INDONESIAN COAL INVESTMENT $20 BLN
ENERDATA - 17 Nov 2022 - A coalition of countries led by the United States and Japan have pledged to mobilise US$20bn of public and private financing to help Indonesia shut its coal-fired power plants and bring forward the peak greenhouse gas (GHG) emissions date of its power generation sector by seven years, to 2030.
The Indonesia Just Energy Transition Partnership (JETP), which will be financed over a period of 3 to 5 years, is also backed by Canada, Denmark, the EU, France, Italy, Germany, Norway and the UK. The Indonesia JETP is based on the US$8.5bn initiative that was launched at the COP26 in 2021 in order to help South Africa accelerate the decarbonisation of its power sector.
To receive the pledged grants, Indonesia has committed to capping power sector emissions at 290 MtCO2eq by 2030, with a peak that year, down from a business-as-usual (BAU) baseline scenario of 357 MtCO2eq. The plan also includes Indonesia adopting a goal to reach net zero GHG emissions in the power sector by 2050, instead of the current 2060 target. In addition, it will require an accelerated build-out of renewable energy so that 34% of the country’s electricity will be generated by renewable sources by 2030.
In September 2022, Indonesia had unveiled its new updated nationally determined contribution (NDC) under the Paris Agreement, which increases the country’s 2030 GHG emission reduction target from 29% to 31.89% (unconditionally) and from 41% to 43.2% (conditionally), compared to a BAU scenario.
At the end of 2021, coal represented 50% of Indonesia’s installed capacity with 39.5 GW and 62% of its power generation with 190 TWh. Renewables represented 15% of the country’s installed capacity and 18% of its power generation.
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