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Why Indonesia’s JETP plan is not even a glass half full
The recently released draft JETP CIPP falls far short of the halfway mark to achieving a just energy transition as the deal’s name claims to promote.
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The Suralaya coal-fired power plant owned by Indonesia Power is lit up on July 10, 2020 against a relatively dark valley in Banten province. (Reuters/Willy Kurniawan)
Almost one year since its launch on Nov. 16, 2022 during the Group of 20 (G20) Bali Summit, the Just Energy Transition Partnership (JETP) Secretariat has released for public consultation the draft Comprehensive Investment and Policy Plan (CIPP) of the Indonesia JETP.
The draft CIPP is crucial, since it will be used as a guideline for implementing the Indonesia JETP, the largest energy financing package in the world to date. The initial fuding commitment of US$20 billion comprises $10 billion from the International Partners Group (IPG) and another $10 billion from the Glasgow Financial Alliance for Net Zero (GFANZ).
Public expectation for the JETP has been very high since it was launched.
First, the word “just” in its name offers an energy transition that takes into account human rights, clean governance and social, ecological and economic justice. It should simultaneously address climate issues, energy affordability and inclusive energy access.
Second, the JETP is expected to be a game changer by accelerating Indonesia’s sluggish energy transition. While the initial JETP pledge is far from sufficient to fund the country’s transition from fossil fuels to clean and renewable energy, it should be able to catalyze other financing sources by providing a clear signal to the global market.
The last thing behind the public’s high expectation is that the JETP is viewed as an opportunity for Indonesia to undertake a transformational change in the energy sector by pushing regulatory and institutional reform.
Yet without fundamental revisions, the draft CIPP will fail to meet these expectations. One visible reason is its extremely low early coal retirement target. For years, huge overcapacity at coal power plants has been hindering Indonesia's energy transition.
