Indonesia has finally issued its long-awaited “Road Map” for energy transition in the electricity generating sector.
The Road Map indicates that Indonesia will rely, in part, on so-called “carbon capture and storage” technology as well as on nuclear power to achieve its energy transition objectives. The Road Map also sets out an expanded list of factors that will determine the progress of closing coal fired power plants. One factor completely dominates all other listed factors in this regard. That factor is funding availability.
The public reaction to the Road Map has been “lukewarm” at best and scathingly dismissive at worst. However, in making clear the overriding importance of funding availability, the Government arguably deserves some modest “credit” for at least being honest about what it will really take to progress the closure of coal fired power plants in any meaningful way.
In evaluating the Road Map, it is useful to take into account Indonesia’s newly issued 2025 - 2034 Electricity Supply Business Plan or RUPTL which sets out when and how new & renewable energy will gradually replace fossil fuel as important energy sources for electricity generation over the next 10 years.
Read together, the Road Map and RUPTL 2025 – 2034 provide an important “reality check” in terms of the prospects for Indonesia making major advances in energy transition any time soon. Coal “phase-down”, rather than coal “phase-out”, has become the new reality for energy transition in Indonesia.
In this article, the writer will review some of the more important aspects of the Road Map and RUPTL 2025 – 2034 as well as the likely implications of the same for the future of energy transition in Indonesia.
Author:
Bill Sullivan, Senior Foreign Counsel
Email: bsullivan@cteolaw.com