Indonesia cites financing, feasibility as reasons for rejecting G20 energy proposal

Ministry special staffer Yudo Dwinanda Priaadi said such a target could only be achieved if issues of accessibility, technology and financing were resolved.

Deni Ghifari

Deni Ghifari

The Jakarta Post


Coal power: Smoke and steam billow from a coal-fired power plant owned by Indonesia Power in Suralaya, Banten province, on July 10, 2020. (Reuters/Willy Kurniawan)

July 26, 2023

JAKARTA – Indonesia is standing with a group of countries opposed to a joint Group of 20 commitment to triple renewable energy capacity by 2030, mainly because of concerns about financing and feasibility.

The Indonesian delegates to the 14th G20 Clean Energy Ministerial Meetings in Bambolim, India, were Energy and Mineral Resources Minister Arifin Tasrif and ministry special staffer Yudo Dwinanda Priaadi.

The latter confirmed to The Jakarta Post that Indonesia had rejected the 2030 proposal, saying that such a target could only be achieved if issues of accessibility, technology and financing were resolved.

He added that Indonesia had tabled those issues with the G20 last year. Indonesia chaired the G20 in 2022, before passing the torch to India. Brazil will lead the forum next year.

“When we are talking about such things, [they are related to financing]. That is important, so it becomes realistic, not just empty promises,” Yudo said on Monday.

“If you back us up with the US$100 billion you promised, we would welcome the plan to accelerate [the energy transition]. But if you’re only talking about targets without adequate financial resources, it’s not that we don’t agree, it’s just less [feasible],” he added.

He explained that Indonesia and other G20 member countries had been granted flexibility for setting their own road maps for the energy transition, because each had unique conditions in terms of resources, human capital and regulations.

The ministry official pointed out that Indonesia had a road map to reach its net-zero emissions target by 2060, and the current pace was still in line with that, regardless of any commitment to triple renewable use by 2030.

G20 member countries account for more than 75 percent of global emissions and gross domestic product, giving the group a large responsibility for fighting climate change.

Signatories to the Paris Agreement, an international treaty on climate change, have committed themselves to limiting global warming to 1.5 degrees Celsius, and a study published by the International Energy Agency (IEA) suggests that tripling renewable energy capacity by 2030 is crucial to reaching that target.

The four-day meeting in Bambolim referenced that study and, in addition to hiking the use of renewables, it also put phasing out fossil fuels at the forefront of climate action; on which the G20 members also failed to reach a consensus.

Reuters reported that officials had disagreements over curbing the “unabated” use of fossil fuels and argued over the language to describe the pathway to cut emissions.

Yudo revealed that Indonesia was one of the member countries that had contested this, saying that “what we will phase down” is the use of unabated fossil fuels and apply abatement principles to high-emitting fuels, such as coal.

Indian Power Minister RK Singh, in a press briefing after the conference, said some countries wanted to use carbon-capture and storage (CCS) technology instead of phasing-out of fossil fuels, citing Reuters.

Installing CCS technology on existing coal plants is the “easiest thing to do” to cut emissions, according to Yudo.

Begging to differ, Institute for Essential Services Reform (IESR) executive director Fabby Tumiwa told the Post on Monday that relying on CCS technology was risky, “given that CCS for power plants is still unproven”.

Read also: Experts doubtful about RI’s plan on carbon capture

He also pointed out that using CCS for coal power plants would be significantly more expensive than jumping straight to renewables, as the cost of capturing and storing carbon amounted to as much as $100 per tonne, on top of the coal used for producing electricity.

Assuming market prices, electricity costs 12 to 16 US cents per kilowatt-hour (kWh) for coal power plants, while it costs only 10 to 11 US cents for solar panels, said Fabby.

In Indonesia, however, coal-powered electricity costs only 5 to 6 US cents per kWh today, thanks to the domestic market obligation (DMO) that compels mining firms to sell a portion of their coal in the home market at lower prices.

Greenpeace Indonesia climate and energy campaigner Adila Isfandiari agreed that CCS was not a cheap technology, pointing out that levelized cost of electricity (LCOE) from coal-fired power plants would spike by 70 percent if it included CCS.

“Economically, [CCS] does not add up, and in terms of scale, how much CCS are we planning to build?” Adila said, emphasizing that Indonesia had too many coal power plants to make CCS a viable strategy to reduce carbon emissions.

Both Fabby and Adila said it was “unfortunate” that Indonesia rejected a G20 commitment to tripling renewable energy capacity by 2030.

The former interpreted the move as Jakarta being careful not to place itself in a pickle, given that such a commitment would be hard to fulfill considering today’s state of Indonesian electricity production, while the latter said the government had to try, since the country would face more difficulties in getting green project financing otherwise.

To acquire Just Energy Transition Partnership (JETP) funds, Indonesia is required to ramp up its renewable energy-generating capacity to 34 percent of nationwide capacity, or to some 30 to 35 gigawatts.

That translates to as much as 3 to 4 GW of new capacity per year. However, from 2015 to 2022, the country only managed to increase it by 2 GW a year, said Adila.

On one hand, she expressed understanding for the financing problems cited by Indonesia, considering that JETP funding was uncertain to date. On the other, she said Jakarta needed to reconsider many regulatory commitments.

Read also: ‘Show me the money’: RI frustrated with green financing deadlock

The “government is doing the [energy transition] half-heartedly,” Adila told the Post on Monday, adding that the carbon-reducing commitments were insufficient, giving many coal-fired power plants the go-ahead as well as pushing for “false solutions” such as co-firing.

In a comment to the Post, the United States Embassy in Jakarta appeared to concede that countries could pursue different paths to their Paris Agreement commitments.

“As Secretary [of State Antony] Blinken has said, every G7 country has adopted plans that, if implemented, would hold global warming to 1.5 degrees Celsius. The United States continues to encourage other countries to adopt the necessary targets and develop plans to achieve them,” embassy spokesperson Michael D. Quinlan told the Post on Monday.

scroll to top