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Coal plant project delays might cost developers $13.1 billion: Report
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The site of coal-fired power plant PLTU Cirebon, which is currently under construction. (Courtesy of/www.cirebonpower.co.id)
T
he delayed completion of 11 coal-fired power plants due to the coronavirus pandemic might cost developers billions of dollars in capital outlays, according to a nonprofit energy institution.
San Francisco-based Global Energy Monitor (GEM) said in a report issued on Thursday that COVID-19 lockdowns had discontinued supply chains and skilled labor inflows into the 11 projects, which have a combined investment value of around US$13.1 billion. The situation is particularly acute because China and South Korea, both of which are coronavirus hotspots, are major backers of Indonesian coal plants.
GEM calculated the costs based on the International Energy Agency’s (IEA) estimate that $1,600 is needed to develop every kilowatt (kW) of power plant in Southeast Asia.
“For banks and investors guaranteeing new coal plants, this situation potentially means weaker profitability and heightened business risks,” GEM coal program director Christine Shearer said in a joint statement with energy-related nonprofits Trend Asia, Greenpeace and the Association of People's Emancipation and Ecological Action (AEER).
Trend Asia program director Ahmad Ashov Birry, capturing the gist of the joint statement, urged the government to “cancel the dirty coal plant projects” for the sake of the public and natural environment’s health.
The 11 coal plants are among many foreign-backed infrastructure projects, including several smelters and the Jakarta-Bandung high speed train, whose development has been stalled due to other countries’ emergency responses to the pandemic.
According to the Indonesian Energy and Mineral Resources Ministry’s coal and minerals director general, Bambang Gatot Ariyono, between 300 and 400 Chinese workers have been unable to return to Indonesia since it began imposing travel restrictions on Chinese visitors in early February.
