Jakarta – A report released by the Center for Research on Energy and Clean Air (CREA) and Trend Asia assesses that the government’s policies in implementing energy transition are ambiguous, especially in the power generation sector. The report released in March, titled “Ambiguity versus Ambition: A Review of Indonesia’s Energy Transition Policy,” said approximately 33 percent of the 58 gigawatts (GW) of total installed fossil-fuel generating capacity in Indonesia has exceeded requirements to meet peak demand.
Andri Prasetiyo, Program Manager for Trend Asia, said the oversupply of electricity exceeds the standard national reserve margin of 30–35 percent, with a fixed operation and maintenance cost of around USD 1.2 billion to keep this excess capacity in working condition. He said, the energy transition mechanism (ETM) and just energy transition partnership (JETP) schemes currently being offered in Indonesia will be a very important opportunity to accelerate the transition.
“Especially, to finance the early retirement of coal-fired power plants and encourage the development of renewable energy-based power plants, especially solar and wind power,” said Prasetiyo, adding that new and important policies and investment plans under the Electricity Supply Business Plan (RUPTL) are highly anticipated.
With the 11th largest coal reserves in the world, Indonesia is the 3rd largest producer as well as being one of the largest consumers in the world, countries in Southeast Asia will face many challenges in transitioning from coal, despite the abundant resources and potential for low-carbon energy.
CREA and Trend Asia formulated several important and strategic recommendations for the government in the report, including cancelling all planned new fossil fuel power plants, reevaluating fossil fuel projects that are subject to renewed Power Purchase Agreements (PPAs) to exempt utilities and distribution companies from the large capacity fees that must be paid to maintain existing idle fossil fuel power plants. (Hartatik)
