INDONESIA

Accelerating the Just Energy Transition

In the past year, Indonesia has set ambitious targets to reduce greenhouse gas emissions by 29-41% by 2030 and achieve carbon neutrality by 2060. To meet these goals, Indonesia has committed to decommission coal-fired power plants by 2050 and cancel some coal projects currently in development.

INDONESIA

Accelerating the Just Energy Transition

In the past year, Indonesia has set ambitious targets to reduce greenhouse gas emissions by 29-41% by 2030 and achieve carbon neutrality by 2060. To meet these goals, Indonesia has committed to decommission coal-fired power plants by 2050 and cancel some coal projects currently in development.

This is a step in the right direction as Indonesia has one of the most coal-dependent power sectors in the world. It has the world’s 6th largest fleet of operational coal-fired power plants which produce 63% of the country’s electricity.91

To expedite the process and quickly transition to cleaner sources of energy, Indonesia needs an improved enabling environment for renewable energy deployment and greater access to capital. New financial solutions are needed to attract the concessional capital that will enable Indonesia to replace existing coal-fired power with clean energy sources.

With support from the Alliance and partners like the Asian Development Bank, the government of Indonesia is currently establishing an Energy Transition Mechanism (ETM) Country Platform. The intention behind the ETM is to help shorten the economic lives of coal-fired power plants, accelerate investments in renewable energy, and re-skill workers so that their livelihoods are protected. The ETM is designed to serve as a platform to plan, coordinate, and mobilize capital from a variety of sources to finance the early retirement of coal-fired power plants.

There is a broad need, in Indonesia and beyond, for new climate finance mechanisms that can help accelerate the transition away from coal. To facilitate this needed finance, the Indonesian government, the Alliance, and partners are developing a new approach to monetizing avoided carbon emissions associated with the early retirement of coal-fired power plants. A successful pilot project in Indonesia offers the potential to replicate across other coal-reliant countries such as India and South Africa.

To expedite the process and quickly transition to cleaner sources of energy, Indonesia needs an improved enabling environment for renewable energy deployment and greater access to capital. New financial solutions are needed to attract the concessional capital that will enable Indonesia to replace existing coal-fired power with clean energy sources.

With support from the Alliance and partners like the Asian Development Bank, the government of Indonesia is currently establishing an Energy Transition Mechanism (ETM) Country Platform. The intention behind the ETM is to help shorten the economic lives of coal-fired power plants, accelerate investments in renewable energy, and re-skill workers so that their livelihoods are protected. The ETM is designed to serve as a platform to plan, coordinate, and mobilize capital from a variety of sources to finance the early retirement of coal-fired power plants.

There is a broad need, in Indonesia and beyond, for new climate finance mechanisms that can help accelerate the transition away from coal. To facilitate this needed finance, the Indonesian government, the Alliance, and partners are developing a new approach to monetizing avoided carbon emissions associated with the early retirement of coal-fired power plants. A successful pilot project in Indonesia offers the potential to replicate across other coal-reliant countries such as India and South Africa.

Indonesia’s energy transition plan also extends to the phase-out of diesel generators installed in 2,130 locations across Indonesia. The alliance seeks to accelerate the replacement of diesel generators with renewables by partnering with the government, state utility, private sector, and an alliance partner.

Footnotes

  1. Source: IEA, “Global energy crisis shows urgency of accelerating investment in cheaper and cleaner energy in Africa”; available at: https://w/ww.iea.org/news/global-energy-crisis-shows-urgency-of-accelerating-investment-in-cheaper-and-cleaner-energy-in-africa
  2. Source: Tracking SDG7 – SDG 7.1.1 Electrification Dataset; available at: https://trackingsdg7.esmap.org/downloads
  3. Source: Tracking SDG7 – SDG 7.1.1 Electrification Dataset; available at: https://trackingsdg7.esmap.org/downloads
  4. Source: IEA, SDG7: Data and Projections; available at: https://www.iea.org/reports/sdg7-data-and-projections
  5. Source: Tracking SDG7 – SDG 7.1.1 Electrification Dataset; available at: https://trackingsdg7.esmap.org/downloads
  6. Source: SEforAll “Lasting Impact: Sustainable Off-Grid Solar Delivery Models to Power Health and Education” (2019), available at: https://www.seforall.org/publications/lasting-impact-sustainable-off-grid-solar-delivery-models
  7. Source: 60_decibels: Uses and Impacts of Solar Water Pumps; available at: https://storage.googleapis.com/e4a-website-assets/Use-and-Impacts-of-SWPs-July-2021-v2.pdf
  8. Source: Authors’ calculations assuming average-sized smartphone battery (4,000 mAh, 3.8V; 15 Wh) and average electricity rates in the US and Europe ($0.15- $0.30 per kWh) vs. typical charging service cost in developing contexts.
  9. Source: IFC, The Dirty Footprint of the Broken Grid, 2019; Available at: https://www.ifc.org/wps/wcm/connect/industry_ext_content/ifc_external_corporate_site/financial+institutions/resources/dirty-footprint-of-broken-grid
  10. Source: IFC, The Dirty Footprint of the Broken Grid, 2019; Available at: https://www.ifc.org/wps/wcm/connect/industry_ext_content/ifc_external_corporate_site/financial+institutions/resources/dirty-footprint-of-broken-grid
  11. Source: World Bank, Underutilized Potential: The Business Costs of Unreliable Infrastructure in Developing Countries, 2019; Available at: https://elibrary.worldbank.org/doi/10.1596/1813-9450-8899
  12. Source: World Bank Enterprise Surveys; available at: https://www.enterprisesurveys.org/en/enterprisesurveys
  13. Source: Authors’ calculations, leveraging Tracking SDG7 – SDG 7.1.1 Electrification Dataset, IEA per capita electricity consumption data
  14. Source: Energy for Growth Hub, The Modern Energy Minimum; Available at: https://www.energyforgrowth.org/wp-content/uploads/sites/4/2019/01/FULL-Modern-Energy-Minimum-final-Jan2021.pdf
  15. Source: Authors’ calculations, leveraging US EIA data for US historicals, IEA per capita electricity consumption data, and World Bank country designations.
  16. Source: IEA Data Browser, Available at: https://www.iea.org/data-and-statistics/data-tools/energy-statistics-data-browser
  17. Source: Authors’ calculations based on regression analysis of per capita GDP and electricity consumption data vs. HDI score
  18. Source: Authors’ calculations, leveraging IEA per capita electricity consumption data, IEA residential share of electricity consumption data, and UN DESA World Population Prospects 2022 medium variant projections (all publicly available).
  19. Source: IEA Data Browser, Available at: https://www.iea.org/data-and-statistics/data-tools/energy-statistics-data-browser
  20. Authors’ calculations based on IEA, Tracking Transport 2021, available at: https://www.iea.org/reports/transport
  21. Solar PV indirect emissions occur during the manufacturing, distribution, installation, and disposal of systems component
  22. Source: IRENA, Power Generation Costs, 2021; Available at: https://www.irena.org/publications/2022/Jul/Renewable-Power-Generation-Costs-in-2021
  23. Source: Bloomberg New Energy Finance, “Battery Pack Prices Fall to an Average of $132/kWh, But Rising Commodity Prices Start to Bite”, available at: https://about.bnef.com/blog/battery-pack-prices-fall-to-an-average-of-132-kwh-but-rising-commodity-prices-start-to-bite/
  24. Source: IEA, Annual energy storage additions by country, 2015-2020; available at: https://www.iea.org/data-and-statistics/charts/annual-energy-storage-additions-by-country-2015-2020
  25. Source: Author’s calculations leveraging NREL’s U.S. Solar Photovoltaic System and Energy Storage Cost Benchmarks: Q1 2021
  26. Source: Rockefeller Foundation, Electrifying Economies; Available at: https://www.rockefellerfoundation.org/rf-microsites/electrifying-economies/
  27. Source: SEIA, “Solar Industry Research Data”; available at: https://www.seia.org/solar-industry-research-data
  28. Source: Ember Data Explorer; available at: https://ember-climate.org/data/data-explorer/
  29. Source: Author modeling leveraging data from CAIT and assuming that OECD countries reach net zero by 2050, emerging economies by 2060, and energy-poor countries by 2070, with emissions growth reversed in the latter by 2040
  30. Source: Author modeling leveraging data from CAIT and assuming that emissions grow at a CAGR of 2.8 percent per year through 2050 and 1.4 percent in the following decade, only beginning to decrease starting in 2060.
  31. Source: Author’s calculations based on OPEC crude oil reserves of 267 billion barrels and and 0.3714 tCO2/barrel from ‘Carbon Majors: Accounting for Carbon and Methane Emissions 1854-2010 – Methods & Results Report’

 

GEAPP Program and Partner Project Highlights

  1. Source: Benchmarking Distribution Utilities in India, October 2020, SPI & Niti Aayog; Available at: https://smartpowerindia.org/wp-content/uploads/sites/4/2021/07/WEB_SPI_Electrification_16.pdf
  2. Source: Rooftop Solar final render; Available at: https://www.youtube.com/watch?v=4wwvbXpuWgs
  3. Source: Rooftop Solar final render; Available at: https://www.youtube.com/watch?v=4wwvbXpuWgs
  4. Source: SPI Customer Report; Available at: https://smartpowerindia.org/smart-power-india-launches-its-report-on-rural-electrification-in-india/
  5. Source: Health Effects of Diesel Exhaust; Available at: https://www.cancer.org/healthy/cancer-causes/chemicals/diesel-exhaust-and-cancer.html ; https://erj.ersjournals.com/content/17/4/733 ; https://oehha.ca.gov/air/health-effects-diesel-exhaust
  6. Source: SPI Deployment estimates
  7. Source: ESMAP, Nigeria Tracking SDG 7, available at: https://trackingsdg7.esmap.org/country/nigeria
  8. Authors’ calculation based on IEA 2019 data
  9. Source: FAO,  Nigeria at a Glance, available at: https://www.fao.org/nigeria/fao-in-nigeria/nigeria-at-a-glance/en/
  10. Source: National Bureau of Statistics, available at: https://www.nigerianstat.gov.ng/
  11. Source: IFC, The Dirty Footprint of the Broken Grid, 2019; Available at: https://www.ifc.org/wps/wcm/connect/2cd3d83d-4f00-4d42-9bdc-4afdc2f5dbc7/20190919-Full-Report-The-Dirty-Footprint-of-the-Broken-Grid.pdf?MOD=AJPERES&CVID=mR9UpXC
  12. Source: IFC, The Dirty Footprint of the Broken Grid, 2019; Available at: https://www.ifc.org/wps/wcm/connect/2cd3d83d-4f00-4d42-9bdc-4afdc2f5dbc7/20190919-Full-Report-The-Dirty-Footprint-of-the-Broken-Grid.pdf?MOD=AJPERES&CVID=mR9UpXC
  13. Source: Nigeria Energy Transition Plan, available at: https://www.seforall.org/events/launch-of-nigerias-energy-transition-plan
  14. Source: International Energy Agency Energy Statistics Data Browser; Available at: https://www.iea.org/data-and-statistics/data-tools/energy-statistics-data-browser
  15. Source: International Energy Agency – South Africa; Available at: https://www.iea.org/countries/south-africa
  16. Source: South Africa Department of Energy Energy Balances 2018 (pg. 14); Available at: http://www.energy.gov.za/files/media/explained/2021-South-African-Energy-Sector-Report.pdf
  17. Source: GDP by Country; Available at: https://www.worldometers.info/gdp/gdp-by-country/
  18. Source: UNDP Climate Promise – South Africa; Available at: https://climatepromise.undp.org/what-we-do/where-we-work/south-africa
  19. Source: World Bank data; available at: https://data.worldbank.org/indicator/EG.ELC.ACCS.ZS?locations=MM. However, SPM estimates this number to be closer to 55%.
  20. Source: https://www.unfpa.org/data/world-population/MM
  21. Source: SPM: Energising Agriculture in Myanmar; available at: https://downloads.ctfassets.net/nvxmg7jt07o2/aw1dQBBaMLxivJ7jRLu4Z/716b0732a3e83bfa6c3bbe50a573f565/Final_SPM-agriculturalvaluechains-final_1.pdf
  22. Source: Fulcrum, “Myanmar’s Post-coup Electricity Woes: Stalled Power Plans, Shattered Public Trust”; available at: https://fulcrum.sg/myanmars-post-coup-electricity-woes-stalled-power-plans-shattered-public-trust/
  23. [1]Source: World Bank, Myanmar Rice and Pulses: Farm Production Economics and Value Chain Dynamics (2019); available at: https://documents1.worldbank.org/curated/en/623701579900727742/pdf/Myanmar-Rice-and-Pulses-Farm-Production-Economics-and-Value-Chain-Dynamics.pdf
  24. Source: Myint, T and Myo Thu, K – National Export Strategy (2019) Rubber Sector Strategy, 2015-2019; retrieved from https://ap.fftc.org.tw/article/2606
  25. Source: Myint, T and Myo Thu, K – National Export Strategy (2019) Rubber Sector Strategy, 2015-2019; retrieved from https://ap.fftc.org.tw/article/2606
  26. Source: Myint, T and Myo Thu, K – National Export Strategy (2019) Rubber Sector Strategy, 2015-2019; retrieved from https://ap.fftc.org.tw/article/2606
  27. Source: USAID: Rapid Market Assessment of Aquaculture Sector in Myanmar (2021); available from: https://pdf.usaid.gov/pdf_docs/PA00XCRW.pdf
  28. Source: World Data Population Comparison; Available at: https://www.worlddata.info/populationgrowth.php
  29. Source: GEAPP DREAM Initiative; Available at: https://www.energyalliance.org/news-insights/dream-initiative/
  30. Source: FAO Smallholder Farmer Data Portrait; Available at: https://www.fao.org/family-farming/detail/en/c/385074/
  31. Source: GIZ Solar Irrigation Market Analysis in Ethiopia, IWMI/FAO Suitability Framework for Solar Irrigation ; Available at: http://www.practica.org/wp-content/uploads/sites/4/2021/04/Solar-irrigation-market-Analysis-in-Ethiopia_GIZ-NIRAS-IP-Consult-PRACTICA.pdf
  32. Source: Catalyst calculations leveraging information from the Ethiopian Agricultural Transformation Agency Minigrid Viability Report.
  33. Source: Catalyst estimations leveraging World Bank Multi-tier Framework
  34. Source: Catalyst estimations leveraging GEAPP “Transforming a Billion Lives” Report; Available at: https://www.energyalliance.org/reports/
  35. Source: Catalyst estimations leveraging: CDM AMS-I.L. Electrification of rural communities using renewable energy — Version 3.0; Available at: https://cdm.unfccc.int/methodologies/DB/CCZKY3FSL1T28BNEGDRSCKS0CY0WVA, CDM AMS-I.F.Renewable electricity generation for captive use and mini-grid — Version 4.0; Available at: https://cdm.unfccc.int/methodologies/DB/VLTLVBDOD19GFSTDHAR0CRLUZ6YMGU, CDM AMS-I.B. Mechanical energy for the user with or without electrical energy — Version 12.0; Available at:https://cdm.unfccc.int/methodologies/DB/M204DLP0XMSWSZ9H4SIZ6W86M8RHCM and SE4ALL Emissions Tool; Available at: https://www.seforall.org/mini-grids-emissions-tool
  36. Source: NREL Island Energy Snapshot; Available at: https://www.nrel.gov/docs/fy15osti/62708.pdf
  37. Source: Energy Information Administration – Hawaii; Available at: https://www.eia.gov/state/?sid=HI
  38. [1]Source:Energy Information Administration – Electric Power Monthly; Available at: https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_6_a
  39. Source: The Socio-Economic Impacts of the Puerto Rico Electric Power Authority (PREPA) Restructuring Support Agreement (RSA) on the Population of Puerto Rico; Available at: https://ieefa.org/wp-content/uploads/sites/4/2019/12/PREPA-RSA-Cordero-Guzman-UTIER-REPORT-9-10-19-FIN-ENGLISH.pdf
  40. Source: The Socio-Economic Impacts of the Puerto Rico Electric Power Authority (PREPA) Restructuring Support Agreement (RSA) on the Population of Puerto Rico; Available at: https://ieefa.org/wp-content/uploads/sites/4/2019/12/PREPA-RSA-Cordero-Guzman-UTIER-REPORT-9-10-19-FIN-ENGLISH.pdf
  41. Source: Tracking SDG7 – SDG 7.1.1 Electrification Dataset; available at:https://trackingsdg7.esmap.org/downloads
  42. Source: The World Bank, “Nigeria – Food SmartCountry Diagnostic,” 2020.; Available at: https://openknowledge.worldbank.org/handle/10986/34522
  43. Source: PWC. Boosting rice production through increased mechanisation, (2018); available from: https://www.pwc.com/ng/en/publications/boosting-rice-production-through-increased-mechanisation.html
  44. Food and Agriculture Organization of the United Nations, World Food and Agriculture – Statistical Yearbook 2020. Rome, 2020. doi: 10.4060/cb1329en. ; Available at: https://www.fao.org/3/cb1329en/CB1329EN.pdf
  45. Source: Boosting rice production through increased mechanisation, (2018); available from: https://www.pwc.com/ng/en/publications/boosting-rice-production-through-increased-mechanisation.html
  46. Source: Tracking SDG7 – SDG 7.1.1 Electrification Dataset; available at:https://trackingsdg7.esmap.org/downloads
  47. Source: Prospects for Energy Efficiency in Sierra Leone’s Power Sector; Available at: https://www.energyeconomicgrowth.org/sites/default/files/2022-02/Lucas%20Davis%20working%20paper.pdf
  48. Source: Estimations based on GEAPP Jobs report multipliers and International Labour Organization Hydropower Jobs ; Available at: https://www.ilo.org/wcmsp5/groups/public/—ed_emp/documents/publication/wcms_562269.pdf
  49. Source: Catalyst calculations based on World Bank Multi-tier Framework
  50. Source: CDM AMS-I.L. Electrification of rural communities using renewable energy — Version 3.0; Available at: https://cdm.unfccc.int/methodologies/DB/CCZKY3FSL1T28BNEGDRSCKS0CY0WVA
  51. Source: CDM AMS-I.D. Grid connected renewable electricity generation — Version 18.0; Available at: https://cdm.unfccc.int/methodologies/DB/W3TINZ7KKWCK7L8WTXFQQOFQQH4SBK
  52. Source: Catalyst calculations based on Tracking SDG 7.
  53. Source: IADB Energia Hub; Available at: https://hubenergia.org/index.php/en/indicators/access-electricity-service
  54. Source: IADB Energia Hub; Available at: https://hubenergia.org/index.php/en/indicators/access-electricity-service
  55. Source: Tracking SDG 7 Report; Available at: https://trackingsdg7.esmap.org/country/malawi
  56. Source: IRENA Statistical Profiles – Malawi; Available at: https://www.irena.org/IRENADocuments/Statistical_Profiles/Africa/Malawi_Africa_RE_SP.pdf
  57. Source: Catalyst modeling based on expected improvements to power supply reliability for grid-tied customers served by the new BESS and VRE systems.
  58. Source: Catalyst modeling based on storage industry multipliers for direct BESS construction and general economy sector splits for Malawi applied to estimated employment multipliers from GEAPP’s 2021 Jobs Report.
  59. Source: Catalyst modeling based on displacement of stop-gap and backup power sources for households and businesses
  60. IEA Energy Statistics – Indonesia; Available at: https://www.iea.org/data-and-statistics/data-tools/energy-statistics-data-browser
MALAWI
Battery Storage for Grid Stability
NIGERIA
Lowering Costs for Renewable Energy Developers (DART)