Mitigating Energy Poverty: Mobilizing Climate Finance to Manage the Energy Trilemma in Indonesia

Abidah B Setyowati

doi:10.3390/su12041603

Abstract

Energy poverty remains a key global challenge. In Indonesia, around 25 million people are still without electricity access, and many of them live in geographically isolated areas and remote places that preclude them from access to the electricity grid. Deploying renewable energy sources in these areas could present an opportunity for a remarkable and rare complementarity between energy security, energy access, and climate change mitigation. This article examines how energy trilemma plays out in mobilizing private climate finance for renewable rural electrification in Indonesia. Analysis of relevant documents combined with interviews at local and national levels reveals that multiple barriers persist constraining the mobilization of private climate finance to support renewable rural electrification in Indonesia. In turn, this has led to difficulties with managing the tensions and reaching the complementarity of the three key energy objectives. The article concludes with some recommendations for moving forward.

Highlights

Climate change is already causing frequent and more intense wildfires, droughts, and tropical storms, as the 2018 report of the International Panel of Climate Change makes clear
Almost all of the key informants interviewed suggest that regulatory uncertainty is one of the main obstacles to mobilizing private climate finance for renewable rural electrification
The resulting regulatory uncertainty increases the costs for project developers, both in terms of the investment of time necessary to understand the implications of new regulations and in the cost of complying with them

Summary

Introduction

Climate change is already causing frequent and more intense wildfires, droughts, and tropical storms, as the 2018 report of the International Panel of Climate Change makes clear. In the absence of rapid and radical mitigation action, climate change impacts may well be catastrophic in the longer term [1]. A rapid transition to low carbon energy is required. Such a transition is important in Asia, the region with the world’s highest projected carbon emissions and in which an estimated 92 percent of the world’s proposed coal-fired power plants are anticipated to be built. Mitigating climate change must be seen in its broader context and in conjunction with two other energy objectives. The first is mitigating energy poverty, defined in the UN Sustainable Development Goals (SDG 7) as access to affordable, reliable, and sustainable modern energy. The second objective is energy security, which, in broad terms, means having a reliable and adequate supply of energy at reasonable prices and includes the availability of fuel reserves, the ability of the economy to acquire supply to meet projected energy demand and the extent to which the economy has a diverse range of energy sources or in which end users can become self-sufficient [3]

Methods

Results

Conclusion