Fabby Tumiwa, govt director of the Institute for Important Providers Reform (IESR), an Indonesian assume tank, mentioned that retiring coal energy crops is financially possible, however provided that renewable vitality growth is prioritised.
“The problem is that we have to instantly develop renewable vitality infrastructure earlier than these coal energy crops are retired, as a result of we nonetheless want electrical energy to be up and operating,” he mentioned.
Dinita Setyawati, senior electrical energy coverage analyst for Southeast Asia at Ember Power, known as for modern financing mechanisms and extra engaging incentives to assist the coal phase-out.
“Implementing or increasing carbon-pricing mechanisms, reminiscent of carbon taxes or emissions buying and selling schemes, might generate income to fund coal retirement,” she mentioned. She highlighted challenges in accessing worldwide funding and the restricted expertise with financing native renewable vitality initiatives.
“The federal government might deal with these limitations by organising coaching programmes, workshops and outreach classes to draw extra native gamers to take part within the renewable vitality and coal phase-out markets,” she added.
Fabby additionally famous the long-term financial advantages of retiring coal energy crops, explaining that financial savings might be as excessive as US$18.7 billion by 2045, along with lowering the well being prices related to coal. “Sure, there can be upfront prices for renewable vitality, however it is a good funding that’s within the nationwide curiosity, and we have to method it from that perspective,” he mentioned.
Transition to renewable vitality
Throughout COP29 in Baku, Azerbaijan, Indonesia’s particular envoy for local weather change, Hashim Djojohadikusumo, introduced that the nation plans to allocate 75 GW of renewable vitality capability by 2040.
Hashim estimated that this transition will want a complete funding of US$235 billion, with a deal with creating hydropower crops, geothermal vitality, solar energy, wind farms and nuclear vitality initiatives. Indonesia has set a goal of attaining 23 per cent of its vitality combine from renewable sources by 2025. Nonetheless, the MEMR reported that the nation is already falling brief on the interim 19.5 per cent goal for 2024, citing regulatory and monetary hurdles as the principle components.
Neighbouring international locations have set rather more bold renewable vitality targets. The Philippines, for instance, has pledged to extend the share of renewables within the electrical energy combine to 35 per cent by 2030 and 50 per cent by 2040. Vietnam, in the meantime, targets 30 per cent to 39 per cent by 2030.
Latest evaluation by Ember means that Indonesia might undertake a extra bold vitality technique by including 8 GW of renewable vitality yearly and lowering coal energy era by 3 GW every year till 2040.
With electrical energy demand anticipated to develop by round 5 per cent yearly within the coming years, the report exhibits that Indonesia can meet the projected 806 TWh of electrical energy demand by 2040, supplied the renewable vitality share reaches 65 per cent. Underneath this state of affairs, photo voltaic vitality would contribute 20 per cent, wind 11 per cent, and different renewables, reminiscent of nuclear, geothermal, bioenergy and hydro, would account for 34 per cent.
Dinita careworn that attaining this goal is possible however requires prioritising the fitting measures. Amongst these, she prompt specializing in accelerating renewable growth, securing funding for infrastructure reminiscent of grids and vitality storage, and bettering planning processes to streamline renewable vitality integration.
“Enabling PLN to precisely mission provide and demand by compiling and advancing possible renewable-based initiatives will additional improve the probability of success,” mentioned Dinita.
Pattern Asia’s Novita provides that shutting down coal energy crops additionally raises social issues that have to be addressed. “We are able to’t simply shut down coal energy crops and go away. The impacts on employees, the setting and its restoration, and on communities should even be rigorously managed,” she mentioned.
CELIOS and Yayasan Cerah, two NGOs specializing in vitality, co-published a research in 2023, inspecting the social and financial impacts of early coal retirement. The research discovered that shutting down Cirebon, Pelabuhan Ratu and Suralaya energy crops would end in a minimum of 14,000 job losses and a complete lack of revenue of three.96 trillion IDR (US$243 million).
Nonetheless, if coal energy plant closures had been accompanied by renewable vitality growth, it might generate 639,269 new jobs and enhance revenue by 82.6 trillion IDR (US$5 billion).
Whereas Indonesia’s pledge to section out coal by 2040 marks a major political shift, its feasibility relies on overcoming substantial monetary, infrastructural and social challenges.
Consultants stress that with out cautious planning, modern financing and robust worldwide assist, the transition dangers stalling. With electrical energy demand rising and the well being and financial prices of coal escalating, the daring guarantees of Prabowo’s administration symbolize each an pressing problem and a possibility for Indonesia’s sustainable vitality future.
This text was initially revealed on Dialogue Earth below a Inventive Commons licence.
