CCXG Forum, September 2023, Paul Butarbutar

OECD Environment
OECD EnvironmentOECD Environment
AUGUST 2023
JETP Secretariat
JETP CIPP Summary Presentation
1
Just Energy Transition Partnership (JETP) Indonesia
JETP aims to develop a comprehensive investment and policy plan aiming
to achieve several key joint targets
In line with these targets, JETP secretariat is working on a comprehensive investment plan to
highlight pathway to achieve the targets
Joint Targets Set Between GOI and IPG
Technical Financial
2030 2050 2030
of peaking power sector
CO2 emission by 2030
and immediately
declining thereafter
290 Million
Tonnes
composition of all
power generation to
come from renewable
energy by 2030
34%
as the target timeline for
net zero emissions in
Indonesia’s
power sector
Net Zero by 2050
Mobilization of USD 20 Billion
over the next 3 to 5 years
~ USD 20 Billion
(IPG and GFANZ)
Source: JETP Joint Statement by GOI and IPG (2022)
2
Just Energy Transition Partnership (JETP) Indonesia
JETP comprehensive investment policy and plan (CIPP) is developed to
ensure a consistent view of transition pathways
Investment plan is a "living document" which requires regular update and refresh to reflect the
market development and current priorities
Guiding principles
Positive contribution
towards Indonesia's
economy and ensure
energy affordability
Ensure energy
security and grid
stability while ensuring
just transition
Ensure achievement of
joint target and carbon
emission in line with
government ambition
Contents of investment plan
Decarbonization vision of
Indonesia, JETP target
and energy transition
pathways
Portfolio of JETP
programs across five
investment focus areas
Implementation plan,
policy, financing and
just transition
enablers required
3
Just Energy Transition Partnership (JETP) Indonesia
Five investment focus areas have been identified to accelerate the
energy transition
Heading
1. Development of
transmission network
Heading
2. Early CFPP
Retirement and
Managed Phase-out
Heading
3. Dispatchable
renewable energy
acceleration
Heading
4. Variable renewable
energy acceleration
(VRE)
Heading
5. Development of
renewable energy
supply chains
Development of
transmission networks
(intra and inter
interconnection
transmission system)
Phased retirement of
coal-fired power plants
to meet CO2 emission
targets
Dispatchable
renewable energy
infrastructure
prioritized for the short
term
Acceleration of VRE
development by
considering the
readiness of electricity
system infrastructure
Enabling infrastructure
and industries related to
the energy transition
Developing transmission
networks minimizes the
necessity for captive power
capacity, promoting greater
energy accessibility
Decommissioning coal-
fired plants allows for
increased penetration of
renewable energy and
mitigates power
oversupply
Geothermal and
hydropower plants
could act as a
foundation for a low-
carbon economy
Solar and wind power
plants possess potential
to be cost-effective
electricity sources and
can meet power
demands
The energy transition
presents opportunities
for job creation and
enhancing Indonesia's
economic
competitiveness
4
Just Energy Transition Partnership (JETP) Indonesia
Four working groups have been formed to support the implementation of
JETP action items
We have secured commitments from international and local institutions & think tank, and we are in the process of onboarding the working group
leaders and members
Policy Financing Electrification
& energy
efficiency
Technical Just
transition
Working
group
leader
Working
group
members
Resources
& Partner
(Non-Exhaustive)
To be
determined
INDODEPP
5
Just Energy Transition Partnership (JETP) Indonesia
A Just Transition (JT) framework has been developed to help manage the
social, economic, and environmental impacts of JETP investments
Just Transition Standards
xx
Just Transition framework
Foundations
Human rights
Gender equality &
empowerment
Accountability
9. Economic diversification & transformation
5. Biodiversity & sustainable NRM1
6. Climate change & disaster risk
7. Community health, security, & safety
8. Pollution prevention & resource efficiency
Pillar #1:
Leave no one
behind
1. Cultural heritage
2. Displacement & resettlement
3. Local & customary communities
4. Labour & working conditions
Pillar #2:
Sustainability
& resilience
The JT framework identifies a
comprehensive set of
socioeconomic and
environmental areas that JETP
investments impact
The nine JT standards combine
international safeguarding best
practices with new aspects
added to address the large-scale
and accelerated nature of JETP.
Implementing the framework
allows users to manage the risks
and opportunities presented by
JETP investments which is a
core tenet of the Just Transition
1. NRM is natural resources management
Just Energy Transition Partnership (JETP) Indonesia 6
The Just Transition framework builds on GoI
regulations and lender safeguards
Government of Indonesia (GoI) environmental and
socioeconomic safeguards
Legally mandated actions that all project stakeholders (developers, financiers,
governments, etc.) must take to limit the environmental, social, and economic
damage of a given project
Lender safeguards
Safeguards that extend beyond legal requirements. Lenders (both
MDBs and private) voluntarily adopt these standards but can
mandate their implementation in projects that the lender finances.
Just Transition (JT) framework
Just Transition initiatives that extend beyond current
best-in-class lender safeguards
Gap: Additionality of JT
Framework beyond
combination of GoI
safeguards and lender
safeguards
The JT framework builds
on existing safeguards in
Indonesia by adding two
components:
1. A new standard to
highlight economic
diversification
2. A direct focus on
enhancing
opportunities
stemming from JETP
investments
7
Just Energy Transition Partnership (JETP) Indonesia
Implementing the JT framework involves assessing risks, building
mitigation plans, and enhancing opportunities in areas impacted by JETP
1. Existing safeguards include IFC Standards (2012), World Bank Environmental & Social Framework (2017), and UNDP Social & Environmental Standards (2021); 2. Standards 1-4 are nested
under Pillar 1 “Leave no one behind” and Standards 5-9 are nested under pillar 2 “Sustainability and resilience”; 3. NRM is natural resource management
Accountability
JT standards2 Implementation strategy
Consolidate actions
into implementation
strategy with
indicative timeline &
responsibilities split
between developers,
financiers, local
governments, and
national government
JT principles
9. Economic diversification
& transformation
Human rights
Gender
equality &
empowerment
1. Cultural heritage
2. Displacement &
resettlement
3. Local & customary
communities
4. Labour and working
conditions
5. Biodiversity &
sustainable NRM3
6. Climate change &
disaster risk
7. Community health,
security, & safety
8. Pollution prevention &
resource efficiency
Actions to take within each just transition standard
Perform risk
assessment
Build
mitigation
action plans
Enhance
opportunities
from
investment
Light green shading indicates parts of the Just Transition framework that are additional over existing safeguards1 and therefore require additional actions
8
Just Energy Transition Partnership (JETP) Indonesia
There are several enablers that international and national actors can
enact to support implementation of just transition (JT) initiatives
Coordinated implementation of these and other enablers will pave the way for more equitable distribution
of the risks and opportunities stemming from the energy transition
International enablers
Some JT programs have
limited financial returns but
large social returns and
therefore require zero-cost
financing such as grants
for implementation
Zero-cost
financing
Ensuring that developing
countries can access the
latest energy technology
is key to ensuring that
they can benefit from the
energy transition
Technology
transfer programs
Incorporating capacity
building programmes
into global climate pacts
enables development of
sustainability expertise in
developing countries
Long-term
capacity building
Domestic enablers
Build a policy framework
to identify goals for the
JT, including identifying
new opportunities for
fossil fuel-dependent
communities
Just Transition
policy framework
Create mechanisms for
local ownership of
energy transition
infrastructure projects to
enhance benefits to local
communities
Mechanism for local
project ownership
Implement monitoring
and evaluation programs
to determine if Just
Transition programs are
having the desired
impact
Monitoring &
evaluation
programs
Non-exhaustive
1 von 9

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CCXG Forum, September 2023, Paul Butarbutar

  • 1. AUGUST 2023 JETP Secretariat JETP CIPP Summary Presentation
  • 2. 1 Just Energy Transition Partnership (JETP) Indonesia JETP aims to develop a comprehensive investment and policy plan aiming to achieve several key joint targets In line with these targets, JETP secretariat is working on a comprehensive investment plan to highlight pathway to achieve the targets Joint Targets Set Between GOI and IPG Technical Financial 2030 2050 2030 of peaking power sector CO2 emission by 2030 and immediately declining thereafter 290 Million Tonnes composition of all power generation to come from renewable energy by 2030 34% as the target timeline for net zero emissions in Indonesia’s power sector Net Zero by 2050 Mobilization of USD 20 Billion over the next 3 to 5 years ~ USD 20 Billion (IPG and GFANZ) Source: JETP Joint Statement by GOI and IPG (2022)
  • 3. 2 Just Energy Transition Partnership (JETP) Indonesia JETP comprehensive investment policy and plan (CIPP) is developed to ensure a consistent view of transition pathways Investment plan is a "living document" which requires regular update and refresh to reflect the market development and current priorities Guiding principles Positive contribution towards Indonesia's economy and ensure energy affordability Ensure energy security and grid stability while ensuring just transition Ensure achievement of joint target and carbon emission in line with government ambition Contents of investment plan Decarbonization vision of Indonesia, JETP target and energy transition pathways Portfolio of JETP programs across five investment focus areas Implementation plan, policy, financing and just transition enablers required
  • 4. 3 Just Energy Transition Partnership (JETP) Indonesia Five investment focus areas have been identified to accelerate the energy transition Heading 1. Development of transmission network Heading 2. Early CFPP Retirement and Managed Phase-out Heading 3. Dispatchable renewable energy acceleration Heading 4. Variable renewable energy acceleration (VRE) Heading 5. Development of renewable energy supply chains Development of transmission networks (intra and inter interconnection transmission system) Phased retirement of coal-fired power plants to meet CO2 emission targets Dispatchable renewable energy infrastructure prioritized for the short term Acceleration of VRE development by considering the readiness of electricity system infrastructure Enabling infrastructure and industries related to the energy transition Developing transmission networks minimizes the necessity for captive power capacity, promoting greater energy accessibility Decommissioning coal- fired plants allows for increased penetration of renewable energy and mitigates power oversupply Geothermal and hydropower plants could act as a foundation for a low- carbon economy Solar and wind power plants possess potential to be cost-effective electricity sources and can meet power demands The energy transition presents opportunities for job creation and enhancing Indonesia's economic competitiveness
  • 5. 4 Just Energy Transition Partnership (JETP) Indonesia Four working groups have been formed to support the implementation of JETP action items We have secured commitments from international and local institutions & think tank, and we are in the process of onboarding the working group leaders and members Policy Financing Electrification & energy efficiency Technical Just transition Working group leader Working group members Resources & Partner (Non-Exhaustive) To be determined INDODEPP
  • 6. 5 Just Energy Transition Partnership (JETP) Indonesia A Just Transition (JT) framework has been developed to help manage the social, economic, and environmental impacts of JETP investments Just Transition Standards xx Just Transition framework Foundations Human rights Gender equality & empowerment Accountability 9. Economic diversification & transformation 5. Biodiversity & sustainable NRM1 6. Climate change & disaster risk 7. Community health, security, & safety 8. Pollution prevention & resource efficiency Pillar #1: Leave no one behind 1. Cultural heritage 2. Displacement & resettlement 3. Local & customary communities 4. Labour & working conditions Pillar #2: Sustainability & resilience The JT framework identifies a comprehensive set of socioeconomic and environmental areas that JETP investments impact The nine JT standards combine international safeguarding best practices with new aspects added to address the large-scale and accelerated nature of JETP. Implementing the framework allows users to manage the risks and opportunities presented by JETP investments which is a core tenet of the Just Transition 1. NRM is natural resources management
  • 7. Just Energy Transition Partnership (JETP) Indonesia 6 The Just Transition framework builds on GoI regulations and lender safeguards Government of Indonesia (GoI) environmental and socioeconomic safeguards Legally mandated actions that all project stakeholders (developers, financiers, governments, etc.) must take to limit the environmental, social, and economic damage of a given project Lender safeguards Safeguards that extend beyond legal requirements. Lenders (both MDBs and private) voluntarily adopt these standards but can mandate their implementation in projects that the lender finances. Just Transition (JT) framework Just Transition initiatives that extend beyond current best-in-class lender safeguards Gap: Additionality of JT Framework beyond combination of GoI safeguards and lender safeguards The JT framework builds on existing safeguards in Indonesia by adding two components: 1. A new standard to highlight economic diversification 2. A direct focus on enhancing opportunities stemming from JETP investments
  • 8. 7 Just Energy Transition Partnership (JETP) Indonesia Implementing the JT framework involves assessing risks, building mitigation plans, and enhancing opportunities in areas impacted by JETP 1. Existing safeguards include IFC Standards (2012), World Bank Environmental & Social Framework (2017), and UNDP Social & Environmental Standards (2021); 2. Standards 1-4 are nested under Pillar 1 “Leave no one behind” and Standards 5-9 are nested under pillar 2 “Sustainability and resilience”; 3. NRM is natural resource management Accountability JT standards2 Implementation strategy Consolidate actions into implementation strategy with indicative timeline & responsibilities split between developers, financiers, local governments, and national government JT principles 9. Economic diversification & transformation Human rights Gender equality & empowerment 1. Cultural heritage 2. Displacement & resettlement 3. Local & customary communities 4. Labour and working conditions 5. Biodiversity & sustainable NRM3 6. Climate change & disaster risk 7. Community health, security, & safety 8. Pollution prevention & resource efficiency Actions to take within each just transition standard Perform risk assessment Build mitigation action plans Enhance opportunities from investment Light green shading indicates parts of the Just Transition framework that are additional over existing safeguards1 and therefore require additional actions
  • 9. 8 Just Energy Transition Partnership (JETP) Indonesia There are several enablers that international and national actors can enact to support implementation of just transition (JT) initiatives Coordinated implementation of these and other enablers will pave the way for more equitable distribution of the risks and opportunities stemming from the energy transition International enablers Some JT programs have limited financial returns but large social returns and therefore require zero-cost financing such as grants for implementation Zero-cost financing Ensuring that developing countries can access the latest energy technology is key to ensuring that they can benefit from the energy transition Technology transfer programs Incorporating capacity building programmes into global climate pacts enables development of sustainability expertise in developing countries Long-term capacity building Domestic enablers Build a policy framework to identify goals for the JT, including identifying new opportunities for fossil fuel-dependent communities Just Transition policy framework Create mechanisms for local ownership of energy transition infrastructure projects to enhance benefits to local communities Mechanism for local project ownership Implement monitoring and evaluation programs to determine if Just Transition programs are having the desired impact Monitoring & evaluation programs Non-exhaustive