Jakarta—Coal is still a mainstay in meeting Indonesia’s energy needs. Based on data from HEESI ESDM, in 2023, coal dominated with a contribution of around 39.3 percent in the national primary energy mix. Oil followed at around 29.6 per cent, natural gas at around 17 per cent, and renewable energy at only 14.1 per cent. This indicates that despite efforts to accelerate the energy transition, dependence on coal is still quite high.
Raditya Wiranegara, Research Manager at the Institute for Essential Services Reform (IESR), revealed that more than two-thirds of Indonesia’s electricity is still generated by burning coal. In addition, PLN is expected to continue building coal-fired power plants with a total capacity of 5,876 MW until 2030. Coupled with captive coal plants, Indonesia has the world’s third-largest coal plant construction plan after China and India. On the other hand, Indonesia has also committed to reducing greenhouse gas emissions to achieve a net-zero emission (NZE) target in the energy sector by 2060. The Just Energy Transition Partnership (JETP) financing scheme that is currently being updated targets NZE by 2050 in the electricity sector.
“Indonesia’s energy transition is currently running on two opposite tracks. On the one hand, there are plans to increase the capacity of power plants, especially captive power plants. Still, Indonesia also targets increasing the share of renewable energy in the electricity mix to 44 per cent by 2030. This step is part of the effort to achieve peak emissions in 2030 of 290 million tons of CO2. However, to achieve this target, both PLN and captive power plant owners must cut most of the new development plans and develop renewable energy as a replacement,” Raditya said.
The IESR study shows the potential for cancelling nine PLN power plant projects still in the financing stage. PLN could shift the planned 220 MW power plant to a biomass plant. In addition, with coal demand expected to decline by 2.3 per cent by 2026, Indonesia can begin transitioning away from reliance on this fossil energy source.
“By decreasing the use of coal-fired power plants, Indonesia can reduce fuel costs and variable costs across the energy system. The shift towards more cost-effective renewable energy is one of the main drivers in reducing the cost of the national energy system. However, this energy transition requires the involvement of all parties, ranging from the central government, local governments, the private sector, to the community,” said Raditya.
On the other hand, opportunities for economic transformation in coal-producing areas are also a significant concern. The IESR study shows that the Paser Regency in East Kalimantan and Muara Enim Regency in South Sumatra can develop leading sectors outside coal. Paser has the potential to develop financial services, manufacturing, and education. Meanwhile, Muara Enim can develop the manufacturing, accommodation, and food and beverage sectors. This diversification step is essential to ensure the economic sustainability of coal-producing regions, especially when global demand for coal begins to decline.
“With huge opportunities in the renewable energy sector and economic diversification, Indonesia should capitalize on this momentum to strengthen inclusive and sustainable energy transition policies. This will not only help reduce carbon emissions but also create new economic opportunities in areas previously dependent on coal,” said Raditya.
The Indonesia Energy Transition Dialogue (IETD) 2024 event, which will take place on November 4-6, 2024, can be an important moment to discuss the direction of Indonesia’s energy transition policy so that it can provide renewable energy for the industrial sector. The theme of IETD 2024 is “Realizing a Just and Directed Energy Transition.” Indonesians can register at ietd.info to get involved in the IETD 2024 event.
This article is part of a collaborative media partnership between tanahair.net and the Institute for Essential Services Reform (IESR).
Source:
https://iesr.or.id/infografis/2-daerah-penghasil-batubara-terbesar-kaya-energi-terbarukan/
https://iesr.or.id/dominasi-batubara-di-indonesia-bagaimana-peluang-energi-berkelanjutan/
