One of the challenges faced by modern companies is running business operations in alignment with environmental sustainability principles. As a result, many companies have begun implementing energy transition by utilizing renewable energy sources.
So, what is energy transition? This article will help you understand the definition and importance of energy transition, as well as examples of technologies that support its implementation. Let’s explore it to the end.
What Is Energy Transition?
Energy transition is the shift of the global energy system from fossil-fuel-based energy to clean, renewable energy. Examples of fossil fuels include oil and coal, while examples of renewable energy include solar and wind energy.
Energy transition is part of an international agreement to achieve net-zero emissions by 2050 and prevent the Earth’s temperature from rising above 1.5°C.
Why Is Energy Transition Important?
Previously, it was mentioned that one of the goals of the energy transition is to prevent the Earth’s temperature from rising above 1.5°C. This threshold was not established without reason.
If this temperature is exceeded, the impacts of climate change will become more severe and harder to control, including extreme heat waves, droughts, and biodiversity loss. One of the key strategies to prevent these impacts is the energy transition.
To achieve global targets by 2030, the world’s renewable energy capacity needs to grow by an average of approximately 16.6% per year. This growth rate is expected to triple global renewable energy capacity by 2030.
In reality, although the use of renewable energy continues to increase, its growth rate remains far below the target. In 2024, IRENA reported that growth in South America reached only 7.8%, North America 8.7%, and Africa 6.7%. Meanwhile, Asia recorded the highest growth in renewable energy capacity at 21.5%.
These figures show that energy transition is not only important but also needs to be implemented more rapidly to prevent further environmental damage.
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The Relationship Between Energy Transition and Renewable Energy
Energy transition and renewable energy are closely connected. If energy transition is the journey toward sustainability, then renewable energy is one of the main vehicles for reaching that destination.
Therefore, it is no surprise that energy transition today is largely focused on developing the potential of renewable energy sources.
Most renewable energy sources generate very low or even no carbon emissions and other greenhouse gas emissions during use.
This differs from fossil fuel power plants, which involve combustion and the release of carbon dioxide into the atmosphere.
The shift from fossil fuels to renewable energy accelerates decarbonization, the effort to reduce or eliminate carbon emissions from human activities.
Furthermore, decarbonization helps achieve the net-zero emissions target, a primary objective of energy transition.
Thus, renewable energy can be understood as one of the main pillars in realizing energy transition.
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Types of Renewable Energy That Support Energy Transition
Energy transition can be achieved with the support of the following energy sources:
1. Solar Energy
Solar energy is energy generated from sunlight or solar radiation. This energy can be harnessed through two methods:
- Solar Photovoltaics (PV): Solar panels capture sunlight, and the solar cells within the panels directly convert it into electricity. PV technology is commonly found on rooftops, commercial buildings, and large solar farms.
- Concentrated Solar-Thermal Power (CSP): Specialized mirrors concentrate sunlight onto a single point to generate heat. This heat is then used to warm a fluid, producing steam that drives a turbine and generates electricity.
To meet your company’s electricity needs, PT Chandra Daya Investasi Tbk (CDI), through its subsidiary PT Krakatau Chandra Energi (KCE), is ready to become #YourGrowthPartner with renewable energy solutions based on solar panel systems.
By 2025, KCE's total solar power capacity had grown significantly to 11 MWp. Today, KCE serves more than 200 customers across industrial, commercial, social, and government sectors, as well as more than 1,500 residential customers.
There are four solar panel installation mechanisms available: On-Grid, Off-Grid, On-Grid with Battery Backup, and Hybrid.
Moreover, CDI received the “Private Sector Energy Provider in Energy Transition” award from the National Energy Council in 2023. This award recognizes CDI’s contribution and leadership in supporting Indonesia’s energy transition.
2. Hydropower
As the name suggests, hydropower utilizes the movement of water to generate electricity. Hydropower can be sourced from rivers, reservoirs, dams, and even the ocean.
The process begins with flowing water moving at a certain speed. The water flow spins a turbine connected to a generator. The turbine’s rotation produces mechanical energy, which the generator then converts into electrical energy.
3. Wind Energy
Another type of renewable energy that supports the energy transition is wind energy. This energy is generated by wind that turns a turbine's blades.
The rotating blades drive the turbine shaft, which is connected to a generator. The generator then converts kinetic energy into electricity. The amount of electricity generated depends on the turbine's size and capacity.
4. Ocean Energy
More than 70% of the Earth’s surface is covered by oceans, indicating their vast potential as a source of electricity.
Ocean energy harnesses natural phenomena in the ocean, whether through movement or physical properties. Sources include waves, tides, ocean currents, salinity gradients, and temperature differences.
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Technologies That Can Support the Energy Transition
The following are examples of technologies that support renewable energy transition:
1. Electric Vehicles
In addition to replacing gasoline- and diesel-powered vehicles, electric vehicles also support renewable energy transition through their energy storage capabilities.
EVs use vehicle-to-grid technology, which allows batteries to store excess electricity and feed it back into the grid when needed. This technology helps stabilize the electricity supply.
Chandra Asri Group, the holding company of CDI, has introduced electric vehicle innovations, particularly electric buses for employee transportation. These electric buses are expected to reduce diesel consumption by up to 20,800 liters per year, equivalent to 28.52 tons of CO2e in emissions.
2. Smart Grid
A smart grid is an intelligent electricity network that utilizes digital technology, sensors, and data communication to manage electricity distribution in real time.
The process begins when smart meters and sensors collect data on energy consumption and grid conditions. This data is then sent to a control center and analyzed to determine the most efficient energy requirements.
The control system subsequently regulates electricity flow according to demand. The system can also respond automatically to disruptions, redirect electricity supply through alternative routes, and support energy storage systems that can be utilized when demand increases.
That concludes the information about the energy transition, an issue that deserves the attention of various stakeholders, including businesses. By maximizing Indonesia’s vast renewable energy potential, energy transition can help achieve the net-zero emissions target by 2050.
If your company would like to contribute and requires reliable, efficient, and sustainable energy solutions, trust CDI and KCE!
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