Jakarta, November 15, 2023 – Indonesia’s journey toward achieving net zero emissions by 2060 faces significant hurdles without robust collaboration between central and local governments in advancing clean energy technology innovation. Local governments, in particular, need disruptive technological breakthroughs to ensure equitable access to clean energy across their regions. To fulfill this ambitious commitment, the government must prioritize fostering a vibrant cleantech startup ecosystem through fiscal, financial, and non-financial incentives.
Recognizing this challenge, New Energy Nexus Indonesia launched a policy brief titled “Support for the Clean Energy Technology Startup Ecosystem at the National and Sub-National Levels.” The event brought together nine ministries and agencies, alongside representatives from five provincial governments, to discuss challenges and formulate policy recommendations for developing cleantech ecosystems in Jakarta, West Java, Yogyakarta, East Java, and Bali.
Challenges in regional cleantech ecosystems
Diyanto Imam, Director of New Energy Nexus Indonesia, highlighted that the cleantech startup ecosystem in the regions remains underdeveloped, largely due to limited public sector engagement.
“The clean energy industry holds immense potential for economic transformation, comparable to the rise of the digital sector. This sector can create jobs, boost productivity, and modernize infrastructure. However, there’s still limited awareness among government stakeholders about its opportunities. Interaction between cleantech startups and local governments is minimal, leaving local governments disconnected from the emerging ecosystem. Conversely, cleantech startups often lack awareness of local policies and initiatives that could benefit them,” Diyanto stated.
Key policy recommendations
The policy brief outlined actionable recommendations to address these gaps and accelerate cleantech development across the five regions:
- Financial Assistance: Establish funding pools and government equity investments through venture capital or incubators (funds of funds) to mobilize public-private resources for cleantech startups.
- Access to R&D Facilities: Provide local startups with access to research and development infrastructure to enhance innovation and market competitiveness.
- Educational Program Development: Expand and improve clean energy technology study programs at vocational schools and training centers.
- Regulatory Implementation: Strengthen and detail existing regulations to create a conducive environment for cleantech innovation and entrepreneurship.
Local government challenges
Despite their enthusiasm, local governments often face structural limitations in advancing renewable energy initiatives. Ida Bagus Setiawan, Head of the Energy and Mineral Resources Department of Bali Province, shared the province’s unique approach.
“Bali is the first region to set a net zero target ahead of the national timeline, aiming for 2045. We are focused on increasing renewable energy capacity and promoting electric vehicles. However, our ability to implement fiscal incentives is constrained by the need for regulatory approval from the Ministry of Finance and the Ministry of Home Affairs,” Ida explained.
The role of concrete policy instruments
Marilyn Parhusip, CEO of Leastric, a cleantech startup specializing in energy efficiency, emphasized the importance of actionable policy instruments to stimulate demand for cleantech products.
“Many government initiatives lack follow-through. Harmonizing regulations at the central and local levels is essential for creating a supportive ecosystem. Strengthening coordination mechanisms is one way to bridge the implementation gap,” Marilyn suggested.
Policy brief as a roadmap for action
Satya Widya Yudha, a member of the National Energy Council, praised the policy brief as a practical guide for aligning regional and national energy plans.
“This study is critical for refining technical strategies in the Regional General Energy Plan (RUED) to align with updates in the National General Energy Plan (RUEN). Cleantech startups play a pivotal role in achieving our renewable energy mix and emission reduction targets. Fiscal, financial, and non-financial incentives must be integrated into future strategies,” Satya affirmed.
Strengthening collaboration
To reinforce these efforts, New Energy Nexus Indonesia and Prasetiya Mulya University signed a Memorandum of Understanding (MoU). The partnership focuses on providing non-financial support, including mentoring, networking, and technical assistance for cleantech startups.
“Prasetiya Mulya is committed to nurturing talent in renewable energy through our study programs, laboratories, and business incubator. We’re excited to collaborate in strengthening the cleantech startup ecosystem,” said Stevanus Wisnu Wijaya, a university representative.
Cleantech startups: catalysts for economic growth
The cleantech sector has seen steady growth in recent years, offering significant opportunities to create green jobs, enhance energy security, and position Indonesia as a leader in clean energy innovation. Supporting this sector will not only help the country achieve its climate goals but also boost regional economies and competitiveness in global markets.
Local governments must actively integrate cleantech startups into their strategies for achieving net zero emissions and sustainable economic growth. Coordinated action at both national and regional levels will be critical to realizing this vision.
For more details, download the policy brief [here].
About New Energy Nexus Indonesia
New Energy Nexus is a global accelerator and funding ecosystem supporting clean energy entrepreneurs. In Indonesia, the organization focuses on fostering innovation and building ecosystems for clean energy and climate solutions, addressing both the challenges and opportunities of decarbonization.
Media Contact:
Ziaulhaq Syafahri
Email: ziaulhaq.syafahri@newenergynexus.com
Phone: (+62) 82142395785
