JAKARTA, INDONESIA — United States’ President-elect Joe Biden’s win may boost investment in Indonesia’s renewable energy sector, thanks to his green energy program.
Independent mining and energy research institute Reforminer director Komaidi Notonegoro told TOC on Thursday (12 November) that while most companies, especially oil and gas–US oil giants such as Exxon and Chevron also operate in Indonesia–have followed those standards, “mineral companies may take longer to follow environmental regulations”.
“Other sectors are trying to reach that standard,” Notonegoro added.
At 77, Biden is set to become the US’ oldest elected president. The Democrat is a strong advocate of environmental protections and human rights, including labour rights.
Renewable energy in the US
The US Energy Information Administration (EIA) data stated in 2019, clean energy sources contributed 17 per cent of total electricity generation. The data also showed that US coal consumption has been falling since 2007 of 1.1 billion tons.
“Maybe we should see the data in more detail. The decline in coal consumption is due to the cessation of the country’s power plant. And the US has a wide variety of renewable energy sources at an affordable cost. During the pandemic, fossil fuel prices hit the lowest level, making them less competitive,” Notonegoro explained.
The pandemic suspends investment in green energy
A study from the International Renewable Energy Agency (IRENA) revealed that the cost of wind and solar power could be cheaper than that of fossil fuel if their mass production is supported.
The Indonesian government is committed to pushing investment in the renewable energy sector. One of the efforts is to forge a partnership with the International Energy Agency (IEA), an institution for global energy reference, Antara reported.
However, the pandemic has halted investment in this industry. The Ministry of Energy and Mineral Resources (ESDM) said that the realization of renewable energy investment in Indonesia in the first half of the year hit 29.4 per cent out of the target US$ 1.7 billion, CNBC Indonesia reported.
Bhima Yudhistira, an economist from INDEF, told TOC that it would require significant investment to reach such a premise in Indonesia in terms of renewable energy.
Notonegoro similarly stated that price plays a crucial role when it comes to the Indonesian market.
The government should set a priority scale
Research and development are among critical problems in developing renewable energy in Indonesia.
Generating cleaner energy can also trigger opposition from green activists, especially in relation to geothermal and biodiesel from palm oil.
This is because under Law No.21/2014 on geothermal power, geothermal power plants can be constructed in protected and conservation forests.
Notonegoro opined, however, that such a location in itself should not be a hindrance in building geothermal power plants — rather, a controlled approach would be more prudent.
“Talking about geothermal [power], it is in a mountainous area … Of course a geothermal power plant should be in protected forests. That’s why only four per cent of Indonesia’s geothermal potential has been utilised.
“I think, the government should set a national priority, how much the size of the area should be allowed for geothermal plant and how much is for [conservation] forests,” he explained.
Notonegoro added that the negative campaign against palm oil production has “nothing to do with environmental issues”, but rather due to the trade war — the US and Europe, for example, seek to protect their products such as oil from rapeseed.
Aleksandar Tomic, Associate Dean for Strategy, Innovation and Technology / Program Director MS in Applied Economics at Boston College, told TOC that using an environmental issue to block a product is nothing new.
“The European Union (EU) once opposed American beef because it is not considered healthy,” Tomic said in a Skype interview.
In 1989, Brussels banned the import of beef from the US due to a synthetic hormone allowed in the US. Initially, the European country only covered one type of hormone. However, it expanded the criteria to six types in 2003.