Jakarta—The Institute for Essential Services Reform (IESR) questions the implementation of Presidential Regulation (Perpres) Number 112 of 2022 concerning the Acceleration of Renewable Energy Development, especially regarding the plan to retire coal power plants. Although the policy is an important part of energy transition efforts, a clear road map for its implementation has not been seen until now.
According to IESR Executive Director Fabby Tumiwa, although former Energy and Mineral Resources (MEMR) Minister Arifin Tasrif laid important foundations for the energy transition during his tenure, including ending the construction of new power plants by PLN, the implementation of the roadmap for the cessation of power plant operations has yet to achieve the expected clarity.
“Arifin Tasrif has made a first step by stopping the construction of new power plants by PLN, which provides a foundation for increasing renewable energy in the future,” Fabby said Monday, August 19.
However, Fabby highlighted the importance of a strong commitment from the new Energy and Mineral Resources Minister, Bahlil Lahadalia, to continue and clarify the plan to stop operating the power plants.
“The road map mandated by Presidential Regulation No. 112/2022 should have been prepared by the Ministry of Energy and Mineral Resources with the approval of the Ministry of Finance and the Ministry of SOE so that PT PLN can carry out the early retirement program for coal power plants, including for Cirebon 1 coal power plant in December 2035 with the Energy Transition Mechanism (ETM) scheme,” Fabby explained.
IESR’s study shows that all coal power plants in Indonesia must be phased out before 2045, with 80 per cent of them retired before 2040, to ensure that Indonesia can fulfil its global commitment to limit global warming to 1.5 degrees Celsius following the Paris Agreement. According to Fabby, this step is also needed to increase the penetration of renewable energy to reach 40 per cent in the primary energy mix by 2030.
However, despite the renewable energy mix target of 23 per cent by 2025, IESR data shows that by 2023, the contribution of renewable energy in the energy mix had only reached 13.09 per cent, far from the set target.
“Indonesia’s energy transition requires strong leadership, both from the President and the Minister of Energy and Mineral Resources, to coordinate the optimal utilization of renewable energy,” Fabby added.
IESR recommends that Minister Bahlil soon ensure that PLN increases renewable energy capacity in the 2024 Electricity Supply Business Plan and encourage the concept of “power wheeling” to be accommodated in the New and Renewable Energy Bill (EBET) as one strategy to increase private and state-owned participation in renewable energy investment.
In addition, Fabby also reminded Minister Bahlil to ensure the implementation of the Just Energy Transition Partnership (JETP) goes according to plan.
“JETP implementation requires consistency and long-term commitment. The new Minister of Energy and Mineral Resources needs to maintain policy sustainability and ensure that international support remains solid in encouraging energy transition in Indonesia,” Fabby concluded. (Hartatik)
