Indonesian utility PLN forms energy transition division

Indonesian state-owned utility PLN has created an energy transition and sustainability division to oversee the development of strategic policies as the country pushes to lower its greenhouse gas (GHG) emissions and switch to cleaner energy resources.

Indonesia's power sector currently accounts for over 50pc of the country's GHG emissions, largely because of the country's reliance on coal-fired power for its electricity needs. PLN, the country's sole transmission company and a major power generator, said that a fully fleshed out strategic framework for energy transition is key for a smooth transition process. Indonesia is targeting net zero emissions by 2060.

The new division will be directly supervised by PLN's board of directors, the company said. The new division will be responsible for tracking the implementation of energy transition initiatives, in addition to the development of corporate strategies. This is expected to help the company manage energy transition risks and integrate them into PLN's overall corporate risk management strategy, the company said.

There are six areas that the new division will focus on. These are the projection and inventory of GHG emissions, the development of mitigation and adaptation actions, budget provisioning, utilisation of climate finance and carbon pricing, capacity building of the corporate vehicle and its employees, as well as the monitoring and evaluation of strategic policies to be developed and implemented.

PLN said that through this division, the company will be able to improve and streamline the energy transition process and more effectively collaborate with other players in the energy sector, including technology leaders, universities, investors, development banks, end-to-end power businesses, and other participants. This will allow it to develop new skills and new core competencies to take advantage of energy transition opportunities, PLN said.

PLN has been taking steps to set up the power industry's energy transition process. It has trialled an emissions trading system at 26 coal-fired power plants since last year, which is expected to be deployed on a larger scale in the future.

PLN has also been tasked by the government to develop an early retirement system for existing coal-fired power plants and identify plants that can be decommissioned and replaced with renewable energy.

By Antonio delos Reyes