Jakarta – The Minister of Energy and Mineral Resources (MEMR), Bahlil Lahadalia, stated that the early retirement of coal-fired power plants (PLTU) will be carried out in stages to maintain commitments to the Paris Agreement while maintaining the stability of national electricity supply.
Bahlil stated that the decision not to close the PLTU immediately was a step that considered various economic aspects and domestic energy needs.
“We understand that the global decarbonisation target is very important, but it must be realistic with our economic conditions. The cost of producing electricity from coal-fired power plants is only around 5 to 6 cents per kWh. In comparison, renewable energy-based power plants can reach more than 10 cents per kWh,” Bahlil said in an official statement on Tuesday, February 11.
According to Bahlil, the difference in production costs means that the sudden closure of the PLTU could result in a considerable subsidy burden, reaching Rp 5-6 trillion per gigawatt per year.
“Who will bear that burden? The state, the subsidies, or the people? Therefore, we must make a gradual transition, with efforts to reduce emissions through blending with gas and the application of carbon capture technology,” he explained.
Bahlil emphasised that although the United States had left the Paris Agreement, Indonesia remained fully committed to the agreement.
“The decision of other countries does not mean we have to close the PLTU immediately. We will still utilise coal in the short term while continuing to develop innovative solutions to reduce emissions, such as blending with gas energy and carbon capture technology,” he added.
The government plans to strengthen the integration of coal-based power plants with renewable energy sources in the context of a sustainable national energy transition. Furthermore, Bahlil stated that an in-depth evaluation of the energy transition strategy will continue to be carried out to ensure that the closure of the PLTU does not disrupt the stability of the electricity supply and does not burden the national economy.
“Energy transformation must be done in a measured way and not at the expense of industrial competitiveness or people’s welfare. We will continue to review and adjust policies in line with technological advances and global economic dynamics,” he added. (Hartatik)
