Companies in Indonesia can develop new coal power plants under certain conditions, according to a new regulation that relaxes previous commitments to phase out development of the world’s dirtiest fuel in pursuit of a 2060 net-zero target.
(Bloomberg) — Companies in Indonesia can develop new coal power plants under certain conditions, according to a new regulation that relaxes previous commitments to phase out development of the world’s dirtiest fuel in pursuit of a 2060 net-zero target.
According to a presidential regulation that took effect on Sept. 13, companies can develop new coal power under three circumstances: if the plants will power refineries or metal smelters; if they’re nationally strategic projects; or if they can commit to cutting greenhouse gas emissions by 35% within 10 years of operation.
The rule also says all coal plants must seize operations by 2050.
In 2021, Energy and Mineral Resources Ministry Director-General Rida Mulyana told Parliament that the government wouldn’t approve any new coal-fired power plants.
No New Coal Plants in Indonesia in Another Bid to Cut Emissions
The new exceptions highlight the practical challenges for Southeast Asia’s largest economy in ending coal power, which contributes around half of Indonesia’s total installed power capacity and 70% of power sector emissions. Thermal coal is a cheap and abundant resources in Indonesia, the word’s top exporter of the commodity, and state utility PLN is contractually tied to many such plants.
The rule also says:
- PLN must negotiate renewable-generated electricity tariffs based on newly set benchmark rates
- Energy Ministry will review benchmark prices annually
- Ministries and regional administrations must give incentives like tax cuts and easier permits for renewable energy projects
- Energy Ministry will prepare a roadmap on cutting coal power emissions and retiring coal plants early
- Govt may use state budget to help fund early coal retirement and replace them with renewable plants
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