December 20, 2024
The Indonesian government officially supports retrofitting coal-fired power plants with nuclear technologies in its National Electricity Plan (RUKN) 2025-2060. The plan, signed by President Prabowo Subianto, and written by Indonesia’s Ministry of Energy and Mineral Resources (ESDM) outlines the country’s ambitious strategies for its power sector, including a target of an 87% renewable energy mix by 2060.
The National Electricity Plan now includes the following text (RUKN 2025-2060, page 27):
(Text translated from Indonesian)
“Technologically, the fuel used in coal-fired power plants can be replaced with fuels that utilise new and renewable energy sources, such as biomass, ammonia (fuel switching) or nuclear, through retrofitting coal-fired power plants. By choosing retrofitting, the technical and economic lifespan of coal-fired power plants can be extended, allowing the share of new and renewable energy to continue to increase by utilising existing assets, which can reduce the social impact of shutting down coal-fired power plants.”
This is excellent news, and a significant step forward for Repower Initiative. This addition to the official document was included following discussions that our team member Bob S. Effendi had with Indonesia’s Directorate General of Electricity. This innovative clean energy option will now officially be available to PLN (Indonesia’s government owned corporation which has a monopoly on electric power generation and distribution), and its 2 subsidiary companies who operate coal plants (Indonesia Power and Nusantara Power). This option will also apply to all other private operators of coal plants, and it is expected that the inclusion in RUKN will further advance the technical and engineering research in the field.
After India, China and the US, Indonesia is the 4th most populous country, with an estimated population of 285 million people. This is projected to rise to 320 million people by 2060. The country is currently responsible for nearly 2% of the world’s CO2 emissions and its economy is expected to grow by a target of 8% by 2060. Indonesia is also one of the world’s largest coal producers, consumers and exporters. Coal is heavily used in Indonesian industry and is a significant tax revenue source. Indonesia has the world’s fifth-largest coal-fired power capacity of 52.31 GW, and the fleet is relatively young. The 254 operational CFPPs have an average age of 11 years, and these plants are designed to have a lifespan of decades.
Despite previous commitments to cease the building of new CFPPs by 2023, there are an additional 40 plants under construction, and five plants in the pre-permit stage. Coal ownership in Indonesia is politically connected, with most CFPPs owned by state-owned enterprises, although partial debt and equity may be held by third parties. Coal provides a major contribution to the economy and energy supply (around 61.83% of Indonesia’s energy mix in 2023). Coal generation is significantly subsidised through the government capping the price of domestically used coal, with subsidies equal to $4.5bn in 2022. A large portion of existing coal capacity is locked into Power Purchase Agreements (PPA). These are long-term contracts which guarantee electricity purchase between a generator and a buyer, and these can create financial barriers to renegotiation.
Strong political willpower is required for Indonesia to transition away from coal. At the recent G20 summit in Brazil, President Prabowo announced a decisive vision to revise the country’s target to achieve net zero emissions from 2060 to 2050, with all Indonesian coal-fired plants and other fossil-fuelled plants due to be phased out by 2040. If these plans are realised, 3 Gt of CO2 emissions could be prevented from entering the atmosphere during the 2030-2060 period. Indonesia is building 75 GW of renewable energy capacity by 2060. The G20 summit also saw the announcement of a Just Energy Transition Partnership (JETP) led by the US and Japan, with financing of up to $20 billion to support Indonesia’s Energy Transition Mechanism. The country is heading in a positive direction.
Repower Initiative are working to support Indonesia’s transition to clean energy. Our team in Indonesia, led by Bob S. Effendi, Dr. Retno Gumeland and Rino Mukti, are currently engaged in a collaborative study with Institut Teknologi Bandung (ITB – one of the most prestigious public research universities in Indonesia). They are evaluating the feasibility of retrofitting the 660 MW Tanjung Jat-B coal-fired power plant in Central Java into a nuclear-powered facility. The findings of this study are expected to be submitted to the government by February 2025 as a policy brief, and additional studies will assess the full scope of potential across the country, and other technical and engineering requirements. Effendi estimates that approximately 30 GW of coal-fired power plants could be viable candidates for retrofitting to nuclear, and the team intend to educate Nusantara Power on the concept in 2025.
Ready availability of cheap electricity is vital for Indonesia’s continued economic development, and retrofitting coal plants with nuclear is a welcome addition to their strategy of a just transition towards a clean energy future, that also is mindful of local communities and workers.
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