"If we cannot prepare ourselves on the just and affordable principle in a real manner, there will not be any progress," she stressed during the Munich Security Conference on “Power Shifts: Geopolitics of the Green Transition,” which was streamed online on Saturday.
Therefore, the just and affordable principle is being implemented in Indonesia in a real manner within the energy transition mechanism that is being designed, she informed.
Indonesia is currently designing an early retirement plan for three coal-fired power plants.
To retire the power plants for the sake of carbon emission reduction, the government is implementing gradual contract reduction, for instance, with independent power producers.
The contract for the coal-fired power plants was initially meant to last 30 years. However, to meet the carbon emission reduction target, the contract period was shortened to 15 years.
On account of the contract period reduction, companies will certainly seek compensation. The government will need to be in a healthy fiscal position to handle the problem, the minister said.
The situation is being discussed currently, and it is also the reason Indonesia unveiled the energy transition mechanism during the country's G20 presidency last year, she explained.
Thanks to Indonesia's real action on energy transition, many countries, including Germany, the United States, and Japan, have pledged US$20 billion under the energy transition partnership, she informed.
The funding commitment will be allocated to Indonesia to support its just and affordable energy transition.
During the event, Indrawati also said that a country cannot resolve climate change by itself because it is a global problem.
Related news: Indonesia, international partners launch JETP Secretariat
Related news: VP appeals on oil, gas use amid energy transition era
Related news: Ministry holds e-motorbike conversion training for Jakartans
Translator: Agatha Olivia V, Fadhli Ruhman
Editor: Azis Kurmala
Copyright © ANTARA 2023
