JETP's Target is to Retire Two Coal-Fired Power Plants, but the Cost Requires IDR 18 Trillion

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Adi Ahdiat 09/11/2023 18:20 WIB

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The JETP Indonesia Secretariat prioritizes early retirement or closure of the Pelabuhan Ratu and Cirebon-1 Coal-Fired Power Plants (PLTU) by 2037. However, this requires a US$1.17 billion investment,

Investment Cost Requirements for Early Retirement of Two Coal-Fired Power Plants (PLTU) in Indonesia*

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JETP's Target is to Retire Two Coal-Fired Power Plants, but the Cost Requires IDR 18 Trillion

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Investment Cost Requirements for Early Retirement of Two Coal-Fired Power Plants (PLTU) in Indonesia*

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The Indonesian government plans to achieve its net-zero emission (NZE) target in the energy sector by 2050.

To achieve this target, the government intends to increase renewable energy power plants and gradually cease operations of coal-fired power plants (PLTU).

This plan is recorded in the Comprehensive Investment and Policy Plan (CIPP) document released by the Indonesian JETP Secretariat on November 1, 2023.

JETP, or Just Energy Transition Partnership, is an international financing cooperation program aimed at encouraging developing countries to transition from fossil fuels to renewable energy.

In 2022, Indonesia received a total of US$20 billion in JETP financing commitments. The Indonesian government then formed the JETP Secretariat, tasked with planning and coordinating the implementation of these commitments.

In November 2023, the JETP Secretariat released the Comprehensive Investment and Policy Plan (CIPP) document, which outlines the implementation plan for JETP projects in Indonesia, including a scenario for retiring coal-fired power plants.

The document notes that two PLTUs are prioritized for early retirement: Pelabuhan Ratu PLTU and Cirebon-1 PLTU.

Pelabuhan Ratu PLTU has a capacity of 969 megawatts (MW) with a natural operational lifespan until 2042. However, to accelerate the net-zero emission target in the energy sector, the JETP Secretariat projects that Pelabuhan Ratu PLTU could be retired early in 2037.

Cirebon-1 PLTU has a capacity of 660 MW with a natural operational lifespan until 2045. This plant is also projected to be retired early in 2037.

To retire these two PLTUs, the JETP Secretariat estimates a total investment of US$1.17 billion, or approximately Rp18.3 trillion (assuming an exchange rate of Rp15,645 per US$). This includes US$870 million for the early retirement preparation of Pelabuhan Ratu PLTU and US$300 million for Cirebon-1 PLTU.

"Early retirement and replacement (of PLTUs) are capital-intensive endeavors, requiring investment to compensate PLTU owners (both PLN and private companies), cover decommissioning costs, provide just transition support, and build environmentally friendly replacement power plants," stated the JETP Secretariat in the document.

All plans outlined in this CIPP are currently drafts and do not yet have legally binding force.

"We are opening the draft JETP investment plan with the hope of gathering as much input as possible from all elements and levels of society," said the Head of the Indonesian JETP Secretariat, Edo Mahendra, in a press release on Wednesday, November 1, 2023.

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."

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JETP's Target is to Retire Two Coal-Fired Power Plants, but the Cost Requires IDR 18 Trillion

JETP's Target is to Retire Two Coal-Fired Power Plants, but the Cost Requires IDR 18 Trillion

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JETP's Target is to Retire Two Coal-Fired Power Plants, but the Cost Requires IDR 18 Trillion

JETP's Target is to Retire Two Coal-Fired Power Plants, but the Cost Requires IDR 18 Trillion

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