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Acceleration of Energy Transition in Indonesia: Achieving Equitable Transition through JETP and Other Strategies

Indonesia is pursuing a significant energy transition to reduce greenhouse gas (GHG) emissions and move away from fossil fuels, with ambitious targets under the Paris Agreement. The country's commitment includes a 31% domestic GHG reduction target by 2030, increasing to 41% with international support, aligned with its Enhanced Nationally Determined Contribution (ENDC). To achieve Net Zero Emission (NZE) by 2060, Indonesia has cancelled 8,770 MW of coal power projects, reducing estimated emissions by 64.5 million tonnes of CO2-equivalent per year. This phase-out involves multiple scenarios, including Business as Usual, Zero Emission, and Net Zero Emission, with the latter selected for implementation.

Renewable energy holds vast potential, estimated at 3,686 GW from solar, hydro, wind, geothermal, and ocean sources, but current utilization is only about 11,612 MW. By 2060, renewable generation targets under NZE include 421 GW solar, 94 GW wind, 72 GW hydro, and more, alongside energy storage solutions like pumped storage and batteries. Grid enhancements, including inter-island connections, are critical to support this transition, with planned investments exceeding US$1.1 trillion.

Key enabling conditions include policies from the Ministry of Energy and Mineral Resources (MEMR), such as the Green Taxonomy introduced in 2022 and a draft Renewable Energy Bill. Indonesia is also establishing a Just Energy Transition (JET) framework based on seven principles: justice, legal certainty, expedience, human rights, environmental protection, transparency, and collaborative policy-making. These ensure equitable treatment in regulations and financing.

Financing mechanisms are crucial. The Just Energy Transition Partnership (JETP), originating from COP26, aims to provide US$20 billion in blended finance by 2025, with support from international partners. Complementary mechanisms like the Energy Transition Mechanism (ETM) offer additional funding, with Indonesia launching its ETM Country Platform at the 2022 G20 summit. Challenges include ensuring funds are used equitably without harming vulnerable groups.

Civil society organizations (CSOs) emphasize the need for a clear definition of "just" transition, greater public consultation, and inclusion of environmental and human rights assessments like KLHS in the planning process. They warn that addressing social impacts, including job losses from coal phase-out and workforce training for renewable sectors, is essential.

Key recommendations include developing a comprehensive Just Energy Transition Framework applicable nationwide, strengthening institutional arrangements, and creating a platform for public participation to facilitate inclusive and participatory policymaking. Overall, Indonesia must balance technical, financial, and social aspects to achieve a fair and accelerated energy transition.

References

• IRID (Indonesian Renewable and Alternative Energy Development Organization)
• MEMR (Ministry of Energy and Mineral Resources)
• COP26, Climate Investment Fund, Asian Development Bank, and other contributing entities