JETP: A Roadblock for Indonesia’s Coal Transition

The future of the Just Energy Transition Partnership (JETP) program is in doubt. Septian Hario Seto, Deputy of Investment and Mining at the Office of the Coordinating Maritime Affairs and Investment Minister, said that Western countries were reluctant to fund the early retirement of coal-fired power plants (PLTU) in Indonesia. “During the discussions, it was obvious that they were not enthusiastic about providing financing for early retirement,” he said, quoted by Reuters on Sept 25.

Septian said that Indonesia had clear expectations from JETP: to provide funding for both the early termination of coal-fired PLTU and the development of a smart electricity grid. “However, they were more interested in commercial renewable energy projects,” he said.

He added that building renewable energy power plants was difficult for Indonesia, which already had an excess of electricity supply. He also said that the state budget would be strained if Indonesia increased its renewable energy capacity. “The priority is to stop coal or increase demand.”