Indonesia Must Mitigate Energy Transition After Ceasing Coal Plants, Expert Says

TEMPO.CO, Jakarta - The Director of the Center of Economic and Law Studies (Celios) Bhima Yudhistira stated that ceasing coal-fired power plants will bring benefits to Indonesia. However, he said, the government still needs to mitigate the effects of the energy transition period.

Bhima believed that stopping coal plant operations would affect local own-source revenue (PAD) where the coal plants and mines are located. This, he said, could potentially affect regional fiscal balance.

"The other consequence is the workers of coal plants and mines who are not prepared to face energy transition could become a stranded skill and be unemployed," he said when called by Tempo on Saturday. 

Small businesses around the coal plant locations would also experience a potential profit loss. "This has to be mitigated by the governments," he added.

Meanwhile, in regard to benefits, Bhima stated that closing down coal plants could suppress the economic loss caused by air pollution, which negatively impacted health, productivity, and the environment. Fund and investment toward new renewable energy also creates new job opportunities, reducing unemployment number.

Additionally, it could reduce an estimated 90 million tonnes of CO2 in 25 years and prevent losses for the State Electricity Company (PLN). "PLN take or pay scheme obliged it to pay despite excess electrical supplies," Bhima stated.

Earlier, EMR Minister Arifin Tasrif claimed to cease coal plants by 2058, two years before its net zero emission (NZE) target year. Arifin stated on September 18 that the state will no longer develop coal plants after 2030. "The additional plants after 2030 will use new renewable energy," Arifin stated, as quoted by Antara. Indonesia will develop new, renewable energy power plants with 700 GW capacity to fulfill the 1,942 terawatt per hour necessity.

RIRI RAHAYU | ANTARA

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