Indonesia’s Plan to Retire Coal Plants ‘Challenging’ [Op-Ed]

Indonesian President Prabowo Subianto’s commitment to phase out coal plants in 15 years might be a tall order but not impossible, as long as there is political will, adequate financing and technology to advance the country’s energy transition, analysts said.

Indonesia, a signatory to the Paris Agreement, has set a net zero emissions target by 2060 and has committed to phasing out coal plants while boosting renewable energy capacity. However, on November 19, at the G20 Summit in Brazil, Prabowo announced that Indonesia will achieve net zero emissions by 2050, phase out coal plants within the next 15 years, and build 75 gigawatts of additional renewable energy.

“Although it is a challenging goal, with the right plan, policies, investment and international support, Indonesia has the potential to retire all of the coal-fired power plants within 15 years and replace them with renewable energy sources,” Mutya Yustika, an energy finance specialist for Indonesia at the think tank Institute for Energy Economics and Financial Analysis, told China Daily.

Ember, an independent global energy think tank, released a report on Wednesday which estimated that Indonesia needs to add 8 gigawatts of renewable capacity while reducing coal usage by 3 GW each year for on-grid power if it wants to hit its target of phasing out all coal power plants by 2040. The country must also integrate 4 gigawatt-hours of battery storage annually until 2040 to maximise solar energy usage, especially during peak demand periods in the non-solar hours.

“Phasing out coal by 2040 would position Indonesia to meet the global 1.5 C climate target, marking a significant step toward a sustainable, low-carbon future,” said Dinita Setyawati, Ember’s senior electricity policy analyst for Southeast Asia.
She said the government needs to issue “clear and comprehensive guidance” on retiring coal power plants, as that will send a strong signal that Indonesia is serious about realising its commitment.

Putra Adhiguna, the Jakarta-based managing director of the independent think tank Energy Shift Institute, said Prabowo’s coal plant phase-out target “is appreciated, but it will need very high commitment, beginning by outlining near-term targets in Indonesia’s electricity plans”.
Coal export weighs heavily for Indonesia. It also provides electricity to millions of households across the archipelago. However, coal accounts for nearly 60% of Indonesia’s total emissions, according to the International Energy Agency.

Setyawati of Ember said the government needs to adjust the domestic pricing mechanisms for coal to make renewable energy prices more competitive.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of Energy Tracker Asia.

This article was first published on China Daily and republished with permission.