{"id":99707,"date":"2025-10-08T02:53:50","date_gmt":"2025-10-08T02:53:50","guid":{"rendered":"https:\/\/www.climatepolicyinitiative.org\/?post_type=cpi_publications&p=99707"},"modified":"2026-04-15T15:29:37","modified_gmt":"2026-04-15T15:29:37","slug":"investment-needs-of-indonesiasjust-energy-transitiona-framework","status":"publish","type":"cpi_publications","link":"https:\/\/www.climatepolicyinitiative.org\/pt-br\/publication\/investment-needs-of-indonesiasjust-energy-transitiona-framework\/","title":{"rendered":"Investment Needs Of Indonesia\u2019s Just Energy Transition: A Framework"},"content":{"rendered":"\n

With an ambitious target to generate 61% renewable energy (RE) in the Electricity Supply Business Plan (RUPTL) 2025-2034 and President Prabowo\u2019s bold remark on achieving 100% RE by 2035<\/a>, a rigorous assessment of transition costs and benefits is instrumental in ensuring that Indonesia\u2019s energy transition is not only successful but its outcome truly just and sustainable<\/strong>.<\/p>\n\n\n\n

For the energy transition to be just, it should consider all socioeconomic risks and opportunities <\/strong>and address them for affected stakeholders. Concerns over this stem from two main factors: (1) uneven socioeconomic implications of retiring coal power plants,<\/a><\/strong> and (2) inequitable distribution of benefits from adopting low-carbon technologies<\/strong>.<\/strong><\/p>\n\n\n\n

As with any sunset industry, workers and communities dependent on revenues that fossil fuel plants generate will require support to shift to new livelihoods<\/strong>. Renewable energy facilities can accommodate this shift <\/strong>by replacing the plants as employers and\/or by powering other forms of economic activity. GGGI has estimated that between 2.1 million and 3.7 million new direct jobs can be created<\/a><\/strong> in renewables in Indonesia by 2030. Recent analysis from also highlights cases where community-based renewables have fostered local livelihoods<\/a> <\/strong>in various villages in Eastern Indonesia.<\/p>\n\n\n\n

The flexibility of RE projects<\/strong> in terms of size and location, as well as their generally low maintenance costs, can further deliver<\/strong> benefits related to equity<\/strong>. Solar, wind, hydro, and geothermal technologies can be used in either small- or large-scale installations, reducing<\/strong> market entry barriers<\/strong>. They can also be installed in a decentralized manner, either on- or off-grid, enabling use in remote areas<\/strong>. While upfront investment requirements can be relatively high, maintenance costs and total costs of ownership are low, reducing the need for subsidies<\/strong> often required to sustain fossil fuel energy generation.<\/p>\n\n\n\n

However, it is not a given that the benefits of shifting to renewable energy will be equitably distributed<\/strong>. If not managed well, the introduction of low-carbon technologies risks having minimal benefits for marginalized groups, deepening existing inequalities that have long characterized the fossil fuel industry, or even creating new ones.<\/p>\n\n\n\n

Finance is therefore crucial in delivering energy transition benefits equitably and creating broader economic opportunities. Around USD 97 billion is needed to achieve Indonesia\u2019s 2030 climate targets<\/strong>, as estimated in the Comprehensive Investment and Policy Plan (CIPP) of its Just Energy Transition Partnership (JETP).<\/p>\n\n\n\n

Rooted in the principal justice aspects of an energy transition (recognition justice, restorative justice, distributive justice, and procedural justice), this report lays out a framework for quantifying the investment needs that ensure a truly equitable outcome tailored specifically to Indonesia\u2019s energy transition context<\/strong><\/a>, with the planned early retirement of Cirebon 1 coal-fired power plant (CFPP) as a case study.<\/p>\n\n\n\n

Figure 1. Case-specific framework for financing Indonesia’s just energy transition<\/strong><\/p>\n\n\n\n

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Important information required for policymakers to accurately capture the restorative justice element of an energy transition includes:<\/p>\n\n\n\n