Indonesia scales up renewable energy plans

  • Market: Coal
  • 07/10/21

Indonesia has raised its new and renewable energy generation target to 51.6pc from an earlier proposal of 48pc in its 2021-30 electricity plan, with an aim of reducing its reliance on thermal power.

The country's energy ministry (ESDM) validated the 2021-30 generation plans of state-owned utility PLN. More than half of the nation's planned 40.6GW generation capacity to 2030 is being targeted from renewables, the ESDM said.

The 10-year plan does not have a provision for new coal-fired power plants except those already committed to and under construction. This creates space for the development of renewables to replace coal-fired generation, the ESDM added. But Indonesia will also add 14.7GW of power capacity, primarily coal-fired generation, over the next two years as these projects were announced earlier and are already under construction.

Indonesia had total generation capacity of 73.34GW as of June this year. Of this, 47pc is coal-fired, gas-fired generation at 28pc and hydropower at 9pc. The rest comes from diesel-fired generation, waste-based power units and renewables. The share of renewables was 3pc or 2.21GW.

Indonesia is the world's largest thermal coal exporter and shipped 407mn t in 2020 from output of 563mn t.

Jakarta has taken steps to reduce greenhouse gas (GHG) emissions, starting with a ban on new coal-fired power projects from 2023, along with plans to retire ageing coal-fired plants. New tax legislation with a provision for carbon taxation has been submitted to the People's Representative Council and has been marked as a priority bill.

Indonesian coal consumption is projected to increase for the next nine years as new generation capacity is brought on line, despite a government drive to reduce GHG emissions, according to PLN.

The increase will come from the under-construction coal-fired power plants. These additional power plants are expected to increase Indonesia's annual power sector coal consumption by 36.7pc from now to 156.3mn t by 2030.

But Indonesian coal output could fall by as much as 47pc from 610mn t in 2019 to 322mn t by 2050 under a low-carbon scenario compatible with the 2015 Paris climate agreement target, according to a long-term projection by the UN Framework Convention on Climate Change.


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