Jakarta, February 22, 2023. In response to the recent announcement of the Just Energy Transition Partnership (JETP) secretariat, the Ministry of Energy and Mineral Resources (MEMR) has revealed intentions to integrate fossil gas power plants into the JETP funding scheme. This funding initiative, backed by member countries of the International Partners Group (IPG), has pledged to allocate US$20 billion towards supporting Indonesia’s efforts to achieve decarbonization goals.
MEMR stated that a proposed fossil gas power plant project would replace existing diesel power plants (PLTD) with assertions that this shift will result in significant emissions reductions.
Andri Prasetiyo, a researcher and program manager at Trend Asia, argued that The government’s proposed shift from diesel power plants (PLTD) to other fossil energy sources, such as gas, specifically as part of the JETP energy transition initiative, would be regressive and could impede the country’s ability to achieve its decarbonization target.
According to the 2021-2030 National Electricity Supply Business Plan (RUPTL), Indonesia has a total of 5,200 power plants using diesel, which are spread across 2,130 locations. The de-dieselization process outlined in RUPTL will be implemented in two stages. The first stage involves converting 200 areas with a combined capacity of 225 MW. The second stage will expand the conversion with a total capacity of 1.2 GW. However, Andri has expressed concern that converting thousands of diesel-powered plants to gas could undermine the country’s energy transition plan.
“There is a considerable risk that JETP will not make a substantial contribution towards Indonesia’s goal of achieving decarbonization by 2030 and Net Zero Emissions faster by 2050,” added Andri.
In addition, Grita Anindarini, Deputy Director of the Indonesian Center for Environmental Law (ICEL), explained that including fossil gas in the de-dieselization strategy could hamper Indonesia’s efforts in limiting emissions within the electricity sector to a maximum of 290 million tons of CO2 by 2030. This target represents 67 million tons of CO2 reduction, compared to business as usual conditions (BaU) of 357 million tons of Co2.
Fossil gas power plants have a significant contribution to methane gas. The report “Gas Problems in Indonesia” reveals that when fossil gasses are produced, transported, and consumed, large amounts of methane will come out and cause greenhouse gas emissions (Trend Asia, 2020).
“The IPCC’s 6th Assessment Report has emphasized that to achieve the 1.5 degrees target, we must reduce one-third of the total methane available, which equates to a 34% decrease in current methane emissions. The IPCC report also stated the need to achieve a 51% decrease in methane emissions by 2050 to curb rising temperatures. This proposed conversion plan is not in line with the IPCC’s directives for significant methane reductions,” said Grita.
Meanwhile, the Indonesian government had previously signed the Global Methane Pledge during the COP26 event in Glasgow. As a signatory to this pledge, Indonesia has pledged to take voluntary action to contribute to the collective effort to reduce global methane emissions by at least 30 percent from 2020, which could eliminate more than 0.2 degrees Celsius of warming by 2050.
In addition to environmental problems, gas is not a cost-effective energy source. It is characterized by high volatility, and exorbitant costs, and even at the average Levelized Cost of Electricity (LCOE) level, it is more expensive than renewable energy. “The policy of converting PLTD to gas will close the space for renewable energy development, whose achievements are still too small, as they currently account for a mere 12 percent of the country’s total energy mix,” warns Bondan Andriyanu, Climate and Energy Campaigner at Greenpeace Indonesia.
According to Bondan, this plan will become a stumbling block in accelerating the achievement of renewable energy implementation by at least 34 percent in 2030, as targeted at the beginning of the JETP agreement.
“With the entry of gas to replace PLTD, it also reflects that the government is still half-hearted in carrying out the energy transition,” he added.
Indonesia’s renewable energy mix has decreased to 10.4 percent at the end of 2022, prompting the need to prioritize adding renewable energy sources instead of relying on fossil gas. Notably, Indonesia has committed to achieving 23 percent renewable energy by 2025 as stipulated in the Nationally Determined Contribution (NDC) and 34 percent by 2030 based on the mark in JETP.
Andri warns that adding fossil gas energy infrastructure could ultimately result in a stranded asset and pose an unnecessary drain on public funds.
Therefore, he stressed that “the G7+ countries and JETP funding entities have to strictly prohibit JETP funds for fossil gas projects and instead prioritize the budget towards renewable energy projects that can accelerate Indonesia’s effort in achieving net-zero emissions target.
Finally, Suriadi Darmoko, campaigner of 350 Indonesia, called attention to two critical shortcomings in Indonesia’s JETP: the absence of comprehensive information disclosure and limited participation of civil society in the JETP secretariat. These inadequacies represent significant weaknesses in the current JETP implementation plan in Indonesia.
Suriadi asserted that ensuring comprehensive information disclosure and adequate civil society participation would facilitate practical monitoring efforts to achieve a just energy transition. “Without civil society oversight, policies contravene the JETP framework, such as de-dieselization with fossil gas, will trap Indonesia’s decarbonization strategy in dangerous false solutions and perpetuate the country’s dependence on fossil fuels,” concluded Suriadi.
Andri Prasetiyo, Researcher and Program Manager of Trend Asia, +62 878-8345-3112
Grita Anindarini, Deputy Director of ICEL, [email protected] , +62 813-8277-7068
Bondan Andriyanu, Climate and Energy Campaigner, Greenpeace Indonesia, [email protected]
Suriadi Darmoko, Campaigner of 350 Indonesia, +62 857-3743-9019