Developing Renewable Energy in Indonesia

It is no longer a secret that Indonesia has been suffering from major environmental issues. Pollution and climate change has affected the quality of life of the citizens. Although Indonesia’s economy has greatly improved over the years, the development gap between urban and rural areas is extremely large. Those in less developed regions constantly suffer from energy shortage and contaminated water.

With an expected 6.8% annual growth of electricity demand in coming years and some 30 million people without sufficient access to electricity, Indonesia faces an immense electricity challenge.

Renewable energy is one of the solutions to address the growing energy usage, especially in remote and rural areas where the national electricity grid is not yet available. However, despite the Government of Indonesia’s efforts in promoting renewable energy technology, significant barriers remain which hinder widespread application of renewable energy technologies for generating electricity. Some of main barriers involve lack of access to affordable financing and sufficient investments in renewable energy projects due to their high initial cost, particularly for remote areas. This paper is going to discuss an innovative entrepreneurship that can improve Indonesia’s sustainability as well as contribute to the better future of humanity.

The world is constantly evolving and changing by the second, shedding its skin to a digital, automated future. Along with it, countries all over the world are also taking part in the change, changing the way we live and the way we see the world. Today, robots can build cars, serve customers, and even play ping pong! The cashless culture has also become a hot trend. However, great milestones come with great environmental costs. As a result of human activities, nature has received a lot of damage. Degradation of the world’s natural resources by humans is rapidly outpacing the planet’s ability to absorb the damage, meaning the rate of deterioration is increasing globally.

Indonesia is a nation that has many unique socio-economic, demographic, political and geographical characteristics each of which have direct implications on the country’s overall development agenda. Comprised of over 17,000 islands, Indonesia is an emerging democracy and the 4th most populated country in the world. It is also one of the most culturally-diverse countries. Its economic development has flourished over the past 20 years or so and this has not only contributed to poverty reduction, but has also uplifted the status of the Republic of Indonesia to the 10th largest economy in the world (World Bank 2018).

Through the recent years, digital innovations continue to thrive. Today, not only do we have four unicorn companies, online payments are made possible through apps like Go-Pay and OVO, which are similar to Alipay and WeChat Pay. Indonesia’s tourism is also flourishing, showing off the hidden gems of nature to the world. However, despite the technological and economic breakthroughs accomplished by my home country, there are major problems that have yet to be resolved – environmental issues and disparity.

Pollution, especially air pollution, has been a menace in recent years in Indonesia, posing serious threats to environmental and social wellbeing. Yet, many Indonesian citizens either turned a blind eye on this matter, or remain as clueless as many people are.

Some of Indonesia has made it to the list of one of the cities with the most greenhouse gas emission. More than 80 percent of the energy mix in Indonesia comes from fossil fuels, with coal power plants still the main source of electricity. Based on the Brown to Green Report published by Climate Transparency, Indonesia’s state-owned utility expects coal use to double from 2017 to 2025.

On top of that, there is an extremely big gap along this archipelago. Big cities like Jakarta, Bandung, and Surabaya prosper, while most of the rural areas are vulnerable to electrical shortages.

Sustainable energy innovation is at the heart of solving many of the world’s toughest challenges, and is the key to tapping the full potential of energy as a contributor to future growth and prosperity.

Entrepreneurship is an innovation process. Schumpeter (1934) describes this distinct feature of entrepreneurship that involves with innovating a product with which consumers are not yet familiar or a new source of raw materials or a new market either to unexplored or a new combination of means of production or a new way of operation not yet applied.

As mentioned above, Indonesia, like the rest of the world, faces climate change challenges. Aside from that, many parts of Indonesia are underdeveloped. These two problems have been going on for many years. Now, the idea is to solve them in one go, that is, through renewable energy. This will help equalize the development of the many regions of Indonesia, as well as being a long-term solution to lessen the severity of environmental impacts.

At present, there are already companies in Indonesia providing renewable energy services. However, most are not affordable and the market is not too large. By forming a non-profit organization, as well as cooperating with the government, we will provide services that can reach every corner of Indonesia, giving underdeveloped regions complete utilities that can improve their quality of life. There are three main projects that will be implemented.

Indonesia is the largest archipelagic country in the world, located in the South-East Asia area. According to Indonesia’s National Coordinating Agency for Survey and Mapping, the total number of islands in the archipelago is 13,466, of which 922 are permanently inhabited.

The equator crosses through Indonesia providing it abundant solar irradiation necessary for developing and exploiting solar energy. This favorable climate condition allows Indonesia to receive an almost constant and plentiful sunlight amount throughout the year. This means the yearly output is more predictable. The frequent rain could also help to wash some dust and dirt that sediments on the solar panel glass.

Since Indonesia is an archipelagic country, some remote islands still do not have access to electricity. This off-grid deployment of solar energy to these islands could help to improve the communities’ lives.

Solar energy can generate electricity during day time and store them in a battery. This electricity is then used at night or when there is little sunlight. The off-grid system is normally combined with diesel engine to mitigate the intermittence of solar power.

Another supporting point is that in the recent Paris Agreement, countries are committed to cutting the carbon dioxide (CO2) gas emission. Achieving the CO2 emission target can be challenging without having some form of renewable energy generation.

While there are many other options for the country such as wind, geothermal and tidal, these technologies are generally location dependent. Solar power prefers area with minimum shading. Solar power would be able ideal in area such as rural farm, commercial building in metropolitan city and residential rooftops.

Finally, the job nature of solar panels installation is similar to the construction industry.

The strong solar energy growth in the future could create new jobs. A construction company can take on more projects related to solar in additional to their routine jobs. New skills are needed and training from suppliers could help to speed up the upgrade of the skills.

Indonesia can benefit and derive the greatest value from solar energy technology. Nonetheless, there are other important factors that need to be considered.

They are short-term and long-term energy policy from the government, the financing of the projects, the quality control for building a quality and reliable power generation. These topics deserved high attention and must be considered throughout the implementation of the project to reap the full benefits of this technology.

According to the data from the Ministry of Energy and Mineral Resources, up until the third quarter of 2018, investment in renewable energy in Indonesia was only $1.16 billion, a decrease from $1.34 billion in 2017 and $1.57 billion in 2016. The number shows that the renewable energy sector is not lucrative for investors.

For nonprofit entrepreneurs, proving success and progress is more complicated compared to for-profit entrepreneurs. In the renewable energy sector, convincing donors and supporters that the organization is worth investing in comes down to your ability to prove your impact. This makes documentation and communication doubly important for nonprofits. With a traditional business model, the numbers can often speak for themselves, but even if you have statistics or numbers to show your work, they may need context to convey their meaning. When you can’t give your audience a product or stock in a company, you must deliver the emotional satisfaction that comes from helping others.

1. Nonprofit entrepreneurs, on the other hand, are not working with the prospect of a big pay day down the line. Even if a charitable organization grows in size and impact, the founders do not really own it and therefore aren’t enriched by equity. The crescendo of their work is not an influx of wealth, but the solving of a problem, one that may not have directly affected the founders at all. While founders and executives in the nonprofit sector can draw salaries, their success is truly reflected in the positive impact it has on others. Nonprofit entrepreneurs have a lot in common with for-profit business founders. They work hard and sacrifice to build an organization and they must convince others to believe and invest in their work. Founders of charitable organizations, though, must contend with long-standing challenges to solve problems greater than revenue and stock prices. Their success isn’t measured in dollars and cents, but in impact and social good.

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