GIGA Focus Global

Why Just Energy Transition Partnerships Are Not Enough

Number 2 | 2024 | ISSN: 1862-3581


  • Solar panels are seen near the cooling towers of a retired coal-fired Komati Power Station, operated by Eskom, near Komati village, in the Mpumalanga province in South Africa, May 9, 2024.

    Just Energy Transition Partnerships (JETPs) have been concluded with Global South countries whose energy production is heavily reliant on the use of fossil fuels, especially coal. The partnerships’ objective is to support a “just” pathway to energy sector decarbonisation. The potential and pitfalls of the JETP agreements with South Africa, Indonesia, and Vietnam are worthy of closer examination.

    • JETPs are underfunded, with grants constituting only a very small share of their financing.

    • JETPs have significant shortcomings. While South Africa plans to decommission a number of coal-fired power plants, Indonesia and Vietnam will both increase the number of them in use.

    • Only the South African JETP allocates a higher share of investments to more environmentally sustainable energy solutions like solar and wind power, while the Indonesian JETP focuses on geothermal and hydro sources and even includes nuclear energy in the mix. Vietnam’s plan encompasses liquified natural gas and gas-fired power plants.

    • The individual agreements lack a common understanding of what “just” means and reveal significant shortcomings concerning the incorporation of this key dimension. Civil society is not properly listened to, while in Vietnam activists and experts have even been jailed.

    • In all three countries, especially in Indonesia and Vietnam, the prevailing political-economic structures privilege the use of fossil fuels and, as such, represent a significant obstacle to a just energy transition. Any such endeavour requires, accordingly, a change in political and economic power relations.

    Policy Implications

    Partners should set a good example and implement a just energy transition themselves, plus reconsider amounts and types of financing. JETPs should focus on a coal phase-out and renewable energy projects with no “hidden” social or environmental costs. They should not merely support a transition to new technologies but also be socially just and contribute to overcoming existing political-economic power relations.


    JETPs and the Obstacles to a Just Energy Transition

    What JETPs Are About

    While the energy sector has been sidelined in international debates about greenhouse gas (GHG) reductions for some time now, it has finally been acknowledged that a phasing-out from fossil fuels is of the utmost importance to combat climate change. Just Energy Transition Partnerships (JETPs) are primarily financial policy instruments ostensibly aiming to support the decarbonisation of the economy in emerging countries with fast-growing CO2 emissions and a high dependence on coal-based electricity generation while at the same time being strongly affected by climate change. Thus, JETPs shall provide funding for a “just” transition in the energy sector. However, what exactly a “just transition” means and what it is to include remain rather vague.

    The JETP paradigm was established at the 26th United Nations Climate Change Conference of the Parties (COP26) in Glasgow. The International Partners Group (IPG) together with the Glasgow Financial Alliance for Net Zero (GFANZ), a global coalition of leading financial institutions, signed the first agreement with South Africa in 2021. This was followed by partnerships with Indonesia (2022), Vietnam (2022), and Senegal (2023). The IPG comprises, further to the European Union, also Canada, Denmark, France, Germany, Italy, Japan, Norway, the United Kingdom, and the United States.

    The individual JETPs’ financing packages differ. Yet all of them include a variety of funding mechanisms, including grants, concessional and non-concessional loans, and investments; grants, however, only make up a rather modest part of the financing involved. This is regarded as initial funding intended to act as a catalyst, for example helping attract further funding and investment given that the total cost of a given energy transition is projected to be much higher in all of the countries in question. Why this incentivisation is expected to work has not been further detailed though. Negotiation processes and the final distribution of funds have so far been relatively opaque.

    JETPs are still at an early stage. Yet three of the four countries concerned, South Africa, Indonesia, and Vietnam, have already presented their implementation road maps, which are worthy of evaluation. As Senegal still has not presented an implementation plan of its own, analysis must wait. By examining the presented road maps against the specific country contexts, the prospects and potential pitfalls the agreements bear for promoting or hindering a just energy transition become apparent.

    South Africa

    The South Africa JETP was announced as the first partnership of this kind in November 2021. The financing package consists of USD 8.5 billion. Following the agreement, South Africa presented its JET Investment Plan on 7 November 2022. Additionally, a JET Implementation Plan was developed following a series of public consultations and approved by the cabinet in November 2023. Both plans are initially set for the five-year period of 2023–2027.

    As is the case for all of the JETP countries, South Africa’s energy sector is highly dependent on fossil fuels. Coal is the largest source of electricity by far, still accounting for around 80 per cent thereof in 2023. Renewables only made up around 10 per cent, meanwhile (African Energy Chamber 2023).

    In 1994, when Apartheid ended and the African National Congress (ANC) took power, the party promised the electrification of the country given more than half of the population did not have access to electricity. The abundance of coal being exported and increasingly also used for the supply of the country’s newly built power plants allowed for fast growth in electricity production. Yet, the situation has changed tremendously since. South Africa has witnessed a series of severe power supply crises post-2007, the current one starting in 2021. This is not least due to corruption, bad policy decisions, and outdated infrastructure, especially the breakdown of ageing coal-fired power plants (CFPPs) as well as transmission and distribution losses. The national electricity utility Eskom responds to these power shortages with what is termed “load shedding,” namely regular, scheduled power cuts.

    On the positive side, the permissible power supply and raised tariffs have led private actors to invest in renewable energy. However, this has further accelerated socio-economic inequality in the country. Private businesses, as well as middle- and upper-class households, can survive the blackouts as they are able to invest either in generators or solar photovoltaics (PV). However, those who cannot afford this have to live with high electricity tariffs and several hours of blackouts daily. This, in turn, accelerates inequality as the absence of electricity also interrupts everyday activities such as working and studying. In 2022, power cuts occurred on a total of 205 days of the year. Together with corruption and vested interests related to CFPP construction, the frequent breakdowns, defects, and delays have led to Eskom finding itself in enormous debt, as the state-owned electricity utility owns most of the country’s power stations (accounting between them for around 95 per cent of electricity production) (African Energy Chamber 2023; Swilling 2024). Given the problems South Africa has been facing over the last few years in this regard, a restructuring of the energy sector is urgently needed – and the JETP promises to provide initial funding for this.

    South Africa’s JET Investment Plan and JET Implementation Plan

    South Africa’s Investment and Implementation Plans focus on three primary needs for its energy transition: electricity (including an improvement of the grid); new energy vehicles; and green hydrogen. Current plans are in line with South Africa’s CO2 emissions reduction target, namely of 420–350 megatons (metric tons of CO2equivalent, MtCO2-eq) by 2030.

    A total need of USD 98.7 billion has been identified for the next five years. The JETP agreement, however, only includes initial funding of USD 8.5 billion, to be disbursed through different financial mechanisms. This shall function as a starting point that is expected to be followed by private investment, as it only covers a small part of the total funding required. According to the Investment Plan, approximately half of the overall investment amount, USD 68.7 billion, needs to be allocated to electricity sector reform. Green hydrogen and the development of municipal capacity require more than USD 21 billion meanwhile, with the rest to be devoted to the new energy vehicles industry and skills development. Thus, the electricity sector is clearly the focus of the JET Investment and Implementation Plans. Financing in this sector shall be especially used for the decommissioning of CFPPs, the acceleration of renewables, the enhancement of the transmission grid, and a modernisation of the distribution system. More than 73 per cent of the electricity budget shall be used for solar and wind energy development and around 20 per cent for the improvement of transmission capacity. The rest is to be used for CFPP decommissioning, distribution, and new batteries. A special priority of the JET initiative is Mpumalanga Province, where 83 per cent of South Africa’s coal is produced and 12 of Eskom’s 15 CFPPs are located. The first CFPP decommissioning project, Komati, already commenced here in 2022.

    The JET Investment Plan refers to a comprehensive understanding of “social justice,” hence including principles of procedural, distributive, and restorative justice. “Just” is generally understood in terms of ensuring that those directly affected – especially vulnerable groups such as workers and local communities (including women and girls) – are not left behind. The energy transition shall be realised through the acceleration of “affordable, decentralised, diversely owned renewable energy systems” (Republic of South Africa 2022: 26). However, the JET Investment and Implementation Plans have been criticised for not complying with these social-justice principles. Procedural justice, for example, would require a transparent and inclusive consultation process. Yet, the government organised several rounds of consultation with different stakeholders but did not sufficiently include civil society actors and affected communities prior to compiling the JETP road map. Concerning matters of distributional and restorative justice, the rather narrow scope of the planning – focusing on coal mining and CFPPs as well as low-carbon development, while at the same time failing to address entrenched inequalities related to energy access and affordability – is regarded as a major shortcoming here. Further oversights at the outset were insufficient inclusion of different government entities, leading to some ministers openly questioning the JETP road map or suggesting the delaying of the planned decommissioning of CFPPs – something the ruling ANC would propose.

    Concerning financing, the fact that the vast majority of the funding package comes from loans is problematic, with grants only making up around 4 per cent of the total amount in play. Moreover, the grant-allocation process has been criticised for a lack of transparency on how recipients and projects were selected. It is also not clear whether the list of grants includes ones that were already assigned before the partnership was concluded. Less than one-quarter of the implementing entities are domestic actors (private and public), while the rest are foreign companies and agencies, mostly from donor countries. For example, more than one-third of Germany’s grant financing is to be implemented and therefore allocated to the German development agency GIZ and the German development bank KfW (and a few research institutions); it remains unclear how much of this money actually trickles down after they have covered their own costs. Additionally, more than half of the international financing in question was already disbursed (mostly to projects now already concluded) before the JET Investment Plan became open to public consultation (Lehmann-Grube et al. 2024). Hardly any money has been allocated for actual electricity-infrastructure construction or to civil society organisations and workers’ unions. Instead, most is (to be) spent on technical assistance, capacity-building, and the like.

    Indonesia

    Indonesia is the second country with which a JETP would be agreed, as signed on 16 November 2022. With a financing package of USD 20 billion, the Indonesian JETP is by far the largest of the four concluded to date. Twelve months later, the Indonesian implementation road map, the Comprehensive Investment and Policy Plan (CIPP), would be presented. Prior to its release, the CIPP underwent a three-week public-consultation period. It is considered a “living” document that shall be updated annually.

    Indonesia’s energy sector is largely based on fossil fuels. There exists a continued dependency on coal, accounting for around 60 per cent of electricity generation in recent years. This is not least the result of the pro-coal policy of previous governments. The big “coal rush” in Indonesia started already around 2011 when the country became the biggest exporter of the commodity worldwide. Especially during Joko Widodo’s presidency (2014–), however, domestic coal consumption has risen rapidly. This is not only due to increasing demand but also because the Indonesian government has actively promoted the use of coal and the construction of new CFPPs as a means to foster economic growth. Indonesia’s electricity manifesto was launched in 2015: the so-called 35,000 Megawatt Program even foresaw the construction of nearly 300 new CFPPs – a number which has, meanwhile, since been reduced (Fünfgeld 2019). Currently, Indonesia has 254 operational CFPPs with a total capacity of 51.56 gigawatts. There are an additional 40 CFPPs under construction, five of which are currently at the pre-permit stage (Ramdlaningrum and Pratiwi 2024). This staunch pro-coal policy is a result of the country’s political-economic structures, especially the fact that many politicians up to the ministerial level are involved in the coal business and thus vested interests play a key role in energy-related decisions. Coal use is supported through many direct and indirect subsidies, while the conditions for investment in solar and wind energy are far less favourable (Fünfgeld 2019). Moreover, the state-owned electricity utility PLN has been regarded as a major veto player vis-à-vis renewables due to resource constraints and a lack of experience in handling related projects. It is thus not surprising that in 2021 renewables only accounted for 19 per cent of the country’s electricity matrix, with the largest share produced via geothermal and hydro sources, while wind accounted for only 1.1 per cent hereof and solar even less besides (IEA 2024).

    Indonesia’s Comprehensive Investment and Policy Plan

    Among the central targets defined in the CIPP is the reduction of emissions from electricity generation to no more than 250 million metric tons of CO2 by 2030. This replaces the country’s previous 290 million tons target. Similarly, Indonesia’s net zero target (the year by which a balance between the amount of GHG emissions produced and the volume thereof removed from the atmosphere shall be reached) has been brought forward by ten years (from 2060 to 2050). The established target concerning the share of “new and renewable” energy sources in power generation has also been expanded to at least 34 per cent by 2030. However, these targets are termed “conditional.” Beyond them, the CIPP also defines four key principles of Indonesia’s JETP. First, it shall positively contribute to the country’s economy and assure energy affordability; second, guarantee energy security and stability; third, ensure energy sustainability; fourth, and finally, it shall also be financially sustainable for PLN and its subsidiaries in the long term.

    The CIPP identifies five areas of focus for investment: transmission lines and grid development; early CFPP retirement; the acceleration of dispatchable renewable energy sources; the acceleration of variable renewable energy sources; and an enhancement of the renewable-energy supply chain. It lists more than 400 priority projects here, and out of these the top 50 overall. Moreover, it also includes recommendations for policy reform.

    Of the USD 20 billion required in total, the IPG has pledged USD 10 billion, with the other 50 per cent coming from private funding provided via GFANZ. As is the case for all four JETPs, the package includes various financing mechanisms and is regarded as only initial funding. The CIPP estimates that the cited USD 20 billion will only cover one-fifth of incurred costs through 2030. Moreover, the fact that only around USD 300 million or 1.4 per cent of the funding is from grants has come in for criticism.

    On a positive note, as a number of Indonesian non-governmental organisations have also stressed, the CIPP has at least had a favourable discursive impact, highlighting the importance of an energy transition in a highly coal-dependent context and also linking it to questions of justice. Moreover, the partnership has also led to the Indonesian government setting more ambitious climate targets.

    Despite, as noted, a three-week public-consultation period on the initial draft, from a procedural justice perspective, the CIPP’s development has been criticised for being too opaque and not sufficiently inclusive of civil society actors and local communities. Other shortcomings concern the CIPP’s chosen scope and approach. One major problem here is that, by now, it only includes electricity sources connected to a power grid. This means, then, the exclusion of small-scale, off-grid renewable energy solutions that would be well-suited to Indonesia’s smaller islands and other remote areas. The overlooking of off-grid power sources also implies that “captive coal power plants” used by industrial actors directly and not connected to a grid are completely excluded from the JET strategy. Thus their emissions are not included in the calculations, even though those from these power plants alone could exceed 180 MtCO2. That is a significant figure, especially when compared to the emissions cap target of 250 MtCO2 intended to be reached by 2030. Moreover, these plants are not subject to phase-outs, and the additional more than 20 GW of captive coal plants that are currently in the pipeline will not be cancelled (Jong 2023).

    Additionally, the CIPP reflects the lacklustre commitment the Indonesian government and PLN demonstrate towards phasing out CFPPs. While the JETP joint statement from 2022 speaks about a “plan to accelerate the early retirement or avoid the construction of on and off-grid coal-fired power plants both before and after 2030” (Government of Indonesia 2023: 8), as well as about the “freezing of […] planned on-grid CFPPs” and a “full moratorium on any new on-grid coal power generation capacity” (Government of Indonesia 2023: 9), these objectives were severely curtailed in the CIPP. It lists only two older CFPPs with a total capacity of 1.7 GW scheduled for phasing out. This is not only very low compared to other countries such as South Africa, but also in relation to Indonesia’s huge coal fleet and its tremendous impact on domestic emission levels. According to the International Energy Agency (IEA 2024), coal is by far the largest source of CO2 emissions in the Indonesian energy sector, accounting for more than 51 per cent thereof in 2021.

    The CIPP’s understanding of a “just” energy transition mainly rests on the World Energy Council’s trilemma, which describes the simultaneous requirements to ensure equity (including affordability and access), security, and environmental sustainability. Yet, the CIPP’s definition and selection of renewable energy sources is problematic in this respect. It refers to “new and renewable” energy sources as solutions. “New” ones here also include nuclear energy. While under discussion for many years already by now, it appears unlikely that nuclear power plants will be established in the foreseeable future. Moreover, it is considered a high-risk electricity source, especially in a country plagued by earthquakes like Indonesia is. There is a clear emphasis on dispatchable renewables like geothermal and large hydro in the CIPP. These centralised and costly (in terms of financing) forms of electricity generation are only suitable for locations with larger populations or industries and often lead to environmental destruction, evictions, and the loss of livelihoods. Thus, they do not take into account aspects relating to distributional justice – which would also involve ensuring access to electricity for a larger share of Indonesian society and a consideration of who bears the costs for the related infrastructure.

    From a justice perspective, one that ought to additionally take into account questions of energy equity (the distribution of costs and benefits), it is also problematic that most of the shortlisted projects are on Java and Sumatra. This might be obvious given the fact that the CIPP only refers to on-grid power. Electricity is most needed, though, by inhabitants of the country’s eastern islands that will not be served by a power grid. This is why the inclusion of off-grid solutions is so critical for a just energy transition in Indonesia. Yet, the CIPP to date has only floated the idea of a study that shall

    explore the need for construction of community-based renewable energy projects or the integration of demand areas into the existing power grid. (Government of Indonesia 2023: 309)

    Vietnam

    On 14 December 2022, the IPG and Vietnam announced the signing of a JETP. By 2030, grants and loans worth a total of USD 15 billion shall be raised equally by the IPG and GFANZ. The goal here is to help Vietnam become carbon neutral by 2050.

    As part of this declaration, several agreements have been concluded in terms of energy, finance, and industrial policy. These are in strict accordance with national energy planning (e.g. the “Power Development Plan 8,” or PDP 8, dated May 2023) and aimed at complying with the Vietnamese form of a “debt brake” (2023 public debt was at 37 per cent of gross domestic product). The agreement states that the JETP shall “support” Vietnam to further reduce the amount of coal-fired power from 37 GW to 30.2 GW by 2030; to hold “negotiations” to close old, inefficient CFPPs, and to halt investment in the latter “where appropriate” parallel to the (temporary) expansion of them; to increase the share of renewables (wind, solar, but also hydro) to 47 per cent; and, lastly, to develop “the technical expertise to support and manage a grid increasingly powered by variable renewable energy.” These convoluted formulations regarding the closure of CFPPs suggest that they are the result of protracted, tough negotiations in which the IPG and GFANZ pressed for decisive steps to be taken towards the timely closure of CFPPs but were ultimately only met with very limited concessions on the Vietnamese side.

    Fossil fuels such as coal and gas currently dominate Vietnam’s energy mix. In the hot summer months in particular, the proportion of fossil fuels in use rises to over 60 per cent. This situation will not change by 2030: Vietnam currently has 76 CFPPs in operation and plans to build at least seven more. The country’s gas consumption will also increase, including imported liquefied natural gas: The country plans to build 13 LNG power plants and seven LNG terminals by 2030. Peak CO2 emissions are expected to be reached in 2030, with a decline occurring only thereafter. The share of renewables in the energy mix is to be 47 per cent by 2030 and 75 per cent by 2050. In 2020, coal and gas together made up 43.9 per cent of domestic energy sources (Reuters 2023).

    Vietnam’s Resource Mobilisation Plan

    On 14 July 2023, the Government of Vietnam established a “JETP Implementation Secretariat,” headed by the Minister of Natural Resources and Environment (MoNRE). Members are representatives at the department level from various ministries. The Secretariat’s main task is to support the Prime Minister in implementing the JETP (e.g. via the Resource Mobilisation Plan, RMP).

    The RMP presented in December of 2023 (RMP 2023) lists the intended uses of pledged public funds totalling USD 8.77 billion. It includes 400 possible projects overall; they have yet to be systematically prioritised or sufficiently specified. Of the pledged sum, however, only USD 321.51 million will come from grants; USD 2.7 billion from concessional loans. USD 4.8 billion is to be provided by loans offered at market rates. Vietnam had endeavoured to secure a much larger share of grants and concessional loans. The RMP names “priority” areas as well as “additional priorities” as intended beneficiaries of the pledged funds.

    “Priorities” are to develop network infrastructure, mobilise private investment to expand the power grid, and to create an appropriate legal framework for that; to modernise the energy-storage system, develop a political and legal framework for it, and invest in pilot projects on battery-storage systems; and to support ministries and other organisations to develop the first offshore wind farms. “Additional investment priorities” include proposals to increase energy efficiency and reduce electricity demand; ramp up solar energy, for example through developing rules on Direct Power Purchase Agreements (DPPAs) and the introduction of so-called surplus tariffs for rooftop and multi-use PV systems; and reduce coal-fired power generation by “restructuring” CFPPs and allowing

    pilot tests for improved operational efficiency and flexibility of four to five coal power plants using different types of coal and technology. (RMP 2023: 113)

    Heading the list of 400 possible projects, but not mentioned under either of the stipulated priority considerations, is the proposed construction of 20 hydropower plants alongside the conversion of CFPPs into ones able to use, among other things, biomass, green ammonia, and hydrogen. These different priorities seem to reflect Vietnamese investment preferences, which in turn are influenced by key business and political figures. State-owned corporations such as Petrovietnam, Petrolimex, Vinacomin, Electricity of Vietnam (EVN), but also private and semi-private companies in the “green” energy sector may stand to benefit from the JETP. These gains could also accrue to EVN’s employees, coal miners, and the largely state-owned fossil fuel industry, as well as those working in the renewable energy sector both now and in the future.

    Those set to lose out from the energy transition are public and political figures from NGOs and think tanks, despite being the ones whose considerable efforts have contributed to the possible achieving of carbon neutrality by 2050 or later. In the past three years, five environmental, land rights, and civil rights activists (accused of tax offences) and one prominent energy expert (the “Vietnam Six”) were arrested; some of them would later be sentenced to long prison terms. These arrests and convictions are in stark contrast to the “regular consultation” (“with media, NGOs and other stakeholders”) agreed on in the JETP. Possible victims also include those farmers and landowners where wind turbines, transformer stations, and power lines are being built; on the coast, this concerns harbour facilities. Up to now, they have been insufficiently compensated for the loss of land ensuing. There are only a handful of references made to gender equality in the JETP; even fewer so in the RMP, which merely contains only one passage in this regard (RMP 2023: 46–49). Not a single one of the 400 proposed projects has a recognised gender-specific focus, meanwhile.

    In Vietnam, “just” is understood almost exclusively in a socio-economic sense. This includes employment prospects for CFPP workers after coal is phased out alongside the desire to keep electricity prices low, for example in remote regions. However, this does not mean that workers, representatives of ethnic minorities, or other social actors have a say or even get to participate in these deliberations in a (self-)organised manner.

    The agreement concluded to support Vietnam in its energy transition is highly ambitious. With three investment focus areas designated as “priorities” and the targeting of energy efficiency and ramped-up solar energy, it concentrates on solving key problems in the energy transition. The planning of numerous “Technical Assistance Projects” to create and develop political and legal frameworks and concrete legal and other guidelines, not least in order to attract private investment, is also reasonable and appropriate to the context. All the more so as such frameworks are about who is allowed to operate in, and make a profit from, a new sector that promises to reap significant reward in the future. Conflicting interests can be seen, for example, in the protracted and ongoing disputes over general plans and rules regarding DPPAs. Currently, a draft decree presented by the Ministry of Industry and Trade (MoIT) is under consideration. It would allow selected large manufacturing enterprises (e.g. Samsung) to buy electricity directly from renewable energy plants going through EVN’s grid (Viet Nam News 2024).

    The mentioning of further additional priority areas of investment indicates that the Vietnamese side, the IPG, and GFANZ were unable to reach agreement on what should take precedence in the first phase of the energy transition. The vast majority of the proposed projects in the area of “phasing out coal-fired power generation” are technologically immature, economically unprofitable, and in some cases even environmentally harmful. They were likely added under pressure from corporate interests and their representatives in various ministries. The preference for expanding hydropower plants and the comparatively swift pathway towards the importing and use of LNG suggest that key players in state-owned companies as well as in various ministries continue to rely on, as they see it, tried and tested technologies as well as fossil fuels – namely, coal and gas.

    Neither the government’s own documents on national energy planning nor the JETP offer targeted solutions on how to persuade the operators of relatively young CFPPs (being merely seven years old on average) to decommission their plants or, indeed, how to financially compensate them. “Restructuring” endeavours and revised “operating strategies” are designed on the basis of the CFPPs’ continued operation. In this sense, the RMP notes:

    CFPP phase-out at large scale in Vietnam is not feasible in the near-term, but some older CFPPs may be able to transition to alternative energy sources and uses, for which transactions could be piloted. (RMP 2023: 65)

    Recent reports, based on briefing notes by UK officials and their observations of discussions taking place about the RMP, suggest the MoNRE is politically weak. Furthermore, that providers of fossil fuels such as Petrovietnam, Petrolimex, and Vinacomin as well as representatives of various ministries (including the MoIT, Ministry of Finance, and Ministry of Planning and Investment) are hindering the expansion of renewables by engaging in “persistent obstructionism,” “foot dragging,” and “blockages and bureaucracy.” “Vietnam’s cross-government consensus on efforts to fight climate change [is becoming] increasingly fragile” (Politico 2023), the British diplomats’ notes say. Not least, such observations reinforce doubts about whether Vietnam will ultimately succeed in seeing through the energy transition and prove that any attempts to do so will meet with stiff resistance from key economic and political actors.

    The Long Road to Energy Justice

    Analysis of the initial road maps for just energy transitions in South Africa, Indonesia, and Vietnam reveals all three implementation plans contain certain weaknesses. The probability of a successful start to just energy transitions commencing between 2023 and 2030 and actually coming to fruition in the period 2030 to 2050 is offset by significant challenges (South Africa) or even rather low (Indonesia and Vietnam). The underlying capitalist logic of production, prevailing ownership structures favouring fossil fuels, and existing power relations in all three countries are major obstacles to a just transition given the lack of will regarding implementation that ensues.

    One of the core problems concerning the JETP mechanism in general is that the provided funding is quite low in relation to estimated needs. The IPG and GFANZ argue that they shall only provide seed capital intended to attract private investment later. However, it remains unclear whether this further financing will actually come to pass – or, indeed, if it will be able to make up for the huge funding gaps currently in play: some 70 per cent in Indonesia and 89 per cent in Vietnam respectively for the period 2023–2030 (Martinus 2024); similarly, 91.7 per cent in South Africa for the years 2022–2027. Moreover, much of this financing is to come from concessional loans; it is questionable, meanwhile, to what extent the few grants allocated will actually see any money trickle down given implementation is largely pursued by donor agencies. The lack of financial resources is only one obstacle though, and perhaps not even the most decisive one.

    A shared constraint in many countries, but one particularly evident in both Indonesia and Vietnam, is that economic and political rulers follow a specific “productivist mantra.” This is based on the use of seemingly cheap fossil fuels and aims at energy security for industry first, then cheap electricity for citizens, then everything else if necessary – including an energy transition. More specifically, in both Indonesia and Vietnam the owners and operators of coal, gas, and other fossil fuel deposits as well as their supporters occupy the economic and political “commanding heights.” The ways in which they dominate differ, however, in terms of the use of formal rules and instruments: Vietnam’s ruling “party-state–business alliance” is extremely reluctant to allow the private, uncontrolled production and feed-in of energy that is largely free from state planning and the oversight of state-owned energy producer and grid near-monopolist EVN through DPPAs and a restructuring of Power Purchase Agreements. In Indonesia, conversely, those in control of energy production and policy are using precisely such instruments to continue to operate and even expand fossil fuel-based production. It is clear that the instruments that promote the development of renewables in Vietnam have the opposite effect in Indonesia. This leads to the conclusion that a context-specific approach to the use of mechanisms like DPPAs is required if the use of renewables is to be successfully promoted. Against the backdrop of existing patterns of domination and current power relations, seemingly neutral measures like DPPAs can work for or against a proposed energy transition. DPPAs are not a panacea.

    The justice dimension, which ought to take centre stage in the energy transitions to be fostered by these JETPs, remains rather vaguely defined: so far, no common understanding or principles have been established here. While South Africa employs, at least in theory, the by far most comprehensive framing of “social justice” as procedural, distributional, and restorative justice, Indonesia’s and Vietnam’s plans do not really spell out what kind of “justice” they are respectively aiming for. When looking at matters up to now, procedural justice has not been fully realised in any country: in South Africa and Indonesia, civil society actors and local communities were not sufficiently included in the consultation process; in Vietnam, critical voices were silenced and even jailed. Distributional and restorative justice have remained fairly limited desiderata in all implementation plans to date due to their narrowly defined scope: for example, questions of energy access, affordability, and poverty have yet to be thoroughly addressed herein. Moreover, taking justice seriously at the international level also requires the countries of the Global North to not simply transfer responsibility for a just energy transition and global decarbonisation to the Global South, but to consistently implement a just energy transition themselves.

    Another problem with the JETP implementation plans formulated so far is their lukewarm commitment to phasing out coal and really transitioning to alternative energy sources. So far, there has been no convincing plan on how to phase out CFPPs anytime soon. This is very evident in Indonesia’s and Vietnam’s implementation plans. Therein, it is clearly argued that it will not be possible to phase out coal in the foreseeable future. While South Africa plans to decommission various CFPPs, Indonesia will continue to build new such plants, is intending to phase out only two older ones, and has entirely excluded captive CFPPs from its agenda. South Africa intends to heavily invest in solar and wind power as well as transmission lines, while concerning alternatives to fossil fuels Indonesia is mostly focused on dispatchable and environmentally questionable sources such as large hydro, geothermal energy, and even nuclear power. Vietnam is building additional CFPPs through 2030 and is also focusing on LNG and gas in its planning. Due to its energy crisis and the tremendous economic and social costs of load shedding, South Africa actually does not have a great deal of choice besides fundamentally transforming its power sector; prices for technologies such as solar PV are currently attractive. In Indonesia and Vietnam, though, irrespective of the different mechanisms of domination in the two countries, the main obstacle to any energy transition remains the continued operation of CFPPs and their extremely strong political protection. A comprehensive strategy for the closure of CFPPs and the post-decommissioning stage is hence urgently needed; such endeavours will require at least an accounting for the political-economic landscape in each, not only additional financial means or other technological solutions.

    For future JETPs, as well as revisions to existing ones, what remains important is, first, a clear commitment to phasing out CFPPs within a very narrow time horizon and to increasing renewables, especially those that do not lead to other environmental or social problems down the line. This also requires the initially cost-intensive then profitable restructuring and expansion of electricity grids, as well as of energy storage and control, consumption, and efficiency. This brings us back to the problem of the funding and implementation of energy transitions and the underlying context provided by existing political-economic power structures. Therefore, second, any just energy transition will only be enforceable against the will and power of many if not most of those who determine and enforce the political and economic direction of their country’s energy policy. Third, organising the energy transition in a “just” manner requires not only a more comprehensive understanding of social justice but the participation and consideration of the most affected and the ones left out or left behind; project priorities must, accordingly, be oriented along these lines. An energy transition can only be “just” if it not only represents a shift from one technology to another but also makes access to and possibly even ownership of energy more equal as a whole. All of these issues make a change in political-economic power relations in our three examined countries an unavoidable necessity.


    Footnotes



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      Editorial Department GIGA Focus Global

      Petra Brandt

      Editorial Management


      How to cite this article

      Fünfgeld, Anna, and Jörg Wischermann (2024), Why Just Energy Transition Partnerships Are Not Enough, GIGA Focus Global, 2, Hamburg: German Institute for Global and Area Studies (GIGA), https://doi.org/10.57671/gfgl-24022


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