A research project titled “Towards a Just Energy Transition in Indonesia” was carried out in close partnership with the Technical University of Denmark, University of Indonesia, Prasetiya Mulya University, the Dala Institute, and the University of Cape Town. Running from 2022 to 2024, it was funded by the Ministry of Foreign Affairs of Denmark and administered by the DANIDA Fellowship Centre.
This policy brief synthesizes findings from three key papers. The papers focus on Indonesia's energy transition, specifically on three aspects: (1) how removing market distortions affects decarbonization pathways in the power sector; (2) barriers to renewable energy procurement; and (3) a comparison of Indonesia's and South Africa's energy financing issues within Just Energy Transition Partnership (JETP) initiatives.
The study draws insights from Indonesia's energy modeling using the TIMES (The Integrated MARKAL–EFOM System) framework. It also includes seventeen in-depth interviews and a focus group discussion with a diverse range of stakeholders, such as government officials, off-taker companies, developers, associations, financers, and experts, along with a review of JETP-related documentation.
The project's scientific output includes nine journal papers, scheduled for publication in top-tier international journals, three of which directly address the themes covered in this policy brief.
Key Messages
- Not a single policy but a combination of policies is needed to increase the relative competitiveness of renewables to accelerate power sector decarbonization.
- Lack of a credible renewable energy procurement program is the main obstacle to private investment in the Indonesian green energy transition.
- The JETP Investment Plans are tailored to each country's needs and provide Indonesia an opportunity to overcome its specific barriers to the green energy transition.
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