Jakarta – Energy and environmental research institute EMBER has highlighted the plan to add 26.8 gigawatts (GW) of steam power plant capacity in the National Electricity General Plan (RUKN). According to EMBER’s analysis, this expansion contradicts Indonesia’s target to reduce carbon emissions and could hamper the implementation of the Just Energy Transition Partnership (JETP).
“This plan is not in line with the energy transition commitments that Indonesia has announced in various international forums, including the target of phasing out coal by 2040,” said Dody Setiawan, Senior Climate and Energy Analyst for Indonesia at EMBER, in a written statement on Thursday, February 20.
According to the EMBER report, of the total additional capacity of 26.8 GW of power plants, around 20 GW comes from the expansion of captive power plants that specifically supply electricity to industry. This risks increasing the industrial sector’s carbon emissions and weakening the competitiveness of Indonesian products in an increasingly clean energy-oriented global market.
“Producing materials for green technology with energy sources that still have high emissions is a counterproductive step. Indonesia should start reducing the emissions of its smelter industry with renewable energy so that the sustainability aspect and competitiveness of its products increase,” Dody explained.
Financial and regulatory impact of new PLTU
EMBER also highlighted that the new PLTU planned in the RUKN will face various financial and regulatory challenges. Under existing policies, new power plants can only operate until 2050 and must reduce emissions by 35% within 10 years. In addition, these plants will not benefit from the domestic market obligation (DMO) scheme, so their production costs are more expensive than renewable energy.
EMBER’s calculations show that the cost of generating electricity from a new captive power plant can reach USD7.71 cents per kilowatt-hour (kWh). This figure is higher than PLN’s electricity generation (BPP) cost in 2020, which was only USD7.05 cents/kWh. Electricity tariffs from renewable energy such as solar and wind power range from USD 5.5 to 5.8 cents/kWh.
“With higher costs than renewable energy, the expansion of captive power plants will actually increase the industry’s financial burden and domestic energy prices,” said Dody.
In addition to economic factors, new power plants also pose a risk of negative impacts on health and the environment, especially for people living around industrial areas.
Katherine Hasan, an analyst from the Center for Research on Energy and Clean Air (CREA), said that the planned expansion of captive power plants, especially in Sulawesi and North Maluku, will increase health risks for residents due to air pollution.
“Communities living near industrial areas will bear the greatest health impacts due to exposure to air pollution and toxic particles from the PLTU. In addition, the ecological impact of this pollution is also difficult to recover from,” said Katherine.
According to Katherine, Indonesia should accelerate the transition to renewable energy rather than expand its coal use. “Committing to a coal phase-out pathway while accelerating the transition to renewable energy will help Indonesia overcome the challenges of achieving its low-emission targets,” she added.
EMBER recommends the government re-evaluating the plan to add PLTU capacity in the RUKN. Accelerating the development of renewable energy, enforcing emission regulations, and increasing investment in clean technology are considered more appropriate steps to ensure the sustainability of Indonesia’s electricity sector.
“Indonesia has great potential in renewable energy. If we want to achieve the Net Zero Emission target by 2060, the government must be bolder in reducing dependence on coal,” Dody concluded. (Hartatik)
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