Investment Needs Of Indonesia’s Just Energy Transition

The report argues that standard top-down cost estimation methods for energy transitions often overlook socio-spatial factors and marginalized groups. It proposes a new framework that identifies specific losses (recognitional justice), determines preventative and transformative spending (restorative justice), assigns cost burdens (distributive justice), and ensures stakeholder consensus (procedural justice). Using the planned early retirement of the Cirebon 1 coal-fired power plant as a case study, the report demonstrates how to map direct, indirect, and induced impacts across individuals, companies, and governments to more accurately calculate the financial requirements of a just transition.

• Indonesia has set ambitious renewable energy targets, including a goal of 61% renewable energy in the Electricity Supply Business Plan (RUPTL) 2025-2034 and a presidential target of 100% renewable energy by 2035.
• The report identifies significant financing gaps for just transitions in various regions: Indonesia requires approximately USD 97 billion for its 2030 climate targets, South Africa needs USD 98 billion over five years, and the EU Just Transition Mechanism provided EUR 55 billion from 2021 to 2027.
• Existing 'top-down' cost component approaches, such as the one developed by iFOREST, are limited because they assume uniform cost factors across different locations and times, failing to account for socio-spatial variations and the interests of marginalized groups.
• The proposed framework categorizes transition impacts into three scopes: direct costs (plant operators and contractors), indirect costs (supply chain entities like coal transporters), and induced costs (electricity customers and local governments).
• The framework distinguishes between preventative spending, intended to avoid potential losses (e.g., reskilling programs), and transformative spending, intended to achieve net benefits (e.g., green job creation and RE cooperatives).
• Procedural justice in the energy transition is achieved through active stakeholder engagement and the transparent circulation of high-quality, impartial datasets to reach a consensus on investment needs.
• A case study of the Cirebon 1 coal-fired power plant retirement illustrates that impacts extend to a wide array of entities, including FABA (fly ash & bottom ash) off-takers, local 'warung kelontong' (mom-and-pop stores), and 'warteg' (home restaurants).

APA

Siagian, A. P., & Yusuf, B. (2025). Investment Needs Of Indonesia’s Just Energy Transition. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/10/Investment-Needs-of-Indonesias-Just-Energy-Transition.pdf

Chicago

Siagian, Albertus Prabu, and Berliana Yusuf. Investment Needs Of Indonesia’s Just Energy Transition. Climate Policy Initiative, 2025. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/10/Investment-Needs-of-Indonesias-Just-Energy-Transition.pdf.

Wikipedia

{{cite report |last1=Siagian |first1=Albertus Prabu |last2=Yusuf |first2=Berliana |title=Investment Needs Of Indonesia’s Just Energy Transition |publisher=Climate Policy Initiative |date=October 2025 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2025/10/Investment-Needs-of-Indonesias-Just-Energy-Transition.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{siagian2025investment, author = {Siagian, Albertus Prabu and Yusuf, Berliana}, title = {{Investment Needs Of Indonesia’s Just Energy Transition}}, institution = {Climate Policy Initiative}, year = {2025}, month = oct, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2025/10/Investment-Needs-of-Indonesias-Just-Energy-Transition.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }