AsiaElec: Indonesia ponders CPP closures

Indonesia could guarantee a wealth of new jobs at the same time as slashing CO2 emissions by replacing ageing coal power plants (CPPs) with renewable energy facilities, but at a cost.

In an analysis released by TransitionZero, the closure by as early as 2040 of CPPs across Southeast Asia’s most heavily populated nation could cost up to $37bn.

Yet in a nation so often identified with large-scale coal mining and known as the world’s biggest exporter of thermal coal, any moves towards one day closing down coal exports entirely will carry significant knock-on effects for nearby India, China and Taiwan, who are all major importers of Indonesian coal.  

On the home front too, an estimated 70% of all Indonesian power is generated by coal burning.

A predicted boost in jobs of around six created for each one lost by closing CPPs, though, will be hard for the central government in Jakarta to ignore. So too will CO2 cuts of approximately 1.7 gigatonnes, according to the report.

At present, the Indonesian archipelago is home to 118 coal-powered facilities, and much of the projected $37bn cost would come in the form of early buy-outs of existing facility contracts.

Equivalent to $1.2mn per MW to close down, sources for the capital required for Jakarta to even consider wide-scale CPP closures at first appear few and far between.