The Indonesian economy in 2020 based on Gross Domestic Product (GDP) at current prices reached Rp. 15,434.2 trillion, and GDP per capita reached Rp. 56.9 million or US$ 3,911.7, which grew by 2.07 percent (c to c) compared to 2019, as well as the decline in Gross Domestic Product (GDP) at -7% (BPS, 2020). The presence of the COVID-19 pandemic impacts Indonesia’s economic ideals, which are always projected to grow every year. Therefore, the Indonesian government has a target in 2022 that economic growth can reach 5%.

However, the energy sector, one of the most significant contributors to GDP in Indonesia, is still oriented towards fossil energy which is not in line with the energy transition and green economic recovery efforts. Based on the data obtained, the development of coal production for 2009-2018 experienced a reasonably significant increase, with production achievements in 2018 of 557 million tons. The export portion of coal reached 357 million tons (63%), and most of it was used to meet the demands of China and India. The high number of Indonesian coal exports makes Indonesia one of the largest coal exporters in the world (OEI, 2019).

The energy transition echoed by the Government has become constrained due to the presence of COVID-19, where the Government has again increased the volume of coal exports under the pretext of boosting the country’s foreign exchange. The coal export volume target is to increase by 75 million tons, bringing the total national coal production from 550 million tons to 625 million tons through the Decree of the Minister of Energy and Mineral Resources No.66.K/HK.02/MEM.B/2021. The acceleration program is needed to fulfil the target of renewable energy through the construction of renewable energy plants at competitive costs and the placement of renewable energy as a national economic recovery activity to achieve the energy transition. The total renewable energy potential in Indonesia is 417.8 GW, but the utilization/installed capacity is still 10.4 GW.

Table 1

The Potential and Total Utilization of Renewable Energy

It is necessary to consolidate efforts from various sectors to make green economy becomes the primary basis for economic recovery. Amalia Adininggar Widyasanti (Deputy for Economic Affairs, National Development Planning Agency, Bappenas) explained that in encouraging economic recovery and strengthening the green economy in the energy sector, the energy sector must be oriented to energy transition accelerated use of renewable energy. Visible from the global trends, especially in the European region, starting to allocate environmentally friendly energy development, for example, Germany with 15 million euros for electric vehicles, the UK with 3 billion pounds with green investment. In the long term, if the government can encourage the use of renewable energy as one of the implementations of strengthening the green economy, it will provide multiple benefits, specifically, investment and new sustainable businesses. Amalia also explained that one of the efforts to restore the green economy is by increasing the value of capital, called natural capital, and emphasizes that the green economy is an economy that is oriented towards a new and renewable economy by encouraging the use of energy that is more sustainable and environmentally friendly. (HS)