Indonesia intends to landfill coal-fired power plants by 2060 for reasons of CO2 neutrality

JAKARTA – The Indonesian state utility Perusahaan Listrik Negara is aiming to phase out coal power as the country pushes its ambitions to be CO2 neutral by 2060.

The accelerated schedule follows a decision earlier this month to stop building new coal-fired power plants and the government’s plans to introduce a carbon tax.

It also follows the criticism that President Joko Widodo received from the local media for not advocating curbing greenhouse gas emissions at the Leaders Summit on Climate hosted by US President Joe Biden in April.

PLN deputy CEO Darmawan Prasojo announced the plan at a parliamentary hearing on Thursday. The company will seek to replace coal and coal-fired power plants with a value of 1.1 gigawatts with renewable energies by 2025. A total of 49 GW coal-fired power plants will be gradually shut down by 2056.

Indonesia’s energy demand is projected to reach 1,800 terawatt hours by 2060, of which PLN expects 53% to come from solar and wind sources. Currently, 60% of the archipelago’s energy comes from coal, while less than 1% comes from solar and wind power, according to the International Energy Agency.

“The goal by 2060 is that all power plants in Indonesia are already using clean energy,” said Prasojo. “We believe we can be carbon neutral by 2060.”

Indonesia, the world’s largest coal exporter by weight, has an unconditional 29% emissions reduction target under the Paris Agreement, while government officials said in March the country hopes to achieve net-zero emissions by 2070.

The major industrialized countries – including Japan, the US, South Korea and Europe – have announced that they are committed to achieving zero net greenhouse gas emissions by 2050. Among the ten members of the Association of Southeast Asian Nations, three – Cambodia, Myanmar and Laos – have made such a statement, according to the Climate Action Tracker.

At a separate event on Thursday, Luhut Binsar Panjaitan, Coordination Minister for Maritime Affairs and Investment, also spoke about the phasing out of coal-fired power plants. “Fossil fuels have become a common enemy [of the world]”said Luhut, known as President Joko Widodo’s right-hand man.” The Indonesian government will also be able to gradually shut down the coal-fired power plants because international banks no longer want to finance fossil fuels. “

According to the IEA, Indonesia was the tenth largest emitter of CO2 in the world.

PLN’s plan provides that nuclear energy is an integral part of the energy mix. According to the materials submitted to Parliament, in 2040 nuclear energy will become a factor “to maintain system reliability when the development of nuclear technology becomes safer”.

Indonesia has consistently had nuclear ambitions since the establishment of its National Nuclear Energy Agency in 1958. Though strong public opposition long prevented large-scale development, Jakarta revived its goal in October by including provisions in a controversial collective law passed by parliament to encourage private sector investment in nuclear power.

The new PLN plan follows its promise to stop the construction of new coal-fired power plants after the construction of the power plants already in the pipeline, as the local media reported in mid-May. The new coal-fired power plants are part of government plans to develop additional electricity capacity of 35 GW.

The Treasury Department is also considering introducing a carbon tax. A document released last week outlining the economic framework and fiscal policies for next year said that such a tax could be levied on fossil fuels and emissions produced by factories or vehicles, as well as on “carbon-intensive” industries such as Pulp and paper are released. Cement, power generation and petrochemicals.

Indonesia’s goal of carbon neutrality by 2060 is “clearly possible” and “could even be accelerated by around 2050,” said Fabby Tumiwa, executive director of the Institute of Essential Services Reform, an Indonesian think tank focused on energy and the environment .

But PLN’s plan “will require certainty from the government,” Tumiwa said, adding that a presidential decree could be a way to ensure the phasing out of coal-fired power plants takes place.

Building renewable power plants requires private investment as PLN cannot bear all of the costs, he said. The challenge, he added, is “to design a bankable project” with “the government supporting the investment climate”.

Additional reporting from Ismi Damayanti