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Massive costs, reforms await Prabowo full coal phase out plan
The IESR estimates the government would need around US$1.2 trillion worth of investment in order for the country to meet all of its electricity needs from clean energy and billions more in order to retire its coal plants early.
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Phasing out?: Smoke and steam billow from the coal-fired power plant owned by Indonesia Power, next to the area for the Java 9 and 10 coal-fired steam power plant project in Suralaya, Banten, on July 11, 2020. (Reuters/WILLY KURNIAWAN)
T
o phase out all coal and other fossil-fueled power plants in the next 15 years, President Prabowo Subianto would need to introduce massive reforms to the existing energy and climate policies, analysts have said, pointing out that the president could not rely on existing systems to realize his ambitious promise.
The promise, which Prabowo conveyed during the group of twenty (G20) meetings in Brazil on Nov. 19, also comes with a commitment to introduce 75 gigawatts (GW) of renewable energy into the electricity grid within the same period.
Fabby Tumiwa, executive director of the Institute for Essential Services Reform (IESR), said in a statement on Nov. 21 that the promise sends a positive signal, but it should be followed up with a firm direct order to relevant ministers and state-owned electricity firm PT PLN to develop detailed and measurable means to make it happen.
The IESR estimates that retiring the country’s coal plants early would cost the country US$4.6 billion until 2030, which includes assets costs, as well as a drop in state revenue. It would also require the transitioning of affected workers. The cost is estimated to increase to $27.5 billion until 2050, as the government accelerates the plan over the coming decades.
Moreover, the IESR estimates that the government would need around $1.2 trillion of investment so that the country could meet all of its electricity needs from clean energy, including energy storage and transmission networks to address intermittency risks, as well as remote characteristics of renewable sources.
“The end of coal-fired power plants requires massive investment,” Fabby said, implying international support would be critical to realize such a goal.
Coal plants generate the lion’s share of over 54 percent of a total 91.16 gigawatts (GW) of installed capacity in the country last year, followed by over 30 percent from oil and gas, according to Energy and Mineral Resources Ministry data.
