Indonesia imposes strict limits on new coal power plants

JAKARTA, 15 Sept 2022:

Indonesia will allow the construction of new coal plants only under certain conditions, according to a presidential decree – holding on to its ambitious commitment to reach net zero emissions by 2060.

President Joko Widodo has allowed new coal plants to come up if they are national strategic projects, generate employment and create wealth, or commit to emitting 35% less greenhouse gas emissions than coal-fired plants currently in operation.

The government has banned all other plants under the presidential regulation on the acceleration of renewable energy.

The decree, published yesterday, also urges the government to design a plan to accelerate the previously-set objective to eliminate all coal plants before 2050.

Currently, coal accounts for 37% of total energy production in Indonesia – compared to oil (32%), gas (19%) and renewables (13%), data from the energy ministry showed.

According to a study by the University of Maryland (US) published this year, Indonesia would need US$32 billion to eliminate all 72 coal plants it currently has through 2050.

The study highlighted that the positive benefits from avoided coal power subsidies and health impacts amount to US$34.8 billion and US$61.3 billion – 2-4 times larger – than the costs of stranded assets, decommissioning of plants, employment transitions and state coal revenue losses.

Indonesia has set a goal of achieving zero greenhouse gas emissions by 2060.

The reduction of CO2 and other polluting gases will be one of the objectives of the next climate summit in Egypt in November.