Handling Air Pollution in Jakarta: The Role of Coal Power Plants Intervention Towards Early Retirement

Air pollution remains a problem in various regions. Although awareness of air pollution has increased, the urgency to find a solution has yet to become a priority. The impact is significant for everyone, including children as the most vulnerable group.

Co-founder of Nafas, Piotr Jakubowski, explained air pollution is significantly higher in the dry season than in the rainy season. This phenomenon occurs due to the connection between wind direction and pollution sources. According to a study conducted by the Center for Research on Energy and Clean Air (CREA), the seasonal changes exert a substantial  impact on air pollution. Piotr emphasized that air pollution has evolved into a daily challenge in Indonesia, thus prompting people to prioritize their health and contemplate systemic solutions for addressing air pollution issues.

“Currently, there are several categories of sources of pollution, such as coal-fired power plants (CFPPs), industry, transportation, logistics, land burning, and indiscriminate waste. The source of pollution depends on the urban activity itself, and the kind of impact it will have also depends on its geographical location. For example, the city of Bandung, which has cool air. However, due to its geographic basin position,  air pollution in Bandung is quite high. If the wind does not disperse the pollution, it can linger for a long time compared to Jakarta, which has a source of  sea wind,” said Piotr in a Twitter or X Space discussion entitled Tackle Air Pollution with Coal-fired Power Plant Intervention.

The lead analyst of CREA, Lauri Myllyvirta, said that based on a recent study titled “Health Benefits of Just Energy Transition and Coal Phase-out in Indonesia” conducted by CREA and IESR, coal-fired power plants (CFPPs) caused 10,500 deaths in Indonesia in 2022, with this number projected to soar to 180,000 by 2040 if coal plants continue to operate.

“Jakarta is one of the cities in Indonesia most affected by coal-fired power plants due to their proximity. During the dry season, the wind direction shifts from east to south, resulting in CFPPs in Cirebon, Cilacap, and other areas contributing to pollution in Jakarta. The air reaching  Jakarta is already polluted, and the emissions within Jakarta further compound the issues. There are chemical reactions between the pollutants, and this causes air pollution to increase,” said Lauri.

For this reason, according to Lauri, it is advisable to install emission control devices at the CFPP, enabling the Government to control the emissions they emit. Air pollutant emissions from coal-fired power plants are one of the causes of loss of life in Indonesia. In 2022, health costs associated with CFPP operation could reach USD 7.4 billion, equivalent to IDR 111.126 trillion.

Senior analyst of the Institute for Essential Services Reform (IESR), Raditya Yudha Wiranegara, mentioned that the power plants scattered around Jakarta significantly contribute to elevated pollution levels in the city. He pointed out that there are approximately eight CFPP situated in the vicinity of Jakarta, including CFPPs in the east of Jakarta (Suralaya CFPP, Lontar CFPP, Banten CFPP) and in the West (Cirebon 1 and 2 CFPPs, Batang CFPP, Cape Jati CFPP). Based on the CREA and IESR studies, several CFPPs have the most significant impact on health, as measured by the number of deaths caused and health costs.

“The five top coal-fired power plants (CFPPs) indicated the most significant impact on health, including the Central Java Power Plant in Batang,  Lontar CFPP, Cirebon 1 and 2 CFPPs, and Cilacap CFPP. These five CFPPs are integrated to the Java-Bali electricity network, which is currently oversupplied. While their retirement isn’t a problem to air pollution, there’s concern about network instability since most are in the West. It’s necessary to consider accelerating renewable energy, including solar PV construction, if they’re retired,” said Raditya.

Accelerate a Fair and Equitable Sustainable Energy Transition in Indonesia by Termination of CFPP Operations

JETP

Jakarta, June 27, 2023 – Environmental sustainability and overcoming the climate crisis have driven the need for an energy transition toward cleaner and more sustainable energy sources. The early termination of fossil energy generation operations as one of the largest emitters is a fundamental step towards accelerating the energy transition in Indonesia.

Director of Electricity Program Development at the Ministry of Energy and Mineral Resources (ESDM), Wanhar, explained that Indonesia already has regulations regarding the termination of coal fired power plants (CFPP) contained in Presidential Regulation (Perpes) Number 112 of 2022 concerning Acceleration of Renewable Energy Development for the Supply of Electricity which was stipulated and promulgated in September 13, 2022. Furthermore, Wanhar emphasized that in the Perpres, it was stated that new PLTUs were prohibited from being built except those that had been stipulated through the Electricity Supply Business Plan (RUPTL).

“The strategy related to the early retirement of the PLTU based on Presidential Decree No. 112 is currently being discussed in depth in the general energy planning. In addition, Indonesia also needs to accelerate the acceleration of the national electricity general plan (RUKN). We prioritize using renewable energy and tighten licenses for captive PLTUs, except for those from the government,” said Wanhar at the JETP Convening for Exchange and Learning event at Ayana Midplaza.

Wanhar mentioned that the Government of Indonesia and the State Electricity Company (PLN) have a shared vision to encourage renewable energy by considering four factors: the newly built substitution network, guaranteeing a fair transition, affordability, and international financial support. Terminating the PLTU must be accompanied by using renewable energy, for example, solar power.

David Elzinga, Senior Energy Specialist at Asian Development Bank, explained there is concern about the return on investment in ending PLTU operations early. Considering that some financial institutions are still hesitant to fund the coal-fired power plant early retirement program. For that, the Asian Development Bank (ADB) decided to take over this matter.

“There are several challenges in the energy transition, including managing energy reliability and supply. With the existence of a just energy transition partnership (JETP), it is hoped that green job opportunities for people working in coal production will be wide open as well as capacity building (skills) need to be strengthened,” said David.

On the other hand, Vikesh Rajpaul, General Manager of Just Energy Transition at Eskom Holdings SOC Ltd explained, in carrying out JETP implementation, extending the life of the CFPP was not considered for old generators. However, some units may need to remain operational longer than planned to overcome a power crisis.

“There is no energy transition without transmission, and equality is the key to implementing the energy transition, considering that the process will have environmental, economic, and social impacts. We have seen the potential for an energy transition in South Africa, including the abundant solar and wind power potential. For this reason, South Africa can encourage using renewable energy,” said Vikesh.

Jerredine Morris, Senior Manager at Carbon Trust, said that the management of JETP funds in South Africa is carried out by protecting vulnerable groups and workers with early retirement from CFPP. In addition, in implementing JETP, the most important thing is to consider the interests of local residents or what is commonly called a bottom-up approach.

“In implementing the CFPP’s early retirement, we look at the eligibility of retirement from the age of the CFPP, as well as maintenance costs. We also look at the economic feasibility and social impact of these retirements. The main obstacle is the retiring capacity of the coal-fired power plants and how we build renewable energy around it,” said Jerredine.

Pariphan Uawithya, Asia Director for the Global Energy Alliance for People and Planet (GEAPP), stated that there are three essential stakeholders in the early retirement process for coal fired power plants (CFPP) in Indonesia: the government, the private sector, and the community. According to him, the early termination of CFPP operations in Indonesia is critical in reducing greenhouse gas emissions and air pollution. Retiring old power plants will also open up opportunities for investment in alternative energy sources, such as renewable energy, increasing the country’s energy sustainability.

“Along with the energy transition, the government has also issued regulations regarding carbon markets as a form of Indonesia’s commitment to the issue of climate change. However, remember that in the energy transition process, coal is not the only asset; diesel generators can also be replaced by renewable energy,” he said.

The Ford Foundation in Indonesia organizes the Just Energy Transition Partnership (JETP) Covening, the Institute For Essential Services Reform (IESR), and the African Climate Foundation (ACF), with support from the Global Energy Alliance for People and Planet (GEAPP) to facilitate the forum exchange of learning between stakeholders.

The Important Role of Renewable Energy to Build a Bright Future

Jakarta, June 24, 2023 – Raditya Yudha Wiranegara, Senior Researcher at the Institute for Essential Services Reform (IESR), explained several challenges in retiring PLTU and how renewable energy plays a role in shaping the future. This was discussed in the Energy Talk event held by the Hasanuddin University Society of Renewable Energy (SRE).

Raditya, or mostly referred to as Radit, opened the discussion session by explaining that human activities, especially in the energy sector, are the main contributor to the increase in earth’s temperature. The energy source is still dominated by coal and followed by consumption of fossil fuels. Radit considered this as work to be done for Indonesia, to start making plans to reduce dependence on coal-based power plants.

Furthermore, Radit points out that Presidential Decree 112/2022 regulates the acceleration of renewable energy development, and the third article contains a mandate for the Ministry of Energy and Mineral Resources (MEMR) to start making scenarios for accelerating retirement of coal power plants. There are also restrictions not to build coal fired power plants (CFPP) after this Presidential Decree is passed, except for those that are currently being planned, and those that are included in national strategic projects.

“The existing CFPP must also start reducing their emissions, until all are retired in 2045. However, this plan is still in dynamic discussion; the State Electricity Company (PLN) plans to retire CFPPs in 2030,” Radit explained.

Moreover, Radit mentioned , the benefits of early retirement from CFPPs are 2-4 times the cost that can be saved, based on an IESR study with the University of Maryland. Radit emphasized that these benefits include the benefits of health costs on air quality and reduced electricity subsidies that must be issued considering that our electricity is now subsidized. However, retiring coal-fired power plants includes several challenges, including the need for quite large upfront costs, around USD 4.6 billion by 2030 and USD 27.5 billion by 2050, which require substantial international support to achieve them. Second, USD 1.2 trillion is needed to replace PLTU electricity generation with renewable energy. Third, the legal aspect. Radit assessed that both PLN and independent power producers (IPP) have several scenarios that must be met in retiring their generators. For example, PLN needs to be investigated by an auditing agency if there is a loss to the state due to a reduction in the power plant, and the IPP can file a claim for the loss.

“From the results of the study we conducted, we found that in terms of mitigation costs, canceling the PLTU project is the most affordable option in reducing carbon emissions. Canceling will also avoid the big costs that will occur when you have to retire later, “said Radit.

Radit emphasized that with the Just Energy Transition Partnership (JETP) momentum, Indonesia must be able to catalyze more investments and build an attractive market climate in Indonesia for foreign investors. JETP is a climate change and energy transition funding partnership from the G7 countries plus Norway and Denmark for the development of electric vehicles, technology, and the early retirement of fossil-based power plants in Indonesia. This partnership also promotes an equitable energy transition that takes into account the lives and livelihoods of affected communities at every stage of the energy transition journey, so that no one is left behind. Indonesia has received an allocation of USD 20 billion to support the energy transition in Indonesia through the JETP framework.

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