Draft CIPP Targets 44 Percent Renewable Energy Mix by 2030

Jakarta, November 2, 2023 – The government has released the draft of the Comprehensive Investment and Policy Plan (CIPP) in the Just Energy Transition Partnership (JETP) for public consultation on Wednesday (1/11/2023). 

The Institute for Essential Services Reform (IESR) has acknowledged some changes in the CIPP document, particularly the significant increase in the renewable energy mix target to around 44% by 2030, up from 34% in the JETP joint statement last year. However, the CIPP includes establishing a net zero emissions (NZE) target in the electricity sector by 2050. This does not align with the Paris Agreement, which calls for phasing out fossil generation by 2040.

Furthermore, the emission reduction target was focused solely on power plant emissions within the PLN grid, rather than addressing emissions from the overall power sector, to 250 million tons of carbon dioxide equivalent in 2030. This figure does not include the emission reduction target from captive power. If combined, the total peak emission target is much higher than projected during the JETP negotiation last year. Furthermore, the previous draft had a plan to end the operation of coal-fired power plants with a total capacity of 5 GW, but it was removed due to unclear funding sources from the IPG.

IESR assesses that eliminating the plan of early retirement of coal power plants will make it difficult for Indonesia to achieve its net-zero target in 2050 and increase the renewable energy mix after 2030. In the current JETP scenario, emission reductions are achieved by reducing the utilization of coal power plants. Therefore, to achieve the new target of 44% renewable energy mix in 2030, there should be an increase in the flexibility of PLN’s coal power plant operations, and a review of private coal power plant contracts, as well as regulatory support for accelerating the development of renewable energy in Indonesia. The renewable energy development plan, which gives a large portion to geothermal power plant (PLTP) and hydropower (PLTA) and adjusts PLN’s priorities, can pose a risk in achieving this target, considering the development period of geothermal power plant (PLTP) projects, which takes 8 to 12 years and hydropower, which can take 6 to 10 years.

“The elimination of the plan to early retire the operation of 5 GW of coal-fired power plants before 2030 due to the lack of funding support is regrettable. This makes Indonesia’s JETP even further away from the Paris Agreement target. Based on the results of the IESR study, to achieve the previous peak emission target of 290 million tons of carbon dioxide, it is necessary to end 8.6 GW of coal-fired power plants in PLN’s electricity network by 2030. For this reason, it is necessary to conduct further dialog with IPG to explore blended finance with a matching fund scheme where funding for early retirement of CFPP comes from additional funds above IPG’s commitment and is equalized with funds from State Budget and other sources,” explained Executive Director of IESR, Fabby Tumiwa.

IESR also highlighted the CIPP document that has not considered the termination of captive CFPP operations operated by utility companies outside PLN.

“The challenges of captive power plants vary depending on the industry they supply. However, there is already a basis for Presidential Regulation 112/2022, which requires a 35% reduction in emissions and an end of operations by 2050. Therefore, emission reduction strategies and early termination of operations for captive power plants and other business areas need to be reviewed immediately,” said Deon Arinaldo, Program Manager of Energy Transformation, IESR.

Policy reforms and increased commitment from policymakers and stakeholders are crucial in implementing CIPP, which aims for a 44% renewable energy mix by 2030. Indonesia’s renewable energy capacity of 12.6 GW needs to be increased by 62 GW to reach around 75 GW of renewable energy capacity in 2030.

“The procurement process of existing renewable energy plants is still constrained in several ways. Often, this is due to project preparation, including grid connectivity studies, land acquisition, and the completion of relevant permits before the auction process. In Indonesia, this is still a burden on developers, making renewable investment prospects accessible only to certain ‘players’. Policy reforms that emphasize efficiency and ease in the renewable energy plant procurement process are necessary if the capacity expansion target is to be achieved,” said Raditya Wiranegara, Senior Analyst IESR.

Emission reduction efforts listed in this CIPP document also need to emphasize justice aspects by including community participation. Based on IESR’s various studies on mitigating the impact of energy transition in coal-producing areas, the government needs to increase the capacity of national and local government institutions in implementing energy transition and diversifying the economy to a more sustainable economy.

Promoting Central and Local Government Institutional Capacity for Just Transition

press release

Jakarta, October 26, 2023 – The Institute for Essential Services Reform (IESR), in collaboration with the Stockholm Environment Institute (SEI), conducted a collaborative study on the analysis of central and local government institutional capacity for sustainable coal transition in Indonesia. 

The preliminary findings of this study show that of the eight ideal capacities that governments must possess to facilitate the energy transition, national and local governments have different strengths in their ability. The national government understands the energy transition well, while local governments have sufficient capacity to implement it. However, national and local governments still require capacity building in seven other abilities to support the energy transition successfully.

Wira Swadana, Program Manager of Green Economy, IESR, mentioned that a just energy transition requires careful planning and implementation. For this reason, qualified and complementary capacities and close collaboration between the national and local governments are crucial. 

“The national government can play its role in establishing regulations that support the implementation of an equitable energy transition, attracting investment and financing the energy transition through various international cooperation. Meanwhile, local governments can act as coordinators and stimulators in the energy transition process because they are better positioned to understand the field conditions and directly interact with citizens,” said Wira Swadana at the National Workshop on Equitable Transition: Building Capacity for Sustainable Coal Transition in Indonesia.

IESR assessed eight government capacities: awareness, technical knowledge, stakeholder engagement, communication, multilevel networking, finance, instrumental mastery in organizational structuring and strengthening, and implementing the energy transition. Based on IESR’s initial analysis, the national government needs capacity building in technical knowledge, communication, and networking. Meanwhile, local governments must also improve technical knowledge about the energy transition, finance, and authority, including instrumental capacity.

Martha Jesica, Social and Economic Analyst at IESR, explained three major gaps in the capacity building of the government at the national and regional levels. First, the rapid transfer of labor that limits the exchange of information. Second, there needs to be more awareness about the impact of coal and its implications on economic development. Third, multilevel communication between governments is hindered by complex bureaucratic processes.

“To address the capacity gap in technical knowledge among national and local government, shifting from a coal-centered economy to a more sustainable and equitable green economy is imperative because future economic growth and development are moving towards sustainability and equitable development. Furthermore, it is important to involve actors outside the government in planning, such as civil society groups at both the national and local levels, to facilitate knowledge exchange about this energy transition,” Martha said. 

Stefan Bößner, Researcher at Stockholm Environment Institute, said that the government can enhance its capacity to create policies and regulations supporting low-carbon initiatives and technologies. He also mentioned that economic diversification is a key solution to making an equitable energy transition. 

“These economic diversification options are available in Indonesia. For example, coal-producing regions can develop environmental tourism and use mining sites for solar energy installations or as energy storage,” Stefan said.

Driving Low-Carbon Industry Through an Industrial Decarbonization Roadmad

Jakarta, October 25, 2023 – The Institute for Essential Services Reform (IESR) and the Lawrence Berkeley National Laboratory (LBNL) have released a roadmap and policy recommendations for industrial decarbonization to achieve net zero carbon emissions (NZE). This report focuses on five industrial sectors: cement, iron and steel, pulp and paper, ammonia, and textiles, which are expected to experience a significant increase in GHG emissions if no decarbonization measures are taken. According to the Ministry of Industry, from 2015-2022, the industrial sector contributed 8-20% of national emissions. Referring to IESR’s modeling, total industrial GHG emissions are predicted to continue to increase by 3-4 times by 2060 without any intervention (Business as usual, BaU).

Deon Arinaldo, Energy Transformation Program Manager at IESR, stated that implementing decarbonization in the industrial sector, as the main driver of the Indonesian economy, is a precondition to ensure high economic growth and to make Indonesia an advanced yet low-emission country. Industries with low-carbon products will become the most competitive industries.

“Indonesia can implement the pillars of industrial decarbonization, which include improving energy efficiency, electrifying energy needs, transitioning to low-carbon fuels such as renewable energy, and enhancing material usage efficiency. Each industry is unique, so it’s necessary to anticipate the specific situations and contexts when developing the roadmap and supporting regulations,” Deon said in his address at the Dissemination Workshop of Indonesia Industry Decarbonization Roadmap and Policy Recommendations organized by IESR in collaboration with LBNL and supported by the ClimateWorks Foundation.

IESR and the Lawrence Berkeley National Laboratory (LBNL) view that decarbonizing the industrial sector can be achieved before 2060. According to IESR’s data, among the total of 17 business entities analyzed in these five sectors, each company has set different proportions of decarbonization targets, although only the pulp and paper industry has specific decarbonization targets.

“Large-capacity industries such as cement, iron and steel, textiles, pulp and paper, and ammonia have a strong motivation for decarbonization. There are still challenges regarding high energy consumption, dependence on fossil fuels, waste management, and GHG emissions in processes and value chains, as well as the high costs and economic benefits of decarbonization efforts. Furthermore, the existing regulations have not improved much for the industry, advanced industry, and consumers to drive industrial decarbonization,” explained Farid Wijaya, Senior Analyst at IESR.

Hongyou Lu, Environmental/Energy Technology Researcher at LBNL, emphasized that the Indonesian government needs to develop different national strategies for each type of industrial sector. For example, the iron and steel industry can focus on implementing electric arc furnaces as a process electrification step for a short-term strategy, along with energy and material efficiency. Meanwhile, in the cement industry, decarbonization strategies could include increasing the use of substitute materials for clinker materials (supplementary cementitious materials), implementing material efficiency and energy efficiency measures (short term), and switching to low-emission fuel sources (medium-long term). Furthermore, the government should also create a national strategy for green energy production, such as hydrogen and ammonia, cross-sector technologies like heat pump applications, and Carbon Capture Storage (CCS) for residual emissions that cannot be decarbonized.

“To implement these various industrial sector decarbonization strategies, the Indonesian government needs to coordinate planning with various stakeholders in the development of low-carbon infrastructure, such as pipeline networks, storage facilities, and electricity transmission and distribution systems, enabling industries to access renewable energy,” explained Hongyou.

Furthermore, Hongyou Lu added that industrial decarbonization is unavoidable and involves many aspects. Decarbonizing the industry has the potential to develop new industries, boost the local economy, reduce air pollution, and enhance Indonesia’s competitiveness in the international market. This is necessary to ensure that Indonesian industrial products can still comply with stricter environmental regulations for imports and effective carbon pricing mechanisms in some export destination countries, such as the European Union.

Indonesia Can Push the Energy Transition Agenda during Laos’ Chairmanship of ASEAN in 2024

Jakarta, October 20, 2023 – Indonesia, as the chair of the Association of Southeast Asian Nations (ASEAN) in 2023, has achieved significant progress in climate and energy transition issues, including the launch of ASEAN Taxonomy for Sustainable Finance (ATSF) Version 2 and the ASEAN Carbon Neutrality Strategy. The Institute for Essential Services Reform (IESR) appreciates this progress. However, IESR believes that after its leadership in ASEAN, Indonesia must consistently prioritize the development of renewable energy over untested technologies like carbon capture storage (CCS) to ensure the implementation of low-carbon ideas. IESR also suggests that Indonesia should push for the energy transition agenda to be a priority during Laos’ chairmanship in 2024. 

Besides, Indonesia must reduce emissions by demonstrating a stronger commitment and implementing effective strategies. Indonesia’s Nationally Determined Contribution (NDC) target ranking, as evaluated by the Climate Action Tracker (CAT) in 2022, is still ‘Very Inadequate’. Some causes of Indonesia’s low ranking include the energy sector’s inconsistent strategies. According to the 2021-2023 RUPTL, the percentage of coal mix increases from 62% in 2025 to 64% in 2030. Furthermore, Indonesia’s government is working on a regulatory framework for carbon capture and storage technology (Carbon Capture Storage CCS/Carbon Capture Utilization Storage CCUS) to establish Indonesia as a CCS hub in Southeast Asia.

Wira Swadana, Program Manager of Green Economy IESR,  mentioned that many issues related to climate and energy diplomacy in ASEAN still do not touch the community, even though climate actions directly impact the community. The outcome of Indonesia’s chairmanship of ASEAN 2023 shows some improvement in climate and energy ambition and implementation. However, Indonesia’s focus on developing untested infrastructure, such as CCUS and the Electric Vehicles (EV) ecosystem, remains, neglecting the principles of sustainable mobility.

“Indonesia and other ASEAN countries should focus on more decisive actions and cooperation such as building a renewable energy development ecosystem, focusing on equitable and responsible practices for the development of transition/critical minerals,” he said in the public discussion “Reflection on Indonesia’s Leadership in ASEAN 2023: Towards a Regional Front-runner in Climate and Energy Transition Issues”.

Arief Rosadi, Project Coordinator of Climate Diplomacy IESR, explained that besides Indonesia, four other ASEAN Member States (AMS), such as the Philippines, Singapore, Thailand, and Vietnam, have inadequate climate ambition based on CAT. Therefore, ASEAN countries need to increase their climate ambition by significantly reducing emissions in the energy sector, and this should be reflected in the upcoming regional energy planning document (ASEAN Plan of Action for Energy Cooperation, APAEC).

“Four gaps require attention in ASEAN’s approach to energy and climate issues. These gaps are institutional, ambition, implementation, and participation gaps. First, the institutional gap in ASEAN’s approach can be seen in the fragmented regulation of energy and climate issues. Energy issues are under the ASEAN economic pillar, while climate issues are under the ASEAN socio-cultural pillar, which creates a lack of coherence. ASEAN must comprehensively map out institutional roles and responsibilities to address this issue. This will ensure that policy implementation at national and regional levels is effective and efficient,” Arief said.

Arief continued that the second gap concerns the lack of alignment with the Paris Agreement regarding climate ambitions. Third, political and technical factors still constrain the energy transition implementation gap by giving space to untested technologies such as CCS. Fourth, there is a limited participation of civil society in these efforts. Addressing these four gaps will be crucial for ASEAN to achieve its goals.

“Indonesia plays a crucial role in ASEAN due to its position as the largest economy and significant political influence. It can use its influence to promote the energy transition agenda as a key discussion during Laos’ chairmanship of ASEAN in 2024,” Arief said.

IESR encourages Indonesia to strengthen its climate diplomacy strategy by conducting a comprehensive synchronization of various multilateral forums to produce tangible results and cooperation regarding technical, clean energy investment or funding mobilization for Indonesia and ASEAN.

On the other hand, Indonesia and other ASEAN countries need to consider the development of a Carbon Economy (NEK/Carbon Pricing) to achieve their climate goals. To ensure effective NEK implementation, Indonesia needs to identify the target NEK segmentations from the existing NEK instruments, determine the lowest cost NEK instrument, establish a carbon tax, and create a roadmap for Nationally Determined Contributions (NDC) and Net Zero Emissions (NZE) that is in line with NEK.

“Domestic carbon pricing instruments can be quite helpful to achieve the NDC and NZE targets. However, these pricing instruments should be applied to mitigation actions that are relatively no cost or low cost not to overburden domestic finances. Even though a carbon tax will help reduce greenhouse gas (GHG) emissions, it is not easy to calculate the exact reduction in GHG emissions. Therefore,  the revenue generated from carbon tax should be allocated towards climate mitigation and adaptation actions so that the benefits of a carbon tax can directly impact climate action,” said Moekti Handajani Soejachmoen, Executive Director of Indonesia Research Institute for Decarbonization.

Efforts to Strengthen Indonesia-China Energy Transition Commitment in BRI Cooperation

Jakarta, October 18, 2023 – President of the Republic of Indonesia (RI) Joko Widodo (Jokowi) in his speech at the opening ceremony of the 3rd Summit of the Belt Road Forum (BRF) at the Great Hall of the People, Beijing, emphasized that the synergy of the belt and road initiative (BRI) needs to be strengthened in conjunction with the industry’s decade of development. In his speech, the President mentioned that the BRI should be based on equal and mutually beneficial partnerships, transparent funding systems, utilization of local labor, and domestic products. President Jokowi also plans to coordinate the development of a new capital city, energy transition, and downstream industries as part of the BRI cooperation.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR), also attended the event, said that the Chinese and Indonesian governments must emphasize their renewable energy development commitments to accelerate the energy transition through the Belt and Road Cooperation framework. These commitments should be outlined in medium- and long-term strategies and programs to attract additional technological support and funding for the energy transition.

“Indonesia’s energy transition requires funding of USD 100 billion by 2030 and USD 1 trillion by 2060. This involves building 35 to 40 GW of renewable energy capacity, shutting down 9 GW of existing power plants, and constructing thousands of kilometers of transmission lines, interconnections, and energy storage facilities by 2030. Therefore, the cooperation between Indonesia and China towards energy transition should primarily focus on achieving these targets. Another crucial area of focus should be greening the mineral extraction process within Indonesia’s downstream program, which involves several Chinese businesses. A comprehensive program covering these aspects would be highly appreciated,” Fabby said.

During the third BRI, IESR was invited by the Ministry of Ecology and Environment of the People’s Republic of China to support the launch of the Green Investment and Finance Partnership (GIFB) together with the Hong Kong Government, China National Development Bank, Sino Hydro Corporation, China International Capital Corp and Children’s Investment Fund Foundation. GIFP is a collaborative initiative to establish a project planning facility that helps improve the readiness of China’s overseas green development projects.

“Indonesia can utilize this GIFP to prepare a pipeline of renewable energy projects, structure funding, and lower project risks to accelerate the energy transition in Indonesia,” Fabby explained.

 

Furthermore, Fabby stated that BRI cooperation can be a strategy for developing large-scale renewable energy pilot projects. It also provides an opportunity to mobilize other renewable energy manufacturing industries.

The governments of Indonesia and China can discuss measures to address the coal-fired power plants in Indonesia that Chinese companies are developing. These plants have a total capacity of 7.6 GW, with 3.8 GW already operational, 2.9 GW under construction, and 0.9 GW for which Power Purchase Agreements (PPAs) have been signed. Along with promoting the use of renewable energy, the two governments can collaborate to intervene in these coal-fired power plants.

“According to the IESR study, at least 9.2 gigawatts of power plants will need to be retired during this decade to support the emission reduction goals set by the Paris Agreement. To replace them with renewable energy, Indonesia and China’s future partnership must find ways to facilitate asset owners of 7.6 GW of PLTU from China with PLN and Indonesian businesses. They need to discuss ways to retire PLTU assets and replace them directly with renewable energy,” said Deon Arinaldo, Energy Transformation Program Manager, IESR.

Indonesia – China need to Formulate an Energy Transition Financing Partnership at the Belt and Road Initiative Summit

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Jakarta, October 17, 2023 – Marking the 10th anniversary of the Belt and Road Initiative (BRI) launch, China is hosting the third BRI International Cooperation Summit or Belt and Road Forum in Beijing on October 17-18, 2023. China’s theme is “High-quality BRI Cooperation: for Common Development and Prosperity” at this year’s summit. The Institute for Essential Services Reform (IESR), has been invited to the BRI Summit agenda and expects a breakthrough in the partnership between Indonesia and China regarding energy transition financing, including renewable energy, early termination of coal-fired power plant operations, green industry, and close collaboration in renewable energy technology to accelerate the energy transition.

The Executive Director of IESR, Fabby Tumiwa in his remarks at the High-Level Seminar Building a New Vision for the Green Silk Road in Beijing organized by the BRI International Green Development Coalition (BRIGC) and Foreign Environmental Cooperation Center (FECO), Ministry of Ecology and Environment of China, revealed that Indonesia needs considerable funding support, around USD 1 trillion, from developed countries and other countries, one of which is China, to achieve net-zero emissions by 2060.

“Financing is crucial to this transition. Accessible and affordable financing options can accelerate the global low-carbon transition, increase the adoption of green technologies, retire emission-intensive assets, and optimize energy asset portfolios,” Fabby said.

IESR believes that China can assist Indonesia in fulfilling its financial requirements to expedite the transition towards cleaner and sustainable energy. 

Direktur Eksekutif IESR, Fabby Tumiwa
Direktur Eksekutif IESR, Fabby Tumiwa

“Through this BRI, China and Indonesia can partner to finance their energy transition. This partnership needs to involve financial institutions, technology providers, and the government to unlock more domestic financing, spur innovation, and drive shared economic prosperity,” Fabby explained.

Fabby believes developing renewable energy is crucial to reducing global emissions and preventing a severe climate crisis. Not only that, massive utilization of renewable energy will also increase Indonesia’s energy security. 

Regarding technology, China is currently at the forefront of developing renewable energy, particularly solar power. In the roadmap for decarbonizing Indonesia’s energy system to achieve the Paris Agreement’s target of zero emissions by 2050, IESR found that Indonesia needs to utilize solar energy through solar PV up to 80% of the energy system in Indonesia by 2050.

“According to IESR’s Deep Decarbonization study, by 2030, renewable energy capacity needs to reach 138 GW, with solar power being the dominant source. On the other hand, China currently controls about 90% of global solar panel manufacturing capacity and half of global wind turbine manufacturing capacity. Therefore, the massive renewable energy market potential in Indonesia can be fulfilled by Chinese companies. At the same time, there is a need to build renewable energy manufacturing capacity and transfer technology to Indonesia. Bilateral cooperation between the two countries can facilitate and accelerate this process,” said Deon Arinaldo, Energy Transformation Program Manager, IESR.

Deon added that China invests in Indonesia’s energy, industrial, and infrastructure sectors. This is an opportunity for both countries to strengthen their cooperation by shifting investment plans currently centered on supporting fossil energy to the development of the renewable energy industry.

Grounding the Energy Transition Narrative

Jakarta, 13 October 2023 – As Indonesia’s ambition to realize a Golden Indonesia by 2045 and achieve net zero emission (NZE) by 2060 becomes clear, the government and related parties need to work together to strengthen public understanding of the energy transition, as one of the efforts to achieve these targets.

Agus Tampubolon, Project Manager of Clean, Affordable, and Secure Energy for Southeast Asia (CASE), Institute for Essential Services Reform (IESR), mentioned that the perspective on nature and the use of renewable energy in Indonesia should be ingrained in every individual’s mindset and life.

“Every person has an innate tendency to safeguard their belongings. Therefore, collectively acknowledging the value of nature, forests, oceans, and the environment as crucial components can inspire us to take more eco-friendly actions,” Agus said at Indonesia Sustainable Energy Week (ISEW) 2023.

The relevance of the energy transition issue to people’s lives will also increase understanding of the transition to renewable energy and encourage changes in behavior to become more environmentally friendly; it also promotes increased action to encourage policies that support the adoption of renewable energy.

“The energy transition is multidimensional, not only technical but also social. Everyone must be involved and contribute to an equitable transition,” Agus said. 

On the other hand, efforts to raise public awareness of the energy transition should promote a positive attitude towards Indonesia that can achieve emission-free targets according to the Paris Agreement. Providing reliable data support will help dispel pessimism and encourage support for renewable energy initiatives.

“Pessimism can come from an attitude of helplessness and the view that getting out of the centuries-old fossil energy trap is impossible and expensive. If we stick to this polluting energy, the country will incur much more expensive costs, accelerating global temperatures that exacerbate the climate crisis,” he said.

The availability of data related to the potential of renewable energy potential in the country, studies showing that Indonesia can achieve zero emissions faster, actionable recommendations that can be implemented and measured, and collaborative advocacy efforts involving various community groups are several ways to spread optimism and encourage the acceleration of energy transition for Indonesia to achieve zero emissions faster.

Calculating the Costs of Early Termination of Coal Power Plant and Other Decarbonization Measures

Jakarta, 11 October 2023 – Early termination of coal-fired power plant (CFPP) operation from the natural CFPP retirement year is a more cost-effective approach than extending the life of coal CFPP with the addition of carbon capture and storage (CCS) technology. It was stated by Fadhil Ahmad Qamar, Program Staff for the Clean, Affordable, and Secure Energy (CASE) project for Southeast Asia (SEA), Institute for Essential Services Reform (IESR), at Indonesia Sustainable Energy Week (ISEW) 2023.

Fadhil mentioned that adding CCS technology to power plants tends to be expensive due to the high procurement costs and initial capital expenditure (Capex) and operating expenditure (Opex). Moreover, shutting down coal power plants can result in similar reductions in emissions as implementing CCS but at a lower cost.

“Appropriate carbon pricing must be applied alongside innovative financing to attach economic value to the advantages of reducing emissions through the early termination of coal power plant operations and utilization of CCS technology. This will prevent any burden on the state budget,” said Fadhil.

On the same occasion, Raditya Wiranegara, Senior Analyst, IESR, also emphasized again the social and economic impacts of the early termination of coal power plant operations are crucial, primarily when the local communities rely heavily on these operations for their economic activities. Therefore, policymakers must adopt an approach to formulating policies for the cessation of coal power plant operations based on reliable data on the plants’ generating assets and their external costs. These external costs include social costs associated with local pollution produced by coal power plants.

“It is crucial to include the plan for early termination of coal-fired power plants in the RPJPN. This will enable us to prepare a social safety network and estimate the required budget to minimize the impact of ending coal-fired power plant operations on the communities around the plant and producing areas. Additionally, we should consider taking anticipatory measures such as preparing to shift workers from coal-fired power plants to renewable energy-based power plants. All of these steps can be included in the RPJPN,” explained Raditya.

Energy Transition is a Game Changer to Achieve Indonesia Emas 2045 Ambition

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Jakarta, October 10, 2023 – Indonesia is pursuing the Indonesia Emas 2045 ambition that targets economic growth, characterized by an increase in per capita income on par with developed countries and a decrease in emissions intensity. For economic growth to continue to increase, with the fulfillment of reliable energy and low emissions, energy towards renewable energy is one of the essential ways to realize the vision of Indonesia Emas 2045.

Ervan Maksum, Deputy for Facilities and Infrastructure, Ministry of National Development Planning/Bappenas, mentioned that energy transition is one of the game changers to achieve the Indonesia Emas 2045. According to Ervan, sustainable energy provision must be encouraged to fulfill essential services, support economic activities, and improve national growth.

“Energy transition not only requires the implementation of modern technology, but also regulatory and institutional support. Through the energy transition, we hope to fulfill Indonesia’s commitment to the world where Indonesia’s greenhouse gas emission reduction can reach 32%-43% by 2030 and the net zero emission (NZE) target by 2060 or sooner,” Ervan said at Indonesia Sustainable Energy Week (ISEW) 2023.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) emphasized the importance of developing a renewable energy ecosystem and incorporating it into strategies in the National Long-Term Development Plan (RPJPN) and the National Medium-Term Development Plan (RPJMN). According to him, the energy transition should strive to achieve more ambitious emission reduction targets through accelerating renewable energy, by attracting more funding from within and outside the country and utilizing available energy transition financing, such as the Just Energy Transition Partnership (JETP).

“The priority of energy transition and emission reduction in the RPJPN and RPJMN must be a priority for presidential candidates, political parties, and legislative candidates who will contest in 2024. The end of coal-fired power plant operations in line with the Paris Agreement targets, and the equitable energy transition need to be promoted as a political agenda and work program in the remaining time of the current government and the new government later,” Fabby explained.

Yudo Dwinanda Priaadi, Director General of New, Renewable Energy and Energy Conservation, Ministry of Energy and Mineral Resources (MEMR) explained that his party had compiled a Road Map for Early Termination of Coal-Fired Power Plant Operations as mandated by Presidential Regulation 112/2022. One of them targets the early termination of coal-fired power plant operations until 2030 with a total coal-fired power plant capacity of 6.1 GW to achieve the JETP target of reaching a peak emission of 290 million tons of carbon dioxide equivalent.

“To maintain the reliability of the energy system, there are alternative scenarios such as the use of renewable energy using batteries, Java-Sumatra renewable energy interconnection, coal-fired power plant co-firing with a maximum of 10 percent,” Yudo said in his presentation on the same occasion.

The five investment focus areas of the Just Energy Transition Partnership (JETP) include early termination of coal-fired power plant operations. This was conveyed by Paul Butarbutar, Chief Deputy of the JETP Secretariat. He said that in addition to the early termination of coal-fired power plant operations, other investment focuses under the JETP scheme are transmission and distribution development, renewable energy that is controllable and constant (dispatchable), variable renewable energy and supply chains, and fair energy transition programs.  

“As we advance, to provide greater space for renewable energy, coal-fired power plants can continue to operate with a reduced portion of energy generated. We are also encouraging investment in the renewable energy industry, with two factories producing solar panels planned to be operational in the third and fourth quarters of next year. From these various investment focus areas, USD 95 billion is needed until 2030 with the biggest focus on variable renewable energy (VRE),” he explained.