JETP estimates Indonesia requires $92 billion for decarbonising the captive power sector by 2050
In a recent report, the Just Energy?Transition Partnership stated that Indonesia will need to invest an estimated $31 Billion by 2030 and a total $92 Billion by 2050 in order to switch?to a greener energy sector in its captive power sector.
In recent years, the captive power sector in Southeast Asia, which includes?electricity production?developed by industry for its own use, has expanded rapidly, especially in nickel industrial estates.
According to the report, Indonesian JETP Secretariat estimates that captive power will reach 25,9 GW by 2024. Over 75% of this capacity is powered by coal. Nearly 11 GW is in various stages and will use coal.
According to the report, estimated investments up to 2030 will be focused on battery storage and deployment of renewable energy, led by hydropower and solar PV. The report also suggested switching to gas in some cases as a fuel, improving systems and integrating renewables.
The report stated that this adoption would result in 75% lower emissions of carbon in 2030 than a baseline scenario. The captive sector had been excluded from Indonesia's decarbonisation plan for 2023 under JETP. This was a G7-backed initiative that was designed to help developing countries reduce carbon emissions. The U.S. pulled out of its JETP agreements with Indonesia, South Africa, and Vietnam earlier this year.
The JETP Captive scenario report is not a legally binding document but is usually produced in conjunction with government officials. Indonesia, a coal-producing country, has received over $20 billion in financing pledges through the JETP scheme. However, deployment has been slow.
The report stated that "as the JETP fund represents only a small fraction of the total investment requirements, realizing the outlook requires a much larger funding from multiple sources of capital."
Separately the JETP Secretariat estimated that $97 billion in investment was needed by 2030 to clean up Indonesia’s main on-grid power sector.
(source: Reuters)
