Indonesia's new plan to phase out all coal power by 2040 can be achieved if the country rapidly increases its share of renewables in the energy mix to 65pc, according to energy think-tank Ember.
Indonesian president Prabowo Subianto made the coal phase-out announcement last month. The commitment is highly ambitious given the country's current reliance on coal. The share of coal in Indonesia's power mix hit 61.8pc in 2023, while renewables accounted for 19pc.
The country needs to retire 3 GW/yr of coal power and add 8 GW/yr of renewables until 2040 to achieve this lofty new goal, said Ember in a report released on 4 December. This means a renewable energy target higher than the government's current goal of 75GW by 2040, Ember said. Delegates at the UN Cop 29 climate summit in Azerbaijan last month affirmed that under the national electricity plan, the country needs to add around 102GW of additional capacity, with 75pc to come from renewable energy.
Electricity demand is projected to grow by around 5pc/yr to around 806TWh in 2040, said Ember. Indonesia can meet this if its share of renewable energy reaches 65pc, with solar making up 20pc, wind 11pc and the remaining from other sources such as nuclear, geothermal, hydropower and bioenergy.
But concrete action is required to scale up clean energy technologies, with the report providing some key recommendations. Indonesia should enhance private-sector engagement to unlock financing for the energy transition and coal phase-out. This can be done by implementing policies to address project risks and uncertainties around electricity sector reform.
Indonesia should also provide a comprehensive regulatory framework to select coal power plants that will be retired early, and develop economic diversification plans for provinces in which these plants are located, said Ember.
Other recommendations include increasing grid connectivity and incorporating more energy storage to maximise solar use and address intermittency. Integrating 4 GWh/yr of battery storage would enable Indonesia to do this. The country has the advantage of having "abundant resources for producing battery components for storage capacity", said Ember's senior electricity policy analyst for southeast Asia, Dinita Setyawati.
