Smoothing the way for Indonesia's JETP plan

  • Jakarta, Indonesia

  • 14 November 2023

The draft plan for Indonesia’s Just Energy Transition Partnership (JETP) is an ambitious step forward that is close to hitting the mark, but falls short of ideal, according to a formal feedback submitted by global energy think tank Ember. Further refinements to the Comprehensive Investment and Policy Plan (CIPP) of the JETP are needed to ensure Indonesia’s power sector transition aligns with global climate objectives.

Following the public consultation period, Ember had the chance to review the CIPP draft and commends the plan’s aims to increase Indonesia’s share of renewable electricity generation from the initially announced 34% to 44% and limit emissions to 250 million tons of CO2 equivalent (MtCO2eq) by 2030, from a previous target of 290 MtCO2.

However, Ember’s review highlights several concerns. The CIPP’s exclusion of captive power plants risks underestimating the projected emissions by 2030. Under the same assumptions of the 250 Mt CO2 projected on-grid emissions, captive coal power plants could reach between 153 – 187 Mt CO2 by 2030. Combined, they will overshoot the 290 Mt CO2 target by a significant margin.

The review also underscores the need for a greater focus on solar and wind. Ember recommends harnessing the country’s high potential for these renewable sources, especially solar, and the economic viability of these resources as the draft plan leans towards more expensive dispatchable renewables like hydropower and geothermal, accounting for the bulk of the 44% renewable energy share by 2030.

We have seen the combo of solar and battery energy storage systems (BESS) outperforming other sources of energy in terms of costs and practicality for deployment. The CIPP’s focus on dispatchable renewables, which will only begin operations by the end of the decade, risks steering Indonesia off course from an accelerated energy transition.

Pamela Simamora Southeast Asia Senior Electricity Policy Analyst, Ember

Finally, it takes two to tango in the race towards a decarbonised world. The International Partners Group (IPG) as well as the Glasgow Financial Alliance for Net Zero (GFANZ) have their fiduciary responsibilities to deliver on their promises to Indonesia. Mitigation strategies to ensure stable and clear funding commitments, backed by transparent and accountable financing should be addressed in the plan, in light of potential global political challenges.

In addition to funding, domestic policy reforms are crucial to support the expansion of renewable energy and the discontinuation of coal power subsidies. A holistic approach to energy transition is necessary, emphasising not only emissions reduction but also inclusive strategies and balanced policies that consider both environmental and social dimensions.