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Indonesia has revised its 2030 carbon emissions target for the power sector, excluding captive coal-fired power plants from a draft roadmap aimed at securing $20 billion in funding from wealthy nations to transition away from coal, local media reported.
These plants produce power off the public electricity grid and serve large industries with high-volume, reliable 24-hour power needs. This decision was made due to the complex nature of the issue and the critical role these plants play in supporting the government's industrial down-streaming strategy for economic development, reported Benarnews.
The plan envisions a strategy to retire coal-fired power plants, boost renewable energy sources, and modernize the electricity grid while ensuring an equitable transition that minimizes the social and economic impacts of moving to cleaner energy.
Indonesia aims to reduce carbon emissions in the power sector to 250 million tonnes by 2030, down from the 290 million tonnes pledged in November last year. The country also plans to increase the share of renewable energy to at least 34% of total electricity generation by 2030, compared to the 34% agreed upon last year. It has set a target of achieving net-zero emissions by 2050.
Indonesia heavily relies on coal for electricity, with over 60% of the country's power supply coming from coal. Coal plays a significant role in the nation's economy, providing income and employment for many Indonesians.
The Just Energy Transition Partnership (JETP), announced at the G20 summit in Bali in November 2022, is considered the largest country-specific climate investment partnership, from which Indonesia received an initial $20 billion fund over 3-5 years.
The initiative will be funded by grants and loans from wealthy countries, including Group of Seven nations. Led by the United States and Japan, the JETP includes signatories such as Canada, Denmark, the European Union, France, Germany, Italy, Norway, and the United Kingdom.
The draft plan indicates that funders have earmarked $153.8 million in grant funding, which constitutes less than 1% of the total JETP budget. However, there have been calls for more significant grants to fund the energy transition, given the high social returns associated with just transition initiatives. Critics have urged developed countries to provide more grants than loans due to the critical nature of climate change.
The JETP is regarded as a significant step towards transitioning Indonesia's energy landscape, but it's clear that additional sources of funding and broader stakeholder engagement will be necessary to realize the country's ambitious energy transition goals.
(Writing by Alex Guo Editing by Harry Huo)
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