Beranda Berita

It may take years for Indonesia to switch from coal to renewable energy

Impossible for Indonesia to totally discontinue using coal due to economic reasons, experts say



JAKARTA, INDONESIA — The push for renewable energy poses a threat to the global coal mining sector — and Indonesia appears to be affected by such developments, as China and India begin to restrict the import of coal from the Southeast Asian nation.

Based on data from the Geology Agency — as published on the ministry’s official website in 2018 — Indonesia amassed 26.2 billion tons of coal in its reserve.

Citing data from the Ministry of Energy and Mineral Resources (ESDM) in 2019, Bisman Bhaktiar from the Center for Energy and Mining Law Studies (PUSHEP) told TOC that Indonesia’s coal reserve will last for the next 60 years.

Phasing out coal: Will Indonesia follow suit?

Several European countries such as Poland, France, and the United Kingdom will gradually reduce their reliance on coal as they plan to shut down their coal mines in the next few years.

“Everything has to undergo a process [which will take some time]. It is unlikely to shut down all coal mining sites. How can you shut down all coal-generated power plants in Indonesia? Is there an affordable technology to develop renewable energy?” said Simon Sembiring, former director-general mineral and coal at the ministry, in a phone interview with TOC.

Coal consumption in the electricity sector increased from 65.98 million tons in 2014 to 70.80 million tons in 2015.

In 2017, coal consumption for the power industry hit 75.4 million tons in 2016 and up to 83 million tons in 2017, official data showed as quoted in Liputan6.

Efforts to make coal cleaner underway

Simon observed that technology has developed rapidly to reduce coal emissions — thus, there is no need to contradict fossil fuel and renewable energy.

ESDM has committed itself to reducing coal emissions by applying technologies such as coal bed methane (CBM), coal gasification dan coal liquefaction, the ministry’s website said.

A steam power plant in Cirebon, West Java is one of the examples of the use of coal with clean technology, Simon illustrated.

The second unit of the plant utilises a more advanced technology called ultra-supercritical technology which makes use of heat and high temperatures to reduce coal emissions.

The second power plant’s construction is expected to finish in 2022.

Cirebon Power power plant consortium won the award from the Ministry and Environment and Forestry (KLHK), CNBC Indonesia reported.

State coal mining firm PTBA, state oil company Pertamina, and the US-based industrial gas provider Air Products have inked a deal to set up a coal gasification processing plant, as confirmed by Felix I, a retired high-ranked official at PTBA Finance Division and M Hatta from the company’s corporate development division.

“The plant will be located in Tanjung Enim, South Sumatera. Hopefully, the construction of the plant will start in 2021 and the production will be in 2025. We cannot provide a company profile first as the negotiation with partners is still ongoing,” Hatta said in a text message to TOC.

Coal is the cheapest option

Bisman opined that it is unlikely for Indonesia to fully stop using coal, as it is cheap and does not require high technology to produce energy, unlike oil and gas.

He explained that Indonesia’s oil production reaches 700,000 barrel per day while the fuel demand can reach more than 1.6 million kiloliters.

“It is targeted in the National Energy Policy (KEN) that coal’s use will be reduced to 30 per cent in 2025 and 25 per cent in 2025, meaning that a quarter of our energy needs depends on coal,” Mr Bisman stated.

Renewable energy development in Indonesia

Simon described that lack of support for research and development has hampered the development of renewable energy in Indonesia.

“When I was at the ministry, we researched liquid coal with the Agency for the Assessment and Application of Technology (BPPT). It went successfully on a laboratory scale.

“However, I don’t know as there was no follow up then. R&D [research and development] costs a lot, but remember that the result will be applied in industries,” Simon, who was once head of the ministry R&D body from 2001 to 2003, stated.

Before the R&D agency was established in the ministry, Simon noted that the research cooperation was carried out with the Coal and Mineral Technology Development Research Center (PPTM) in Bandung, West Java.

Bisman argued that “developing renewable energy is always a need” regardless of “how huge Indonesia’s coal reserve is”.

“The problem during the pandemic is due to the low price of fossil fuel, so the price of renewable energy cannot compete with that,” he said.

The cost of solar price in 2020 reaches US$12,920 after tax credits (US$2.91/Watt), as cited in Energy Sage.

However, wind and solar can be cheaper than other fossil fuels, according to Carbon Tracker Initiative, as cited in The Guardian.

What about nuclear energy?

Many Indonesians still have a negative perception of nuclear energy, given deadly incidents on a massive scale such as Chernobyl in Ukraine and Three Miles Land in the United States.

There has been no specific regulation on nuclear for electricity.

The Law No.10/1997 on nuclear, however, outlines nuclear use for purposes such as medical, agriculture, and pharmaceuticals, said the Indonesian Power Society (MKI) in a written statement TOC received Friday (16 October).

Simon supports the use of nuclear energy. However, public education is needed to build a positive image of the energy source.

“Nuclear is a country’s pride. Why is the US afraid of North Korea? Because of nuclear, right? We must see nuclear from a broader perspective,” Simon said.

Indonesia has three nuclear reactors for research purposes, namely those in Bandung, Yogyakarta, and Serpong-Tangerang.

Indonesia has yet to realise a commercial nuclear power plant since 56 years ago when Law No.31/1964 was introduced.

MKI said there is no budget for commercial power plants, as the government only finances feasibility studies such as those conducted in Muria and Bangka.