Indonesia, one of the world's leading emitters of greenhouse gases, faces a challenging path in reconciling its energy ambitions with its climate commitments. President Prabowo Subianto has pledged to phase out coal within 15 years and achieve net-zero emissions by mid-century. However, recent developments in the country's energy plans suggest a complicated road ahead. Despite securing a US$20 billion Just Energy Transition Partnership with developed nations in 2022 to accelerate its clean energy transition, the government's latest electricity master plan projects significant growth in coal generation beyond 2030.
The government has committed to phasing out coal by 2030 and closing all coal-fired plants by 2040. Currently, Indonesia operates 49.7GW of coal-fired power plants, with 253 plants reported operational as of December. However, the new national electricity master plan unveiled in November outlines an additional 26.8GW of coal capacity over the next seven years. This expansion predominantly stems from captive coal, which supplies energy directly to industries rather than the national grid.
More than 20GW of this new capacity will come from captive coal expansion. Dody Setiawan, a senior climate and energy analyst for Ember in Indonesia, has raised concerns, stating that expanding captive coal while global markets pivot to clean energy "makes little economic sense."
"Expanding captive coal while global markets shift to clean energy makes little economic sense," – Dody Setiawan, Ember's senior climate and energy analyst for Indonesia.
Renewable energy is expected to constitute 44% of Indonesia's power generation by 2030. However, the Centre for Research on Energy and Clean Air (CREA) warns that the health and economic burdens from pollution exposure will be highest among local communities due to the growth of captive coal, particularly on the Sulawesi and North Maluku islands.
"will have to bear the highest health and economic burden from pollution exposure" – Katherine Hasan, CREA analyst.
The environment ministry has reaffirmed Jakarta's support for the Paris Agreement, despite previous remarks from a climate envoy suggesting the deal was irrelevant. Yet, CREA's report indicates that Indonesia requires more substantial efforts to meet the Paris Agreement targets by 2050.
Dozens of coal-fired plants remain under construction, including captive coal facilities. Dody Setiawan emphasized that committing to a definitive coal phase-out path while prioritizing renewable energy could help Indonesia tackle the multifaceted challenges associated with transitioning away from coal dependency.
"Committing to a clear path for coal phase-out while prioritising renewables would help Indonesia address the multi-faceted challenges that all coal-dependent economies must face." – Dody Setiawan, Ember's senior climate and energy analyst for Indonesia.
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