Report: Captive coal power plants may curb Indonesia’s climate targets

Jakarta – Captive coal power plants may prevent Indonesia from achieving its climate targets according to the Global Energy Monitor in its ninth annual survey report entitled ‘Boom and Bust Coal 2023’. Indonesia is committed to reducing greenhouse gas emissions by 31.89 percent on its own or by 43.20 percent with international support.

According to the report, captive coal power plants or off-grid power plants exclusively supply electricity to industry. Flora Champenois, lead author of the report and project manager for the Global Energy Monitor’s Global Coal Plant Tracker said that a green transformation policy approach to reducing emissions can backfire. This is because the proposal put forward is that coal-fired power plants together with other fuels such as ammonia can increase emissions in the long term.

“Not only in Japan but throughout Southeast Asia is encouraging the practice. Untested technology will make it impossible for Vietnam, Indonesia and the Philippines to meet their climate targets, and it will be a financial burden in this price-sensitive market. There is no room for new coal-fired power or extending the life of existing plants when the world needs to shut down around 117 gigawatts annually,” said Champenois.

Indonesia has canceled plans to build a new coal-fired power plant with a capacity of nearly 9 gigawatts (GW) in 2022. Meanwhile, in the same year, the operating capacity of Indonesia’s coal-fired power plants increased by 9 percent from 39.4 GW to 40.6 GW, and up 60 percent from 25.4 GW in 2015.

Champenois said, at this level the transition from existing coal plants to renewables are not happening fast enough to avoid a climate crisis. The IPCC and the United Nations have both renewed their calls to phase out coal power globally as a last chance to avert the worst of the dangers of global warming.

On the other hand, it is feared that the operation of the captive coal power plant will undermine the USD 20 billion transition fund from the Just Energy Transition Partnerships (JETP) scheme.

The Indonesian government has allowed exceptions for captive power plants referring to regulations issued in September 2022, namely Presidential Regulation 112/2022 concerning the Acceleration of Development of Renewable Energy for the Provision of Electricity.

The Global Energy Monitor report also found that Indonesia still has 18.8 GW of coal-fired power plants under construction. This number exceeds all other countries except China and India. In addition, there are around 7 GW of coal power plants currently in the pre-construction stage.

According to the Global Energy Monitor “about 13 GW (58 percent) of the capacity under construction and in pre-construction is captive coal power plants for industries such as nickel and cobalt smelters, which are exempt under JETP. This means that Indonesia may still be far from stopping coal-fired power plants.” (Hartatik)

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