Background Paper Acceleration of the Energy Transition in Indonesia Achieving an equitable transition through the Just Energy Transition Partnership and other Financing Strategies Author : Henriette Imelda (IRID) Contributors : Ann Phang, Alexandra Goritz, Felita Putri, Felix F, Giovanni Maurice Pradipta, Petter Lyden (Germanwatch). Layout Design : Maginate Creative Communication Photo Cover Credit: © Hardy Mynhart / Shutterstock Solar power plant panel in Likupang Indonesia Background Paper Acceleration of the Energy Transition in Indonesia Achieving an equitable transition through the Just Energy Transition Partnership and other Financing Strategies © Bastian AS / Shutterstock Wind farm turbine installed in Jeneponto Regency, South Sulawesi, Indonesia One of the initiatives that emerged from the 26th annual meeting of the United Nations Framework Convention on Climate Change Conference of the Parties (COP) held in 2021 in Glasgow, UK, was the Just Energy Transition Partnership, or JETP. JETP is a form of financial funding programme that was initially created as a partnership with South Africa, supported by the governments of France, Germany, the United Kingdom, the United States, and the European Union as members of the International Partners Group (IPG). A vital feature of the JETP is the emphasis on an equitable shift in its investment plans and financing. The JETP with South Africa is expected to serve as a model that can be replicated in other developing countries, especially those highly dependent on fossil fuels for economic development. At G20 Summit, in Bali, Indonesia, the partnership programme was launched for Indonesia, with US$ 20 billion combined public and private financing. Similarly, a Vietnamese JETP was announced in December 2022, with a value worth more than US$15 billion. To take advantage of JETP and other funding opportunities for Indonesia, the country must identify what it needs to enable the right environment for cooperation that does not violate applicable principles. Simultaneously, Indonesia must encourage ambitious and proper use of funding to accelerate the energy transition towards fossil-free alternatives. 2 Acceleration of the energy transition in Indonesia 1 Indonesia's energy transition plan Indonesia expressed its commitment to support the Paris exceed 1.5°C. Indonesia’s first NDC aims to reduce Agreement through its first Nationally Determined around 314 to 446 million tons of CO2-eq by 20302 by 1 Contribution (NDC) , which states that Indonesia will developing renewable energy, implementing energy reduce greenhouse gas (GHG) emissions through its own efficiency measures and conversion, and installing clean efforts by 29%. However, with international assistance, energy technology. To do so, a total of 8,770 MW of coal- Indonesia can achieve GHG emission reductions of 41%. fired power plant projects have been cancelled, with an Indonesia also expressed its willingness to support joint estimated GHG emission reduction equivalent to 64.5 efforts to prevent the increase in the global average million tons of CO2/year (DJK, 2022) (see Figure 1). temperature from exceeding 2°C, even striving not to Distribution of Cancelled Coal Power Plant Projects As Part of The Energy Transition Plan PLTU Kalseltang 4 2x100 MW PLTU Sumut-2 2x300 MW PLTU Banyuasin 2x120 MW PLTU Riau-1 2x300 MW PLTU MT (Ekspansi) 350 MW PLTU Sumsel-6 300 MW PLTU Bangka-1A 2x50 MW PLTU Bintan 2x100 MW PLTU Kaltim 5 2x100 MW PLTU Kalbar 2 2x100 MW PLTU Jawa-5 1.000 MW PLTU Ekstension 300 MW PLTU Kalbar 3 2x100 MW PLTU Belitung-2 2x15 MW PLTU Banten 660 MW PLTU Kaltim 3 2x100 MW PLTU Sulbagut 3 2x50 MW PLTU Kalseltang 3 2x100 MW PLTU Indramayu 1.000 MW PLTU Lombok 4 2x50 MW PLTU Sulbagut 2 2x100 MW PLTU Toli-Toli 2x25 MW PLTU Kalseltang 5 100 MW PLTU Lombok 2 2x50 MW PLTU Lombok 3 2x50 MW PLTU Sulbagsel 2x200 MW PLTU Sumbawa 2 2x50 MW PLTU Ambon 2x25 MW PLTU Timor 2 2x50 MW PLTU Bau-Bau 2 2x15 MW PLTU Waai 2x15 MW PLTU Haltim 200 MW PLTU Sulbagsel 2 2x200 MW PLTU Bau-Bau 2x15 MW PLTU Sorong 3 2x25 MW PLTU Jayapura 2 50 MW PLTU Jayapura 3 50 MW 8.770 MW TAKE OUT PLTU 64.5 million TONS CO₂ / YEAR Figure 1 Distribution of cancelled coal power plant (PLTU) projects as part of the energy transition plan (Wanhar, 2022) 1 On 23 September 2022, Indonesia issued its Enhanced Nationally Determined Contribution (ENDC), in which it pledged to reduce its greenhouse gas