The Importance of Managing Energy Transitions

[parkerallielada]

Looking at the situation of the coal crisis that has just occurred, there are several views that say that Indonesia needs to accelerate the energy transition. Similar views have also emerged when Europe was hit by the energy crisis in the 4th quarter of last year.

Not to mention if we look at climate change factors such as the amount of extreme weather that will occur in 2021 as well as data from the Copernicus Climate Change Service (C3S) which shows that the concentration of greenhouse gases (GHG) atmospheric carbon dioxide and methane will continue to increase in 2021, with levels high methane growth.

Unbalanced Transition Pressure
Today the pressure to make energy transitions is increasing. However, the pressure is greater on the producer side than on the consumer side.

We see that international oil and gas companies are pressured by investors to transition to low carbon energy (ERK), coal energy is also pressured to be abandoned immediately, even though the results of the COP26 international climate change conference prefer the term phase down (reduce) rather than phase out (leave).

Meanwhile, world energy consumption is still very dependent on fossil energy. Based on the BP Statistical Review of World Energy (2021). Under these conditions, the challenge to balance a low-carbon transition on the supply and demand sides is enormous.

If this situation is not handled properly, there will be a risk of escalating supply crises in the future which will result in an increase in energy commodity prices.

Energy Transition Projection and Roadmap

Apart from differential pressures on supply and demand, another factor that can lead to an irregular transition is the different and independent energy transition roadmaps.

Various institutions issue scenarios, projections, and roadmaps for energy transition towards net zero emission (NZE). These various projections are based on their respective assumptions and views. Energy transition projections are timed to 2050 or beyond, with varying stages and details.

For example, achieving a certain portion of vehicle electrification, achieving a certain portion of ERK in the energy mix, including the type of ERK that will dominate the energy mix in the future.

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