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ADB, PLN consider plan to retire Indonesian coal plants early
The Asian Development Bank (ADB) plans to start buying facilities in 2022, before Indonesia takes over the G20 chairmanship that same year.
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The five chimney stacks of the 4,025 MW Suralaya coal-fired power plant, one of the largest of its kind in Indonesia, tower above Cilegon city in Banten on Sept. 24, 2019. (JP/Norman Harsono)
T
he Asian Development Bank (ADB) is working on a financing scheme to buy coal-fired power plants (PLTU) in Indonesia and retire them early, hoping to expedite the energy transition in one of the world’s top carbon dioxide-emitting countries.
The ADB, state-owned electricity monopolist PLN and other stakeholders are finalizing a pre-feasibility study on the scheme, called the Energy Transition Mechanism (ETM). The preliminary study includes a system analysis, plant modeling and a regulatory and policy review. It is to be followed by an in-depth feasibility study.
“Throughout the process, ADB is collaborating with its longstanding and valued partner PLN and other local stakeholders to determine the best path forward for ETM in Indonesia,” ADB senior energy specialist David C. Elzinga told The Jakarta Post on Aug. 16.
Similar studies are being conducted in Vietnam and the Philippines as fellow coal-reliant developing Southeast Asian countries.
The ETM is a new approach to tackling what experts have described as the key hurdle to reaching Indonesia’s net-zero emissions goal, which is the long remaining lifespan of domestic coal plants, the current backbone of power generation in the country.
As of April, PLN was operating coal plants with a combined capacity of 32,924 MW, accounting for 45 percent of Indonesia’s total installed power plant capacity. More such plants are in the pipeline, Energy and Mineral Resources Ministry data shows.
The ministry estimates that Indonesia’s last coal plant will be retired in 2058 and that the country may only achieve net-zero emissions by 2060. That would be later than the international benchmark of carbon neutrality by 2050.
