Funding Roadblock in Coal Power Plant Shutdown: Indonesia's Next Move?


  • Indonesia's Emission Reduction Strategy Shift: Faced with funding challenges, Indonesia adopts the Accelerated Renewable Energy with Coal Phase Down scenario, allowing existing coal-fired power plants (PLTU) to operate until contract expiration. The focus shifts to integrating cutting-edge technologies for emission reduction through CCS technology and co-firing using biomass, green ammonia, and green hydrogen.  
  • Limited Funding for PLTU Early Retirement: Indonesia faces financial constraints in the early retirement of PLTU, with potential funds available only under The Energy Transition Mechanism (ETM) partnership funded by CIF-ACT.
  • Controversy Surrounding CCS Adoption: The Ministry of Energy and Mineral Resources proposes including Carbon Capture Storage (CCS) in the Just Energy Transition Partnership (JETP), drawing criticism for costliness and effectiveness. However, the Comprehensive Investment and Policy Plan (CIPP) draft of the partnership implicitly includes the project through coal retrofit.
  • Challenges in Biomass Projects: Despite targeting co-firing at 52 power plant locations, Indonesia grapples with biomass feedstock availability and pricing issues. 
  • Advancements in Green Ammonia and Hydrogen:  Indonesia is venturing into green ammonia and hydrogen co-firing, showcased by the Java 9 and Java 10 Power Plants. The so-called Ultra Selective Catalytic Reduction technology reportedly can utilize ammonia for up to 60 percent of the fuel.
  • Sustainable Taxonomy and PLTU Financing Classification: Indonesia introduces a Sustainable Taxonomy, labeling PLTU financing as "green" and "yellow" under certain criteria.

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