- Indonesia's recently revamped $20 billion clean energy transition plan has been criticized for offering "false solutions" that eliminate everything except promised benefits.
- One of their most controversial proposals is to not count emissions from off-grid coal-fired power plants that serve industrial users without feeding into the grid.
- Emissions from these priority systems alone exceed all emissions reductions under the Fair Energy Transition Partnership.
- The program focuses heavily on “fake” renewable energy solutions such as biomass cogeneration and replacing diesel generators with natural gas generators.
Malinu, Indonesia - Indonesia's new energy transition plan calls for tougher limits on carbon emissions, a greater share of renewable energy generation and a range of financing options to cover the $20 billion bill.
But energy analysts say the plan contains many “false solutions” that nullify any promised emissions reductions. Note that these emissions limits will create a large gap for off-grid coal-fired power plants; The renewable energy landscape is based on the construction of central hydroelectric power plants and geothermal plants instead of small solar and wind plants. And the financing occurs mainly through high-interest loans from the rich countries responsible for the climate crisis.
This plan, known as the Comprehensive Investment and Policy Plan (CPP), sets out the roadmap for Indonesia's Just Energy Transition Partnership (JETP), under which the country will receive $20 billion in funding from the G7 group of nations rich, as well as Denmark. . And Norway is going outside the box.
In the latest CIPP draft, the government plans to limit emissions to 250 million tonnes of CO2 (MtCO2) by 2030, up from 290 MtCO2 previously. However, the ultimate goal of achieving net-zero emissions in the electricity sector has a deadline of 2050.
According to the Institute for Essential Services Reform (IESR), a Jakarta-based think tank that was part of a technical working group involved in developing the CIPP, Indonesia joined the Paris Agreement ten years later than expected.
There is also an energy production gap in this emissions target. In particular, so-called primary power plants are purpose-built to provide electricity to industrial and commercial consumers without entering the country's core grid, exempt from any emission limits or net-zero emissions targets.
Thanks to the expansion of the metalworking sector, Indonesia has grown rapidly in the last decade with very high coal power. In the year In 2013, Indonesia had a domestic coal-fired electricity generation capacity of 1.3 GW. According to the Ministry of Energy and Mineral Resources, this number will increase 10-fold to 13.74 GW in 2023. Another 20.48 GW of privately owned coal-fired power plants are in the planning stage.
According to energy think tank Ember, these power plants are Emitting 153 to 187 million tons of carbon 2 by 2030. If these emissions were properly accounted for, electricity sector emissions would far exceed 250 million tons of emissions of carbon established by the government.
Haridin Mahardika, director of the Clean Transition Programme, said coal-fired power plants pose a major obstacle to Indonesia's energy transition agenda and net-zero emissions goal.
“Even if the CIP target is achieved, Indonesia's zero emissions target cannot be achieved because its coal-fired power plants still produce large amounts of emissions,” he said.
The CPP Technical Working Group announced that large, fast solar and wind plants and transmission lines will be needed over the next six years to compensate for the enormous capacity of existing and planned power plants. This is unrealistic, the group says.
But even when it comes to the grid, the CIPP only calls for the closure of some of the coal-fired power plants in the pipeline, according to a joint analysis by Indonesian non-governmental organizations. When the government announced the JTP deal, the government's initial target was to remove 5.2 GW of coal from the grid by 2030. However, this target will be reduced to 1.7 GW due to a lack of funding in the new draft plan, said Fabi Tumiwa, CEO of IESR.
This figure is significantly less than the amount needed for Indonesia to break even and meet the 9.2 GW target of the Paris Agreement. A similar JTP deal for South Africa falls short of its target, which calls for an early exit from 6GW coal-fired power plants.
“From our perspective, building new power plants and decommissioning them are two actions that cancel each other out. This mutual retirement is costly and inefficient,” the analysis states.
Bhima Yudhishthira, Executive Director of the non-profit Center for Economic and Legal Studies (CELIOS):
Wrong solutions for renewable energy
Then there is the issue of renewable energy. Indonesia had previously planned to increase the share of renewable energy to 34% by 2030, but the latest CIPP project raised it to 44%.
While this may seem like good news, observers say there will be a greater focus on the development of renewable energy such as solar and wind, which are called emitters like hydroelectric and geothermal, which are more expensive and require more time for production compared to variable renewables.
In the project, variable renewable energy development will account for the majority of the 44% share, with an estimated cost of up to $49.2 billion, of which an estimated $25.7 billion is for variable renewable energy development .
“We view the combination of solar and battery storage systems (BESS) as better than other energy sources in terms of cost and feasibility of deployment,” said Pamela Simamora, senior electricity policy analyst at Ember Southeast Asia. “With CIPP's focus on renewable energy not available until the end of the decade, Indonesia risks falling behind in its accelerated energy transition.”
According to Cecilia Nurmala Dewey, CIPP focuses more on the development of renewable energy than on small energy sources managed by local communities, despite their decreasing costs. Head of the Indonesian branch of the climate campaign group 350.org.
This means Indonesia's energy transition agenda could leave local communities behind, he said.
“The CPP document still sees citizens as consumers, not citizens who can contribute to the development of renewable energy,” says Cecilia. “As an archipelago with a large population and high renewable energy potential, energy decentralization is a key strategy to ensure community energy sovereignty and strengthen national energy security.”
CIPP also calls for energy transition strategies that experts see as “false solutions,” such as biomass and natural gas.
Common combustion in coal-fired power plants is replacing some of the coal with woody biomass such as wood pellets, palm oil pellets and sawdust. This is because it releases emissions that were previously trapped in the biomass, or at least some of the biomass neutralizes the CO2. JETP predicts that between 2030 and 2050, 5-10% of annual electricity generated by coal-fired power plants will be covered by co-firing.
However, to ensure an adequate supply of biomass, the government has established that 9 million tons per year. Critics say 10.2 million tonnes would ensure massive deforestation, according to think tank Trend Asia.
Trend Asia estimates that producing the necessary timber would require 2.33 million hectares (5.7 million acres) of land, 35 times the size of Jakarta. Annual wood pellet production in Indonesia is around 1 million tonnes, so around half of this must be new plantations.
This makes biomass co-firing a bogus solution that should have no place in Indonesia's energy transition agenda, said Diane Sunardi, director of the Social Change Communications Agency. He said! Indonesia.
“This will only exacerbate the climate crisis and disrupt Indonesia's energy transition.” “Indonesia must take a firm position, reject false solutions and withdraw from the CIPP.”
CIPP also calls for greater use of natural gas. And while it's true that gas emits half as much carbon per unit of energy as coal, it's still a fossil and dirtier than wind and solar. The gas is also associated with methane, a more potent greenhouse gas than CO2, meaning a gas-fired power plant can emit more greenhouse gases over its lifetime than a coal-fired power plant.
“All these [wrong solutions] could hinder Indonesia's energy transition,” said Leonard Simanjuntak, head of Greenpeace Indonesia. “I fear that JETP will end up as a meaningless boutique project or as a cosmetic operation in the complexity of Indonesia's energy transition.”
It's business as usual for "Boiling Planet".
JETP's funding programs have also been contested.
The draft CIPP foresees that $20 billion will be provided in the form of grants, concessional loans, market loans, guarantees and private investments. The government is pushing for a larger share of aid in JTP funding, which currently stands at just $153.8 million, or less than 1% of the total fund. In comparison, this percentage is lower than the subsidy share under South Africa's JETP agreement, which is 4%.
Unlike loans, grants do not have to be repaid.
The United States is the largest donor to Indonesia's JETP agreement, with more than two billion dollars. However, of this, $66.7 million was provided in the form of grants, or just 3.3% of the total pledged funds. At the same time, one billion dollars of the interviewee included regular market loans.
For these $1 billion loans alone, Indonesia must pay at least $68.3 million per year in interest; This is more than the one-time subsidy from the United States.
This raises questions about developed countries' commitment to a “fair” share of the equitable energy transition, says CELOS's Bima.
“What is the point of waiting for the publication of the CIPP document if the agreement with developed countries will simply continue as before?” He said.
Indonesian President Joko Widodo has criticized developed countries, which are mostly responsible for historic emissions, for failing to provide low-cost financial support to countries in the Global South to deliver climate solutions.
In a speech at Stanford University in the US on November 15, he said: “We all know that climate finance is still business as usual, still like commercial banks. It should be more constructive and not in the form of loans. This increases the burden on poor and developing countries (such as Indonesia).
Pius Ginting, coordinator of the NGO Action for Ecology and Emancipation of People (AEER), cited the example of Japan, a developed country that needs to step up its financial policy after Indonesia's coal-fired power plants continue to contribute to emissions. Financing. .
Between 2014 and 2019, the largest financial institutions for Indonesia's coal projects were Japanese and Chinese financial institutions. Three Japanese lenders are in the top five, with the Japan Bank for International Cooperation (JPIC), the largest lender, providing $4.7 billion to build coal-fired power plants in Indonesia. This price corresponds to a quarter of Indonesia's JETP agreement.
Pius says countries like Japan should follow the example of Germany, which provided $167 million in aid or technical assistance to the Indonesian JTP; This is 10% of the total commitment.
“This part of the aid should be used as a reference for other developed countries,” he said.
Image of a flag. A shepherd follows his flock of sheep as they graze near a coal-fired power plant in Jepara, Central Java, Indonesia. Photo by Kemal Juffrey/Greenpeace.
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