Indonesian President Prabowo Subianto has made headlines with his bold commitment during the recent G20 summit, as he laid out plans to retire all coal and fossil fuel power plants within the next 15 years. Alongside this, he announced strategies to dramatically increase the country’s renewable energy capacity, rendering it one of the more ambitious announcements of its kind globally.
At the summit held in Brazil, President Subianto emphasized his administration’s focus on leveraging Indonesia's rich geothermal resources, stating, “Indonesia is rich in geothermal resources, and we plan to phase out coal-fired and all fossil-fueled power plants within the next 15 years. Our plan includes building over 75 gigawatts of renewable energy capacity during this time.” This renewable capacity surge is aimed directly at making the nation’s energy mix more sustainable, promising almost 80% reliance on cleaner sources by mid-century.
Subianto's announcement was well received by environmentalists and other stakeholders, who commend the direction but express reservations about the practicalities of such ambitious targets. Indonesia, after all, is currently one of the world's largest producers and consumers of coal, with over 250 coal-fired power plants still feeding the national grid, and many more under construction. These installations are not only powering homes but are also pivotal for industries processing key materials like nickel, cobalt, and aluminum.
The stakes are high, as according to the International Energy Agency, Indonesia's energy sector emitted over 650 million tons of carbon dioxide last year alone, placing it among the highest contributors to global carbon emissions, largely driven by its extensive reliance on coal.
Providing background, it’s noteworthy to mention the previous commitments made by Indonesia under former President Joko Widodo, who initiated various agreements with international stakeholders aiming to phase out coal usage. These efforts culminated in the Just Energy Transition Partnership, which was the largest of its kind amounting to $20 billion. Despite these agreements aiming to catalyze changes on the ground, progress has been painfully slow with many financial commitments remaining unfulfilled.
“If the government is serious about speeding up the energy transition, efforts to shut down coal-fired power plants and prevent new permits must be clear. This ensures investors can see potential pathways and progress,” advised Bhima Yudhistira, the executive director of the Center of Economic and Law Studies based in Indonesia. The challenge of transitioning from fossil fuels is compounded by rapid population and economic growth, which is projected to triple energy consumption by 2050.
Highlighting Indonesia's vast potential, President Subianto pointed out the current underutilization of renewable resources. He remarked, “We have other renewable energy sources, and this is why we are very optimistic we can achieve (net) zero before 2050.” At present, only approximately 14.5% of Indonesia’s energy generation is from renewable sources, showcasing the substantial infrastructure shift required to meet these goals. The installed capacity for renewable energy stands at around 13 gigawatts, which amounts to less than 15% of the country’s total electricity generation.
Renewable energy encompasses various sources such as solar, wind, and hydropower, but the Indonesian state electricity firm, Perusahaan Listrik Negara (PLN), has acknowledged the challenges accompanying this transition. Gregorius Adi Trianto, PLN spokesperson, said, “There is a mismatch between the locations of large-scale renewable energy resources and industry epicenters. We face the challenge of intermittency from solar and wind power so we are developing a green smart grid.” He outlined plans to nearly triple the capacity for wind and solar energy by 2040 to bolster energy security.
Adding another layer of complexity, Indonesia's burgeoning nickel industry plays an instrumental role amid this energy transformation. Not only is nickel poised to be pivotal for electric vehicles and renewable technologies, but Indonesian firms are eager to cooperate with international markets to facilitate swift growth. Yet, remaining reliant on coal for such projects can hinder genuine progress.
A recent development showcases Indonesia's strategy to tap extensive natural resources not only for energy expansion but also for economic gain. During discussions at the same summit, President Subianto addressed partnerships with Chinese firms to explore clean tech and biotechnology ventures, elevates Indonesia's stature within regional cooperation frameworks.
Meanwhile, environmental advocates caution about potential pitfalls along this route. The environmental impact from continued reliance on fossil fuels could challenge the net-zero aspirations set by the administration. There’s optimism, but it remains cautious until tangible improvements come to fruition.
Indonesia's green vision poses considerable financial demands estimated at around $235 billion. The shift entails not just infrastructural change but unwavering commitment from national and global stakeholders to meet these lofty ambitions. If executed correctly, these efforts could redefine the nation's energy portfolio and set new examples for developing countries grappling with similar energy challenges.
With the sound of change echoing through the halls of power, the next steps toward tangible plans on how to swap coal-fired power with renewables and collaborative efforts with other nations will be pivotal. The pace and focus must now turn to actionable goals, as the clock ticks toward substantive commitments to reform.
“Achieving renewable energy goals and phasing out coal is no small feat for any country, let alone one with such deep-rooted dependencies on fossil fuels,” said one analyst reflecting on Indonesia's ambitious plans. It will take time, investment, and accountability to safeguard and propel Indonesia toward fulfilling its vision for sustainable development.
