Navigating Indonesia's Power System Decarbonisation with the Indonesia Just Energy Transition Partnership
Executive Summary
Decarbonization Goals and Context
- Energy System Transformation: Indonesia aims to decarbonize its energy system by reducing fossil fuel dependency, particularly coal, which accounts for 80% of the electricity mix.
- Net Zero Emissions: The country has pledged to achieve net zero emissions by 2060.
- Key Drivers: Rapid economic growth and equitable energy access for a population of 276 million people.
International Support and Partnerships
- Just Energy Transition Partnership (JETP): Established during the G20 summit in Bali in November 2022, it aims to mobilize $20 billion over the next 3-5 years.
- Partners: The partnership includes the United States, Japan, Canada, Denmark, the European Union, France, Germany, Italy, Norway, and the United Kingdom.
- Funding: The IPG members aim to mobilize $10 billion, while the Glasgow Financial Alliance for Net Zero (GFANZ) aims to mobilize and facilitate at least $10 billion in private finance.
Comprehensive Investment and Policy Plan (CIPP)
- Electricity Demand Growth: Projected annual growth rates of 6.4% (2022-2030) and 5.8% (2022-2050).
- Sectoral Breakdown: In 2022, the residential sector consumed 54% of on-grid electricity, followed by the commercial sector (30%) and the industrial sector (16%). By 2050, these shares are expected to shift to 36% residential, 29% commercial, 23% industrial, and 12% for transport and hydrogen production.
- Energy Efficiency and Demand Response: Identified as key measures to mitigate the impact of end-use electrification and changes in the system's peak load. However, further in-depth analysis using stochastic-based approaches is needed.
JETP Scenario
- Renewable Capacity: By 2030, solar PV and wind are expected to reach 29 GW and 9 GW, respectively.
- Power Sector Emissions: The JETP aims to reach a peak in power sector emissions not exceeding 290 MtCO2 by 2030 and achieve net zero power sector emissions by 2050.
Implementation and Coordination
- Secretariat: Hosted by the Ministry of Energy and Mineral Resources (MEMR) and supported by the Asian Development Bank (ADB), the secretariat coordinates internal and external stakeholders and plays a crucial role in planning and project development.
This summary provides an overview of the key aspects of Indonesia's power system decarbonization efforts, highlighting the strategic partnerships, projected growth, and critical measures to achieve net zero emissions by 2060.
