Sri Mulyani Calls Energy Transition Needs To Implement Just And Affordable Principles

Minister of Finance Sri Mulyani (Photo: Doc. Antara)

JAKARTA - Minister of Finance (Menkeu) Sri Mulyani Indrawati said the energy transition requires fair and affordable principles. This makes the Conference of the Parties (COP) or climate change conferences continue to discuss it.

"But it's not just rhetoric. If we don't prepare ourselves for fair and affordable principles in real terms, then there will be no progress," Sri Mulyani said, quoting Antara, Saturday, January 18.

Therefore, fair and affordable principles, he said, are applied in Indonesia in a real way in the energy transition mechanism that is being designed.

Indonesia is currently planning an early retirement plan against three coal-fired Steam Power Plants (PLTU). To stop the PLTU in order to reduce carbon emissions, the government has imposed a gradual reduction in contracts, one of which is for independent power plants (Independent Power Producers/IPP).

The granting of contracts to coal power plants was initially 30 years. With the target of reducing carbon emissions, the contract is shortened to 15 years.

In reducing the contract period, the State Treasurer said the company would certainly ask for compensation. Thus the government must have a healthy fiscal position to overcome these problems.

"This condition that we continue to discuss and that is why Indonesia during the G20 presidency last year, we launched this energy transition mechanism," he said.

Thanks to real steps made by Indonesia in the energy transition, Sri Mulyani revealed that many countries, including Germany, the United States, and Japan announced the promise of an energy transition partnership of US$20 billion.

This commitment will be allocated for Indonesia to support a fair and affordable energy transition.