What are the JETP investment areas and how much investment is needed for each investment area?
The implementation of the JETP power sector pathway in the CIPP document would require at least US$ 97.3 billion in investment between 2023-2030. This number does not include financing required for the implementation of Just Transition assessment and measures.
The JETP financing commitment of US$ 21.6 billion currently only covers one-fifth of the entire investment needs and is expected to be channeled into projects that are catalytic in nature and is listed in the list of JETP priority projects within the 5 Investment Focus Area (IFA) identified in the CIPP. Below is the list of the IFAs and their investment needs:
IFA 1: Development of Transmission and Distribution (interconnection)
The development of transmission would reduce the need to use captive coal generation and could enhance energy access. The CIPP estimates that 14,000 km circuit of additional transmission would be needed at a total of US$ 19.7 billion in investments.
IFA 2: Early Retirement and Managed Phase-Out of Coal-Fired Power Plants (CFPPs)
The early retirement of CFPPs enables the increased uptake of renewable energy and could help reduce oversupply in the system. The CIPP estimates that retrofitting to increase flexibility of CFPPs and early retirement of CFPPs would required financing up to US$ 2.4 billion by 2030.
IFA 3: Dispatchable Renewable Energy
Hydro power generation, geothermal power generation and biomass based power generation could serve as renewable energy baseload for a low carbon economy. The CIPP estimates a need to expand capacity up to 16.1 GW by 2030 that would require up to US$ 49.2 billion in investments by 2030.
IFA 4: Variable Renewable Energy
Solar power generation and wind power generation has the potential to become a source of affordable and clean electricity to meet Indonesia's rapidly rising power demand. The CIPP estimates the need to expand capacity up to 40.4 GW by 2030 that would require up to US$ 25.7 billion in investments by 2030.
IFA 5: Renewable Energy Value Chain
Energy transition provides opportunities to create new jobs and enhance Indonesia's economic competitiveness.