Indonesia’s efforts to meet its climate and net-zero targets require a rapid transition away from coal, particularly through the early retirement of coal-fired power plants (CFPPs). While economic growth has been accompanied by declining emissions intensity, absolute emissions from the energy and industrial sectors continue to rise, highlighting the need for decarbonisation that does not undermine development. Early CFPP retirement can deliver significant emissions reductions, but without careful planning it risks adverse socio-economic impacts on workers, communities, and coal-dependent regions. 

This study examines the early retirement of the Cirebon-1 CFPP as a pilot case for implementing a just energy transition in Indonesia. Although Cirebon is not a coal-producing region, the power plant plays an important role in the local economy and is linked to coal-producing provinces through national supply chains. Using interregional input–output analysis, the study demonstrates how the impacts of CFPP retirement extend beyond the host region to upstream mining provinces, underscoring the importance of a value-chain-wide perspective.  

The project further assesses the risks of workforce displacement and the capacity of existing government programs to support reskilling, social protection, and alternative employment. It evaluates the potential of agriculture, MSMEs, and emerging green sectors to absorb affected workers, while acknowledging challenges related to income quality and long-term livelihood sustainability. The study highlights the need for stronger institutional coordination, active private sector participation, and strategic use of public and blended finance to ensure that early CFPP retirement contributes not only to emissions reduction but also to inclusive and resilient economic development. The Cirebon-1 case provides insights for designing a replicable approach to just transition in future coal plant retirements across Indonesia. 

Objectives 

• Assess the socio-economic impacts of early CFPP retirement on workers, local communities, and coal-producing regions 

• Analyse interregional economic linkages between electricity generation and coal mining using input–output analysis 

• Evaluate the readiness and effectiveness of existing government programs for reskilling, social protection, and employment absorption 

• Identify viable soft-landing sectors and emerging industries for displaced workers, including MSMEs, agriculture, and green sectors 

• Examine the role of public, private, and blended financing in supporting just transition outcomes