Free Electricity Bills In Net Zero Era
Until the end of the last millennium, we paid very high prices for long distance calls, especially international ones. At that time, who would have thought that in the next two decades, even international video conferences could be free.
Is it possible that electricity will suffer the same fate? A ‘guardian’ in East Java has already predicted that direction. But I explain it with common people sense like the rest of us.
In this SDG decade, especially ahead of the NDC (Nationally Determined Contribution) due date of each country for emission reductions due to 2030, all will rush to achieve their targets.
Developed countries such as Europe have even been very disciplined in implementing this emission regulation. The impact is that the price of carbon credits has soared by almost 100% in the last nine months.
One unit of carbon credit which is equivalent to a reduction in CO2 emissions of one ton, earlier this year the price was only 33 euros, in the past week it has been perched above 60 euros.
The good news is that industrial or commercial players who take steps to reduce emissions, their electricity costs will most likely be paid adequately by the carbon credit they receive.
I give an illustration below for an industry that installs 1 MW solar panels, for example. With the current level of electricity costs and the carbon credit price of around 60 Euros in the EU ETS (emission trading system), the cost of using electricity can be subsidized up to 44% by the carbon credit for solar energy.
My assumption is that electricity will increase between 5%-7.5% per year, while carbon credits will increase by 10%-20% per year at least until 2030. So we can see in the graph, electricity costs can be completely free or completely offset by carbon credits in 2024 or 2025, namely for industries that switch to solar panels.
This can be done if the entire energy transfer process including the equipment is documented and certified according to the EU ETS standard — namely the carbon credit market which is now mature, we may have our own market in due course.
The same thing, of course, can be done by planting trees to absorb CO2, especially if we still have to use fossil for electricity.
So why is the role of a utility company like PLN still needed, if electricity can be free? Of course it is still necessary, only PLN has to prepare to change its business model, PLN can learn from the business model transformation carried out by Indosat, for example, initially its income from international conversations becomes from data quotas. PLN can change from being an energy producer and provider, to becoming an energy marketplace, for example.
Industrial and commercial communities who are often worried about the cost of electricity, can now start talking to us about the scheme prepared by friends at the Indonesia Net Zero Initiative (INZI) above, for a solution that is more suited to their needs.
