Indonesia’s coal-fueled contradiction: Power plants cast shadow on green pledges

The ground shook beneath Edi Suriana, jolting the 45-year-old Indonesian villager from an afternoon slumber in late August. 

Edi soon realized the tremors were caused by a test run of new units at the nearby Suralaya coal-fired power plant, a massive industrial facility located only a mile from his home in Cilegon, a city in Banten province.

“It was deafening,” Edi, who has witnessed the plant’s growth throughout his life, told BenarNews. “I thought it was a quake at first.”

The new addition of units 9 and 10 to the sprawling Suralaya complex embodies a stark contradiction in Indonesia’s energy policy. 

Jakarta has committed to phasing out fossil fuels in favor of renewable sources but keeps relying heavily on coal, a major contributor to climate deterioration.

Indonesia, the world’s fourth-most populous country, had pledged in 2015 to achieve carbon neutrality by 2060, a target announced at the Paris Climate Agreement. Yet, despite the commitment to slash greenhouse gas emissions, coal remains a mainstay in its energy mix.

The 2,000-megawatt project comprising units 9 and 10 represents about a third of the complex’s capacity. The facility currently operates eight other units with a total capacity of approximately 4,025 megawatts.

The Suralaya expansion, a joint project between PT Indo Raya Tenaga and South Korea’s Doosan Enerbility, is touted as Indonesia’s first “hybrid” plant, incorporating a mix of coal, green hydrogen, and ammonia.

PT Indo Raya Tenaga did not respond to requests for comment. In a statement on its website, the company asserted that the new units were “low emission” and aligned with the country’s net-zero carbon goals.

According to Trend Asia, an environmental watchdog, the launch of these new units suggests that Indonesia’s energy transition may be more rhetorical than real.

“The plan to operate Suralaya power plant units 9 and 10 shows that the government is half-heartedly carrying out the transition to renewable energy,” said Novita Indri, a campaigner with Trend Asia.

Novita warned of a potential oversupply of electricity on the islands of Java and Bali, which could lead to significant financial losses for the state utility company, PLN, under existing “take or pay” contracts.

Under such a contract, PLN is required to purchase power from suppliers like Suralaya’s operators regardless of actual demand, making it harder for renewable energy to compete.

Therefore, PLN is obligated to purchase power from Suralaya, even if demand doesn’t warrant it, creating a further obstacle to Indonesia’s renewable energy ambitions, Novita added. 

“How can renewable energy sources enter the grid when the system is already oversupplied?” she said.

Jisman Hutajulu, director general of electricity at the Ministry of Energy and Mineral Resources, dismissed these concerns, saying that increased demand from data centers has mitigated the oversupply issue. 

“Most of the data center consumers are very large,” he told reporters late last month. “We need to keep pace with growing energy consumption.”

The Suralaya complex was built in 1984 on an area of about 240,000 hectares (593,053 acres) and began operations with two generating units. It was expanded in 1989 and 1997, and again under then-President Susilo Bambang Yudhoyono in 2011. 

The latest expansion with units 9 and 10 was driven by the 2015 commitment of former President Joko “Jokowi” Widodo to boost the national grid.

Located 62 miles (100 km) west of Jakarta, Suralaya is now the largest coal-fired power plant in Southeast Asia.

With units 9 and 10, the already severe health problems that the local community attributes to coal-related pollution will likely increase, said Edi, the villager who lives near the power plant complex. 

“Coughing and shortness of breath are [akin to] daily meals for me and my family,” he said.

His young daughter was diagnosed with a lung condition in 2019, suspected to be aggravated by the plant’s emissions. 

“When I complained about this health problem, the power plant management was evasive,” Edi said.

Mad Haer Effendi, director of the local environmental group PENA Masyarakat, noted that Suralaya’s power plants emit pollutants such as nitrogen dioxide, sulfur dioxide, and fine particulate matter, which are linked to respiratory illnesses. 

“Health is the most significant loss, but the economic impact is substantial too,” he said.

The plant occupies what was once a popular local beach, Kelapa 7, which provided weekend recreation and livelihood for small vendors.

A balancing act: Coal versus renewables

Indonesia’s energy transition is a complex balancing act. While the government voices support for renewable energy sources, coal remains a dominant force in the country’s energy landscape. Although policymakers emphasize their commitment to renewables, progress is slow due to entrenched coal interests.

Data from the Ministry of Energy and Mineral Resources reveals that coal-fired power plants accounted for about 60% of Indonesia’s electricity generation in 2022.

“Coal entrepreneurs’ interests continue to dominate government decisions, largely because coal significantly contributes to regional revenues and investment,” said Muhammad Andri Perdana, a researcher at the Bright Institute, a Jakarta-based think tank.

The lower construction costs of coal-fired power plants compared to renewable energy infrastructure make them attractive to investors, added Muhammad Andri. This situation is exacerbated by inconsistent government policies. 

While the Ministry of Finance introduced regulations to promote renewable energy financing, other initiatives have simultaneously eased pathways for coal mining and usage.

For instance, PLN benefits from regulations allowing it to purchase coal at below-market prices, which undercuts renewable energy’s competitiveness, said Muhammad Andri.

“Paying lip service to renewable energy while still primarily relying on coal is a form of greenwashing,” he said. 

“We must ensure this transition is real and not just an illusion.”