Supporting The Clean Energy Technology Startup Ecosystem in Indonesia

November 15 2022, New Energy Nexus Indonesia (NEX Indonesia), in collaboration with Climateworks Centre and Clean Energy Technology Startup Community (KSTEB), held a Roundtable Discussion in Bali with the topic of Supporting the clean energy technology startup ecosystem in Indonesia. The discussion was in line with the G20’s top priority issue of access, technology, and financing of the energy transition.

Diverse stakeholders from policymakers, local governments, venture capitals (VC), incubators, startups, civil society organizations, and philanthropies gathered to establish a network of allies that can later support our efforts to promote and support clean energy entrepreneurship in Indonesia and identify opportunities to collaborate in this field.

There were at least 50 participants that joined the roundtable:

Mustaba A. Suryoko (Coordinator of Services and Supervision of Various RE Businesses, MEMR)
Prof. Nizam (Plt. Director General of Higher Education, Research and Technology, Ministry of Education and Culture)
Tedi Bharata (Deputy for HR, Research and Technology, Ministry of State Owned Enterprises)
Dr. Ajeng Arum Sari (Director of Research and Innovation Funding, National Research and Innovation Agency)
Destry Anna Sari (Assistant Deputy for Business Consulting and Assistance, Ministry of Cooperatives and SMEs)
Yuana Rochma Astuti (Director of Digital Economy Governance, Ministry of Tourism and Creative Economy)
Wahyu Utomo (Head of Center for State Revenue and Expenditure Budget Policy, Ministry of Finance)
I Putu Wisnu Wijaya Kusuma (Head of Regional Development Planning Agency Denpasar)
A. Zulfitra Dianta (Head of Control Planning, City Development Planning Agency Makassar)
Fatima Nur Addini (Program & Management of Koridor, Department of Culture, Youth and Sports, and Tourism of Surabaya)
Joko Sogie (Indonesia Investment Authority)
Clean Energy Technology Startup Community: 3S, AHA, Automa, Berkela, BTI, Faraday, Leastric, Olat Maras Teknologi, Waus Energy, Sonus
Incubators: Ecoxyztem, Innovative Academy UGM, Indigo Telkom
Investors and VCs: East Ventures, MDI Ventures, BRI Ventures, AVPN
NGOs: Climateworks Centre, PYC, Smeru Research Institute, IRID
Foundations: Bulb Foundation, ClimateWorks Foundation, APAC Foundation Canada

Through the roundtable discussions, we were able to collect insights into the state of clean energy entrepreneurship in Indonesia, its barriers, and solutions. We learned that cleantech startups face various challenges that hamper them from growing their businesses: from access to finance, standardization, and access to laboratory to regulatory barriers.

Each stakeholder offered their perspective on the challenges and provided solutions to the barriers. The Ministry of Education, for instance, promised to give access to university laboratories for cleantech startups that need to use them to test their technologies. The Ministry also realized the importance of R&D funding to support cleantech innovations. Meanwhile, VCs expressed their concern on the policy and regulatory framework in the Indonesian energy sector that they perceived as unsupportive of clean energy technology development. This condition has prevented VCs and other investors alike from investing in the space. The fact that most cleantech startups in Indonesia are still in their early stage will further discourage investors from investing as making such an investment risky.

Taking this condition into account, many stakeholders at the event recommended the government to take the lead in investing in early-stage cleantech startups. Many believe that this is an effective measure to derisk investment by private investors. State-owned VCs were particularly deemed as the right entity to help this segment. However, funding from foundations and non-governmental organizations were also identified as potential sources of funding for the early-stage cleantech startups that can help these startups get market traction, making them more attractive to private investors.

In parallel, the Ministry of Energy and Mineral Resources (MEMR) policies and regulations needs to support cleantech startups growth. Regulation on rooftop solar PV, for example, has long inhibited massive adoption of rooftop solar PV in Indonesia, despite the country’s huge solar energy potential. One of the startup founders shared his struggles in growing its rooftop solar PV business in Bali and how the state-owned utility, PLN, often blocked his customers from installing solar modules on their buildings and limited the solar PV capacity to only 10-15% of total power consumption of those buildings. The founder asked the MEMR to make sure that PLN implements the ministerial regulation that allows building owners to install rooftop solar PV without any limitations imposed. The representative from the MEMR responded to that request and explained that the ministry is currently preparing a new regulation that can be a win-win solution for both PLN and rooftop solar PV customers and businesses.

Other than ministries, local governments also provided their views on the role of local governments in helping the cleantech startup ecosystem in their respective city. Meanwhile, university incubators recommended the government to increase the budget that can be used to incubate cleantech startups that emerge on campus and help bring new clean energy technologies from the lab to market.

All stakeholders agreed that collaboration between stakeholders is essential to support the cleantech startup ecosystem in Indonesia. The complexity of the issue should not obscure the huge potential that cleantech startups can bring to Indonesia. The roundtable discussion might not solve problems facing the ecosystem, but the discussion has set a new milestone where more stakeholders pay attention to the issue, and diverse perspectives are put on the table to understand the issue better and find solutions that are key to unlocking the cleantech startup potential in the country.