Jakarta, July 19 2022-The Group of Seven (G7) Summit in Elmau, Germany, was held at the end of last June. The meeting, which was also attended by Indonesia as a G7 partner country and the G20 Presidency, has resulted in a number of agreements, one of which is the collaboration with developing countries including Indonesia to accelerate the clean energy agenda through the Just Energy Transition Partnership (JETP). At the meeting, President Joko Widodo said that Indonesia needs 25-30 billion USD (about 442 trillion rupiahs) investment over the next eight years to expedite the energy transition.

The JETP plan between Indonesia and the G7 countries which aims at supporting energy policy reforms is said to be carried out by decarbonizing the energy system and increasing energy efficiency. However, at present, neither of the G7 countries’ nor Indonesia’s climate action is in line with the Paris Agreement. In this case, the Indonesian government, for example, is known to still be taking contradictory steps by trying to construct at least 13.5 GW of new coal-fired power plants in various stages including the funding stage, excluding captive coal-fired power plants for industry.

Tata Mustasya, Greenpeace Indonesia’s Climate and Energy Campaign Coordinator, said that Indonesia’s leadership in the G20 presidency plays an important role in the current global energy crisis situation. “Indonesia’s G20 presidency must affirm and agree on the acceleration of the transition from fossil energy to clean, renewable energy and the transition management. The deal should be implemented soon, completing some of the homework from COP26 in Glasgow and the recent G7 Summit. The energy transition must fulfil the values of justice, inclusiveness, and democracy as well as be executed with clean and non-corrupt governance. The renewable energy transition must also implement a circular economy from upstream to downstream so that it can be a real solution for the environment and climate.”

Previously, France, Germany, the United Kingdom, the United States, and the European Union as G7 countries also launched the Just Energy Transition Partnership program with South Africa. Through this partnership agreement, they announce a shared long-term ambition to support South Africa’s decarbonization efforts with a focus on the electricity system, to help in achieving the goals set out in its latest Nationally Determined Contributions (NDC) about emissions reduction targets. This effort was undertaken by providing financing of $8.5 billion (approximately 120 trillion rupiahs) through a variety of mechanisms including grants, concessional loans and investments, and risk-sharing instruments, including to mobilize the private sector.

Sisilia Nurmala Dewi, Managing Director of 350.org Asia, said that based on South Africa’s experience as a JETP recipient, there are many similarities in conditions and challenges between Indonesia and South Africa. “In fact, by looking at the national level ambitions through each of the NDC, Indonesia’s target is no more ambitious (highly insufficient) than South Africa (insufficient). Therefore, it is important for the public to be able to monitor the JETP agreement details including the mechanism and the provided funding share. In South Africa, the attention for energy transition is enormous, but only a small amount is given for the equity (just) aspect. Ideally, the formulation for just energy transition should be ambitious, democratic, and the process is open and involving those who are affected (workers, communities in coal areas, young people).”

Andri Prasetiyo, Researcher and Program Manager at Trend Asia, stated that in order for JETP to become a real manifestation of the responsibility of developed countries in global joint efforts to reduce emissions and overcome the pace of climate change, the funding to developing countries must be in the form of grants, not loans so it won’t be burdensome for developing countries and could optimize the efforts to accelerate energy transition. In addition, the JETP funding received by Indonesia should not be misdirected, for example, used to retire coal power plants that have passed their operating period and have had to stop.

On the other hand, the JETP initiative also needs to be accompanied by proper government readiness to prepare clear policies and guidelines in carrying out early retirement for coal power plants. “One of them is to immediately ratify the Presidential Decree regarding the Limitation of Coal Power Plant Operations, which the government has not yet carried out,” added Andri.

Thus, efforts to accelerate energy transition should be able to avoid false solutions, so that negotiations on the JETP must also avoid all forms of support for false solutions. In addition, the G7 countries and Indonesia as the G20 Presidency should be able to prove its leadership by turning promises into real implementation, especially in this case to carry out the coal phase out and end the era of dirty energy sources immediately.


Photo by Moja Msanii on Unsplash