Indonesia Must Shut Coal Plants Every Year to Hit Climate Goal

(Bloomberg) -- Indonesia needs to shut multiple coal plants a year while also tripling renewables to meet its new president’s ambition of a full phase-out of the fossil fuel by 2040, according to climate consultancy Ember.

The Southeast Asian country, which relies on the dirty fuel for the vast majority of its power needs, must “turbocharge its renewable ambitions” by adding 8 gigawatts of clean energy annually, Ember said in a report on Wednesday. By contrast, the nation added 3.3 gigawatts between 2018 and 2023, the consultancy said separately.

“By increasing renewables share to 65% in the power mix by 2040, and retiring 3 GW of coal annually, Indonesia may reach the target,” the report said. Clean energy made up about 19% of the energy mix in 2023, according to Ember.

President Prabowo Subianto, who took office in October, has ramped up the climate ambitions of his country, one of the world’s top emitters. He’s brought forward its net-zero target from 2060 to 2050, pledged to boost renewables output, and exit coal by the end of the next decade. 

But doing so will take systemic change, including slashing red tape that has hamstrung the deployment of renewables, and confronting powerful vested interests in the mining sector. 

Already, an ambitious international program — the Just Energy Transition Partnership — which seeks to mobilize billions of dollars from wealthy nations to phase out coal in developing countries, has made scant progress since being signed two years ago. So far, not a single coal plant in the country has been retired early under JETP. 

A lack of appetite from international finance to fund coal retirements as well as local laws governing losses accrued on state assets have complicated negotiations.

Ember says a rapid rollout of solar power and battery storage is needed to replace most of coal’s contribution to Indonesia’s grid and meet electricity demand that is projected to grow 5% annually. The country also needs greater private sector involvement, grid connectivity and stable financing for the coal phase-out to reach the new targets, it said.

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