Power Market Resilience

Indonesia’s electricity system is asked to do four things at once: keep the lights on, keep tariffs affordable, spread access equitably across 17,000 islands, and cut its carbon. Each of the four has a constituency, and the trade-offs between them are settled by default rather than by design.

Coal dominates both grid and captive industrial generation, which makes the carbon question a question about existing assets rather than new ones. Retiring a plant early strands capital that was financed on a thirty-year life; keeping it running transfers the cost to air quality, to import exposure, and eventually to the tariff. Neither outcome is free, and the choice is a financing problem before it is an engineering one.

Our work sits at that junction: what the market structure allows, what a reformed tariff and procurement regime would make bankable, and which reductions can be paid for by whom. The analysis is published openly, with the assumptions and the models exposed rather than summarised.

Five strands, all running through the Just Energy Transition Program.

Power market reform — the structural changes needed for a sustainable, affordable, equitable and low-carbon market, including procurement design, grid access and the role of the single buyer. Carbon pricing — a mechanism that makes the transition pay for itself rather than depending on grant finance.

Transition credits — a new carbon asset class from the early retirement of coal-fired plants and their replacement with renewables, assessed for feasibility under an assignment from the government of the United Kingdom. Decentralized renewables — pathways for distributed solar and grid access where central generation does not reach. The subnational socio-economic implications — who gains and who loses in the districts that host the plants and the mines.