Along with South Korea and Japan, China contributes 95 percent of global funding for coal-fired steam power plants (PLTU). They are also major consumers of coal.
By
Kompas Team
·5 minutes read
The green economy has become the world’s mainstream. Unless it undertakes the transformation without delay, Indonesia, which relies on coal exports and energy, will face difficulties and be left behind.
NEW YORK, WEDNESDAY—Sunset is fast approaching coal-based industry and energy. One after another, the major coal-investor countries are discontinuing their funding for the sector. The best choice for Indonesia, whose economy relies considerably on coal, is to promptly transform into a green economy and earn value added.
“China will increase support for other developing countries in developing green and low-carbon energy, and will not build new coal-fired power projects abroad,” Chinese President Xi Jinping announced at the 76th session of the United Nations General Assembly on Tuesday (21/9/2021) at noon New York time, or early Wednesday morning Western Indonesia Time.
Along with South Korea and Japan, China contributes 95 percent of global funding for coal-fired steam power plants (PLTU). They are also major consumers of coal.
The Japanese government announced several months ago that it would cease its investments in coal-fired power plants as of early 2022. The South Korean government has also indicated its impending termination of coal investments, but has not specified a date.
According to Global Energy Monitor, the Asian trio, along with Germany and the Czech Republic, are the five biggest investors of coal-fired power plant projects in the world, with China the largest among the five.
Coal has been vital to global electrification so far. Today, coal-fired power plants contribute 37 percent of global electricity generation. According to the International Energy Agency (IEA), coal will remain the biggest power source until 2040, contributing 22 percent globally and 39 percent in Asia.
Coal contributes 35 percent of Indonesia’s national energy demand, and is also one of the country’s main export commodities.
The problem is that coal is the largest source of carbon dioxide emissions, which trigger global warming. Global warming will still cause various climate disasters, although the goal of the Paris Agreement is to limit global temperature rise to 1.5 degrees Celsius from the pre-industrial era. Its climate impact will be even greater if the global temperature rise exceeds 1.5 degrees Celsius and lead to global catastrophes, such as natural disasters, disease, famine, poverty, species extinction and biodiversity loss, and the disappearance of coastal cities.
“We will further promote the utilization of power generators based on renewable energy. PLTU development currently underway is intended to finish those projects already under contract. For these projects with contract commitments, we will certainly honor their agreements,” said spokesperson Intan Fahdiana of PT PLN (Persero).
Phase two, which will retire 9 GW subcritical PLTUs, is scheduled to commence in 2035.
According to Intan, the state electricity company has drafted a plan for terminating PLTU operations in 2025-2055 to achieve the country’s zero emissions target by 2060. Existing PLTUs will cease operations as of 2025, while planned PLTU and gas-fired power plant (PLTMG) projects will be replaced by renewable power plants with a base load capacity of 1.1 GW. Later in 2030, PLN will start phase one of retiring subcritical PLTUs of around 1 GW, including the Muarakarang, Tambaklorok and Gresik plants. Phase two, which will retire 9 GW subcritical PLTUs, is scheduled to commence in 2035.
A number of civil society groups affiliated with the #BersihkanIndonesia (Clean up Indonesia) movement welcomed President Xi’s announcement. However, they would critically monitor China’s commitment, especially with regard to the ongoing PLTU projects in Indonesia.
“Chinese investments in Indonesia’s coal industry contribute significantly to greenhouse gas emissions, air pollution and negative impacts on public health in Indonesia. We hope the Indonesian government, through the central bank and state-owned banks, will immediately follow [China’s lead] and make the same announcement,” Sisilia Nurmala Dewi, the Indonesia team leader of 350.org, said on Wednesday.
Climate and Energy Campaign Coordinator Tata Mustasya of Greenpeace Southeast Asia said the latest announcement from China signaled that dirty coal energy should be abandoned right away. “It’s a strong signal for the Indonesian government to do the same,” he said.
China’s announcement would therefore have no impact on national coal production over the short term.
Meanwhile, Indonesian Coal Mining Association (APBI) executive director, Hendra Sinadia said that coal demand would still continue over the next 20 years for the PLTUs currently under construction. China’s announcement would therefore have no impact on national coal production over the short term.
Still, the APBI would study Beijing’s announcement, as Indonesia would be affected if China wound up its investments in coal projects in the Asia-Pacific, which consumes 98 percent of Indonesia’s coal exports. The APBI also had no details on whether China, one of the top destinations for Indonesian coal, would cease its coal imports or not.
Energy Transformation program manager Deon Arinaldo from the Institute for Essential Services Reform (IESR) maintained that China’s latest policy was an opportunity to cancel PLTU development in ASEAN countries. “Indonesia should get ready to transition to its exit from the coal industry. Economic diversification is important,” said Deon. (AFP/REUTERS/RAZ/MED/AIK/ICH)