s Energy Ministry has relaxed regulation, paving the way for investors in the geothermal industry.

The Government issued the Law No.21/2014 on Geothermal Energy that allows the construction of geothermal plants in conservation, protected, and industrial forests.

The energy ministry noted that its investment in the geothermal sector was still below the expected target in the first half of the year.

As of the second quarter of the year—Bisnis reported on 9 September—the investment realization in this sector had reached 28.67 per cent of the target set at S$1.05 billion.

The Ministry’s official overseeing energy conversion told Bisnis that the pandemic has posed a challenge in the geothermal industry due to the disruption of logistics transportation.

Singapore is responsible for formulating the ASEAN Plan of Action on Energy Cooperation Phase 2: 2021-2025

Singapore chairs the Regional Energy Policy and Planning Sub Sector Network (REPP-SSN). It is aimed at formulating the ASEAN Plan of Action on Energy Cooperation Phase. The document will be adopted by ASEAN member countries’ energy ministers in the upcoming ASEAN Ministers’ on Energy Meeting this month.

The REPP-SSN will also launch the 6th document of the ASEAN Energy Outlook, which is developed based on ASEAN member countries’ energy policies and targets. Such a paper will be the primary source of information, analysis, and projections related to energy in the region, providing in-depth insights on energy consumption and supplies of the bloc’s members.

The latest report from Greenpeace Southeast Asia (GPSEA) in September revealed that Vietnam is leading in the energy transition by doubling its solar power capacity from 134 megawatts in 2018 to 5,500 megawatts at the end of 2019.

The International Energy Agency (IAE) predicted that solar power would overtake coal as the primary fuel for electricity, thanks to the decline in the price of solar panel installation.

Gas supply for Singapore

One of several critical issues is the gas supply to Singapore. In February, the Government announced it would stop exporting gas to Singapore in 2023 as the Indonesian government intends to focus on domestic markets.

The energy ministry’s said in February that the gas originally allocated for Singapore would be distributed to the Duri Dumai pipeline. Then it would be channelled to industrial areas in Sumatera. The price of the gas supplied to Sumatera’s industrial zones will be set at US$6 per MMBTU based on the Presidential Regulation No.40/2016 on the cost of natural gas.

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