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INSIDE INDONESIA'S COAL CONUNDRUM

Indonesia stands as the world's fourth-most populous country, boasting the seventh-largest economy, ranking 12th in terms of energy consumption and holding the distinction of being the largest exporter of coal. The nation heavily relies on coal as a primary source of energy for both domestic needs and international trade.

In April 2023, Indonesian President Joko Widodo stated his government's plan to retire at least 118 coal-fired power plants with the financial assistance of foreign nations was hindered by COVID.

Given the circumstances, the Indonesian government should explore novel and cost-effective ways to slash global carbon dioxide (CO2) emissions in order to maintain its commitment to the Paris Agreement's global temperature goals. 

President Widodo has identified two primary challenges that Indonesia must overcome in its mission to retire its current tally of 253 coal plants: financial constraints and a deficiency in technological capabilities aimed at diminishing coal dependence within its energy portfolio. 

Coal power plants have exerted a significant influence on Indonesia's energy sector, accounting for 66 percent of power generation in 2021. Alarming statistics reveal that coal plants have been responsible for approximately 40 percent of the sector's emissions, and an astonishing 90 percent of emissions from the power industry.

Despite these concerning figures, the recent Long-Term Electricity Procurement Plan (RUPTL) of state-owned electricity company Perusahaan Listrik Negara (PLN) still includes the addition of 13.8 GW of coal power plants over the next decade. Such a trajectory starkly contradicts the objectives outlined in the Paris Agreement.

IESR executive director, Fabby Tumiwa, emphasised the prudence of canceling coal-fired power plants, asserting that such a measure would not compromise energy security or affordability. Tumiwa further stressed that compared to alternative interventions like co-firing and early coal retirement, cancelling these plants would be the most cost-effective approach. He also highlighted that this decision would present an opportunity for PLN to increase renewable energy capacities while simultaneously reducing system and electricity costs.

A study conducted in 2022 by the Institute for Essential Services Reform (IESR) and the University of Maryland stated that 9.2 GW of coal must be phased out from the grid of Perusahaan Listrik Negara (PLN), the state-owned electricity company, by 2030. It also advocates for the complete elimination of unabated coal plants by no later than 2045.