The Jolt: Indonesia asks the $20 billion question

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Introducing The Jolt, a new series from FORESIGHT Climate & Energy, which will keep you updated on all the essential energy transition stories

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Welcome to today’s episode of The Jolt by FORESIGHT Climate & Energy. In a world underpinned by climate and energy stories, it is sometimes hard to cut through the cacophony of noise and get to the news you need to hear.

This is where The Jolt comes in. Tune in on Mondays, Wednesdays and Fridays for bite-sized updates, expert analysis and a global view.

We kick off with a look at the major global climate and energy news stories.

Here are some of the main climate and energy stories making the news around the world:

• Portugal’s prime minister has resigned after he was implicated in an ongoing corruption probe into energy contracts. Investigators are looking into whether there was foul play in the award of lithium mining and hydrogen deals. A snap election is now likely.
• China unveiles a new plan to monitor and crack down on methane emissions. The world’s largest emitter of the planet-warming gas, China has not indicated how it will actually reduce those emissions and has still not signed up to the global methane pledge, which was launched two years ago.
• India has signed a $200 million loan deal with the World Bank so that its northernmost state, Himachal Pradesh, can green its power sector by 2030. The plan aims to up renewable energy levels from 80% to 100% by the end of the decade.
• Scotland’s devolved government has delayed publishing an update to its climate plan, insisting that a rollback of net-zero commitments by the central UK government in London had messed with its timeline. 
• Also in the UK, King Charles III, a well-known environmentalist, confirmed in a speech to mark the opening of a new parliament session that the UK energy regulator will be legally obliged to hold annual oil and gas exploration auctions, according to new government plans.
• Morocco’s energy ministry is looking for developers to design, fund, construct and operate two transmission lines that will link the energy-rich south with power-hungry regions in the middle of the country. The lines should both be up and running 2028.
• Namibia breaks ground on the world’s first green iron project. As part of an agreement between the Namibian and German government’s, iron will be produced using 100% renewable power.
• Latin America and the Caribbean will increase their emissions under a business-as-usual scenario, the International Energy Agency says in a first-of-its-kind new report. Check the details here.
• The European Union will soon launch a small modular nuclear reactor alliance, in a bid to commercialise the nascent technology. Work is ongoing to get the alliance ready after 11 EU countries, including France and Poland, asked the European Commission to set up the initiative.
  

• Indonesia is the world’s tenth largest emitter and its fourth most populous country. Its economy is growing and so are its emissions but there is an appetite to rein in greenhouse gases and advance the energy transition.
• In 2022, the European Union, United States and other G20 countries agreed to set up a partnership with Indonesia worth $20 billion to kickstart that energy transition, by helping Indonesia clean up its power sector and reduce its massive coal power fleet.
• But the money has not yet started flowing, donor governments are struggling to get budget approvals and private sector players are worried that policies will change once the current president, Joko Widodo, leaves office next year.
• Indonesia published its just transition investment plan last week and is now in the consultation phase. It includes a breakdown of where the $20 billion will go and targets for clean energy deployment and coal phaseout.

“Indonesia is a large country and the challenge is great: coal still holds primary share in the electricity mix”

• Katherine Hasan, an Indonesia analyst at the Centre for Research on Energy and Clean Air, says that the opportunity posed by the partnership is massive and that the transition in Indonesia will have not just domestic benefits but global ones.
• She adds that the investment plan published by the government is a good start but that more improvements can be made, including more ambitious clean energy targets and commitments about captive coal power—power plants that are not connected to the grid but which are used in industrial processes.
• President Wikodo will meet with US counterpart Joe Biden this weekend, where the $20 billion question will be raised, as well as potential exemptions under the Inflation Reduction Act. Indonesia wants to benefit from subsidies offered to producers that fall within the electric vehicle value chain, in particular its market-leading nickel industry. 

While you’re here, check out the latest edition of Watt Matters, a special live episode that looks into how public procurement of energy could help clean up the transport sector.

We want The Jolt to be as listener-driven as possible! Get in touch with us about what you like, what you don’t like and what you’d like to see in future episodes. All feedback is appreciated so don’t be shy.

Email us at thejolt@foresightdk.com

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