Wednesday, 16 August 2023
National Strategic Environmental and Social Assessment (SESA) Workshop for Energy Transition Mechanisms in Indonesia
Head of Provincial Bappeda. East Kalimantan, Mr. Yusliando, accompanied by the Head of Economics and Natural Resources, Mr. Wahyu Gatut Purboyo, attended the National Strategic Environmental and Social Assessment (SESA) Workshop at the Grand Melia Hotel Meeting Room, Jakarta.
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In implementing sustainable development goals and achieving the Nationally Determined Contribution Target (NDC), the government is committed to increasing the portion of renewable energy in order to achieve the renewable energy mix target in the electricity sector. Based on the NDC Mitigation Roadmap, the energy sector requires the largest portion of funding compared to other sectors.
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To achieve the Net Zero Emission (NZE) target in 2060 or accelerated, Indonesia has prepared a road map towards a clean energy transition. In implementing this roadmap, there are at least three important things that need to be considered to achieve a just and affordable energy transition. First, financing to stop operating coal power plants early (coal early retirement) in order to switch to renewable energy sources. Second, funding for investment in the renewable energy sector. Third, the energy transition mechanism needs to pay attention to and consider the environment and socio-economic impacts as a form of just and affordable transition.
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In terms of coal early retirement activities and the provision of renewable energy generation, fiscal support is needed through the provision of funding and financing frameworks that can increase the effectiveness and efficiency of APBN utilization in an effort to attract other funding sources legitimate. To accommodate this, the Indonesian Government, supported by the Asian Development Bank (ADB), is currently developing the Energy Transition Mechanism (ETM) program framework. ETM is a financing mechanism to accelerate the energy transition process in Indonesia by stopping the operation of coal-fired power plants (PLTU) early and replacing them with renewable energy. ETM aims to create a coordinated and integrated funding and financing framework involving the public and private sectors, as well as combining the de-risking facilities needed to support the accelerated energy transition in the electricity sector and increase the proportion of renewable energy in the electricity energy mix.
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