Bappenas warns of impact of early power plant phaseout on economy

The National Development Planning Agency (Bappenas) has warned the energy sector about the impact of the early retirement of coal-fired power plants (PLTUs) on the regional economy.

Indonesia has coal natural resources, and the government obtains large revenue from the commodity, noted Vivi Yulaswati, Bappenas' Deputy for Maritime Affairs and Natural Resources, during a discussion on Indonesia's climate ambition on Friday.

"When we talk about the early retirement of PLTU, we also have to think about the revenue from provinces and districts rich in mining resources, especially coal," she said.

The policy on retiring coal-fired power plants early should consider the economic aspect since it would reduce the revenue of regional governments, thus potentially increasing the poverty rate in regions that produce coal, she explained.

If the policy is not enacted carefully, it could reduce the quality of basic services at public facilities.

According to Yulaswati, Indonesia can utilize the Just Energy Transition Partnership (JETP) scheme to prepare for the transition from coal-based jobs to clean energy-based jobs.

The funding of US$10 billion under the JETP scheme will come from public funding in the form of concessional loans and donations.

The remaining US$10 billion will come from private funding coordinated by the Glasgow Financial Alliance for Net Zero (GFANZ), which comprises Bank of America, Citi, Deutsche Bank, HSBC, Macquarie, Mitsubishi UFJ Financial Group (MUFG), and Standard Chartered.

JETP will be utilized to encourage the early retirement of coal-fired power plants in Indonesia and investment in renewable energy technology and industry. The funding scheme is a positive signal to encourage energy transition acceleration.

During the event, Yulaswati also highlighted the inclusion of nuclear energy as an option for energy efficiency within the 2025-2045 National Long-Term Development Plan (RPJPN) document.

Source: ANTARA News