Communities impacted by a multi-billion-dollar climate deal to help Indonesia shift from polluting coal power to renewable energy are at risk of losing out because they have had limited involvement in planning the transition so far, analysts warned.
Earlier this month, Jakarta published a plan for how it will slash planet-heating emissions from its power sector under a US$20-billion Just Energy Transition Partnership (JETP) backed by wealthy nations - welcomed as a good start by energy experts.
But the plan does not address the potential consequences of the proposed emissions-cutting measures for coal workers and local people, said Tommy Pratama, executive director of Traction Energy Asia, an Indonesian policy think-tank.
“There is nothing ‘just’ about JETP Indonesia yet - and it’s also clear that (planners) do not have a clear idea of what a ‘just’ approach entails,” he said.
“Hopefully that will come after proper consultation with the NGOs and affected communities,” he told Context.
Late last year, a group of rich nations pledged public and private finance to help Indonesia retire its coal power plants sooner than planned - similar to other pacts with South Africa, Vietnam and Senegal that offer financing to help emerging economies cut greenhouse gas emissions in their energy sectors.
Analysts said ensuring the success of Indonesia’s JETP will require a process that limits harm for local communities where jobs could be lost in coal mining and coal power production, and that aims to bring them benefits from clean energy development.
Today, nearly 85 per cent of electricity in the sprawling archipelago is generated from fossil fuels, the bulk of it from coal-fired plants - hurting national climate goals and causing deadly air pollution.
The JETP plan authors - who spoke with 40 civil society groups in June - acknowledged the need to “strive” for a just transition and to consult “relevant stakeholders” to identify the most vulnerable populations reliant on coal industries, as well as the importance of creating green jobs.
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There is nothing ‘just’ about JETP Indonesia yet - and it’s also clear that (planners) do not have a clear idea of what a ‘just’ approach entails. Hopefully that will come after proper consultation with the NGOs and affected communities.
Tommy Pratama, executive director, Traction Energy Asia
Indonesia’s Coordinating Ministry for Maritime Affairs and Investment did not immediately respond to a request for comment.
Room for improvement
Pratama said there was still scope and time to improve the JETP plan to green Indonesia’s energy mix in a way that is socially, environmentally and economically fair.
“This first draft needs improvements to the content as well as to the process - more comprehensive consultation with civil society and affected communities,” he added.
Involving local people - and regional governments - is key to energy transition planning, said Lauri Myllyvirta, lead analyst at the Helsinki-based Centre for Research on Energy and Clean Air (CREA).
While Indonesia’s JETP plan makes some mention of this, Myllyvirta noted it had yet to detail key steps such as analysis of impacts, skills development for workers, social protection, dialogue, innovation and technology transfer.
Fabby Tumiwa, head of the Indonesia-based Institute for Essential Services Reform which works on energy transition, said Indonesia’s JETP plan was the first to acknowledge the “just” element and pledge to mitigate the risks of the transformation.
Civil society organisations have one year to make inputs, noted Sisilia Nurmala Dewi, Indonesia team leader at climate activist group 350.org.
In contrast, in neighbouring Vietnam, activists have urged rich nations to pause its JETP after a government crackdown on environmentalists.
Dewi said it was unfortunate Indonesia’s JETP implementation plan does not provide for the development of community-based renewable energy, because of its potential to improve access to clean power, especially in impoverished and remote areas.
In addition, she noted that the JETP investment plan relies heavily on debt finance, with grants making up only 1.4 per cent.
That amounts to shifting the burden of emissions reductions from advanced industrial nations onto developing countries “through the entrenchment of debt and dependency”, she added.
Goal to retire all coal power dropped?
It is still too early to say whether the JETP deals will be a success or failure, said Traction Energy Asia’s Pratama.
South Africa’s JETP, for example, has been criticised for potentially increasing its debt burden and for insufficient consultation with coal communities.
Vietnam, meanwhile, is finalising a draft investment plan and has made a head-start by developing clean energy resources fast, with China’s help, Pratama noted.
On Indonesia’s JETP, analysts have warned that the recently released plan omits so-called “captive” power plants - off-grid systems managed by industries such as metal for their own use.
Indonesia has captive coal power capacity of 13.74 gigawatts (GW), with a further 20.48 GW planned.
“The plan seems to have almost entirely moved away from retiring coal power plants,” said CREA’s Myllyvirta.
Tumiwa said the government had underestimated the number of captive coal plants, which rose after bans on raw mineral exports and a resulting ramp-up of processing facilities.
Last year, Jakarta introduced conditions on building new captive plants - including emissions reductions within a decade of operations and a 2050 phase-out - but many were exempt as they were already built or under construction, he noted.
Most of Indonesia’s private coal plants are either financed or constructed with backing from China, said Traction Energy Asia’s Pratama, calling for Beijing to be held to account on its 2021 pledge not to support new coal power overseas.
Indonesian President Joko Widodo has already asked China - which is not involved in the JETP - to assist with developing Indonesia’s abundant clean energy resources, Pratama added.
While noting some “disappointments” in the JETP so far, it “can provide a solid foundation for Indonesia’s energy transition”, he said.
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