Indonesia Landscape of Climate Finance - Financing Indonesia Energy Transition_page-0001

Briefing Paper : Indonesia Landscape of Climate Finance – Financing Indonesia Energy Transition

Indonesia’s National Energy Policy aims to increase renewable energy capacity to 23 percent of the energy mix by 2025. Coal (30%) and oil and gas (47%) would make up the balance. However, progress has been slow, as renewables accounted for only 14% of the energy mix in 2020. Although Indonesia has announced a moratorium on new coal power plant permits by 2025; a large number of coal-fired power plants are already in the pipeline (IEA 2021). The government’s 2021–2030 national electricity supply plan (RUPTL 2021–2030) has set a coal capacity target of 44.7 GW by 2030, representing a 40 percent increase from 2020 levels (Ministry of Energy and Mineral Resources (MEMR) 2020 and PT Perusahaan Listrik Negara (PT PLN) 2021). Fossil fuel subsidies have remained at an annual average of USD 135 million since 2015, together with uncompetitive feed-in tariffs for renewables and locked-in coal investments. Renewable energy investments need to be mobilized at an accelerated rate, while investments in coal need to decrease to narrow the investment gap and ensure clean energy transition targets are met.


Reviewer IESR: