🇮🇩 Versi Bahasa Indonesia tersedia di bawah
Capacity tripled in five years, on track to cost USD 20 billion in public health burden
Over the past year, Indonesia’s coal power capacity has seen a 15% increase. Yet, none of the increase has come from coal-fired power plants (CFPP) owned by the state-owned electric company PLN. From July 2023 to July 2024, the increase came to a total of 7.2 GW, of which 2.6 GW was from independent power producers (IPPs), and 4.5 GW was from captive use, meaning new coal capacity for industry was nearly double that of coal for the national grid.
CREA and Global Energy Monitor’s latest report on Indonesia’s captive coal capacity following their 2023 report, finds that sizable growth in captive coal is expected to continue, with an estimated total of 11.04 GW up to 2026, including all units in the construction, pre-permitted, and announced phases. Combined with the 132 units of operational captive coal-fired power plants (CFPPs) totaling 15.2 GW, proposals would put total captive coal capacity at 26.24 GW, which is greater than the total coal plant capacity of all of Australia in 2023 – and would put captive in the largest share of Indonesia’s coal generation outside of PLN and IPPs, at nearly 40%.
The health and economic impacts of unchecked CFPP development in Indonesia would be catastrophic. Analysis on nickel industrial complexes located in Central and Southeast Sulawesi and North Maluku reveals that under the current growth pathway and without strengthened emission and environmental standards, exposure to air pollution emitted from coal-based smelting processes and associated captive coal power plants would lead to nearly 5,000 deaths in 2030 and cause IDR 56 trillion (USD 3.42 billion) in economic burden. Meanwhile, exclusion of captive CFPP retirement from a 2040 coal phase-out target would cause an additional 27,000 deaths and IDR 330 trillion (USD 20 billion) of economic burden from cumulative health impacts nationwide.
Indonesia holds the capability to pivot from captive coal and become a leader in industrial decarbonisation. What’s more, the financial benefits of renewables clearly outweigh those of remaining reliant on coal – by 2025, solar-storage levelized cost of electricity (LCOE) in Indonesia with preferential financing is projected to be USD 0.01 cents per kWh cheaper than coal. In the next decade, pricing will be even better, with the cost difference anticipated to be over USD 0.03 cents per kWh.
In anticipation of the Just Energy Transition Partnership (JETP) Secretariat’s release of Indonesia’s captive power landscape mapping, national and global stakeholders will be presented with a collective opportunity to catalyse decarbonisation efforts. Inclusion of captive CFPP retirement in Indonesia’s national plan would not only support the government’s energy transition and climate targets, but would also garner interest for clean energy investments.
