{"id":61680,"date":"2025-03-17T01:13:41","date_gmt":"2025-03-17T01:13:41","guid":{"rendered":"https:\/\/energytracker.asia\/?p=61680"},"modified":"2025-03-17T01:13:45","modified_gmt":"2025-03-17T01:13:45","slug":"captive-coal-threatens-indonesias-peak-emissions-by-2030","status":"publish","type":"post","link":"https:\/\/energytracker.asia\/captive-coal-threatens-indonesias-peak-emissions-by-2030\/","title":{"rendered":"Captive Coal Threatens Indonesia\u2019s Peak Emissions by 2030"},"content":{"rendered":"
<\/div>\n

Throughout 2024, Indonesia, one of the leaders in global coal production and supply, ambitiously pledged to peak emissions by 2030 and phase out fossil fuels by 2040. However, analysts warn that its latest electricity master plan (RUKN)<\/a> threatens to derail the progress by significantly increasing captive coal power generation. As a result, Indonesia risks distancing itself from the low-emission pathway targets in its Just Energy Transition (JETP) plan and exposing its economy and population to increased electricity prices and elevated health and environmental risks.<\/p>\n\n\n\n

Ember: Indonesia’s Captive Coal to See a 180% Increase Over the Next Seven Years<\/strong><\/h2>\n\n\n\n

In a new report<\/a>, Ember\u2019s Senior Analyst on Climate and Energy Dody Setiawan raises concerns that Indonesia\u2019s latest electricity plan (RUKN<\/a>) could negatively impact the country\u2019s decarbonisation plans and increase electricity costs. The plan targets 26.8 GW of new coal capacity over the next seven years, with over 20 GW from captive coal power. <\/p>\n\n\n

\n
\"Indonesia
Source: Ember<\/a><\/figcaption><\/figure>\n<\/div>\n\n\n

In total, captive coal capacity would increase by a staggering 180% over the next seven years. Instead of declining, coal generation would grow at an annual rate of 3.9%, peaking in 2037 at levels 62.7% higher than today\u2019s.<\/p>\n\n\n\n

However, according to Ember, increasing coal generation beyond 2030 is incompatible with Indonesia\u2019s JETP and Paris Agreement targets.<\/p>\n\n\n

\n
\"Indonesia
Source: Ember<\/a><\/figcaption><\/figure>\n<\/div>\n\n\n

Indonesia\u2019s Captive Coal Expansion Associated with Economic, Environmental and Health Consequences<\/strong><\/h2>\n\n\n\n

Today, Indonesia operates 49.7 GW<\/a> of coal power plants, with 11.2 GW being captive and 38.5 GW grid-connected thermal power. According to Ember, the latter has doubled over the past 10 years, leading to significant electricity oversupply. This has caused economic hardship for the state electricity company, PLN, and impeded clean energy growth. Between 2014 and 2023, captive coal power capacity jumped from 2.3 GW to 11.2 GW, mainly due to the mineral smelting industry\u2019s expansion and the increased power demand from metallurgical processes.<\/p>\n\n\n\n

According to Ember<\/a>, the planned expansion of coal power may cause various problems for Indonesia, including the following.<\/p>\n\n\n\n

Slowing Decarbonisation and Distancing Indonesia From its JETP Goals <\/strong><\/h3>\n\n\n\n

The captive coal growth plans contradict President Prabowo Subianto\u2019s pledge to phase out coal by 2040, announced at the G20 summit in 2024, and risk distancing the country from its JETP goals. While the JETP aims to cap grid emissions at 290 MtCO2<\/sub>e by 2030<\/a>, Indonesia\u2019s plans would take total power sector emissions at 598 MtCO2<\/sub>e in 2037, with 166 MtCO2<\/sub>e from captive power.<\/p>\n\n\n\n

Furthermore, according to Ember<\/a>, the increase in coal power demand could further expand the coal mining sector, which targets peaking production in 2025. This would increase carbon dioxide and methane emissions from mining processes.<\/p>\n\n\n

\n
\"Indonesia
Source: Ember<\/a><\/figcaption><\/figure>\n<\/div>\n\n\n

Locking Indonesia Into a Future of High Power Costs<\/strong><\/h3>\n\n\n\n

According to Ember<\/a>, new captive coal plants operate for shorter periods than their economic lifetime, with existing policies mandating that they can only run until 2050. The country must also cut emissions by 35% within 10 years.<\/p>\n\n\n\n

Furthermore, new captive coal plants aren’t subject to the government\u2019s capped coal price, meaning their generation costs would be higher, and operators would have to pay market rates. As a result, Indonesia would be locked into expensive, high-emission power generation that is increasingly uncompetitive compared to renewables.<\/p>\n\n\n\n

Figures reveal that new captive coal generation costs could reach USD 0.0771 per kWh, exceeding PLN\u2019s generation cost in 2020 (USD 0.0705 per kWh) and recent solar and wind tariffs of between USD 0.055 and USD 0.058 per kWh.<\/p>\n\n\n

\n
\"New
Source: Ember<\/a><\/figcaption><\/figure>\n<\/div>\n\n\n

\u201cExpanding captive coal while global markets shift to clean energy makes little economic sense. Indonesia has a clear opportunity to scale up renewables instead of committing to more coal,\u201d Setiawan says.  <\/p>\n\n\n\n

Environmental and Health Risks\u00a0of Captive Coal in Indonesia<\/strong><\/h3>\n\n\n\n

According to Katherine Hasan, an analyst at the Centre for Research on Energy and Clean Air (CREA), aside from the economic toll and slower decarbonisation, the captive coal plans also pose environmental and health risks. Currently, captive coal falls outside the scope of environmental regulations. Unlike grid-connected coal-fired power plants, captive coal is excluded from the power sector emissions trading scheme, and there are no requirements for emissions reporting. <\/p>\n\n\n\n

\u201cWith planned growth largely concentrated in Sulawesi and North Maluku islands, those residing near the industrial sites where the coal power plants will operate will have to bear the highest health and economic burden from pollution exposure, not to mention the irreversible environmental impacts from the spread of toxic particles,\u201d the expert warns.<\/p>\n\n\n\n

In a recent analysis, CREA<\/a> recognises the announcement of Indonesia\u2019s Minister of Energy and Mineral Resources for the early retirement of the Cirebon-1, a 660 MW coal power plant<\/a> in West Java, as a positive example of the potential benefits from avoided air pollution-related health impacts. The plant, which, alongside Pelabuhan Ratu, makes up the first two pilot projects under the JETP for early retirement. The plant is slated to cease operation in 2035, seven years ahead of schedule. Furthermore, it will be replaced entirely with a mix of solar systems (700 MW and 346 MW low-power), wind power (1,000 MW), and waste-to-energy (12 MW). The analysts note the early retirement will help avoid over 6,000 deaths and USD 4.4 billion in economic losses between 2036 and 2042. An early retirement of Pelabuhan Ratu in 2037 could yield similar benefits, with 5,409 deaths prevented and USD 3.7 billion saved between 2038 and 2043.<\/p>\n\n\n

\n
\"Air
Source: CREA<\/a><\/figcaption><\/figure>\n<\/div>\n\n\n

Scaling Up Renewables Crucial For Accelerating Decarbonisation and Reducing Energy Costs<\/strong><\/h2>\n\n\n\n

According to Ember<\/a>, a bigger role for renewables can help Indonesia meet the demand for new captive coal plants and address their costly electricity. Furthermore, recent wind and solar power purchase agreements have demonstrated lower tariffs<\/a>, presenting opportunities to reduce operational costs and lower emissions for captive power generation.<\/p>\n\n\n\n

Indonesia\u2019s electricity plan targets<\/a> around 75 GW of additional renewable capacity over the next 15 years. In total, renewables share will reach around 21% by 2030 and 41% by 2040, causing a six-year delay in achieving the 23% renewable energy target set in the 2014 National Energy Policy<\/a>. Similarly, the JETP target of increasing renewable energy share to 34% by 2030 could also face delays.<\/p>\n\n\n\n

Currently, the pipeline of announced renewable energy and nuclear power projects, as well as those in construction and pre-construction phases in the country, totals 45 GW<\/a>. While achieving this would bring Indonesia on track to hit the 75 GW renewable energy capacity addition goal well ahead of schedule, the targets laid in the RUKN reveal low ambition for solar capacity and risks missing out on the country\u2019s massive wind power potential. If the targets aren\u2019t improved upon, CREA<\/a> warns that by 2040, renewables would contribute just 36% to power generation, compared to 41% for coal-fired plants and 17% for gas. <\/p>\n\n\n\n

According to Ember, besides developing a strong project pipeline and ensuring renewable energy additions are on track, Indonesia should also address existing procurement challenges<\/a> to accelerate deployment.<\/p>\n\n\n\n

Introducing more ambitious renewable energy deployment targets would also make the country\u2019s electricity plan significantly more cost-effective<\/a> and fuel its industry\u2019s decarbonisation efforts in line with the global energy transition.<\/p>\n\n\n\n

\u201cProducing materials for green technology using high-emission energy sources is counterproductive. Indonesia must decarbonise its smelter industries with renewables to enhance sustainability and the market competitiveness of its products,\u201d says Setiawan.<\/p>\n\n\n\n

Furthermore, scaling up renewables expansion targets would help Indonesia accelerate<\/a> the development of domestic manufacturing and secure the economic benefits the country needs to realise its ambitious growth projections.<\/p>\n\n\n\n

Reconsidering Captive Coal Plans Crucial For Indonesia<\/strong><\/h2>\n\n\n\n

According to CREA and Global Energy Monitor, Indonesia\u2019s captive coal capacity could reach 26.2 GW by 2026<\/a>. Ember considers this an opportunity for the country to review the plan and incorporate more renewables, reflecting it in the Comprehensive Investment and Policy Plan document update.<\/p>\n\n\n\n

Alongside accelerating renewables deployment, scaling down captive coal expansion plans would reduce long-term energy costs, attract green investments and enhance the sustainability of its mineral products.<\/p>\n\n\n\n

To stay on track with its climate commitments, Indonesia should reconsider its captive coal expansion plan and enforce strong emissions regulations, including applying the same standards to captive coal as grid-connected plants. By requiring captive coal plants to report emissions, generation output and other relevant data, authorities can improve oversight, accountability and transparency.<\/p>\n\n\n\n

CREA\u2019s Hasan urges the Indonesian leadership to commit to a clear path for coal phaseout while prioritising renewables to better address the challenges that coal-dependent economies would face in the upcoming crucial decades.<\/p>\n\n\n\n

\u201cNow is the time for Indonesia to walk the talk and realise true energy affordability and security as outlined in the RUKN.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Ember’s latest research reveals that Indonesia\u2019s captive coal expansion plans risk distancing the country from its ambitious decarbonisation goals. The analysts warn they could also lead to increased electricity costs and adverse health impacts. <\/p>\n","protected":false},"author":14,"featured_media":61682,"comment_status":"closed","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[15,359],"tags":[40,397,34],"hashtags":[],"class_list":["post-61680","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-features","category-indonesia","tag-coal","tag-fossil-fuels","tag-indonesia"],"acf":{"custom_author_name":"","article_pdf_file":{"ID":61691,"id":61691,"title":"Indonesia\u2019s Captive Coal Expansion Risks Increasing Costs and Derailing Peak Emissions by 2030","filename":"Indonesias-Captive-Coal-Expansion-Risks-Increasing-Costs-and-Derailing-Peak-Emissions-by-2030.pdf","filesize":724520,"url":"https:\/\/energytracker.asia\/wp-content\/uploads\/2025\/03\/Indonesias-Captive-Coal-Expansion-Risks-Increasing-Costs-and-Derailing-Peak-Emissions-by-2030.pdf","link":"https:\/\/energytracker.asia\/captive-coal-threatens-indonesias-peak-emissions-by-2030\/indonesias-captive-coal-expansion-risks-increasing-costs-and-derailing-peak-emissions-by-2030\/","alt":"","author":"14","description":"","caption":"Indonesia\u2019s Captive Coal Expansion Risks Increasing Costs and Derailing Peak Emissions by 2030","name":"indonesias-captive-coal-expansion-risks-increasing-costs-and-derailing-peak-emissions-by-2030","status":"inherit","uploaded_to":61680,"date":"2025-03-04 12:33:03","modified":"2025-03-04 12:33:11","menu_order":0,"mime_type":"application\/pdf","type":"application","subtype":"pdf","icon":"https:\/\/energytracker.asia\/wp-includes\/images\/media\/document.png"},"poll_vote":0,"manage_the_date":"global","show_in_lastest_from_the_region":"0","order":"","short_desc":"Ember's latest research reveals that Indonesia\u2019s captive coal expansion plans risk distancing the country from its ambitious decarbonisation goals. The analysts warn they could also lead to increased electricity costs and adverse health impacts. "},"_links":{"self":[{"href":"https:\/\/energytracker.asia\/wp-json\/wp\/v2\/posts\/61680","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/energytracker.asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/energytracker.asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/energytracker.asia\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/energytracker.asia\/wp-json\/wp\/v2\/comments?post=61680"}],"version-history":[{"count":13,"href":"https:\/\/energytracker.asia\/wp-json\/wp\/v2\/posts\/61680\/revisions"}],"predecessor-version":[{"id":62255,"href":"https:\/\/energytracker.asia\/wp-json\/wp\/v2\/posts\/61680\/revisions\/62255"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/energytracker.asia\/wp-json\/wp\/v2\/media\/61682"}],"wp:attachment":[{"href":"https:\/\/energytracker.asia\/wp-json\/wp\/v2\/media?parent=61680"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/energytracker.asia\/wp-json\/wp\/v2\/categories?post=61680"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/energytracker.asia\/wp-json\/wp\/v2\/tags?post=61680"},{"taxonomy":"hashtags","embeddable":true,"href":"https:\/\/energytracker.asia\/wp-json\/wp\/v2\/hashtags?post=61680"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}