Options for CFPP to Allow High Level of Renewable in Indonesia’s Energy System

The energy transition has become a global necessity as an effort to mitigate climate change. Fossil energy burning is proven to contribute greatly to the increase in greenhouse gas (GHG) emissions which causes an increase in the average global temperature. For countries whose energy systems are mostly supported by fossil energy, this requires special attention, because they also have to take the right steps amidst the available options to decarbonize the energy system which means ending the operational life of coal power plants.

Raditya Wiranegara, senior researcher at the Institute for Essential Services Reform (IESR), during a webinar entitled “Financing Indonesia’s Coal Phase-Out: A Just and Accelerated Retirement Pathway to Net-Zero” Saturday, 19 November 2022, explained two scenarios that could be taken for coal-fired plant. These two scenarios aim to provide more space for renewable energy to enter the PLN grid.

The first option is to retire old CFPPs and are no longer operationally effective and efficient. To examine this option, IESR collaborated with the Center for Global Sustainability, University of Maryland, United States of America.

“Our research shows that there are 9.2 GW of coal-fired power plants that can be retired starting from 2022-2030,” said Raditya.

By retiring all coal plants, and building renewable energy-based plants, Indonesia can achieve net zero emission status by 2050 aligned with the Paris Agreement.

In addition, there are various socio-economic and environmental impacts that can be avoided. Until 2050 it is estimated that there will be 168,000 deaths that can be avoided with the retirement scenario of all coal power plants.

The second option is to operate the CFPP flexibly. Flexible CFPP operation means changing the pattern of CFPP operation from initially operating 24 hours a day to support the base load of the electricity system, to only supporting peak loads at certain hours.

“This flexible operating pattern allows the addition of renewable energy supplies, especially energy sources that depend on certain conditions such as solar and wind,” explained Raditya.

Raditya added, this flexible operating pattern is suitable for CFPPs that are still young, as there are many in Indonesia. In the study report “Flexible Thermal Power Plant: An Analysis of Operating Coal-fired Power Plant Flexibly to Enable the High-Level Variable Renewables in Indonesia’s Power System” it is explained that technically the CFPPs in the Sumatra, Java-Bali and Sulawesi can be operated flexibly. There will be differences in the level of efficiency, the amount of emissions, and the investment costs required from one unit to another depending on the age of the coal plant. A relatively young CFPP requires lower retrofit costs because the infrastructure is still relatively strong to support a flexible operational pattern.

For this reason, careful planning is needed to operate the Coal plants flexibly as well as to retire the coal plants and increase the capacity of renewable energy in the system. The government through PLN can also include a flexible coal plant operation pattern in the electricity supply planning document to provide regulatory certainty to investors.

An explanation of flexible PLTU operations can be watched via the following channel.

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Read more on CNN.

Central Java Stakeholder Gathering 2022


Since 2019, IESR and the Provincial Government of Central Java have continued to work together in the energy transition sector. There is a significant positive impact from the cooperation that has been carried out, in 2022, IESR and the Provincial Government of Central Java will renew their collaboration which is marked by the signing of a Joint Agreement on the Development of Renewable Energy for the Energy Transition. This is a form of multistakeholder institutional action to encourage Indonesia’s decarbonization system.

The contribution of religious parties, especially local governments, in supporting development that is oriented towards low carbon development and a green economy needs to be increased through various instruments, such as; policies and regulations, incentives, and some other supporting instruments to guarantee a just energy transition process. In addition, IESR also sees that regional policymakers and the general public have an important role in the smooth energy transition. Therefore, it is hoped that with the renewal and expansion of the scope of cooperation between IESR and the Provincial Government of Central Java, it is hoped that various policy stakeholders can work together in supporting the energy transition and regional decarbonization.

The expansion of the scope of cooperation as outlined in the joint agreement document (KSB) covers the energy, industrial and environmental sectors. The energy sector together with the Department of Energy and Mineral Resources (ESDM) on increasing the mix of renewable energy, especially solar energy. The industrial sector together with the Industry and Trade Service (Disperindag) to increase the implementation of renewable energy in the industrial sector. The environmental sector together with the Environment and Forestry Service (DLHK) reduces greenhouse gas emissions through the management of waste and waste into renewable energy. In addition, the expansion of the scope of cooperation also involves Regional Owned Enterprises (BUMD), and Central Java Petro Energi (JPEN) to accelerate the construction of PLTS in Central Java.

IESR work plans and programs with each Regional Apparatus Organization (OPD) of Central Java Province have been prepared and compiled in the 2022 KSB update. Several approaches and initial studies have been carried out and discussed together to obtain an up-to-date picture of the energy transition landscape in the regions to develop a plan of directed action and an equitable transition at the local level.

Considering the continuity and smoothness of plans and work programs on renewing cooperation between IESR and OPD of Central Java Province, it requires a strong commitment from various parties as a manifestation of the contribution of the role of local government in integrating energy transition issues into regional development plans. input, collaboration, and participation from various parties are widely open to push the energy transition agenda in the regions.

Therefore, IESR in collaboration with the Provincial Government of Central Java will carry out dialogue and public dissemination with related stakeholders under the title “Central Java Stakeholder Gathering 2022” to strengthen commitment, roles and joint responsibilities for implementing work plans and programs as well as a form of dissemination local government in encouraging community participation in the energy transition.


  1. Presentation of the progress of the cooperation between IESR and OPD Central Java Provincial Government.
  2. Presentation of activity plans in collaboration with IESR and OPD Central Java Provincial Government in 2023.
  3. Dissemination of local government commitments and best practices on energy transition by various parties and stakeholders.

Observing the Efforts to Increase Electricity Consumption in Indonesia

Sinergi Stakeholder dalam Upaya Peningkatan Elektrifikasi dan Konsumsi Listrik per Kapita di Indonesia

Surabaya, November 25, 2022 – Electrical energy is one of the human needs that integrates into daily needs. Increasing access to electricity through 100 percent electricity ratio also needs to be coupled by providing energy sources that are more environmentally friendly.

Akbar Bagaskara, Electricity System Researcher, Institute for Essential Services Reform (IESR), in a public discussion forum with the theme “Stakeholder Synergy in Efforts to Increase Electrification and Per Capita Electricity Consumption in Indonesia” organized by the Directorate General of Electricity, Ministry of Energy and Mineral Resources, stated that there are five countries in ASEAN that have not achieved a 100% electrification ratio, such as Cambodia, Laos, Myanmar, Indonesia, and the Philippines.

“Based on data from the ASEAN Center of Energy as of 2021, Indonesia has an electrification ratio of 99%, followed by the Philippines at 97%, Laos at  95%, Cambodia at  81%, and Myanmar at 51%. Indonesia and the Philippines have not yet achieved a 100% electrification ratio due to the condition of the archipelagic countries. This condition is a challenge compared to other ASEAN countries, which are mainland, therefore, it is easier to distribute electricity, “explained Akbar.

Observing the electrification ratio must be connected to electricity consumption in Indonesia. Akbar said that the majority of electricity consumption in the household sector is used for lighting. As for cooking, they still use liquefied petroleum gas (LPG), with a ratio of total energy consumption in the household sector of up to 49%.

“The existence of these conditions creates the potential to electrify stoves used by the household sector, replacing LPG,” said Akbar.

In addition, based on data from the Ministry of Energy and Mineral Resources, said Akbar, electrification in the transportation sector still tends to be low, around only 1%. According to him, the Indonesian Government’s program to promote electric cars is crucial to increasing the adoption of electric vehicles.

“Full utilization of electrification potential will create opportunities to increase electricity consumption in the transportation and household sectors,” said Akbar.

Furthermore, Akbar explained that electrical energy use in Indonesia and other ASEAN countries is still only around 20%. It can be seen based on energy consumption data per capita for 2018-2021. On the other hand, based on the MEMR 2020-2024 Strategic Plan (RENSTRA), Indonesia’s electricity consumption target per capita is 1,408 kWh. Meanwhile, the average electricity consumption in ASEAN itself is around 3,672 kWh per capita.

Head of the Electricity Sector at the East Java ESDM Office, Waziruddin, stated that based on an electrification ratio of 99.32% in the third quarter of 2022, there are households that have not had electricity connections. This can also be seen from the number of low-income families (RTM) in East Java that do not have electricity, around 126,708. However, his party has budgeted around IDR 12 billion in house installation grants in 2023 and various other assistance to provide access to electricity for these households. In addition, Waziruddin  stated that the East Java Provincial Government continues to push for an energy transition policy to increase energy security.

“For example, using geothermal as a substitute for coal energy in power plants, considering that East Java is rich in geothermal potential. In addition, several industries in East Java have also installed rooftop solar power plants, developed biomass power plants, and utilized biofuels,” said Waziruddin.

Edy Pratiknyo, Sub-Coordinator of Business Commercial Relations Facilitation, Ministry of Energy and Mineral Resources, stated that the Directorate General of Electricity is pushing for an accelerated increase in electricity consumption.

“With the program to increase electricity consumption, the government is pushing through accelerating permits for charging infrastructure for Battery-Based Electric Motorized Vehicles (KBLBB),” Edy concluded.

Aligning the Electricity Supply to the Paris Agreement Pathway

Jakarta, 24 November 2022 – Electricity has become a primary need as well as an economic driver for everyone. The demand for electricity is predicted to continue to increase both from the industrial sector and from the residential sector. In order to meet this demand and reduce emissions in the energy sector, planning with greater use of renewable energy should be designed in the RUPTL (Electricity Supply Business Plan).

In the 2021-2030 RUPTL, PLN plans to increase renewable energy capacity by up to 51.6%. Unfortunately, the amount of this target is not enough to meet the target of the Paris Agreement, which is to limit emissions and global temperature rise at 1.5 degrees Celsius.

Akbar Bagaskara, IESR’s power system researcher, during the launching of the study report “Enabling High Share of Renewable Energy in Indonesia’s Power System by 2030” explained that as a country ranked in the top 10 largest emitters in the world, Indonesia has a responsibility to reduce its emissions systematically.

“Electrification in all sectors ranging from industry, transportation and other sectors as well as the maximum utilization of renewable energy is the main key to reducing Indonesia’s emissions and then pursuing the Paris Agreement target,” Akbar explained.

Akbar explained that the renewable energy capacity that can be added to the system reaches 129 GW consisting of 112.1 GW of solar energy, 9.2 GW of water energy, 5.2 GW of geothermal energy, 1.5 GW of wind energy, and biomass of 1 GW.

Akbar also added that this study was a follow-up of the “Deep Decarbonization of Indonesia’s Energy System” study launched by the IESR in 2021 which looked at the possibility of Indonesia’s energy system achieving net zero emission (NZE) status by using 100% renewable energy in 2050.

Kamia Handayani, PT PLN’s EVP Energy Transition and Sustainability, explained that the 2021-2030 RUPTL is indeed not suitable for pursuing the Paris Agreement target.

“RUPTL is indeed not fully aligned with the Paris agreement because there is still coal involved. We (PLN) have several scenarios to reach NZE, based on PLN’s NZE roadmap until 2060, CCS can be a technology that is utilized. Yet, we must see future technological developments to meet the NZE target,” said Kamia.

Elrika Hamdi, Energy Finance Analyst at IEEFA, added that in order to align with the Paris Agreement targets, there needs to be one agency that monitors the implementation and development of renewables.

“There needs to be an agency that ensures development targets and renewable procurement which, for example, is issued by the government in the electricity system so that curtailment can be anticipated,” said Elrika.

Ikhsan Asa’ad, Chairman of the Executive Board of PJCI, highlighted the importance of building a strong domestic renewable energy industry such as solar to meet ambitious renewable energy targets.

“Currently, the price of renewables is still relatively more expensive than PLN’s electricity, but the more massive the use, the more competitive the price is expected to be. Local industry must begin to be prepared to meet the increasing demand for renewable energy components in the country,” he emphasized.

Eko Adhi Setiyawan, Lecturer, University of Indonesia, said that there is a need for demand management to mobilize customers. In addition, it is necessary to translate the Paris Agreement terminology into more concrete targets.

The Potential Role of the Industry and Community Sectors in Accelerating a Just Energy Transition

Semarang, 10 November 2022 – The energy transition has become the focus of many parties lately. It’s not only the government that has the responsibility to provide clean and affordable energy for the entire community, the industrial sector is also starting to switch to clean energy through various efforts. For companies, today’s global product competitiveness is also determined by how the manufacturing process is carried out efficiently and by using sustainable energy sources. The collaborative action of various sectors in the use of renewable energy will support the acceleration of the energy transition on a national level.

To take a closer look at various initiatives from the industry and community sectors, the Central Java Provincial Energy and Mineral Resources Office in collaboration with the Institute for Essential Services Reform organized the “Jelajah Energi Terbarukan” activity on November 10-11 2022. This activity visits several destinations focused on industries and villages that utilize renewable energy potential. This is the second activity, after last June a similar activity was carried out with a focus on different destinations.

The journey started by visiting CV Jaya Setia Plastik, in Demak, to see how the children’s toy industry saves electricity by installing a 470 kWp on-grid rooftop solar PV.

PLTS Atap di CV Jaya Setia Plastik
PLTS Atap di CV Jaya Setia Plastik

“Currently, what is actually installed on our roof is 1,300 kWp, but we have not used the other 470 kWp connected to PLN because we are currently constrained by regulations that limit the installation of rooftop PLTS to a maximum of 15% of the total installed power,” Wahyu representative of CV Jaya Setia Plastik explained. 

Djarum Kretek Oasis, which is located in Kudus, Central Java, also experienced similar challenges. Having several types of green industry initiatives such as the use of biomass boilers, rooftop PLTS, water storage ponds equipped with wastewater treatment facilities, Djarum is still determined to continue to increase its renewable energy capacity.

“Our roof area can still accommodate more solar PV, but due to regulatory limitations we have not been able to add capacity,” said Suwarno, Deputy General Manager Engineering at PT Djarum.

The limitation of rooftop PV capacity has become a concern of various parties because it has become one of the obstacles for consumers, especially the industrial sector, to install or increase the capacity of their rooftop solar. Currently, the Ministry of Energy and Mineral Resources and PLN are in the process of revising the Minister of Energy and Mineral Resources’ decree no. 26/2021 which regulates the installation of rooftop PV for PLN consumers.

Apart from utilizing solar rooftop, Djarum Oasis has also designed a sustainability scheme for its factory comprehensively covering various aspects, one of which is by utilizing the pruning trees of ‘trembesi’ (Samanea saman) planted on a number of toll roads as part of its CSR, as wood chips for biomass boiler fuel.

The first day’s journey continues towards the waste-to-energy plant Putri Cempo, which is in the Surakarta area. This plant has signed a Power Purchase Agreement (PPA) with PLN and will be on COD at the end of 2022. Elan Suherlan, Director of PT SCMP (Solo Metro Citra Plasma) explained, Putri Cempo waste-to-energy plant exists to overcome the waste problem in Surakarta city which can no longer be accommodated by the Waste Processing Site. PT SMCP, which won the tender for the plant construction, started its construction in 2021.

“Later Putri Cempo waste-to-energy plant will produce 5 MW of electricity and will be distributed to PLN,” said Elan.

What needs to be observed is a clear calculation of the greenhouse gas emissions resulting from this waste-to-energy plant.

The first day of “Jelajah Energi” was closed by visiting Krendowahono Village, which has utilized biogenic shallow gas for 30 households. Biogenic gas is produced from organic compounds such as plants and grasses that decompose with the help of bacteria. Because it comes from residues of organic compounds, biogenic gasses are generally found in shallow soil layers. Since its amount is relatively small and dispersed, biogenic gas must be compressed (increased pressure) so that it is easy to flow and use.

Several villages in Central Java have quite a lot of potential for biogenic gas, including Gabus Village, in Ngrampal District, Sragen, Rajek Village, in Grobogan, Bantar, and Pegundungan Villages in Banjarnegara, which can be used as an alternative energy source for cooking. The biogenic gas utilization installation is also relatively low and can be used communally.

Solihin, head of RT 6, Krendowahono Village, explained that the discovery of swamp gas started with residents who were going to make a well for a water source but when water was found at a certain depth, the water could actually catch fire.

“After we reported it and a team came to check it, turned out that this gas can be used for households,” he said.

Mrs. Uni, one of the beneficiaries of the swamp gas, admitted that by using the swamp gas she could save on cooking fuel quite significantly.

“Usually in a month I can use 4 of 3 kg of LPG gas, now it’s only 1,” she said while showing her kitchen. Uni admits that she still uses LPG gas as a fuel reserve for cooking because the stove from swamp gas only has 1 burner.

Currently the local communities are designing an operational system for the swamp gas network, starting from the operating hours of the machine, the amount of contributions, and maintenance costs.

Looking Closer to the Renewable Energy Development in the Industrial and Community Sectors in Central Java

Central Java, November 11, 2022 –  The Central Java provincial government is committed to supporting and encouraging renewable energy development from the industrial sector to the community level. It can be seen in several companies and villages implementing renewable energy in their environment. Renewable energy is generated from natural processes that are continuously replenished. Renewable energy includes solar, geothermal heat, wind, tides, water, and biomass. 

The Central Java Energy and Mineral Resources Department and the Institute for Essential Service Reform (IESR) held the Central Java Energy Exploration for two days, November 10 and November 11, 2022, with the theme “Energy Transition to Build an Environmentally Friendly and Sustainable Industry.” Participants visited two companies and villages implementing renewable energy on the second day, PT. Sarihusada Generasi Mahardhika – Prambanan Factory, PT. Tirta Investama-Klaten Aqua Factory, and Ngesrep Balong Kendal Village PLTMH.

Utilization of Rice Husk as Energy

Sarihusada Generasi Mahardhika – Prambanan Factory inaugurated the construction of a rice husk-fired Biomass Boiler in June 2022. The biomass boiler will use 10,500 tons of rice husk annually and can produce up to 6 tons of steam per hour. With this ability, it’s no wonder this rice husk-fired industrial biomass boiler is claimed to be the first in Central Java.

Rice husk is an agricultural waste sourced from several areas in Central Java Province, including the surrounding agricultural land within this Biomass boiler facility, which is one of the most significant contributors to rice production nationally. Joko Yulianto, Plant Manager of Sarihusada Prambanan Factory, stated that the biomass boiler operated by Sarihusada could reduce carbon emissions by 8,300 tons of CO2 or the equivalent of carbon emissions absorbed through planting 120,000 trees. It also reduces the carbon footprint generated from the production process at the Prambanan Factory by up to 32%.

“Biomass boilers are an alternative to environmentally friendly technology. The energy produced comes from natural renewable sources. In the form of biological elements such as dead organisms or living plants, “explained Joko Yulianto.

The IESR Study 2021 assesses the potential for biomass in Indonesia to reach around 30.73 GW, but the efficiency is still in the range of 20-35 percent. The use of biomass in the industrial sector is becoming increasingly popular with the emergence of sustainable business targets. Therefore it must ensure a reliable supply chain to ensure the availability of biomass sources. Biomass feedstocks include crop residues and other plantation product wastes such as oil palm, coconut, and sugarcane.

Solar Power Plants in the AQUA factory in Klaten

Meanwhile, PT. Tirta Investama-Aqua Factory, Klaten, inaugurated a rooftop solar power plant (PLTS atap) in 2020. The rooftop solar PV installed at the AQUA factory in Klaten consists of 8,340 modules of solar panels in four roof buildings covering an area of ​​16,550m2, with a peak power of around 350 watts per unit.

“This solar power plants can generate 4 GWh (Gigawatt hour) electricity per year which can supply 15-20% of electricity needs for operations while reducing 3,340 tons of carbon emissions per year. It was built starting in August 2019 and required 187,200 working hours carried out by 130 workers with zero accidents,” said I Ketut Muwaranata, Plant Director AQUA Klaten. 

Based on the latest IESR report entitled Indonesia Solar Energy Outlook 2023, the industrial and commercial sectors are the biggest drivers of solar power plant use, reaching up to 23 MWp in October 2022. In addition to sustainable business targets, especially for companies that are members of the RE100 coalition, renewable energy also reduces production costs. Innovative financing schemes, such as the zero-CAPEX offered by many solar PV developers, increase the attractiveness of rooftop PV mini-grid for industrial customers.

In the last three years, the growth of rooftop solar PV users in the industrial sector has increased, and when the 10 to 15 percent limit of capacity currently imposed by PLN continues, this trend will change and even decrease. This is unfortunate and does not support the various energy transition commitments from the government and companies, who cooperate in realizing Indonesia’s net zero emission.

PLTMH Lights Ngesrepbalong Villages’s Road

Based on the 2021 IESR study, the technical potential for micro-mini hydropower in Indonesia reaches 28.1 GW in all Indonesian provinces. In Central Java, the technical potential of micro-mini hydropower comes to 730.3 MW. If this potential is utilized optimally, it will increase the productivity of rural communities, thereby encouraging access to quality and affordable energy and improving the economy and people’s welfare.

The Micro Hydro Power Plant (PLTMH), Ngesrepbalong Village, Kendal Regency, was developed by the youth around 2020 and used for electricity at the Pucue Kendal Coffee shop, which is located on the northern slope of Mount Ungaran. In the process, the village youth got the state-owned company, Indonesia Power, to look at and help their businesses realize independent energy.

The PLTMH in Ngesrepbalong Village, Kendal Regency, has a capacity of around 1,000 watts and can turn on dozens of lights to illuminate the 200-meter road to the coffee shop and turn on the coffee processing equipment in the shop.

The Central Java Energy Exploration event was held to raise the issue of energy transition in Central Java based on the green industry and the Climate Village program. It also disseminates information regarding the urgency of the energy transition to the public, increasing exposure to the green industry and the Climate Village program in Central Java.

APLSI Declares Just Energy Transition, Supports Acceleration of Green Energy Mix

press release

Jakarta, 15 November 2022- Presidential Regulation No. 112/2022 on the Acceleration of Renewable Energy Development for Electricity Supply mandates the Ministry of Energy and Mineral Resources (MEMR) to develop a roadmap for the early retirement of the coal-fired power plants (CFPP). It is in line with Indonesia’s commitment to the Global Coal to Clean Power Transition declaration at the Conference of the Parties 26 Summit (COP26 Summit), which considers the early retirement of coal-fired power plants in the 2040s, with international funding and technical assistance, and achieving the Net Zero Emission (NZE) target by 2060 or earlier as stated by President Joko Widodo.

The Institute Essential Services Reform (IESR) views that the government’s goal needs to be supported by various parties, including Independent Power Producers (IPP), who currently operate more than 15 GW of power plants in Indonesia.

“Indonesia Independent Power Producers (APLSI) supports the Government of Indonesia’s plans and policies that encourage decarbonisation and energy transition. We are ready to transform to continue contributing to an independent, increasingly environmentally friendly and sustainable national electricity, to support the Indonesian Government’s Net Zero Emission target,” said Arthur Simatupang, Chairman of APLSI, at the declaration of the Just Energy Transition Initiative by Indonesian Power Producers organized by IESR in collaboration with APLSI in conjunction with the 2022 Indonesia G20 Summit in Bali. 

“APLSI wishes to optimize the role of the private sector as a government partner in building a reliable electricity system based on just energy transition by diversifying investment in power plants from various renewable energy sources whose potential is huge in Indonesia,” Arthur explained.

It has also been stated in the Expression of Interest between APLSI and the Indonesian Chamber of Commerce and Industry (Kadin Indonesia) at the Kadin Net Zero Hub event at the B20 Indonesia Summit. At that event, Arthur mentioned that his party had signed an agreement to conduct an intensive joint study on the diversification of power plant investment so that the role of the private sector would be optimal in realizing low-carbon economic growth by partnering with the government in building a reliable, independent electricity system, and a just energy transition.

Furthermore, IESR said that a just energy transition would run with the availability of space for renewable energy development, including by terminating the operational period of CFPP more quickly.

“The IESR study found that to be consistent with limiting temperature rise to 1.5°C, all CFPPs, that are not equipped with carbon capture, must be retired before 2045. In the period 2022-2030, at least 9.2 GW of power plants must be retired, of which 4.2 GW comes from private electricity, without which it will be difficult to achieve NZE,” said Fabby Tumiwa, Executive Director of IESR.

On the same occasion, Rida Mulyana, Secretary General, MEMR, said the importance of partnership to decarbonise the energy system. He explained that based on Presidential Regulation 112/2022, Indonesia plans not to build new coal-fired power plants after 2030 except those that are committed or under construction.

Furthermore, Wanhar, Director of Electricity Program Development at the Directorate General of Electricity, MEMR outlined a roadmap for the early retirement of coal-fired power plants in Indonesia.

Through his presentation, Wanhar explained that the government also took various steps to achieve the NZE 2060 target, including ensuring the retirement of CFPP owned by IPP after the power purchase agreement (PPA) was ended, and Combined Cycle PP retired after the age of 30.  Furthermore, starting in 2030, there is an increasingly massive development of solar power plants, followed by wind power plants both on land and offshore starting in 2037.

However, Wanhar emphasized, several provisions need to be fulfilled in terminating the operational period of coal-fired power plants in Indonesia.

“Retirement of CFFP can only be done once grid reliability is ensured, with substitution from renewable replacement and/or transmission system installation, the assurance of just transition of a fair energy transition. There should not be any negative social impact from coal plant early retirement, affordable renewable energy generation prices, and the availability of international financing support,” Wanhar explained.

Based on IESR’s “Financing Indonesia’s Coal Phase-out” study with the Center for Global Sustainability, University of Maryland, to retire 9.2 GW of coal-fired power plants by 2030, Indonesia needs international funding support to meet the cost of retiring the power plants, around USD 4.6 billion by 2030. 

Supporting decarbonisation efforts in the power sector, the Government of Indonesia will work with the International Partners Group (IPG) to realize investment plans to support the early retirement of coal-fired power plants as well as other low-carbon technologies. The cooperation will support the achievement of Indonesia’s electricity system decarbonisation targets, including achieving peak electricity sector emissions of 290 million tonnes of CO2 by 2030, preparing CFPP projects that must be retired early, and ensuring the achievement of a renewable energy mix of at least 34% by 2030.

“For the early retirement of coal-fired power plants, especially those owned by IPPs, to take place with the principle of just energy, the government must form a national commission or task force involving relevant government agencies by the end of this year. Its tasks include comprehensively assessing the list of coal-fired power plants that have the potential to be retired immediately, as well as renegotiating with IPPs,” explained Deon Arinaldo, Energy Transformation Programme Manager, IESR.

Deon added that CFPP contract negotiations between PLN and IPP must begin by considering the potential for additional costs without jeopardizing the investment climate in Indonesia. 

“The government also needs to assess the appropriate financing mechanism to retire coal-fired power plants owned by private power producers. The financing mechanism also needs to support the link between the financing of early retirement of CFPP and investment in renewable energy so that it can mobilize international financial support,” he concluded.

The Declaration of Supporting the Roadmap of Just Energy Transition was carried out to coincide with the G20 Summit. This is expected to provide a positive signal for the Indonesian Government’s leadership at the G20, which also highlights the energy transition or the transition from polluting energy to renewable energy as one of the main issues.

“Indonesia’s leadership in conducting early retirement of power plants to accelerate the energy transition will create a good precedent for other G20 countries.  The spirit to accelerate the end of CFPP operations through the declaration of IPPs  supported by the government and PLN will be an example for India, which will hold the G20 presidency in 2023 and become an example for other ASEAN countries in Indonesia’s leadership in ASEAN in 2023,” concluded Fabby Tumiwa.***

Points of declaration:

Support the Roadmap for a Just Energy Transition in Indonesia

  1. Willing to transform to continue to contribute to an independent national electricity that is increasingly environmentally friendly and sustainable to support the net zero emission target.
  2. Support the Indonesian government’s plans and policies that encourage decarbonisation and energy transition.
  3. Diversify investment in power generation from various alternative renewable energy sources, in which Indonesia has enormous potential.
  4. Committed to opening up opportunities for renewable green energy sources and a sustainable energy supply ecosystem.
  5. Optimizing the role of the private sector as a government partner in building a reliable electricity system and a just energy transition.