CREA’s response to Indonesia Just Energy Transition Partnership (JETP) Comprehensive Investment and Policy Plan (CIPP) public consultation draft

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The Indonesia Just Energy Transition Partnership (JETP) Comprehensive Investment and Policy Plan (CIPP) draft for public consultation was released on 1 November 2023. The plan projects that on-grid coal power generation will peak well before 2030 and achieve a reduction back to 2020-level by 2030 as a result of increased power generation from renewable energy and gas. This peaking of coal is well aligned with Indonesia’s energy and climate commitments, and should be pursued.  

In this draft plan, there is significant acceleration of solar and wind power compared with the previously released plans. Meeting these targets requires removal of barriers that have prevented the take-off of these low-cost sources of clean power in Indonesia, and will therefore pave the way for emissions reductions after 2030.

While the ambition to increase the share of renewable energy in power generation by 2030 is welcomed, there is an excessive focus on biomass and hydropower and overly conservative limits on solar power expansion. There is no reason why Indonesia cannot pursue more than 32 gigawatts (GW) of solar to be installed before 2030, based on experiences from China, among others. China has successfully installed 130 GW of solar power in the first 9 months of this year, and is expected to install a total of 200 GW this year alone.

In addition, JETP seems to have almost entirely moved away from retiring coal power plants. There are 7.4 GW of grid-connected coal-fired power plants in Indonesia that should retire by 2035 based on the 30-year lifetime the investment plan assumes, and there are only 1.6 GW of permitted projects due to be completed after 2025. Even without any decisions on early retirement, coal power capacity should therefore fall by almost 6 GW from 2025 to 2035. Yet, the plan projects no reduction in coal power capacity from 2025 to 2035. This raises a question about the Government and the PLN’s (Perusahaan Listrik Negara) commitment to the retirement pathway.

The plan only allocates 1.3 billion USD for early retirement of 1.7 GW of coal power capacity. In effect, the Government is refusing to commit to early retirement of coal power generation, refusing to accept funds to support the retirements. 

The CIPP draft also does not include any funding or provisions to address emissions from Indonesia’s coal power plants, which currently lack essential air pollution control devices. In 2022, coal-fired power plants were responsible for an estimated 10,000 air pollution-related deaths nationwide.

Lastly but most importantly, captive coal power remains the pressing issue to address, as it currently accounts for 25% of the national operating coal capacity. Captive capacity has increased nearly eightfold in the past decade, and is shown to reach 30 GW in 2030 or 43% of the projected national coal power. Our estimates show that captive power is currently responsible for one-fifth of all health impacts from coal power. 

While it is good that the JETP is moving forward on grid-connected power, Indonesia must prioritise the development of a captive coal power phase-out roadmap – not only to set the country on track for a clean energy transition, but also to start scaling up Indonesia’s clean energy supply chains.

CREA recommendations:

  • Prepare a plan to phase out captive coal power plants over the same timeline as grid-connected coal power.
  • Prepare a plan to retire all coal power units whose operating life will exceed 30 years by 2035, in line with the 30-year maximum lifetime assumed in the plan.
  • Increase the targets for solar and wind to economically optimal levels, without setting artificial limits.
  • Strengthen Indonesia’s air pollutant emissions limits for coal power plants, noting that the current limits are very lax, causing severe public health impacts throughout the transition decades when coal power phase-out occurs under current plans.