Indonesia begins first slow steps towards ditching coal, to stop new plants

Indonesia, a country with one of the highest proportions of coal and a pipeline of new coal plants, may be on the verge of a change in direction. Indonesian outlet Kontan reported last week that Perusahaan Listrik Negara (PLN), the country’s state-owned generation and distribution company, is planning to cease the construction of new coal-fired power stations after 2023, once the construction of existing planned capacity is complete.

However, there are more than 20 gigawatts worth of coal capacity due to built in the country over the coming years, which would take the country’s installed capacity of coal up to 57 gigawatts, a 60% increase in coal-fired power. An Ember Climate analysis of Indonesia’s power sectors paints a picture of one of the world’s worst coal problems, with even China and India seeing a relative decrease in coal’s share in the power system in recent years, but Indonesia seeing a steady increase. A small rise in hydro has offset oil and gas, rather than coal, and wind and solar are essentially non-existent in the country.

“This places Indonesia in stark contrast with the need to halt the development of new coal capacity and phase out existing coal capacity, in order to put the world on track for 1.5 degrees”, say Ember. “This also suggests that Indonesia must take urgent action to embark on its transition toward a low-carbon electricity future. The key question now is whether Indonesia can commit itself to such a journey, to give the world a better chance of avoiding the catastrophic consequences of climate change”.

In 2019, a report by Warwick Forster and Ariel Liebman found that Indonesia could significantly expand market share while potentially lowering cost and not reducing system reliability. The emissions reductions would be significant. “Displaying the projected annual electricity sector emissions in 2027 and comparing the BAU scenario to higher renewables alternatives we observed reductions of between 39 and 89 MegaTonnes of CO2e”. Their plan models a grid featuring up to 43% renewables by 2027.

“Indonesia’s emissions remain on an upwards trajectory”, writes Climate Action Tracker in a recent review of the country’s climate policies. “The effect of COVID-19 is prominent in the short term but it appears Indonesia looks set to miss the opportunity to lock in deep emissions reductions as it recovers from the pandemic. The government’s National Recovery Programme does not support low-carbon options; instead, it bails out coal-heavy electric utilities. The CAT continues to rate Indonesia “Highly Insufficient””. They note Indonesia has the fourth largest pipeline of coal-fired power stations in the world, around 6% of the global share of potential new coal. It is also one of only five countries in the world that had started new coal plant construction in 2020.