On February 16th, the Government of Indonesia launched the Secretariat for the Just Energy Transition Partnership (JETP) in coordination with the co-leads of the International Partners Group (IPG), a coalition led by the United States and Japan and includes the European Union, Canada, and many other European countries. Indonesia’s energy needs received special attention during the G20 Leaders’ Summit in Bali and throughout the country’s G20 presidency, which led up to the Bali event. JETP will help coordinate the $20 billion in public and private financing to assist in Indonesia’s transition away from coal power and toward clean energy. Two weeks earlier, Indonesia’s Energy and Mineral Resources Minister said Indonesia planned to produce 695 million tons of coal and export 518 million tons in 2023. The minister also estimated Indonesia’s domestic coal consumption would decline from 193 million tons (2022) to 177 million (2023).
Why it matters: While Indonesia has committed to reduce its coal use, that hasn’t yet diminished its role as the world’s leading coal exporter. Indonesia’s coal exports to India, Japan, and South Korea increased in 2022 and the country is still building new coal power plants. A loophole in the $20 billion energy transition deal permits new coal plants if they had been previously announced or are deemed “nationally strategic projects.” Ensuring that clean power is both affordable and reliable is especially difficult for developing countries like Indonesia, where governments face continuing dilemmas in allocating scarce resources —and limited international assistance— to meet pressing needs. Considerable growth in Indonesia’s power demand forecasts adds to these difficulties by increasing the support needed to build new clean power systems while also working to reduce emissions from existing generation.