It sounds eerily familiar..Indonesia is the latest to slam the brakes on a multi-billion effort to decarbonize its electrical grid and reach net-zero by 2050..On Wednesday, the southeastern Asian nation — which is also the world’s largest coal exporter — pushed back the implementation of the ‘Just Energy Transition Partnership’ (JEPT) made with G20 nations including the US, Japan and Canada in November of last year..An initial instalment of US$20 billion in private and government spending to decarbonize its electricity grid was due this year. Cost estimates to reach net-zero by 2050,10 years ahead of schedule, are on the order of $3.5 trillion according to data advisory BloombergNEF..But the policy centrepiece of President Joko Widodo — who implemented new electricity regulations by Presidential Decree — has been marred by public opposition and other stakeholders over the cost and allocation of grants as opposed to loans..The JETP model combines public and private investments to assist with climate financing for developing countries, particularly to transition energy generation away from fossil fuels, as a way of providing redress to poorer nations under the Paris Accord. .Indonesia is only the second country to receive funding under the agreement; the first was South Africa at the COP26 Summit in 2021. Vietnam and India are expected to be the next recipients. .In addition to government funding, loans from international institutions such as the World Bank will account for a portion of the public financing..Some of the conditions for the money include a commitment to cap electricity sector emissions and effectively double renewable electricity sources to 34% of power generation by 2030 while retiring coal-fired power plants and accelerating energy efficiency and electrification technologies such as EVs..Indonesia had previously committed to being carbon neutral by 2060 and generating 23% of its electricity from renewable sources by 2025. That figure presently sits at just 12% while coal accounts for 60%..In September 2022, Erick Thohir, Indonesia’s Minister for State-Owned Enterprises, said that retiring 15 gigawatts of coal generation over the next three decades will cost upwards of US$600 billion..“Given Indonesia’s current state of economic development, this effort can only be achieved with international support,” said Rachmat Kaimuddin, the country’s deputy coordinating minister for maritime affairs and investment. “Therefore it’s essential that the ambition and support are aligned on all aspects.”
