Indonesia’s renewable capacity targets not enough to meet new net-zero aim: report
It says these plans, in addition to nuclear energy installations, will only meet 35% of projected electricity demand by 2040
DESPITE Indonesia’s commitment to more ambitious climate targets, plans to add 75 gigawatts of renewable energy by 2040 will not be enough to meet the country’s energy needs then, said a report by climate non-profit Centre for Research on Energy and Clean Air.
This amount of renewable capacity, in addition to plans to install 5 GW of nuclear energy, will only meet 35 per cent of projected electricity demand by 2040, read the report.
South-east Asia’s largest economy would have to set much higher ambitions for clean energy deployment to achieve its targets, it added.
Newly minted Indonesian President Prabowo Subianto made a big splash at the recent G20 summit in Brazil, where he announced that the country will bring forward its net-zero target by a decade – from 2060 to before 2050 – and plans to shut down all its coal and other fossil-fuel power plants by 2040.
This came one week after the country’s climate envoy unveiled plans to build 75 GW of renewable power over the same period at the United Nations’ climate change summit, more commonly known as COP29.
This would require US$235 billion worth of investments to build renewable energy plants with that capacity, as well as 70,000 km of transmission lines.
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It is part of a wider programme to build 100 GW of new power generation by 2040. In addition to another 5 GW coming from nuclear energy, the rest will be from fossil fuels.
While lauding these new plans as a significant step forward for Indonesia’s decarbonisation journey, the report noted that Indonesia’s renewable energy target must be more than double the 75 GW plan.
In fact, Prabowo’s vision goes beyond the scenario laid out in the Just Energy Transition Partnership’s (JETP) investment plan, which was released in November last year – one year after the deal was inked.
The JETP is a US$20 billion climate deal signed with several developed economies – as well as private financial institutions – to help the country bring forward the closure of its coal power plants and decarbonise its power sector.
Under the JETP, the objective was for the power sector to hit net zero by 2050, on a decarbonisation pathway that will see 210 GW of renewables – accounting for over 75 per cent of power generation – developed by 2040. This refers to only on-grid electricity, and does not include off-grid power generation from industrial power plants.
The accelerated plans to phase out fossil fuels under Prabowo would require an additional 25 per cent in clean energy generation than what has been forecast in the JETP’s investment plan, said the report.
If Indonesia does not increase its 75 GW target in renewable energy deployment, this would mean having to increase fossil-fuel-based power generation by 160 per cent – from 267 terawatt-hour in 2022 to 704 TWh in 2040 – to meet the projected demand growth by that year, it added.
The 2040 phase-out target would is unlikely to be realised, said another report by BMI, the financial research arm of Fitch Solutions.
For one thing, the economy is still largely dependent on fossil fuels. According to energy think tank Ember Energy, 80 per cent of Indonesia’s electricity generation in 2022 was powered by coal, with 20 per cent from clean energy sources.
For another, progress in adding renewable capacity has also been slow.
“Rising consumption driven by rapid economic growth and industrialisation means that demand for significant additional energy will see demand for other fuels like coal and natural gas,” read the BMI report.
“The government’s efforts to secure funding through the JETP and other international partnerships will be crucial in determining the pace and success of the energy transition.”
However, the BMI report noted that Indonesia has not received the promised US$20 billion from developed nations under the JETP as at September this year.
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