Fighting for Just Energy Transition in Indonesia, Colombia, and South Africa

Jakarta, February 29, 2024 – The aspect of justice in energy transition is closely tied to community involvement in the process, particularly in preparing communities in coal-producing areas. Civil society organizations, as entities that closely engage with both the community and the government, play a significant role in urging the government to adopt participatory policies and integrate equitable principles. Additionally, they help in enhancing the community’s capacity by providing skills and knowledge, enabling them to effectively articulate their interests.

Ilham Surya, an Environmental Policy Analyst at the Institute for Essential Services Reform (IESR), highlighted that the income of coal-producing regions in Indonesia heavily relies on the coal industry. He pointed out that the lack of economic diversification in these regions could lead to economic disruptions if there’s a decrease in coal demand due to the global energy transition, especially if no measures are taken to mitigate this change.

“Indonesia is practicing distributive justice concerning fossil energy by providing access to electricity from coal and offering some subsidies to maintain affordability. The government should extend this distributive justice to the adoption of renewable energy during this global energy transition. Furthermore, Indonesia has ratified the Paris Agreement to contribute to emission reduction, including emissions from the energy sector,” Ilham explained during the webinar titled “Cross-country reflections on coal and just transitions in Colombia, South Africa, and Indonesia,” organized by the Stockholm Environment Institute (SEI) in collaboration with IESR.

Ilham emphasized the government’s promotion of the concept of energy transition, which he finds still confusing. On one hand, Indonesia receives various funding for energy transitions such as the Energy Transition Mechanism (ETM) and the Just Energy Transition Partnership (JETP). On the other hand, Indonesia appears to be permitting the construction of coal-fired power plants for industrial purposes.

According to Ilham, civil society organizations need to establish intensive discussion spaces and enhance the relevance of energy transition to the community to ensure that more people are exposed to energy transition issues.

Juliana Peña Niño, Senior Staff at the National Resource Governance Institute, revealed that the coal-producing regions of La Guajira and Cesar in Colombia are heavily reliant on royalties from the coal industry. She stated that nearly 50% of the region’s revenue comes from coal royalties, leading to a less diversified economy.

“The government must utilize these royalties to channel investments towards economic diversification. The challenge lies in the fact that local governments lack the capacity to access these resources and develop alternative economic projects,” she elaborated.

Furthermore, when discussing the energy transition in South Africa, Muhammed Patel, Senior Economist at Trade and Industrial Policy Strategies, considers the bottom-up approach as the ideal method to encourage community participation. However, implementing this approach tends to be challenging due to the prevailing top-down approach in South Africa.

“A lot of energy policy decisions can be made at a national level, but local governments sort of have to bear the costs,” added Patel. “Moreover, local governments often face capacity constraints. Even struggling to provide basic services, often private sector stakeholders take over the government.”

In South Africa, the civil society movement has also brought attention to the issue of energy transition through various means, such as pursuing legal cases concerning air pollution from factories in South Africa, lobbying the government, and engaging with the community.

“But those are some of the dynamics where there’s a strong voice for justice, strong backlash against injustice, especially when it concerns vulnerable communities and heavy industrial operations. But they don’t get a lot of support. So they often are flying the flag on the triangle,” remarked Patel.

Fairness and Inclusivity Should be the Foundation of Indonesia’s JETP Investment Plan

Jakarta, June 27, 2023 – Following the signing of the Just Energy Transition Partnership (JETP), three countries, namely South Africa, Indonesia, and Vietnam, promptly initiated actions to implement the agreement and prepared various strategic steps to achieve the goals of JETP in each country. The JETP Convening for Exchange and Learning Session facilitated communication and discussions among the three countries to share information and lessons learned in achieving equitable energy transition.

Dadan Kusdiana, the Director General of New Renewable Energy and Energy Conservation at MEMR, mentioned that the JETP Secretariat in Indonesia is currently in the process of drafting a roadmap to phase out coal-fired power plants (CFPP).

“We are currently discussing (within the JETP Secretariat-ed) the prioritization of the Pelabuhan Ratu CFPP in the plan for early retirement of its operations. The Ministry of Energy and Mineral Resources is also reviewing the regulations, particularly concerning asset transfers and the establishment of power purchase agreements (PPAs),” said Dadan.

Fabby Tumiwa, the Director of the Institute for Essential Services Reform (IESR), emphasized the importance of conducting the comprehensive investment plan (CIP) preparation process with transparency, clarity, and easy accessibility, while consistently involving public participation.

Furthermore, Fabby also urged the government to reform policies, among other actions, to achieve the goals of JETP and promote the widespread adoption of renewable energy.

“JETP aims to create an enabling environment for renewable energy. While the allocated 20 billion dollars may not be sufficient to achieve the targets of the Paris Agreement, we must utilize it as a catalyst to increase the share of renewable energy and phase out the use of coal-fired power plants,” explained Fabby.

Mpetjane Lekgoro, the South African Ambassador to Indonesia, also stated during the same occasion that his party prioritizes the principles of justice and inclusivity in managing JETP funding.

“South Africa is committed to utilizing the JETP to promote restorative justice in the energy transition. These investments should not only provide financial support but also uphold sustainability and security, ensuring the inclusion of those most affected,” he added.

Similarly, Dipak Patel, Head of Climate Finance & Innovation for the President’s Climate Commission (PCC) in South Africa, emphasized that a detailed discussion on equity in the energy transition is their primary focus.

“South Africa has identified three areas of equity in the energy transition, encompassing restorative justice by considering the most affected communities, procedural justice that involves all communities in decision-making related to energy and climate transition, and distributional justice that guarantees fair and equitable treatment,” Patel explained.

Examining the JETP funding allocated to South Africa, amounting to USD 8.5 million over a period of 3-5 years, Neil Cole from the JETP-IP Project Management Unit in South Africa emphasized the importance of thoroughly and innovatively integrating the JETP funding into projects at both the national and subnational levels.

“It is crucial to synchronize the top-down and bottom-up approaches in order to identify the shared requirements and collaboratively develop an actionable and inclusive implementation plan,” Cole explained.

Le Viet Anh, Director General of the Department of Science, Education, Natural Resources, and Environment at the Ministry of Planning and Investment in Vietnam, highlighted several key actions to expedite the attainment of JETP targets. These actions encompass establishing a robust, collaborative, and supportive environment among the government, international partners, and the private sector. Additionally, accelerating the institutionalization of enabling legal frameworks such as green taxonomy, green incentives, and green financing mechanisms is essential. Furthermore, facilitating the transfer of clean energy technologies, expertise, and technical know-how to enhance Vietnam’s capabilities is crucial.

“The Vietnamese government has demonstrated a strong commitment to promoting green growth through our national strategy. Vietnam has made significant green commitments at COP26, including targets such as achieving net-zero carbon emissions by 2050 and phasing out coal-fired power plants by the 2040s,” he explained.

The Just Energy Transition Partnership (JETP) Convening was jointly organized by the Ford Foundation in Indonesia, the Institute for Essential Services Reform (IESR), and the African Climate Foundation (ACF), with support from the Global Energy Alliance for People and Planet (GEAPP). The primary objective of the event was to provide a platform for stakeholders to engage in a forum for learning and knowledge exchange.