In response to the Progress Report of the Just Energy Transition Partnership (JETP) for Indonesia 2025

Response to Indonesia’sJust Energy TransitionPartnership (JETP) Raising emission reduction targets and stronger policy alignment can Published date: 24 November 2025Authors: Dr Dinita Setyawati, Dody Setiawan Stronger policies and targetspolicies are required for JETP to Indonesia will benefit from prioritising investment in renewable energy and Indonesia’s Just Energy Transition Partnership (JETP) secretariat sought publicconsultation for the Progress Report 2025. The document includes policyrecommendations to strengthen the domestic supply chain of renewable energy The JETP scenario proposes 53% of fossil fuel capacity by 2030, comprising 30% ofcoal and 23% of gas. However, increased reliance on fossils will be costly.Indonesia will benefit from prioritising investment in clean forms of flexibility, ●Captive sector:The document sets out an on-grid peaking emissionscenario starting in 2030. However, with only 1.6 gigawatts (GW) of coalpower plants being considered for early retirement and reuse, considerably less than the earlier proposition of5.5 GW in 2023, it remains ●Strengthening the regulatory framework:Responding to transitionfinance as an enabler for Indonesia’s transition to a sustainable economy- Indonesia would benefit from transition finance guidance. However, this ●Just transition enablers:The document includes recommendations toincorporate a Just Transition framework into JETP projects. At the same 1. Captive sector is a strategic coal More ambitious emission targets and coal power plants’ retirement for on-grid The JETP captive power database tracks 25.9 GW of operating captive coalcapacity in 2024. It is also projected that an additional 11 GW of capacity will beonline by 2030. To support the JETP scenario of fully phasing out coal by 2050, thedocument recommends industrial clustering around shared infrastructure, 1.1 Delivering energy transition in a captive market With stringent regulation, the captive market can be a strategic sector todecarbonise. In the on-grid sector, electricity tariffs need to be kept artificiallylow due to a government mandate. To maintain the low tariffs, the country Replacing coal with renewables in the off-grid system—on-site or dedicatedrenewable energy systems for industrial users—represents a significant There are496.3 GWp of solar PV potential and 8.1 GW of onshore wind potential across all captive power areas. These plant locations exhibit strong solarpotential, with capacity factors ranging from12% to 18%. Beyond the MEMR We estimate that 6.8 GW of ageing captive coal plants could integrate 9.4 GW ofnew solar capacity, phasing down coal operations to 4.4 GW. This shift would cutemissions by 35%, about 4.4 megatonnes of carbon dioxide equivalent (MtCO2e), In comparison, JETP captive scenario models captive solar PV rises from lessthan 1 GW in 2024 to reachover 16 GW in 2030 and 30 GW in 2040. This approach can be financially viable in sectors like aluminium smelting, thesecond-largest user of captive coal after nickel in Indonesia. While initial solar To further reduce coal use, heavy industries should adoptdemand-side flexibilityby shifting more electricity consumption to solar hours. This enablesgreater useof solar power,whether from captive systems or the grid, cutting reliance on 1.2 The inclusion of captive in the peaking emission target The Indonesian government releaseda second NDCin 2025 that projectsemission for the whole energy sector between 1,072 - 1,311 MtCO2e by 2030, under The JETP scenario on-grid targets an emission level of <250 MtCO2e (peak) by2030, with a baseline emission of 236.5 MtCO2e, a reduction of 13.5 MtCO2e fromthe 2023 baseline. Further, the scenario recommends integrating 7 GW of captive The JETP captive scenario implements continuous emission reduction, beyondthe 35% reduction requirement of Presidential Regulation 112/2022, within its firstten years of operations. The captive power emissions decline from an estimated Evidently, these numbers are way above the cap of power sector emissions at290 MtCO2e, as announced in 2023, and slightly below the baseline value of 357MtCO2e.The Business-as-usual (BAU) scenario reflects higher emissions levels, if 8.6 GW of captive coal capacity additions, 16 GW of solar, 2.9 GW of gas, 2.5 GWof hydro, and 1 GW of bioenergy. Ultimately, JETP provides a mechanism for legislative advancement and should 2. Leveraging JETP’s influence to help the Policy focus on clean energy can revamp Indonesia’s power sector toward a The JETP Secretariat is tasked to serve as a “delivery unit” for priority projects,shifting its role from facilitation to operational execution, and acting as theprimary contact point for projects and financing. The Secretariat is developing a Achieving JETP objectives and aligning with the CIPP scenario will requirecomprehensive policy actions. This includes expanding policy recommendations On the supply side, several structural reforms are essent