Message to Global Leaders for COP 28

Jakarta, 3 November 2023 – The Conference of the Parties (COP 28) will soon be held in Dubai, United Arab Emirates. One of the agendas for this annual meeting is to see the progress of global actions to deal with the climate crisis. In a public discussion held by the Foreign Policy Community Indonesia (FPCI) on Friday 3 November 2023, Marlistya Citraningrum, Sustainable Energy Access Program Manager, Institute for Essential Services Reform (IESR), explained that in anticipation of this annual meeting of world leaders, the new Indonesian Government just released the Comprehensive Investment and Policy Plan (CIPP) document and plan to announce the investment plan officially at the COP 28.

“Bluntly speaking, this document is quite disappointing because even though it promises a list of renewable energy projects, it is still very focused on large-scale renewable energy (base-load renewables) such as hydro and geothermal. Variable Renewable Energy (VRE) such as solar and wind is considered a high-risk project,” explained Citra.

Apart from the lack of support for VRE, Citra also highlighted the low commitment to early retirement of coal power plants. In the CIPP document, which is currently in the public consultation process, IPG countries are only willing to facilitate early retirement of 1.7 GW coal. In a draft document last year, the United States and Japan were initially willing to finance 5 GW of early retirement coal-fired power plants.

“In fact, to achieve the net zero emission target, Indonesia needs to retire around 8 GW of coal,” emphasized Citra.

The Director of the Environment at the Ministry of National Development Planning/Bappenas, agreed on the importance of increasing climate commitment and action, not only as climate action but also as part of development.

“In the draft RPJPN which is currently progressing, we are targeting our emission reduction target to increase to 55.5% in 2030 and 80% in 2045. This is a necessity to increase climate targets and ambitions,” said Medril.

Calculating the Costs of Early Termination of Coal Power Plant and Other Decarbonization Measures

Jakarta, 11 October 2023 – Early termination of coal-fired power plant (CFPP) operation from the natural CFPP retirement year is a more cost-effective approach than extending the life of coal CFPP with the addition of carbon capture and storage (CCS) technology. It was stated by Fadhil Ahmad Qamar, Program Staff for the Clean, Affordable, and Secure Energy (CASE) project for Southeast Asia (SEA), Institute for Essential Services Reform (IESR), at Indonesia Sustainable Energy Week (ISEW) 2023.

Fadhil mentioned that adding CCS technology to power plants tends to be expensive due to the high procurement costs and initial capital expenditure (Capex) and operating expenditure (Opex). Moreover, shutting down coal power plants can result in similar reductions in emissions as implementing CCS but at a lower cost.

“Appropriate carbon pricing must be applied alongside innovative financing to attach economic value to the advantages of reducing emissions through the early termination of coal power plant operations and utilization of CCS technology. This will prevent any burden on the state budget,” said Fadhil.

On the same occasion, Raditya Wiranegara, Senior Analyst, IESR, also emphasized again the social and economic impacts of the early termination of coal power plant operations are crucial, primarily when the local communities rely heavily on these operations for their economic activities. Therefore, policymakers must adopt an approach to formulating policies for the cessation of coal power plant operations based on reliable data on the plants’ generating assets and their external costs. These external costs include social costs associated with local pollution produced by coal power plants.

“It is crucial to include the plan for early termination of coal-fired power plants in the RPJPN. This will enable us to prepare a social safety network and estimate the required budget to minimize the impact of ending coal-fired power plant operations on the communities around the plant and producing areas. Additionally, we should consider taking anticipatory measures such as preparing to shift workers from coal-fired power plants to renewable energy-based power plants. All of these steps can be included in the RPJPN,” explained Raditya.

Media Indonesia | Anticipate the Socio-Economic Impact of the Decline of the Coal Industry

DIVERSIFICATION and economic transformation must be immediately planned to anticipate the social and economic impact of the decline in the coal industry. This is in line with plans to end PLTU operations and increase commitment to energy transition and emission mitigation from countries that have been destinations for coal exports so far.

Read more on Media Indonesia.