Kompas | “Off-grid” CFPP Not Yet Included in JETP Targets

The Just Energy Transition Partnership Secretariat or JETP officially opened the draft investment plan to receive input from the public. Observers believe that there is homework to do to reduce greenhouse gas emissions optimally, considering that the emission reduction target in the draft has not yet reached generators outside the electricity grid of the State Electric Company (Persero) or off-grid.

Read more on Kompas.

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.

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

press release

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.

Jakarta Post | Donor Countries’ Aversion to Coal Retirement Could Render JETP ‘Meaningless’

The government has again expressed its doubt that the International Partners Group (IPG), a coalition of Western countries coled by the United States and Japan, is willing to help fund the retirement of Indonesia’s coal-fired power plants, which would signal a major setback to the country achieving its emissions reduction goal.

Read more on Jakarta Post.

Kata Data | JETP Investment Postponed Due to Lack of Consideration for Captive Coal-Fired Power Plants.

The investment in the Just Energy Transition Partnership (JETP) is postponed because the government needs to take into account the coal-fired power plants independently built by industries and located outside the PLN network system or captive power plants. The JETP investment plan, which was previously targeted for August, has been pushed back to the end of 2023.

Read more on Kata Data.