Sustainable Infrastructure Assistance Program Phase II – Supporting Sustainable and Universal Electricity Access Phase 2 – Climate Change and Carbon Market Specialist

Under ADB Sustainable Infrastructure Assistance Program Phase II – Castlerock, in 2020, supported PLN in assessing the impact of the future carbon caps and trade regime to its current operation. Under its scope of work, Castlerock conducted: 

• A review of the existing Indonesian policies and existing studies concerning GHG emission and carbon market that are applicable to the Indonesian power sector
• A review of best practices of ETS in other countries and lessons learned for the power sector
• An analysis of the cost impacts of the proposed cap for selected power plants, based on their mitigation options 
• An analysis of the institutional framework for the ETS that allows the smooth implementation of the pilot phase of the ETS
• An update of international carbon market under Article 6 of the Paris Agreement and analysis of its potential future impact on the domestic ETS and price of offsets

Using information from above, Castlerock  developed a new proposal for the cap which considers both NDC target and PLN’s financial and technical capability.