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Rise in captive power plants casts doubt on JETP emissions target
Newly built captive power plants fueled with coal may be a stumbling block for Indonesia’s effort to cap power sector carbon emissions and get international financial support for its energy transition.
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Coal barges line up to be pulled along the Mahakam River in Samarinda, East Kalimantan, on Aug. 31, 2019. (Reuters/Willy Kurniawan)
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ewly built captive power plants fueled with coal may be a stumbling block for Indonesia’s effort to cap power sector carbon emissions and get international financial support for its energy transition.
Southeast Asia’s largest economy needs to devise a strategy to cap annual carbon emissions from the power sector at 290 million tons, a figure set as a requirement for accessing US$20 billion through the Just Energy Transition Partnership (JETP).
A captive power plant supplies electricity for a specific industrial or commercial facility and is typically managed by the owner of that facility. It makes the user independent of public power supply.
Bhima Yudhistira, director of the Center of Economic and Law Studies (CELIOS), said the technicalities over the peak emissions target from the power sector may be a huge hindrance to the landmark climate financing deal.
“[Stakeholders] have a wrong perception and tend to be defensive, saying it is still necessary to build new coal fleets in industrial areas,” he told The Jakarta Post on Monday. “If you look at it, the problem lies in the International Partners Group’s [IPG] conflicting interests with China in Indonesia’s energy transition, including the issue of power plants for processing critical minerals.”
He went on to say that it was urgent for the government to revise Presidential Regulation No. 112/2022 on renewable energy, which entered into force in September last year.
The regulation allows the construction of coal plants that had been included in the long-term electricity procurement plan (RUPTL) prior to its issuance, as well as captive coal power plants.
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