Indonesia Mulls Over Six-Month Plan to Accelerate Pvt Investment in RE

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Indonesia is now bullish on a national plan with regards to renewable energy. The country is looking to accomplish the plan in six months manifesting investments that will expedite the country’s transition to renewable energy from fossil fuel-based power supply.

As per reports, the new plan is part of the $20 billion Just Energy Transition Partnership (JETP) deal that Indonesia has signed with countries involving public and private financing of renewable projects. The deal was signed recently at the G-20 Summit in Bali with countries like USA and Japan.

The plan is expected to allow Indonesia for smooth energy transition in the coming half a decade and help combat the vagaries of climate change. Rachmat Kaimuddin, the Indonesian Deputy Minister who is leading the follow-up of the JETP deal, said the new RE plan will help in the formulation of policy reforms to oust regulatory barriers in energy sector to step up the private investment in the RE segment.

He also held that Indonesia looks to invest in renewables that will have higher employment of local content. As per reports, Rachmat said that in the next six months, the Indonesian government will work out the details and set up criteria to ensure that the deal goes on smoothly. He also mentioned that the finances will be employed for the development of renewable power generation capacity, transmission system and storage.

Replacement of Fossil Fuels With RE

The key objective of Indonesia is the replacement of the fossil fuel based power generation plants with renewables. Today 80% of the power comes from fossil fuel in the country, making coal dominant. Under the JETP deal, Indonesia is mulling over shutting many coal based power plants even before the end of their operational life.

Retiring the coal based power plants will not be as easy as said. Reports hold that early retirement of the coal plants will incur costs but a just transition to renewable energy will also help in job transitioning.

Indonesia is implementing its Intended Nationally Determined Contributions (INDC) under the Paris Agreement to developing its economy while striving for net-zero emission commitments. At present, Indonesia’s per capita CO2 emissions is about half the global average. The Minister said that despite this fact, Indonesia is committed to achieving net-zero emissions by 2060. He said that Indonesia is one of the largest archipelagic countries in the world. In case global warming worsens, the country will probably be one of the first countries that will face the impact.