Although the Indonesian government has said that no new coal-fired power plants will be built from 2023 onwards and only renewable energy will be developed, a number of coal-fired power plants currently under construction will continue to emit greenhouse gases for decades to come.
Coal is said to make up 40% of Indonesia's energy mix. The non-profit organization China Dialogue said that this situation will be difficult to change in the short term, despite the Indonesian government's commitment to energy transition.
By 2030, Indonesia is still expected to add 41 GW of installed power generation capacity, of which 14-16 GW will come from coal. Pithead power plants, expected to have an installed capacity of 3.5 GW by 2030, tend to use the low-quality lignite characterized by low energy efficiency and high pollution.
Indonesia has ample coal reserves, with South Sumatra alone accounting for 25% of the country's total, or approximately 9.45 billion tonnes. However, most of the region's coal reserves are low-quality lignite and sub-bituminous coal.
Compared to high-CV coal, lignite needs higher consumption and causes severer air pollution if the same amount of electricity is generated.
"The impact of emissions is high, but not much energy is produced by burning lignite," Pius Ginting, executive coordinator of the Indonesian NGO AEER, was quoted as saying.
Coal, energy and climate targets
Nearly half of Indonesia's electricity mix comes from coal-fired generation, and coal in South Sumatra plays a crucial role in this.
The Indonesian government, seeing coal as the cheapest source of energy, continues to build coal-fired power plants, particularly pithead plants, a move that goes against Indonesia's commitments under the Paris Agreement. Indonesia announced in 2015 that it would reduce its greenhouse gas emissions by 41% by 2030 with the help of the international community.
In addition, Indonesia's state-owned electricity company Perusahaan Listrik Negara (PLN) said in May that it would only build renewable energy plants after 2023. However, the company will first have to complete its planned power projects with a total installed capacity of 35 GW , mostly coal plants, most of which are pithead power plant in South Sumatra province. These power plants will continue to emit greenhouse gases for decades to come.
"The banks should finance projects that are environmentally friendly and have a long future by applying the principles of sustainable development, without causing harm to the public at large," Faisal Basri, an economist at the University of Indonesia, said.
South Sumatra's coal resources are not of high quality, and poor shipping conditions are also a barrier to its global sale. However, these two obstacles may create an opportunity to develop non-coal resources such as geothermal, and local energy policy should shift towards renewable energy.
(Writing by Alex Guo Editing by Tammy Yang)
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