The expanding middleclass living in the urban areas in Indonesia implies increasing demand for high quality energy services resulting in an energy demand that has grown with 8.5% annually in the past 5 years. The increased energy demand is expected to continue and it is predicted that Indonesia in 2025 will need double the amount of energy per capita as they used in 2015. Much of this energy could derive from renewable sources and the target is that 23% of electricity production in 2025 should be renewable. At the same time, Indonesia pledged at COP21 an ambitious target of reducing greenhouse gas emissions by 41% before 2030 with international support.
The ambitious target of reducing emissions with 41% does not come without challenges and Indonesia is in need for partner countries like Denmark to assist in promoting renewable energy and energy efficiency in what is being referred to as the “Indonesian Energy Revolution”.
The Danish and Indonesian governments have therefore initiated a Strategic Sector Cooperation (SSC) programme, which facilitates government-to-government collaboration in areas where Denmark has decades of experience, which is valuable to rapidly emerging economies. The SSC programme is embedded in the Ministry of Foreign Affairs with technical support from different ministries and agencies in Denmark.
The Danish Energy Agency (DEA) is responsible for managing the cooperation and is further supported by an energy counsellor which has been installed at the Danish Embassy.
Three years, three main components
The nature of the SSC-programme is a peer-to-peer cooperation between departments in the Indonesian and Danish energy and climate ministries in order to make Danish experiences available and relevant in the Indonesian context.
The SSC-programme between Denmark and Indonesia runs from 2016-2018. The objective is to assist Indonesian government agencies and other relevant stakeholders in developing relevant policies, strategies and solutions to increase the electrification rate and to achieve the government’s long-term objectives of renewable energy and energy efficiency.
The cooperation operates on both technical and institutional level and the main outcome of the SSC-programme will be the support to improved modelling and energy planning, extended integration of renewable energy in the energy system and the reduction of the energy demand through energy efficiency measures.
The work program has been developed in close cooperation with the Indonesian Ministry of Energy and Mineral Resources (MEMR) and National Energy Council (NEC). The work programme is divided into three main components:
- Modelling and long term energy planning
This component will focus on energy model design, new modelling tools and consolidation of energy data such as technology catalogues, energy forecasting and cost benefit calculations - for example by using the National Energy Plan (RUEN) and to assist the Indonesian Energy Outlook. On the longer run, Danish lessons learned within strategic energy planning will be transferred through the development of a generic guideline to regional energy planning.
- Renewable energy integration
The main output of this component will be to transfer Danish experiences within integration of fluctuating renewable energy into the energy mix and to prepare a set of guidelines on the assessment of wind power projects.
- Energy Efficiency
Assisting in the development of the Indonesian National Master Plan on Energy Efficiency and transferring Danish experiences with energy efficiency to the industrial sector.
Nature of the partnership
The Strategic Sector Cooperation with Indonesia is part of a three-year cooperation defined in a Memorandum of Understanding on Clean Energy and Energy Efficiency , that was signed between the Indonesian Ministry of Energy and Mineral Resources and the Danish Ministry of Energy, Utilities and Climate on 22 October 2015.
The energy partnership comprises a Strategic Sector Cooperation (SSC) programme, which facilitates government-to-government collaboration in areas where Denmark has decades of experience, which is valuable to rapidly emerging economies. Technical assistance in the energy and climate areas takes it outset in Denmark’s four-decades of experience with low carbon transition, scenarios and long-term planning, and a gradual reduction of energy intensity.