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Early retirement of coal plants must be ‘cost-neutral’, PLN says
The head of Indonesia’s state-owned electricity company noted that retiring coal-fired power plants ahead of schedule will incur significant expenses, including the cost of building renewable energy power sources with the same capacity and reliability as the retired facilities.
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Challenging transition: PLN president director Darmawan Prasodjo speaks during a panel discussion in Bali in November 2022.
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tate-owned electricity firm PLN has insisted that every proposal for the early retirement of coal-fired power plants in the country be “cost-neutral”, meaning that no additional costs are to be borne by either the company or the government.
Speaking before House of Representatives Commission VI, which oversees energy policies, PLN CEO Darmawan Prasodjo explained that retiring the fossil-fuel burning plants could result in significant expenses, including the cost of building alternative renewable energy power sources with the same capacity and reliability as the retired facilities.
“We calculate that retiring a single plant requires between Rp 30 trillion and Rp 50 trillion (US$1.9 billion to $3.1 billion). If there are investors willing to fund that [through grants], why not? […] But of course, the discussion is not easy,” he said on Tuesday.
Darmawan added that Indonesia’s carbon emissions amounted to only around 3 tonnes per capita annually, far less than countries like Saudi Arabia, Australia, the United States and even Singapore, which produce 20 tonnes, 17 tonnes, 14 tonnes and 11 tonnes, respectively.
Thus, the responsibility to reduce global warming by retiring coal plants should not rest solely on Indonesia but also on the global community.
“The point is, we have sent a positive signal to the global community that we are part of the global effort to slow down global warming by balancing economic growth and environmental sustainability. We are fortunate that [the] President has made this pledge,” Darmawan said.
During the Group of Twenty (G20) meetings in Brazil on Nov. 19, President Prabowo Subianto stated that Indonesia would phase out all coal and other fossil-fueled power plants in the next 15 years. The pledge includes a commitment to introduce 75 gigawatts of renewable energy into the electricity grid within the same period.
