Half-hearted, government’s pledge to retire the coal powered plants

by: Hartatik

Semarang — The government’s commitment to retire the coal powered plants (PLTU) is still half-hearted. Construction of new coal powered plants is still accommodated by Presidential Regulation  no. 112 of 2022 concerning the Acceleration of Renewable Energy Development for the Provision of Electricity, signed by President Joko Widodo, last Wednesday (13/9).

Executive Director of the Indonesian Center for Environmental Law (ICEL), Raynaldo G Sembiring said that the commitment to retire the coal-fired power plant in the presidential regulation is not ambitious enough, considering the electricity condition in recent times, considering grids, especially Java Island, are already over-supply.

“Without the retirement of fossil generators, the development of renewable energy has the potential to be hampered,” he said.

ICEL noted several things from the presidential regulation that needed further criticism. In Article 3 Paragraph 4, the development of new coal powered plants is still permitted as long as it has been stipulated in the General Plan for the Provision of Electricity (RUPTL 2021-2030) prior to the enactment of this regulation.

This Presidential Regulation still allows the construction of new plants, as long as it is integrated with industries that are built oriented to increasing the added value of natural resources or are included in National Strategic Projects, with the condition that they are committed to reducing greenhouse gas emissions, and operating a maximum of until 2050. In PLN’s RUPTL 2021-2030 alone there are still 37 new coal powered plants in the pipeline.

“That’s just from PLN’s RUPTL, it hasn’t counted power plants in other business areas whose data is difficult for the public to access,” he added.

Further, Sembiring said several of these coal powered plants have also been proven to have failed to obtain funding, and have not been built. “We think that Presidential Regulation No. 112 of 2022 should be a momentum to review all RUPTL business areas other than PLN.”

The replacement of power plants whose operation is terminated is also not explicit, by only stating “can be replaced with renewable energy generators” (according to article 3 paragraph 6), instead of explicitly requiring replacement with renewable energy.

Coal powered plants growth projection
(Infographics by Hartatik)

ICEL Deputy Director, Grita Anindarini added, environmental responsibility also needs to be required. Until now, a lot of coal power plants have caused environmental pollution or damage which not only has a major impact on the environment, but also harms the community.

“Closure of coal power plants should not eliminate the responsibility of the generator owners. The responsibility for restoring and resolving conflicts certainly needs to be resolved and accounted for before the PLTU is retired,” she said.

Anindarini said that the accelerated development of Renewable Energy will not make the environmental safety net and human rights sidelined. The practice of building power plants, which have become a national strategic project that often causes conflicts, needs to be used as an evaluation for clean energy development in the future.

Chairman I of the Indonesian Renewable Energy Society (METI) Bobby Gafur Umar said that the issuance of this new and renewable energy (NRE) Presidential Regulation can be followed by fiscal incentives and special funding policies for renewable energy projects. This Presidential Regulation is expected to provide a legal umbrella reference in buying and selling renewable energy electricity.

“The electricity sales figures stated in the Presidential Regulation have not fully met investors’ expectations. However, the existence of incentives and support in the form of special funding can make renewable energy investment more attractive,” said Umar.

The expected fiscal investment, he said, could take the various forms, ranging from import tax incentives for machinery and equipment for renewable energy generation to tax holidays — for example, the first five years.


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