Can a $20 billion bet wean Indonesia off coal?
Less than a year after it was announced, a $20-billion bet to wean Indonesia off coal is mired in controversies over financing and the construction of new plants to power industry. The Just Energy Transition Partnership for Indonesia was unveiled last November and follows a model first trialed in South Africa, with rich countries pledging funds for the developing world's energy transition.
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A plan for how Indonesia will spend $20 billion to transition to cleaner energy has been submitted
A plan for how Indonesia will spend $20 billion to transition to cleaner energy was submitted Wednesday to the government and its financing partners, the planners said. Indonesia's Just Energy Transition Partnership deal was announced last year and aims to use the funds over the next three to five years to accelerate retirement of the nation's coal plants and development of renewable energy.
Just Energy Transition Partnerships and How They Work
To limit the damage caused by climate change, the world needs to rapidly reduce carbon dioxide emissions everywhere, not just in rich countries. To get there, poor and middle-income places will require trillions of dollars for replacing coal plants with cleaner energy, improving electrical grids and retraining workers, among other measures. Just Energy Transition Partnerships, or JETPs, are among the most high-profile financing mechanisms designed to funnel money from wealthy economies to some of the bigger developing-world emitters for the purpose of weaning off fossil fuels. South Africa signed the first agreement in 2021, and a handful of others are getting off the ground, including in Indonesia. But the process has been slow and politically fraught, raising the question of whether such flagship plans can be inclusive, effective and timely enough to fulfill their promise.
Indonesia's JETP Deal Will Only Succeed if Coupled with Radical Measures to Unblock Renewable Energy Pipeline
At the G20 Summit in Bali, a group of developed countries—led by the United States of America and Japan—pledged to mobilize US$20 billion (around Rp300 trillion) over the next 3-5 years to accelerate Indonesia’s energy transition through early retirement of coal power plants and deployment of renewable energy. The flood of new finance for renewable energy under the so-called Just Energy Transition Partnership agreement (JETP) is certainly welcome—but unless the critical barriers to renewable energy deployment in Indonesia are addressed, the deal will fail to deliver.
How Indonesia's Incoming President Can Advance the Transition to Clean Energy
With Prabowo Subianto inaugurated as Indonesia’s President, speculation abounds about the new administration’s commitment to the clean energy transition and climate targets, given Prabowo’s positioning as the “continuity candidate.” The question is, what, exactly, will be continued?