Indonesia Hastens Switch To Renewable Energy With $20 Billion Investment

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Indonesia is currently optimistic about a national renewable energy strategy. According to sources, Indonesia signed the $20 billion Just Energy Transition Partnership (JETP) agreement with nations that involves public and private financing of renewable energy projects. The agreement was inked at the G-20 Summit in Bali with nations including the United States and Japan.

The nation hopes to complete the plan in six months by making investments that would hasten the switch from a fossil fuel-based power supply to one based on renewable energy.

The new RE plan will contribute to the creation of policy reforms to remove regulatory hurdles in the energy sector in order to increase private investment in the RE segment, according to Rachmat Kaimuddin, the Indonesian Deputy Minister who is overseeing the follow-up of the JETP transaction.

He added that Indonesia seeks to invest in renewable energy sources that will increase the employment of domestic materials. According to reports, Rachmat stated that the Indonesian government will hammer out the specifics and establish standards for the following six months to assure the deal’s success.

The strategy is anticipated to facilitate a seamless energy transition for Indonesia over the next five years and contribute to efforts to address climate change. 

Additionally, he stated that the funds will be used to expand the transmission network, capacity, and storage of renewable energy, with the primary goal to replace fossil fuel-based power facilities with renewable energy sources.

Coal is the predominant fossil fuel in the nation today, providing 80% of the country’s energy. As part of the JETP agreement, Indonesia is considering closing many coal-fired power stations far before the end of their useful lives.

However, it won’t be an easy task, as according to reports, early coal plant retirement would cost money, but a just transition to renewable energy will also aid in employment transition.

In accordance with the Paris Agreement, Indonesia is carrying out its Intended Nationally Determined Contributions (INDC) to grow its economy while pursuing net-zero carbon targets.

This promise is noteworthy in light of Indonesia’s yearly per capita carbon dioxide emissions from burning fossil fuels, which are 2.3 tonnes, Mr. Rachmat noted. This is far less than the 14 to 15 tonnes, found in some developed countries.

Despite this, Indonesia is committed to attaining net-zero emissions by 2060, according to the Minister. He further added, that Indonesia is one of the world’s largest archipelago nations and will probably be among the first to feel the effects of worsening global warming.