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RI coal retirement program hinges on Cirebon Power deal, say experts
Experts say that finalizing a deal on the proposed Cirebon 1 early retirement pilot project was key to getting other operators of coal-fired power plants to sign on to the government's Energy Transition Mechanism (ETM) program.
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Workers walk alongside pipelines extending from the 660-megawatt Cirebon coal-fired power plant in West Java, in this undated photo extracted from the Cirebon Power website in 2018. (www.cirebonpower.co.id) (Courtesy of/www.cirebonpower.co.id)
T
he Cirebon 1 coal-fired power plant owned by PT Cirebon Electric Power (Cirebon Power) is deemed to play a crucial role in Indonesia’s energy transition, with experts suggesting that whether other plants joined the government’s early retirement program for coal plants would depend on its success or failure.
The Cirebon 1 plant is being considered as a pilot of the coal plant early retirement program under Energy Transition Mechanism (ETM), a financing platform backed by the Asian Development Bank (ADB) that is aimed at financing the coal plant retirements and other energy-transition projects in the country. Discussions are ongoing on the facility’s potential decommissioning by up to 15 years before the end of its operational lifespan.
Fabby Tumiwa, executive director of the Institute for Essential Services Reform (IESR), said that stakeholders, especially independent power producers (IPPs), were waiting for negotiations to conclude over Cirebon 1’s early retirement deal before looking into the program further.
According to Fabby, stakeholders were also waiting for negotiations to conclude over the potential early retirement of the Pelabuhan Ratu coal plant, which is owned by state electricity firm PT PLN.
"If this fails, people will become skeptical: What should we do? [They will assume] there are no success models, right?” he said on Thursday, stressing, “we must demonstrate that it is doable" on the assumption that retiring coal plants early was possible.
He added that coal power stakeholders would be "distraught" if the initiative to retire the 660-megawatt (MW) Cirebon 1 plant failed.
This would affect other coal power plants in the pipeline for early retirement as well as the Just Energy Transition Partnership (JETP), which had a similar aim, he said.
