Implementation Check Methodology: a Much Needed Mechanism

New York, 21 September 2023 – The global community is urging global leaders to take serious actions to address climate change. During the COP 27 in Egypt, several countries renewed their commitment to reducing greenhouse gas emissions and achieving net zero emission status. However, there are still gaps between commitment and implementation of policy and action to seize the determined target. 

To assess, rate, and monitor a country’s progress during the policy implementation, Climate Transparency, a global partnership of research organizations and NGO in the G20 countries, has developed a methodology to review policy implementation across four categories: legal status, institutions & governance, resourcing, and oversight.  

Yvonne Deng, Energy and Climate Strategy Expert from the 7Gen Consulting, emphasized the importance of having monitoring instruments to review current policy and its role to seize the climate target. 

“We (Climate Transparency) analyze the gap and go deeper to the sectoral approach to recommend what sectoral policy a country should take to pursue the ambition,” said Yvonne.

South Africa, one of the countries receiving global attention lately as the first recipient of Just Energy Transition Partnership funding. Guy Cunliffe, Energy System Researcher of the University of Cape Town explained that as a country receiving international assistance, South Africa needs to showcase accountability during implementation. 

“An implementation monitoring is critical to showcase success of the implementation and as a beneficiary country it is also a way to display progress of the committed project,” he said.

Guy added that as the first JETP recipient, South Africa has increased its climate ambition and tried to integrate significant renewable capacity to its grid. However, during the implementation, the country is experiencing a glitch in terms of electricity supply. This glitch ‘forces’ them to adjust the plan and policy while rapidly changing the energy market. This is only possible with continuous policy monitoring. 

Similar to South Africa, Indonesia, as one of the biggest coal producers, has its electricity generation dominated by coal. In 2022, Indonesia renewed its emission reduction target in enhanced NDC, from 29% to 31.89% (unconditional) and 41% to 43.2% (conditional).

Wira Agung Swadana, Green Economy Program Manager at the Institute for Essential Services Reform (IESR), noted that during the transition away from coal-dependency, there are still conflicting interests among stakeholders, primarily due to the government’s lack of clear guidance on the transition’s meaning and direction transition.

“Though Indonesia has increased ambition and target in its NDC, the enabling environment for the renewable energy developers is not attractive enough yet. There is still no clear incentive for the investors as well as the lengthy process,” Wira explained. 

The in progress New and Renewable Energy Bill (RUU EBET), though believed to provide a robust policy framework, is to some extent attempting to prolong the use of fossil fuels by including CCS technology in the renewable options.

Eight Recommendations of IETD 2023

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Jakarta, September 20, 2023 – Transforming the electricity sector with renewable energy development and accelerating the coal-fired power plants requires significant financing. The availability of energy transition financing will help the government, utility companies, and community groups to increase the number of renewable energy projects, thereby further reducing the price of renewable energy generation. The Institute for Essential Services Reform (IESR) stated that Indonesia must create innovative sustainable financing schemes to meet renewable energy investment needs.

“Ideas for financing schemes and innovations need to continue to be explored considering the unique structure of the electricity market in Indonesia. Indonesia can use the Just Energy Transition Partnership (JETP) or Energy Transition Mechanism (ETM) process to explore this scheme. In the end, a scheme that can be implemented will require input from all stakeholders, PT PLN, power plant utilities, and financial institutions,” explained Deon Arinaldo, Program Manager of Energy Transformation, IESR.

One opportunity to finance the energy transition with limited public funding, according to Iliad Lubis, South Asia Utility Transition Manager, Rocky Mountain Institute, on the third day of the Indonesia Energy Transition Dialogue (IETD) 2023 (20/9), is carbon credits. Illiad said carbon credits could increase funding from coal transition agreements, generate higher-quality carbon credits in the carbon market, and accelerate the energy transition.

“Even though there are currently various requirements for monetizing carbon credits, in the future, the opportunity to utilize carbon financing will become increasingly attractive with the carbon market predicted to grow significantly,” said Illiad.

Meanwhile, from the business community, financing needs such as concessional loans and financial institutions’ credit support will help businesses switch to the renewable energy sector.

“We need a clear energy transition roadmap for the initial stage to know the financing needed. Second, due to the limited availability of public funding, we need financing support from multilateral and philanthropists to secure concessional financing that can be combined with commercial banks. It will provide the appropriate right credit risk for the project, ensuring investors receive adequate returns,” said Ekha Yudha Pratama, Head and Advisory Services, PT. SMI.

To achieve significant emission reduction targets, the Indonesia Clean Energy Forum (ICEF) and IESR in IETD 2023 have presented eight recommendations to accelerate the energy transformation in the Indonesian electricity sector. These recommendations aim to expedite the process and achieve quick results.

First of all, proposing an energy transition linked to social and economic development. IESR and ICEF emphasized the need for clear targets across ministries.

Second, the availability of strong support for renewable energy development in the next five years. The commitment of the G20 leaders, including Indonesia, to triple their renewable energy capacity should be taken seriously. This can be achieved by providing incentives for the renewable energy market and industry.

Third, the increase of transparency and accessibility of renewable energy data through joint collaboration. Comprehensive and accurate data on renewable energy can benefit all stakeholders by reducing uncertainty in project development for Independent Power Producers (IPPs), financial institutions, and supporting system operators. This can lead to more efficient planning in utilizing renewable energy and its resources.

Fourth, establish a research center for renewable energy, focusing on solar and wind, to operate a flexible and reliable system amidst supply variations and demand uncertainty.

Fifth, it is essential to encourage and support local governments, businesses, and communities in identifying renewable energy potential and developing local energy transition plans. The energy transition process should involve all parties, and the first step towards achieving this goal is to identify different groups of actors and hold dialogues with them.

 

Sixth, reviewing and merging policies and regulations to facilitate renewable energy projects to find competitive tariffs. These policies should aim for more ambitious renewable energy targets, transparent and regular scheduling of renewable energy project procurement processes, and mitigation of various risks that may arise from renewable energy development.

Seventh, exploring and testing financing structures, including coal-to-renewable energy projects with private developers and financial institutions, and utilizing them through a just energy transition cooperation scheme (Just Energy Transition Partnership/JETP) and the Energy Transition Mechanism (ETM).

Eighth, prioritizing the energy transition as a central issue in the political manifestos of national and provincial leadership candidates ahead of the election is of utmost importance. The energy transition will impact society in various ways, such as energy affordability and security in the short term and the long-term effects of climate change on people’s livelihoods. Therefore, Indonesia needs strong leadership to ensure a smooth transition towards sustainable energy sources. The Institute for Essential Technology and Development (IETD) strongly encourages the energy transition to be one of the main agendas discussed during the campaign period, as it will significantly impact the country’s future.

The Indonesia Clean Energy Forum (ICEF) and the Institute for Essential Services Reform (IESR), in collaboration with the Ministry of Energy and Mineral Resources (MEMR), held the 2023 Indonesia Energy Transition Dialogue (IETD) on 18-20 September 2023.

Approaching the G20 Summit, Government Needs to be Consistently Calling for and Raising Climate Ambitions

Jakarta, 9 November 2022-The journey of the Indonesian G20 Presidency will end after the G20 summit in November 2022. Therefore, Indonesia needs to show strong attention to climate mitigation efforts, by increasing its commitment to significantly reducing greenhouse gas (GHG) emissions. The Climate Transparency 2022 report shows Indonesia’s power sector which is dominated by fossil fuels (81%) and produces 62% of its electricity from coal, making the energy sector still the largest contributor to GHG emissions (43%), followed by the transportation sector (25%) in second place in 2021.

Besides that, Indonesia’s emission intensity of the power sector increased throughout the 2016-2021 period by 5.5% to 784.8 gCO2/kWh. This number is greater than the average emissions in the energy sector of G20 countries in the same period which decreased by 8.1% to 444.7 kWh. This is presumed economic activity that has returned rapidly after the pandemic. 

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform, believes that the G20 countries which are responsible for 85% of the world’s GHG emissions, must take a greater role in drastically cutting GHG emissions. Globally, they must cut approximately 45% of GHGs at 2010 levels by 2030. Unfortunately, until now, none of the G20 countries has met this target, including Indonesia, which is the G20 president. 

“Along with the G20 meeting in Bali next week, it is necessary for G20 countries to accelerate the energy transition, moving away from fossil energy that is expensive, polluting and dangerous. Taking the energy transition as one of the G20 priority issues, President Joko Widodo (Jokowi) needs to remind G20 countries to be more ambitious in carrying out the energy transition, including Indonesia. The key to reducing emissions is to first, immediately reduce coal power plants and plan to phase out coal power plants, which must be done before 2040. Second, accelerate renewable energy to replace energy and encourage energy efficiency,” said Fabby.

Furthermore, Fabby implied the fossil subsidies, which are increasing every year and hindering the development of renewable energy and energy efficiency. He hopes that at the G20 Summit, President Jokowi can invite G20 countries to take a stand to cut fossil energy subsidies. 

Meanwhile, based on Climate Transparency 2022 calculations, Indonesia’s unconditional Nationally Determined Contribution (NDC) target will increase emissions by 421% above 1990 levels, or an average of 1,661 MtCO₂e by 2030. To stay below the 1.5°C temperature limit, Indonesia’s emissions by 2030 must be around 449 MtCO₂e, at an ambition gap of 1,212 MtCO₂e. All of these figures do not include emissions from land use.

Despite submitting the Enhanced Nationally Determined Contribution (NDC) in September 2022, the emission reduction targets in the emission sector are not at all consistent with the Paris Agreement’s 1.5°C temperature limit. Based on the  Enhanced NDC, by 2030, the target level of unconditional emission (unconditional) NDCs in the energy sector will be 1,311 MtCO₂e, with a target of unconditional reduction of NDCs of 358 MTon CO₂eq. 

“The increase in emission reduction targets, especially in the energy sector, should be appreciated, but unfortunately, the increasing ambition is still far from achieving a trajectory of 1.5 degrees Celsius. In addition, the implementation is still far from the target that has been set,” explained Farah Vianda, Green Economy Program Officer, IESR. 

According to her, Indonesia’s commitment to gradually stop the use of coal-fired power plants and start the transition to renewable energy referred to in the declaration of ‘Global Coal to Clean Power Transition’ at COP26, needs to be realized immediately. Even Climate Transparency 2022 reveals that the energy transition process must equitably take place, one of which is,  by accommodating the interests of around 100,000 people working in the coal industry.

“The Indonesian government needs to facilitate a just transition for coal mining sector workers and ensure alternative sources of economic growth in areas dependent on fossil energy. The government can diversify the economy to prioritize investment in the clean energy sector, engage in social dialogue to ensure an inclusive transition, and implement carefully designed early mitigation actions,” Farah said.

Farah stated that every commitment must be realized, considering that Indonesia has signed the Silesian Declaration on Solidarity and Just Transition (COP24), but until now both policies to increase renewable energy and retiring coal-fired power plants are still at the middle level.

Furthermore, Climate Transparency 2022 encourages Indonesia to design a clear roadmap to phase out coal power and start the energy transition. The 2021-2030 Business Plan (RUPTL) still maintains the use of coal.

Climate Transparency identified several opportunities for Indonesia to increase its climate ambitions. First, Bappenas has developed a net zero emissions  2045 roadmap which is considered to provide economic and social benefits compared to the zero emissions target of 2060. Second, the energy sector’s high carbon intensity continues to increase. Third, the transportation sector accounts for 33% of final energy consumption, and 95% of this demand is met through oil. Strong policies to decarbonise the transport sector would help Indonesia achieve its net zero targets. 

Based on the evaluation of the Climate Action Tracker (CAT), Indonesia’s climate targets and policies are “highly insufficient”. The rating shows that Indonesia’s climate policies and commitments lead to rising rather than reducing emissions and are completely inconsistent with the Paris Agreement’s 1.5°C temperature limit. To get a better ranking, Indonesia needs to set more ambitious NDC targets and policies. Its unconditional NDC targets need to be brought well below its current policies to result in emissions close to present levels by 2030. Meanwhile, its conditional NDC targets need to be well below present levels in 2030. 

ISEO 2023 Launch: Indonesia Needs Clear Targets and Effective Implementation to Develop Solar Energy

Jakarta, 27 October 2022 – The Institute for Essential Services Reform (IESR) launched the Indonesia Solar Energy Outlook 2023 report. This report was originally part of the Indonesia Energy Transition Outlook (IETO) which has been routinely published every year since 2018. Starting this year, the solar energy section is made in a separate report to provide a more in-depth report on the development of solar energy in Indonesia and the supporting ecosystems that solar energy needs to grow in Indonesia.

Fabby Tumiwa, Executive Director of IESR, in his remarks at the Shine Bright: Advancing G20 Solar Leadership event organized by IESR with the support of Bloomberg Philanthropies, and in collaboration with the International Solar Alliance, and the Indonesian Solar Energy Association, stated that solar energy prices remain competitive despite the existence of increase in the price of raw materials for the manufacture of solar panels. Fabby also emphasized the importance of developing the solar industry for both Indonesia and all G20 countries which are in the spotlight in efforts to reduce global emissions.

“Developing cooperation in solar manufacturing among G20 countries will secure the supply of solar module and cell production, balance systems to meet future demand, and reduce product monopolies.”

On the same occasion, the Minister of Energy and Mineral Resources, Arifin Tasrif, emphasized the need for support from the industry and local solar module manufacturers to meet the requirements for the Local Content Requirement (LCR) considering that Indonesia has mineral materials to make solar modules and batteries.

“Easy access to financing, incentives, and other financing facilities is very important to provide the cost of a feasibility study and increase investment in renewable energy, one of which is solar,” said Arifin.

Ajay Mathur, Director General of the International Solar Alliance, said that to make solar energy the energy of choice, three things that must be taken as strategic steps. First, providing the latest information, analysis, advocacy, and establishing relationships with various parties. Second, providing adequate resources so that solar energy investments ‘flow’ is important because investors will assess and weigh various situations that can affect the return on their investment capital.

“ISA approved the creation of a solar energy financing facility that provides risk capital guarantees,” explained Ajay.

Ajay added, the third step, it is important to build the capacity and capability of various parties who handle the development of solar energy such as policymakers, operators, and regulators.

Daniel Kurniawan, the lead author of the Indonesia Solar Energy Outlook 2023 report, presented some findings from this report. One of them is that although solar energy is getting more and more attention until Q3 2022 only 0.2 GWp of solar has been built.

“Based on the 2021-2030 RUPTL, PLN plans to add 3.9 GW of solar energy in 2025, of which 2.45 GW will be procured under the IPP scheme and 1.45 GW will be auctioned directly by PLN. However, until Q3 2022 there are only eight IPP projects with a capacity of 585 MWp,” explained Daniel.

Presidential Decree number 112/2022 which was issued in September 2022 is expected to provide fresh air for the energy transition in Indonesia, at least with regulations on renewable energy prices and instructions to accelerate the termination of coal-fired power plants.

To encourage the acceleration of the use of solar energy, the ISEO 2023 report recommends some steps, including PLN which can arrange a schedule for renewable energy auctions, especially solar for 2023. Previously, the government had to set ambitious and binding targets for renewable energy in certain years, for example 30% in 2025-2030, 90% in 2040, and 100% in 2050. With a target like this PLN must make room for solar energy in the PLN network.

“The IEA analysis shows that the Java-Bali and Sumatra systems can accommodate 10% of solar energy from their total capacity with flexible PLTU operations,” explained Daniel.

Although the system is technically capable of handling solar energy variability, the main challenge in realizing greater solar penetration is contractual inflexibility (particularly due to the take-or-pay clause in the coal plants power purchase agreement with the IPP as well as the primary energy supply contract for gas).

Daniel also added, considering the readiness of the domestic solar manufacturing industry, the percentage of Local Content Requirement (LCR) needs to be adjusted for a limited time, for example until 2025. While preparing the domestic manufacturing industry for decarbonization.

Finally, ISEO 2023 also recommends that PLN review the policy on limiting the installation of rooftop solar PV.

Henriette Faergemann, Environment, Climate Action EU Delegates to Indonesia and Brunei Darussalam, stated that it is important to create an ambitious and consistent energy transition policy to provide a strong signal to investors and financial institutions so that they are interested in participating in financing the energy transition.

“There is good progress for Indonesia in formulating its policies, but there are still many things that need to be done and improved if Indonesia wants this (energy transition) to happen quickly,” Henriette explained.

Joshua Wyclife, Chief of Operations International Solar Alliance, agrees that structural change is needed and this change starts with policy. Joshua also stated that this ISEO report is one way to increase awareness for various parties about the current situation of solar energy development in Indonesia.

“One way to maximize solar potential in Indonesia is to increase the level from awareness to advocacy, by various parties through various ways such as workshops, facilitating training programs with existing resources,” said Joshua.

Meanwhile, Rahmat Mardiana, Director of Electricity, Telecommunications, and Information at the National Planning Agency (Bappenas), stated that this report would be studied further considering that Bappenas is currently preparing national development planning documents such as the RPJP and RPJM, one of which is about the energy transition strategy.

“With our commitment to achieve the RUEN, Paris Agreement, and NZE targets, of course we must provide reliable electricity at affordable prices, and gradually fossil power plants will be replaced by renewable energy,” explained Rahmat.

Dewanto, Vice President of Various Energy PLN, said that PLN continues to support the development of renewable energy.

“The Business Plan (RUPTL) is a tangible manifestation of PLN’s support for new and renewable energy. According to the RUPTL, until early 2023 PLN will auction almost 1 GW of renewable projects,” Dewanto said.

Dicussion and Media Briefing : Towards the G20 Summit, How are G20 Climate Actions?

Indonesia, which is hosting the G20 this year, is the world’s fourth largest coal exporter and 75% of its energy mix still comes from fossil fuels (Climate Transparency 2022). Despite its reliance on fossil fuels, Indonesia proposed the core theme of Sustainable Energy Transition in its G20 presidency. The energy crisis proved to be one of the most challenging in the Energy Transition Ministerial Meeting in reaching an agreement or joint communique. The failure to produce a joint communique was highlighted as a setback to the G20’s climate commitment to achieve the 1.5 degrees Celsius target.

According to the Climate Transparency Report’s latest publication, the G20’s climate action still falls short of preventing the earth’s temperature from rising above 1.5 degrees Celsius, although it is not too late. Meanwhile, in the assessment of each country’s achievements by the Climate Transparency Report, it can be said that Indonesia is not yet on track to achieve the 1.5 degrees Celsius target. The energy crisis caused by the conflict between Russia and Ukraine has led to many G20 countries taking ‘temporary’ measures to secure their energy supply, which has hampered the achievement of the zero net carbon target. The same report also states that all G20 countries need to strengthen their NDCs (nationally determined contributions) to be more in line with the 1.5 degrees Celsius target.

The G20 Summit is scheduled to be held in Bali on 15-16 November 2022. As the G20 event draws to a close, the world is waiting to see what commitments and actions the G20 will take to slow the rate of climate change impacts. The pressure on the G20 is even higher, given that the G20 Summit will be after COP27 in Sharm El-Sheikh, Egypt. G20 countries need to convince their people that they are keeping the promises and commitments made at COP26 in Glasgow. As major contributors to the world’s total greenhouse gases, there is hope that the G20 Summit can be a catalyst for climate action based on multilateralism.

To strengthen the transparency framework for global adaptation and mitigation action, Climate Transparency has launched its annual report. The report provides an assessment of emissions and projections of G20 climate adaptation, mitigation and financial mobilisation to prevent global temperature rise. In addition, the report presents analyses of responses and recommendations for a green recovery aligned with the Paris Agreement. The Climate Transparency Report 2022 was made available globally on 20 October 2022. As Climate Transparency’s partner in Indonesia, IESR will disseminate the Climate Transparency 2022 report and Indonesia Country Profile inviting the government, CSOs, policymakers, and the general public to the event.

ANTARA | IESR Urges G20 Countries to Prioritize Solar Energy to Achieving NZE

The Executive Director of the Institute for Essential Services Reform (IESR), in a webinar entitled “Shine Bright: Advancing G20 Solar Leadership,” which was monitored online in Jakarta, stated that the G20 has a big responsibility to suppress global warming because the G20 contributes up to 80 percent of CO2 emissions from energy use.

Read more on ANTARA.

Seize the Energy Transition Funding Opportunity

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Jakarta, 28 July 2022- Indonesia’s energy transition requires significant investment to develop renewable energy generation, clean fuels, power grids, and energy storage. However, Indonesia also has a huge opportunity to attract investment in the renewable energy sector while developing innovative financing instruments

G20 Seminar
One out of three panel sessions at the G20 seminar series that discuss sustainable financing opportunities for energy transition in Indonesia (27/07/2022). (Doc. Seminar Secretariat )

“Indonesia at least needs investment for the energy transition of around USD 1 trillion by 2060”, said Minister of Energy and Mineral Resources, Arifin Tasrif in his speech at the G20 seminar series entitled “Unlocking Innovative Financing Schemes and Islamic Finance to Accelerate a Just Energy Transition In Emerging Economies”

Based on a study by the Institute for Essential Services Reform (IESR), investment needs for decarbonization of the energy sector range from USD 20–25 billion per year between 2020 and 2030 and around USD 40–60 billion per year from 2030 to 2050. 

“Indonesia owns renewable energy potential and energy needs that will continuously grow. In many ways, Indonesia should become a main investment target. Unfortunately, inconsistency on policy, regulation and lack of integrated coordination across sectors makes investors perceive Indonesia as a high risk investment market,” explained Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR).

According to the IISD (International Institute for Sustainable Development) report in 2020, only 7.8% of total investment was allocated for renewable energy in Indonesia. The rest is still focusing on fossil fuel. Peter Wooders, Senior Director Energy of IISD emphasized that the G20 should set a clear direction towards clean energy – which gradually includes a move away from supporting fossil fuels. 

“While public finance is not enough on its own, its role is essential – and many mechanisms can help”, he added. 

Therefore, in this G20 Seminar Series, the discussion about Islamic financing was elevated such as waqf, sukuk and green bonds to enrich the perspective of energy transition financing potential. 

Islamic finance also plays an important role in funding various sustainable projects, including renewable energy. According to Indonesia Islamic Economic Masterplan 2019–2024, renewable energy has received some support through the Murabaha (the principle of buying and selling) scheme, as well as donations through zakat. 

Anna Skarbek, CEO Climateworks Centre stated that investment opportunities in climate transition and innovations in investment models across ASEAN region are profound. 

Yet, Kuki Soejachmoen, Executive Director of Indonesia Research Institute for Decarbonization (IRID) as well as the seminar’s moderator reminded that any financing mechanism must pay attention to inclusivity and just/ fairness for everyone. Energy transition impact will gradually meet the end of fossil fuel and its relevant supply chain business, early retirement, new job opportunity, new skill, new industry – hence, it must be addressed in a good manner. 

$200 million Grant Commitment from Australia to Indonesia  

In his opening remarks, Andrew Hudson, CEO Centre for Policy Development, specifically raised the recent grant commitment dialogue between President Joko Widodo and Prime Minister Anthony Albanese, as a real example of the importance of cross-border dialogue. 

“It is crucial that we engage in a dialogue that shares experiences of the action required for effective,scalable and impactful cross-border investment in climate transition by both public and private-sector investors. We need to use the ambition and momentum of the $200 million climate and infrastructure partnership announced between Australia and Indonesia at the recent leaders’ meeting”

On the road to G20 Summit, this seminar series was held by Energy Transition Working Group (ETWG) Indonesia G20 2022 and T20 Indonesia, in collaboration with the Centre For Policy Development (CPD) Australia, Climateworks Centre, International Institute for Sustainable Development (IISD), Indonesia Research Institute for Decarbonization (IRID), and the Institute for Essential Services Reform (IESR), supported by Asia Investor Group on Climate Change (AIGCC). 

Strengthening a Just Energy Transition with Sustainable Finance

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Jakarta, 28 July 2022– The energy transition is crucial and urgent to be implemented to reduce greenhouse gas (GHG) emissions and limit the earth’s temperature below 1.5 degrees Celsius by 2050, according to the Paris Agreement. Strengthening the just energy transition requires sustainable and innovative funding.

IESR - Wapres - Meneteri Keuangan - Menteri ESDM
Vice President Ma’ruf Amin took a picture with keynote speakers and representatives from each partner organization at the G20 seminar series hosted by the Ministry of Energy and Mineral Resources (Doc. Seminar Secretariat)

Minister of Energy and Mineral Resources, Arifin Tasrif in his speech at the G20 seminar series entitled “Unlocking Innovative Financing Schemes and Islamic Finance to Accelerate a Just Energy Transition In Emerging Economies” said Indonesia already has an energy transition roadmap to achieve carbon neutrality by 2060 or earlier.

“PLN through its national energy supply business plan (RUPTL) by 2021-2023, has also targeted the cleaner business plan by adding power plants generated from renewable energy up to 51.6%. Indonesia has planned to build an archipelago super grid to ramp up renewable energy development and maintain electrical stability and security,” said Arifin.

Arifin added that at least Indonesia needs investment for the energy transition of around USD 1 trillion by 2060.

“Therefore, Indonesia continues to create strengthened relations with cooperation with partner countries and international financial institutions to find innovative funding mechanisms,” he said.

Adding up, Yudo D. Priaadi, Chair of the Energy Transition Working Group (ETWG) G20 2022, said that innovative financing and Islamic (Islamic) financing have the potential to open opportunities to increase accessibility and inclusiveness toward sustainable financing.

“We must deploy an effective and proven platform as well as securing the investment,” he said.

Mahendra Siregar, Chairman of the Board of Commissioners of the Indonesia Financial Services Authority, stressed that besides using sustainable financing to fund the energy transition, it should also be aligned with poverty alleviation efforts. He stated that the energy transition plan with sustainable financing also needs to provide profit.

“OJK plans to balance the transition and green economy, social stability, and alleviate poverty. OJK convinces the banks and public credit companies to address climate change,” he explained on the same webinar.

Kuki Soejachmoen, Executive Director of the Indonesia Research Institute for Decarbonization (IRID), said that the energy transition does not only focus on the gradual transformation of the GHG emitting sectors, but also on new jobs, new industries, new skills, new investments and other opportunities to create a resilient society.

“The inclusiveness and fairness in the energy transition process are significant for society, the economy, industry and the environment,” said Kuki.

A just energy transition also needs to ensure access to quality energy for all, especially for the poor.

“The energy transition, one of which is by retiring coal-fired power plants, as is being reviewed by the Ministry of Energy and Mineral Resources of 9.2 GW. According to the IESR study, it requires about USD 4.3 billion. But it will provide long-term benefits for the people of Indonesia,” explained Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR).

He believed that managing energy transition with a people-centered approach will ensure the benefits and costs involved in the transformation of the energy system are distributed fairly and protect the most vulnerable in society.

Energy Transition Working Group (ETWG) Indonesia G20 2022 and T20 Indonesia, in collaboration with Australia’s Center for Policy Development (CPD), Climateworks Centre, International Institute for Sustainable Development (IISD), Indonesia Research Institute for Decarbonization (IRID), and the Institute for Essential Services Reform (IESR), and supported by the Asia Investor Group on Climate Change (AIGCC), organized the G20 seminar series entitled “Unlocking Innovative Financing Schemes and Islamic Finance to Accelerate a Just Energy Transition In Emerging Economies.”