How does Indonesia's JETP compare to net zero pathways?

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How does Indonesia’s JETP compare to net zero pathways?

Indonesia’s Just Energy Transition Partnership (JETP) puts it on a pathway for net zero by 2060 – but falls short of a 1.5C-aligned pathway and net zero by 2050

Available in: Bahasa Indonesia

16 Nov 2022

Achmed Shahram Edianto
Asia electricity analyst
Ember

The Indonesian JETP raises the country’s ambition for power sector decarbonisation and closely aligns to a pathway that delivers Indonesia’s target of net zero by 2060. However, the deal falls short of the ambition required to put Indonesia on a 1.5C-aligned pathway and net zero by 2050.

At the G20 summit in Bali – and on the same day as COP27’s Energy Day – Indonesia announced its ‘Just Energy Transition Partnership’ (or JETP). The groundbreaking deal secures $20bn funding from the US, Japan and others to help Indonesia accelerate the transition from coal to clean electricity.

We took a look at how these commitments compared to the pathways published by the International Energy Agency in September in its much-awaited Energy Sector Roadmap to Net Zero Emissions in Indonesia. It is clear that Indonesia’s JETP moves it towards a pathway aligned with net zero by 2060 – currently the national commitment – but it doesn’t yet reach the highest levels of ambition required for 1.5C that we set out in our recent commentary.

What’s new?

The JETP commitment sees Indonesia bring forward its target by ten years, from 2060 to 2050, to phase out unabated fossil fuels in power sector and achieve a net zero power sector.

It also raises the share of renewable electricity to 34% by 2030. Previously, the government plan (RUPTL) had a target of 23%.

It brings Indonesia’s ambition in line with a pathway modelled by the IEA, which showed what Indonesia needs to achieve to put it on track for achieving its target of economy-wide net zero by 2060.

Is it enough for 1.5C?

According to the IEA’s roadmap for Indonesia Net Zero, the plan is still ten years too late for a pathway aligned with 1.5C. To get on track for economy-wide net zero by 2050, Indonesia should fully phase out unabated fossil fuels by 2040 and target a net zero electricity sector by that date.

In our commentary on the IEA report, we explained that it is possible for Indonesia to decarbonise its power sector by 2040 and provide a sustainable, affordable and secure energy supply. It just needs integration of government vision, political commitment and implementation.

Accelerating renewables this decade

The JETP sets out an ambitious new target of 34% renewable electricity by 2030. The natural next question: is this achievable?

As of 2021, Indonesia generates around 12% of its electricity from renewables, including 6% hydro, 5% geothermal, and less than 1% from solar, wind and bioenergy.

Solar in particular can be very quick to deploy. Viet Nam provides good lessons for Indonesia. According to Ember’s Global Electricity Review, in just two years, from 2019 to 2021, the share of wind and solar rose from 3% to 11%, whilst the share of fossil fuels fell from 73% to 63%. Similarly, in the Netherlands, the share of wind and solar rose from 14% to 25% in just two years, and in Australia, wind and solar rose from 13% to 22%.

No New Coal

We can assume that the current pledge would see no new coal plants built after the current pipeline to 2030.

There are 14 GW of new plants in the PLN 2021-2030 project pipeline, as defined by the Electricity Supply Business Plan (Rencana Umum Penyediaan Tenaga Listrik [RUPTL]). After this, the Indonesian government and PLN have stated that no new coal capacity should be built.

This is consistent with the IEA’s analysis that shows how there should be no new coal after the current pipeline in order to put Indonesia on track for a net zero electricity sector in 2050.

However, for a faster, 1.5C-aligned transition, the IEA shows that Indonesia should build no new coal after 2024.

JETP should be the final piece of Indonesia’s puzzle to accelerate its energy transition. According to the IEA, Indonesia needs to triple energy investment by 2030 from today’s level, equal to USD 8 billion annually, to achieve its 2060 Net Zero target. This JETP deal therefore came at a critical moment for Indonesia to accelerate the clean energy transition and move away from coal. The next critical step is to ensure its implementation in a transparent and inclusive manner so it can be implemented properly, guarantee the effectiveness, and help provide a much-needed framework for the country.