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Innovation: The most important yet the most ignored facet of Indonesia’s energy transition
It is no surprise that Indonesia ranks last among the six ASEAN countries (Malaysia, Thailand, Philippines, Vietnam, Singapore and Indonesia) in the Global Innovation Index
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Star Energy Geothermal (Wayang Windu) Limited operates an electricity capacity of 230.5 megawatts. (Star Energy Geothermal/-)
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n oft-forgotten point, both in governmental and professional energy circles, is the importance of innovation to integrate renewable and/or clean energy into the energy mix of Indonesia. Innovation, both in product and process, is the most salient if not the only pillar to establish an energy transition that will reduce greenhouse gas emissions while simultaneously boosting the national economy.
However, Indonesia is significantly lagging in its scientific innovation and this could have present and future grave consequences. The most distressing aspect? It is mostly a self-inflicted wound. What is often heard in the energy transition discourse today are statements that only scratch the surface, which really does nothing but push Indonesia further from that hopeful reality.
The levelized cost of electricity (LCOE), a combination of the capital expenditure and operating expense of an energy source project initiative, for renewable energies has gone down in the past few years making it cheaper to generate energy as compared with fossil fuel energy. It is an eye-grabbing conjecture, yet a wholly incomplete metric if applied for a just and socially fair transition of energy.
The LCOE does not take into account the electricity transmission costs, electric grid flexibility costs and balancing costs that need to be increased as more renewables are integrated. The need for additional base-load plants to be built as a backup to support the intermittent nature of some renewable energies, mainly solar and wind, has also not been taken into account. These extra hidden costs are of course then mainly a burden for the end users.
It is also customary to hear, “Indonesia is working hard to achieve the 2025 target of reaching 23 percent renewable integration and 31 percent integration by 2060” as ratified by the Paris Agreement in 2015.
But just a few days ago, Indonesia reduced the 2025 renewables target from 23 to 17 percent, a significant setback for the renewable industry not only for the next few years but moving forward to the 2060 net-zero target.
What is desperately needed for Indonesia is more governmental effort in technological innovation. As it currently stands, Indonesia’s budget for research and innovation is a mere 0.01 percent of the national gross domestic product in 2023. A truly alarming figure if compared with other countries in the region. For example, Singapore spends 1 percent of its GDP and is in the midst of a five-year US$25 billion plan for research and innovation. China spends 4 percent of its GDP on the same endeavor.
