NUSA DUA, Indonesia, Sept 9 (Askume) – Indonesia is still waiting for cheap financing during a transition period to accelerate the early retirement of coal-fired power plants under an agreement with rich Group of Seven nations, a senior government official said on Monday. clean power.
The Southeast Asian country of more than 275 million people has pledged $20 billion as part of the G7 Just Energy Transition Partnership (JETP) to be announced in 2022, but has actually delivered very little.
Senior Minister responsible for the mining industry Luhut Pandjaitan said the current financing mechanism did not involve any grants and did not address existing issues such as high retirement costs.
“If you force us to retire coal plants early, how will we finance it? The interest rate has to be attractive,” Luhut said at the Coaltrans Asia conference.
“If they give commercial (rates), what does that mean?”
Indonesia wants cheaper tariffs than the market and needs US$94.6 billion by 2030 to develop clean power transmission and generation infrastructure to phase out coal-fired power generation.
The grant funding identified in the JETP document represents only $153.8 million of the total commitment.
Efforts to reduce emissions from the world’s seventh-largest coal-fired power generator have stalled due to a lack of progress on the plan, which US Treasury officials called the “largest single climate finance deal” when it was first announced.
Indonesia is currently trying to shut down the 660 megawatt Cirebon-1 power plant in West Java, but Deputy Investment Minister Septian Hario Seto said a final agreement has not yet been reached.
“A lot was promised and not delivered,” Seto told Askume on the sidelines of the meeting.
The government is considering shutting down 13 coal-fired power plants owned by state utility Perusahaan Listrik Negara (PLN) but has not set a timetable due to energy security and affordability concerns.
Luhut urged other countries not to lecture Indonesia on decarbonisation, telling US Treasury Secretary Janet Yellen in a speech that Indonesia’s per capita emissions are much lower than those of the United States.
Indonesia’s carbon dioxide emissions are 2.3 tons, far higher than the United States’ per capita carbon dioxide emissions of 14.7 tons, and lower than the global average of 4.5 tons.
