Emerging captive coal power: Dark clouds on Indonesia’s clean energy horizon

🇮🇩 Versi Bahasa Indonesia tersedia di bawah

In Indonesia today, captive coal-fired power plants (CFPPs), referring to power stations that are operated and utilised off-grid by industrial actors, sit at the heart of a clean energy transition contradiction. According to the latest update from the Global Energy Monitor (GEM)’s Global Coal Plant Tracker, 8.2 gigawatts (GW) of the 10.8 GW capacity operating as captive CFPPs in Indonesia today are for the metal processing industry for necessary products for the renewable energy transition. Yet, they are processed using coal power.

A new report by the Centre for Research on Energy and Clean Air (CREA) and Global Energy Monitor (GEM) finds that captive coal power has exploded across Indonesia with nearly eight times more captive capacity operating in 2023 than in 2013.

 PT Perusahaan Listrik Negara (PLN, state-owned electricity provider), Independent Power Producers (IPP), and captive coal-fired power plant (CFPP) growth

Indonesia’s existing climate commitments leave a loophole for the continued development of captive CFPPs. Over half (50.1%) of the country’s remaining proposed coal capacity additions are for captive use, but the government’s efforts to decarbonise the energy sector have thus far been limited to grid power.

Key findings:

  • Nearly 25% of operating coal capacity in Indonesia is for captive use, but the government’s efforts to transition away from coal are currently limited to the power sector.
  • Captive power capacity has increased nearly eightfold from 2013 to 2023, from 1.4 GW to 10.8 GW operating.
  • 50% of proposed coal capacity additions (announced, pre-permit and shelved) as of July 2023 is for captive use. 14.4 GW of captive coal capacity is proposed or in construction.
  • Indonesia is a leading supplier of the critical metals needed for a renewable energy transition, but many operating and planned smelters are operated using coal power. The national industrial development plan for 2015-2035 considers metal processing to be “added value to natural resources”, and developing coal plants is allowed when they will increase the “added value of natural resources”. Smelters are currently located in 13 provinces.
  • Coal capacity additions have been outpacing renewables additions, despite Indonesia’s stated goal of peaking emissions by 2030 through the acceleration of renewable energy deployment.
  • Future emissions from captive coal plants are a major threat that must be considered within the planned use of the USD 20 billion JETP funding. As the launch of the JETP investment plan has been delayed, Indonesia and international partners must negotiate commitments to clear, focused and ambitious targets. 

Katherine Hasan, Analyst, CREA; Jobit Parapat, Researcher, CREA; Lucy Hummer, Researcher, GEM

Partners: Global Energy Monitor (GEM)