Indonesia Faces Challenges In Transitioning Away From Coal For Clean Energy – Report

A new report by Ember, released highlights the hurdles Indonesia faces in its transition from fossil fuels, particularly coal, to cleaner energy sources. Despite setting ambitious renewable energy targets, the country’s progress has been slow, stalling its efforts to combat climate change.

The report reveals a significant increase in Indonesia’s reliance on coal for electricity generation. Coal-fired power plants have nearly doubled their capacity in the past decade, contributing to a sharp rise in greenhouse gas emissions. While the government has set goals to boost the share of renewable energy in the energy mix, the actual implementation has fallen short.

Key challenges and opportunities identified in the report:

Dominant fossil fuels: Fossil fuels, primarily coal, account for a staggering 81% of Indonesia’s electricity generation.

Lagging renewable energy: Renewable energy sources currently hold a small share of the energy mix, with solar and wind contributing less than 1%. This represents a missed opportunity, as Indonesia has vast potential for solar and geothermal energy.

Economic benefits of clean energy: The report emphasizes the economic potential of transitioning to renewable energy. Shifting to cleaner energy sources can create substantial job opportunities, with estimates suggesting the creation of up to 96,000 jobs in coal-producing regions. Additionally, renewable energy projects could attract billions of dollars in investments, boosting these regions’ economies.

Policy and planning hurdles: The report highlights the need for stronger policies and incentives to accelerate the adoption of renewable energy. Streamlining regulations and providing financial support for renewable energy projects can significantly contribute to progress.

Balancing economic needs with environmental goals:

The report acknowledges the importance of ensuring a just transition for coal-producing regions. These regions are heavily reliant on the coal industry, and a shift to clean energy needs to be carefully managed to minimize job losses and economic disruptions. The report suggests that by strategically allocating renewable energy projects in these regions, Indonesia can create new economic opportunities while reducing its dependence on coal.

Indonesia’s energy choices have far-reaching consequences. Continued reliance on fossil fuels will not only hinder its climate goals but also limit its economic potential in the long run. Embracing clean energy presents a unique opportunity to address climate change, create jobs, and foster sustainable economic growth.

Call to action:

The report serves as a call to action for policymakers, businesses, and civil society to work together in accelerating Indonesia’s clean energy transition. By implementing effective policies, fostering innovation, and attracting investments, Indonesia can secure a clean and prosperous future.

The report also highlights that Indonesia has a target of reaching 44% renewable energy in the energy mix by 2030. However, the current coal power plant capacity factor is only 49%, indicating that there is a need to retire coal plants at a faster pace to achieve the renewable energy target. The report suggests that retiring 5.2 GW of coal capacity by 2030 is necessary to achieve this goal.

Indonesia’s coal exports have also declined by 26% from 2022 to 2023, suggesting a potential shift away from coal. This trend, coupled with the increasing adoption of renewable energy, could help Indonesia achieve its clean energy goals.