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Plan for early retirement of coal plants now in high-level talks
The finance minister says policymakers are not only considering technicalities but also the "political economic" aspects of the plan.
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Fishermen sail past as smoke rises from chimneys of the Suralaya coal power plant in Cilegon, Banten, on Sept. 22, 2021. (AFP/Ronald Siagian)
T
he Finance Ministry has begun talks with the Asian Development Bank (ADB) on the latter’s scheme to retire Indonesian coal-fired power plants (PLTU) early, a sign that the breakthrough scheme has reached high-level discussions with the Indonesian government.
The ministry wrote in a statement on Tuesday that Minister Sri Mulyani Indrawati and senior officials met on Monday to discuss the scheme, officially called the Energy Transition Mechanism (ETM), among other energy-transition policies.
The ADB’s ETM scheme entails pooling funds to buy out and retire coal plants early, on the condition that plant owners reinvest the funds in green energy projects under the same scheme. Proceeds from operating the coal plants and the projects will be used to pay back investors.
“The discussion was about how we can end coal energy and, at the same time, ensure there are funds to take over coal [power plant] contracts,” said Sri Mulyani as quoted in the statement.
Read also: ADB, PLN consider plan to retire Indonesian coal plants early
On Sept. 20, Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan said that President Joko “Jokowi” Widodo had instructed the Cabinet to work on the ETM.
“We should not only design this transition technically and technocratically but also consider the political economics,” she said.
