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Indonesia Needs to Catch the Opportunity to Finance Transition

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Jakarta, 22 Nov 2021 – As the COP-26 wrapped up a few weeks ago, more discussions about “what’s the next follow-up action?” are being conducted to keep reminding both the Government and the public that the pledge or commitment made during the conference should be implemented. 

Acting as the pre-opening of Indo EBTKEConnex 2021, FIRE (Friends of Indonesia’s Renewable Energy) hosted a dialogue to figure out how Indonesia is setting up its strategy to achieve the new target and commitment announced during the COP-26 in Glasgow.

Sripeni Inten Cahyani, the Special Staff of the Ministry of Energy and Mineral Resources explained the Indonesia standpoint during the conference. Earlier this year, Indonesia submitted its updated NDC to the UNFCCC Secretariat and committed to achieving net-zero emissions by 2060 or earlier. This is quite a progressive step since at the beginning of the year there is not even a word about it. 

“Indonesia signed The Global Coal to Clean Power Declaration, and one of its commitments is to retire coal power plants in the 2040s, in our initial plan of coal phase-out around the 2050s. The acceleration means we need more financial support to retire the currently operating power plant and replace it with renewables,” Inten Said.

Indonesia has been consistently urging the developed countries to distribute funds to the fewer capital countries to address climate change and energy transition. 

David Lutman of the British Embassy emphasized that the urge to take action can be translated into deploying renewable energy on a large scale and that means the phase-out of coal. “The faster Indonesia delivers the transition, there will be bigger economic growth to reap,” he said. 

The importance of materialised commitment is needed to showcase promising progress in the next 2-3 years as explained by Fabby Tumiwa, the Executive Director of IESR. “Transition is not only about Indonesia, but the international community is observing so we need to display our progress to keep our accountability, and later to attract more international assistance,” Fabby explained.

Fabby later said that  three key things that can be done by the Indonesian government to accelerate the energy transition in Indonesia i.e conducting coal early retirement, increasing RE project pipeline, and assisting PLN in terms of auction and procurement of renewable energy.

Sufficient financing is needed in transforming the energy system. During COP-26, the Government of Indonesia signed the Energy Transition Mechanism (ETM) Memorandum of Understanding (MoU) with Asia Development Bank to finance the early retirement of coal power plants. Another financing scenario is by reforming the subsidy scheme in Indonesia and diverting it for the deployment of renewable energy.

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