Reversing course, Indonesia conditionally allows new coal-fired power plants

Dandy Koswaraputra
Reversing course, Indonesia conditionally allows new coal-fired power plants Smoke and steam billow from a coal-fired power plant owned by Indonesia Power in Suralaya, Banten province, Indonesia, July 10, 2020.
[Willy Kurniawan/Reuters]

Indonesia is allowing the development of coal-fired power plants for certain projects and under specific conditions, a year after it said it would phase them out to become carbon neutral by 2060.

Coal, the dirtiest of fossil fuels, powers 65 percent of Indonesia’s energy needs, but one analyst told BenarNews that reducing coal usage by more than 20 percent by 2035 would cut into the energy supply and hurt economic growth.

A presidential regulation signed on Wednesday allows construction of coal-fired steam power plants “within an industrial area oriented toward boosting the value of natural resources,” or designated as nationally strategic projects that create many jobs and contribute to economic growth.

Companies also are allowed to build coal-fired power plants provided that they commit to reducing greenhouse gas emissions by at least 35 percent within 10 years since the start of operations and/or cease operations by 2050.

Also on Wednesday, President Joko “Jokowi” Widodo signed an executive order requiring government institutions switch to electric vehicles. The 132,000 vehicles are to transition to electric power by 2030.

Presidential Chief of Staff Moeldoko said the order demonstrated Jokowi’s commitment.

“To realize the energy transition, the government begins by transitioning from conventional vehicles to electric vehicles,” Moeldoko said in a statement.

“While other countries are competing to save the world from the threat of climate change, we should not only be spectators. We must be the main actors,” he said.

But Rere Jamboree Christanto, the energy and mining campaign manager of the environmental group Walhi in East Java, cast doubt on the government’s seriousness about transitioning to renewable energy because “too many exceptions are made by the president.”

“Coal-fired plants are banned, but the fact that there are various exceptions indicates that the efforts to change the direction in terms of providing electricity are still half-hearted,” he told BenarNews.

“In fact, the longer dependence on fossil energy lasts, the more burden will be placed on state finances,” he said.

Indonesia is the eighth most polluting country in the world with 2 percent of global greenhouse-gas emissions to its name, according to the World Resources Institute.

The energy sector accounts for nearly half of the country’s emissions, with automotive emissions making up about one-fifth of its overall emissions, according to the Ministry of Industry.

Southeast Asia’s largest and most populous country aims to switch to renewable sources supplying 85 percent of its energy needs by 2060. During his appearance at COP26 in Glasgow last year, Jokowi declared Indonesia’s commitment to net-zero emission by that year.

The country has set a goal for 2030 of reducing its greenhouse-gas emissions by 29 percent.

Direct hit to economic growth’

Meanwhile, Yayan Satyaki, an economist at Padjadjaran University in Bandung, warned that phasing out coal-fired power plants without generating more renewable energy will hurt the economy.

“Coal can be reduced in the range of 20 percent to 30 percent at most by 2035, because a reduction of above 20 percent could cause an energy supply gap,” he told BenarNews.

“The impact can be a direct hit to economic growth.”

On the flip side, reducing dependence on coal could save forests, according to a study published in the journal Proceedings of the National Academy of Sciences (PNAS) on Monday.

Indonesia accounted for nearly 60 percent of forest loss to large-scale mining operations, the study said.

The report by a team of international scientists who measured the impact of industrial mining on tropical forest loss found that four countries – Brazil, Indonesia, Ghana and Suriname – were to blame for 80 percent of deforestation caused by such activities.

According to the study, industrial-scale mining such as coal, gold and iron ore, has fueled tropical deforestation by clearing previously impenetrable forests for mining and access roads.

“With 1,901 square kilometers of deforested area, Indonesia was by far the most affected country, accounting for 58.2 percent of direct forest loss by mining across all 26 investigated countries,” the study said.

“Mine expansion in East Kalimantan on the island of Borneo for coal production was the main factor behind this development in Indonesia.”

The study said the highest deforestation rates were observed between 2010 and 2014, “a period that was marked by a doubling of coal production volumes.”

The situation improved in the following years because of policies to reduce coal extraction, the study said.

“Institutional reforms after 2014 implemented caps on coal extraction growth rates, which also slowed down direct deforestation,” it said.


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