Research agencies: Indonesia’s energy transition policy stagnant

Jakarta – Research institute Trend Asia and the Center for Research on Energy and Clean Air (CREA) assess the energy transition policy in Indonesia is stagnant and the policy of discontinuing steam power plants (PLTU) is inconsistent.

In his speech at the Opening Ceremony of Hannover Messe 2023 on April 17, 2023, President Jokowi seemed to give a breath of fresh air by saying that he would close all coal-fired power plants by 2025. But not long afterwards his office corrected the statement and said that all new coal plants would be closed by 2050 and that in 2025, 23% of energy would come from New Renewable Energy (EBT).

CREA, through a study entitled ‘Ambiguity vs Ambition: A Review of Indonesia’s Energy Transition Policy’, assessed that the government’s policy so far is still far from adequate and noted, among other things, that the commitment of the Indonesian government is still weak.

CREA researcher Jobit Parapat said that based on the findings, “even though it uses new technology, it has the potential to be a false solution and does not solve the problem of energy transition in Indonesia”.

According to him, these false solutions include biomass co-firing which has the potential to drive deforestation and is being challenged for its status as carbon neutral energy on the international stage, ammonia co-firing and CCUS (Carbon Capture, Utilisation, and Storage) which is unproven and potentially expensive, or Clean Coal which remains dirty and environmentally damaging.

The solutions offered have the potential to shift focus and funding away from clean energy such as solar and wind. The co-firing of ammonia, biomass, CCUS and Clean Coal projects could also potentially be used as an excuse to delay the phase-out of coal power.

Meanwhile, Trend Asia researcher Andri Prasetiyo said that currently the majority of Indonesia’s electricity network is in a state of oversupply. The Java-Bali network is oversupplied by 30%, even the Sulawesi network has an excess installed capacity of up to 69%. This condition burdens the finances of PLN, which still has to buy excess electricity. This is bad for the climate and carbon emissions as half of the electricity mix comes from coal.

“To solve this problem, the Indonesian government should be more progressive in shaping energy policies to meet the 1.5°C target, one of which is by accelerating the early retirement of coal-fired power plants,” said Prasetiyo.

According to him, instead of solving the problem, the government plans to increase the share of coal and other fossil energy in Indonesia’s electricity mix in the RUPTL (Electricity Supply Business Plan). The government plans 40.6 GW of fossil electricity for commercialisation between 2021 and 2030, of which 34% (13.8 GW) will come from coal and 14% (5.8 GW) from gas and diesel.

While President Jokowi emphasised that he would ban and cancel new power plants unless they had secured financial approval or were under construction, several power plants with PPA (Power Purchase Agreement) status and commercial operation dates (COD) in 2024 or beyond, were not cancelled in the 2021-2030 RUPTL.

What PLN is doing is accelerating the Fast Track Program (FTP) 1, FTP 2, and 35 GW mega projects, 70% of which are proposed coal plants, including PLTUs that have not received financial approval. (Hartatik)

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