Case Study

Integration of Just Transition into financing mechanism supports the early retirement of CFPPs in Indonesia

Developing a just transition framework enables a multilateral development bank to seamlessly incorporate the principles of a just transition into its financing mechanism. This framework plays a pivotal role in supporting the timely phase-out of coal-fired power plants in Indonesia.

The Story

Better defined guidelines and activities

The client needed more defined guidelines and activities for what individual assets should do to advance just transition in the early retirement of Coal-Fired Power Plants (CFPPs).

A framework to categorize actions

Neyen developed a comprehensive framework that organizes actions into three distinct phases and identifies the corresponding types of just transition activities. This framework is based on the client’s overarching just transition framework, providing a structured approach to effectively categorize and implement necessary actions.

What did the framework achieve?

We have produced a comprehensive report that delves into the various just transition activities, emphasizing the links between related actions. This report aims to facilitate the user’s understanding of how certain activities enable and support others, ultimately providing clear and actionable next steps for implementation.

Drivers of change

An asset-level framework facilitates the advancement of just transition in energy transitions

As the early retirement of coal-fired power plants persists not only in Indonesia but also in other regions adopting similar financing mechanisms, the formulation of an asset-level just transition framework can greatly facilitate the progress of equitable energy transitions. This framework will serve as a catalyst for promoting just transition principles and practices throughout the entire energy sector.

Lessons Learned

When it comes to the retirement of coal-fired power plants, local regulations already dictate the execution of actions at the asset-level that are considered just transition. Further just transition integration in early CFPP retirement should seek ways to go beyond what local regulations demand.