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Indonesia’s love-hate relationship with coal
Indonesia’s coal industry is at a crossroads
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Indonesia’s coal industry is at a crossroads. Will the nation adopt renewable energy or continue its dependence on coal to boost state revenue and generate cheap electricity?
Jonathan Davin, a 25-year-old pfublic affairs consultant from South Bekasi, said he believed renewable energy was the country’s best option, but that it was not the best choice for now.
“I do understand it [the environmental impact of coal], but we can’t be naive as coal is currently the most efficient energy source, while on the other hand the [development of] renewable energy is still moving at a snail’s pace,” he told The Jakarta Post recently.
The provision of affordable electricity for all Indonesians was a major factor behind the country’s continued reliance on coal, said Ida Bagus Mandhara Brasika, 26, a climate change analyst from Gianyar, Bali.
“If you asked me, I think I’m willing to pay more if the electricity is generated from cleaner energy. Yet talking about electricity for all, we have to consider the energy supply and the affordability factor,” he said.
Indonesia is still highly dependent on coal to generate electricity. In 2018, coal-fueled electricity constituted 60.5 percent of the country’s total energy supply, according to government data.
State-owned electricity firm PLN has stated that in its long-term plan, coal-fueled electricity would continue to constitute more than 50 percent of its supply, and is predicted to stand at 58.5 percent in 2027.
“Our energy policy is simple. We will shut down expensive power supplies in favor of the cheapest options. It is logical,” PLN president director Sofyan Basir said previously.
Coal has also played a major role in boosting state revenue, contributing 10.17 percent of the total national non-tax revenue in 2018 of Rp 407.1 trillion (US$28.89 billion).
Given the positive impacts of coal for revenue and the affordability of electricity, the coal production target set in the National Medium-Term Development Plan (RJPMN) 2015-2019 of approximately 400 million tons has been surpassed.
Even though the plan, created by the National Development Planning Agency (Bappenas), is not a fixed blue print for the government that takes office after April’s poll, it will provide a roadmap for more sustainable use of coal and open the door for renewable energy development.
Since 2015, national coal production has exceeded Bappenas’ target set in the RJPMN 2015-2019. For example, 528 million tons has been produced by 2019, 130 percent of Bappenas’ target of 406 million tons.
When asked about this over production, Energy and Mineral Resources Ministry spokesperson Agung Pribadi identified two reasons, coal’s positive impact on state revenue and existing production contracts.
“We can’t just terminate the existing contracts [for coal extraction], especially for mining companies that have just finished their exploration phase and are set to start their maiden production,” he told the Post on Wednesday.
However, he said this did not mean the ministry was abandoning its concerns for the environment, adding it just needed more time to lower the production quota by limiting the issuance of new mining permits in the future.
On the other hand, Indonesian Coal Mining Association (APBI) executive director Hendra Sinadia argued the latest RJPMN was incomprehensive, as did not include regional mining permits and overlooked the benefits of high coal production for state revenue.
“Some mining permits are issued by regional administrations, so the central government doesn’t have control over it [production limits]. Thus, day by day the data [on national coal production] could be changed,” he said.
Regarding the push for lower coal production because of environmental impacts, the association claimed it was not a big concern, arguing that the commodity was still the cheapest and the most reliable form of energy.
“With the government’s 35 gigawatt power plant project, we are optimistic the demand for coal will continue for decades more,” he added.
Experts have said increased coal production was a set back for Indonesia, which has committed to cutting greenhouse gas emissions by 29 percent by 2030 under the Paris Agreement to hold back global warming, and has set a target for renewable energy to contribute 23 percent to the country’s energy mix by 2025.
“The government should rethink its decision [on higher coal production] by considering the costs of the environmental impacts and how long nature can handle it,” local energy watchdog Institute for Essential Services Reform executive director Fabby Tumiwa said.
The country’s continued dependency on coal-fired power plants (PLTU) has also been criticized by environmentalists, who highlight the health impacts of their operation.
According to 2015 research by Harvard University into the health impacts of air pollution from PLTUs in Indonesia, each new large PLTU (1 gigawatt) is expected to result, on average, in the death of 600 Indonesians every year.
Instead of waiting for the government to act, the Indonesian Renewable Energy Society (METI) and the Indonesia Rooftop PV Users Association (PPLSA) believe societal support for cleaner energy is crucial to push for a transition to cleaner energy.
“It [renewable energy] will only come when society starts to care about the health impacts of using coal, not just the affordability of coal generated electricity,” PPLSA chairman Yohanes Bambang Sumaryo said over the phone.
METI chairman Surya Darma said the government should also educate the public on the importance of renewable energy as a replacement for fossil fuels, which will soon be depleted.
