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The power of energy efficiency to achieve net-zero emissions
It seems that Indonesia's energy transition has primarily focused on ambitious, complex and capital-intensive projects on the supply side, such as the construction and early retirement of power plants.
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Standing tall: The Public Works and Housing Ministry’s building on Jl. Pattimura, South Jakarta, received the Subroto Award for its energy-saving design in 2021.
(Courtesy of/the Public Works and Housing Ministry)
T
he jargon of "energy transition" has gained widespread attention and become a prominent topic in discussions, news and events related to Indonesia's energy sector. While the focus initially revolved around achieving 23 percent renewable energy by 2025, the new trend in the energy and climate-related discussions is shifting toward attaining net-zero emissions (NZE).
Indonesia officially launched its NZE 2060 target at the 26th Conference of Parties (COP26) of the United Nations Framework Convention on Climate Change in Glasgow, followed by the COP27 in Egypt, during which the state electricity company PLN announced strategies to achieve NZE 2060. Significant initiatives such as the Energy Transition Mechanism (ETM) and the US$20 billion Just Energy Transition Partnership (JETP) Joint Statement signed at the Group of 20 Summit in 2022, aimed at facilitating the early retirement of coal-fired power stations, have further promoted this transition.
However, it seems that Indonesia's energy transition has primarily focused on ambitious, complex, and capital-intensive projects on the supply side, such as the construction and early retirement of power plants. Unfortunately, the emphasis on demand-side energy management, specifically energy efficiency (EE) and conservation, has been overlooked.
EE involves efforts to reduce wasteful energy consumption, thereby reducing costs. These efforts can be implemented by various stakeholders, including households, commercial buildings, industries and the government.
Investments in EE range from promoting behavioral changes and raising awareness to adopting energy-efficient appliances like LED lighting, chillers and cooling systems, and energy-monitoring devices. While these initiatives may seem small in scale compared with building new power plants, a widespread movement toward energy conservation among consumers can significantly contribute to achieving NZE.
It is unfortunate that EE policies and measures are often overshadowed by renewable energy and electric vehicles. In fact, there are three key factors that can make EE work effectively in Indonesia.
First, robust government policies and financial tools, known as market-based instruments (MBIs), need to be established to enable the market. These MBIs can serve as incentives or disincentives to drive the primary market and related ecosystems. For example, regulations on green buildings and mandatory energy audits can stimulate the growth of green and low-carbon buildings in Indonesia.
