The Importance of Terminating Coal Power Plant Operations to Pursue Emission Reduction Targets

press release

Jakarta, 20 June 2023 – The Institute for Essential Services Reform (IESR) urges the Indonesian government to transform the energy sector to achieve peak emissions in 2030 and carbon neutral in 2050. This align with President Joko Widodo’s commitment to achieve net-zero emissions in 2060 or earlier as a form of Indonesia’s responsibility to reduce the threat of global warming.

According to Climate Watch’s data, the energy sector is the largest contributor to greenhouse gas emissions. Globally, the sector produces 36.44 gigatons of carbon dioxide equivalent (Gt CO2e) or 71.5% of total emissions. Meanwhile, based on the Ember Climate report, Indonesia ranks as the 9th largest CO2 emitter from the electricity sector in the world, reaching 193 million tons of CO2 in 2021. For this reason, the government must reduce emissions significantly in the energy sector, especially in the electricity sector.

Fabby Tumiwa, Executive Director of IESR stated that as one of the world’s largest economies as well as the largest emitters, Indonesia is expected to show leadership and commitment to decarbonize its energy sector through energy transition policies and plans. President Joko Widodo’s (Jokowi) political commitment must be translated into a series of policies, regulations and plans that align with one another.

“There are signs that President Joko Widodo’s (Jokowi) political commitment is trying to be countered and hindered by a number of parties who are reluctant to make an energy transition, and ultimately want to maintain the status quo, which is to not reduce coal consumption to supply electricity. For this reason, the President must observe in detail which parties are reluctant to do energy transition or try to downgrade the government’s ambition and buy time until they can change the political decision,” Fabby added.

Deon Arinaldo, Manager of the Energy Transformation Program said that IESR views the termination of coal-fired power plants in Indonesia as an important matter. As one of the recipients of Just Energy Transition Partnership (JETP) funding, Indonesia is committed to achieving a peak emission of 290 million tons of CO2 by 2030, and increasing the renewable energy mix in the electricity sector to 34% by 2030,” said Deon.

“The target stated in the JETP commitment is higher than the policies and plans that have been set at this time. For example, the emission target covers the power sector as a whole as well as the renewable energy mix which is 10% higher than PLN’s RUPTL 2021-2030. This means that in order to achieve this target in approximately 7 years, transformation is needed not only in planning the electricity system, such as stopping the operation of coal-fired power plants,” said Deon.

Assuming that all power plants, including coal-fired power plants, planned in the 2021-2030 RUPTL are built, IESR calculates that to achieve the JETP target,  at least 8.6 GW coal-fired power plants must be retired before 2030 followed by the termination of 7.6 GW CFPP operations before 2040. On the policy side, accelerating  renewable energy development and investment disincentives for fossil energy generators also need to be continuously encouraged.

Based on the Delivering Power Sector Transition report, IESR found that of the 13.8 GW PLTU which is planned for development in the 2021-2030 RUPTL as many as 2.9 GW could be canceled, 10.6 GW needed to end operations early, and 220 MW to be replaced with renewable energy power plant such as biomass. The cancellation of the 2.9 GW PLTU is the cheapest option to avoid GHG emissions in the electricity sector.

“From the analysis we conducted in this report, canceling the construction of coal-fired power plants coupled with early retirement for power plants can help achieve the peak emission target agreed upon in the JETP. We estimate that a 5.6 GW PLTU must be retired before 2030 if the 2.9 GW PLTU can be canceled,” said Akbar Bagaskara, Researcher of the Electricity System.

Based on the IESR study entitled Financing Indonesia’s coal phase out: A just and accelerated retirement pathway to net-zero, the cessation of coal-fired power plants is beneficial from an economic and social perspective, such as avoiding the cost of subsidized electricity produced from coal-fired power plants and health costs, respectively. Amounted to $34.8 and $61.3 billion—2 times to 4 times as much—of the cost of stranded assets, decommissioning, job transition, and losses in coal revenues.

“Until 2050, it is estimated that investment costs will be required to develop renewable energy and supporting infrastructure, as a substitute for the retired coal power plants, amounting to $ 1.2 trillion. International funding support will certainly be needed to make this happen. However, by retiring PLTU early and accelerating the development of renewable energy in Indonesia, it is estimated that there will be 168,000 deaths that can be avoided by 2050,” said Raditya Wiranegara, IESR Senior Researcher.

Translator: Regina Felicia Larasati

A Moment of Reflection on Ourselves and Our Climate Targets

Jakarta, 11 May 2023 – This year’s Earth Day is quite a unique one as it falls on the day of Eid ul-Fitr, an Islamic celebration that marks the end of the month-long fasting of Ramadhan. Theologically, those who are successful in withholding all kinds of worldly desires during the holy month would see their entire past sins being wiped out clean. Despite eating less, food waste in Indonesia is on the contrary increasing almost 20% higher during Ramadhan relative to other months, as hinted by the Ministry of Environment and Forestry (MoEF). In terms of GHG emissions, Food Loss and Waste (FLW) in 2000 – 2019 accounted for 1,702.9 million tons  of CO2 (MtCO2) or 7.29% per year of GHG emissions in Indonesia, according to a 2021’s report organized by Bappenas. Apart from that, electricity consumption is also increasing by 5% according to PLN, mainly driven by industrial activities and household electricity consumption. With almost 70% of Indonesia’s electricity still supplied by coal-fired power plants, such an increase would surely increase GHG emissions, particularly carbon dioxide. Sadly, all of these contradict the spirit of Eid ul-Fitr itself as we are not entirely cleansed per se, solely due to our activities during the holy month having instead contributed to the GHG emissions.

The question then, why the concern about GHG emissions?

The Earth’s climate has significantly shifted compared to its pre-industrial state. According to IPCC AR6 Synthesis Report, global temperature has been recorded to be 1.09 °C higher in 2011 – 2020 than in 1850 – 1900. The figure indicates that heat being trapped within the sphere has exceeded what is required to keep the Earth’s climate warm enough for its inhabitants. Large concentrations of GHG emissions, including carbon dioxide, methane, and nitrous oxide, in the atmosphere have been traced to be higher than during prehistoric times, ranging between 800,000 to 2,000,000 years ago, as stipulated in the report. Human-induced GHG emissions have been thought with absolute certainty to cause the continuous emissions increase, inching closer to more prevalent extreme weather events.

So, what sort of human activities of prominent influence on the climate? The report further elaborates the GHG-emitting human activities and their contributions to global GHG emissions. 79% of global GHG emissions in 2019 came from the energy, industry, and building sectors, whilst the remaining came from agriculture, forestry, and land use (AFOLU). The former has been contributing to the large generation of carbon dioxide, particularly from fossil fuel combustion and industrial processes (CO2-FFI). Such conditions come as no surprise as most of the energy that we consume is still being sourced from fossil fuels. This is especially true for developing countries, whereby fossil fuels are perceived to be much cheaper than clean alternatives. For these countries, there is a balance that needs to be struck between reducing their GHG emissions and maintaining economic growth.

 Has Indonesia exerted enough effort in its commitment towards climate change?

Just last year, Indonesia submitted its enhanced NDC (ENDC) to the UNFCCC to demonstrate its continued commitment to the climate change issue. Within the new document, the bar has been slightly increased. The country pledged to reduce its GHG emissions reduction by 31.2% (unconditional) and 43.2% (conditional) relative to Business-as-Usual (BAU) in 2030. Despite its intention to meet Decision 1/CMA.3 line 29 of the Glasgow Pact, the enhanced target is still far from being aligned with the Paris Agreement temperature goal. Aligned with that, Climate Action Tracker has recently rated the country’s ENDC to be highly insufficient. It argued that the targets can be met with existing policy. With conceivable targets, the government does not require further efforts. The analysis further suggested that the electricity sector should be seeing a significant drop in emissions to be aligned with the 1.5°C pathways. This means phasing out unabated coal-fired power plants’ capacity down to 10% in 2030 and to be completely phased out in 2040. Presidential Regulation 112/2022 should have provided a legal basis for relevant stakeholders to take necessary actions. JETP’s joint commitment that would see 20 billion USD being mobilized by the International Partners Group (IPG) countries should further jumpstart the energy transition in Indonesia. In his latest speech during the Hannover Messe, President Jokowi further hinted that Indonesia will phase out its entire coal fleet by 2050.

Through the moment of Earth Day and Eid ul-Fitr, let’s try to reflect on whether we have done enough to help prevent further worsening of climate change. Have we cleansed ourselves in the entirety? Have our lifestyles reflected what we have been advocating so far?

Photo by Asia Chang on Unsplash