Indonesia's JETP Advances but Captive Coal Plants Remain Outside Investment Plan

Indonesia's Just Energy Transition Partnership Comprehensive Investment and Policy Plan, launched in November 2023, covers only on-grid power plants, leaving approximately 20 gigawatts of planned off-grid captive coal plants for separate analysis. The JETP process has nonetheless created significant political momentum on coal retirement, private grid investment, and captive plant governance that was absent from national discourse a year earlier.

The JETP programme, signed by Indonesia with the United States and Japan as lead International Partners Group members and supported by GFANZ, reached its first major milestone with the CIPP launch on 21 November 2023 — delayed from an original August target. The delay was linked to Indonesia's plan to build approximately 20 GW of off-grid captive coal plants, which are used by specific manufacturers or industries and fall under varying levels of national and sub-national licensing authority. Data fragmentation across licensing bodies has made it difficult to compile and disclose comprehensive captive plant data, but the JETP process is now prompting consolidation and transparency efforts.

The article situates Indonesia's challenge within a broader global pattern: despite commitments to no new coal permits, India has an estimated 65.3 GW of proposed on-grid coal capacity under development, China has 243 GW already permitted and under construction, and 51 percent of planned expansion from new oil and gas fields to 2050 comes from the United States, Canada, Australia, Norway, and the United Kingdom. The analysis argues that fossil fuel expansion commitments consistently exempt strategic national interests and pre-existing permits, requiring a coordinated international response that acknowledges the industrialisation priorities of emerging economies.

Solutions proposed for Indonesia's captive coal problem include government acquisition of captive plants and connection to the grid to enable decarbonisation alongside grid renewables expansion, geothermal and hydropower for smelters requiring non-intermittent energy, and storage-paired intermittent renewables. Private sector investment in grid upgrades remains severely lacking, with no significant capital deployed in decades. The JETP is drawing GFANZ and local banks into discussions on grid investment and early coal retirement for the first time. CPI noted the process is ongoing and that as more challenges emerge, additional resources must be mobilised around identifying and supporting solutions.

Key figure — Approximately 20 GW of planned off-grid captive coal plants excluded from Indonesia's JETP investment plan