For ASEAN, Coal Power is Still the Cheapest and Easiest Form of Power

A virtual discussion hosted by Enlit Asia and Indonesian Utility PT PLN highlighted the critical role that coal will play in Indonesia’s energy mix for the foreseeable future.

While a new paradigm focuses primarily on transition to a cleaner, smarter, energy future, coal’s importance in the power conversation cannot be ignored.

The discussion started with an interview with Rudy Hendra Prastowo, Primary energy director, PT PLN.

According to Prastowo, coal is clearly considered incompatible with a clean energy future. However, PLN’s coal assets currently contribute over 60% of overall power generation capacity. Future strategies see the energy resource remain at 50% in 2025. Coal clearly can’t be removed from the short term energy mix.

However, Indonesia has government specifications in place to increase the use of gas and renewables to achieve compliance with Paris Agreement goals. Furthermore, the increased use of biomass and clean coal technology is driving decarbonisation.

Says Rudy Hendra Prastowo: “Our concern is making sure of the implementation of environmentally friendly power plants making use of the latest technology across super critical operations in order to comply with the stringent regulations set by the government… We have planned in the future that clean coal technology will replace [coal assets] gradually with higher boiler efficiency, ensuring cleaner air.”

The country has also recently changed the criteria for new coal plants, using a resource-based scale to optimise efficiency and reduce emissions. Finally, Indonesia’s government is engaging the international community to share best practices and knowledge, with a specific focus on asset management and the implementation of ISO55000 standards.

The second part of the discussion saw an esteemed panel explore how Indonesia can achieve the energy transition and the goal of 100% electrification. There are many vulnerable communities in island and rural areas and currently, coal power is the cheapest and easiest form of power.

This is slowing the phase-out of coal, however, renewable penetration, clean coal technology and decarbonisation efforts must be emphasised through regulations and compliance thereto, while ensuring the most vulnerable have access to power and the economic benefit it brings.

“As for support from financial institutions, I believe we can still develop new coal plants with support from global banks and insurance companies, as long as we have plans to consistently follow the environmental regulations”, says Rudy Hendra Prastowo.

On the uptake of renewables, Osamu Ono, CEO of Mitsubishi Hitachi Power Systems Asia Pacific said: “There is greater uptake of renewables but coal will remain for a while as it is the main source of support for economic growth and stability in this region. Coal will be required throughout renewable integration for energy security, job creation and grid flexibility to accommodate renewable energy fluctuation.”

Comments Heru Dewanto, Coordinator, MKI’s Expert Working Group: “I believe we have the chance to develop [clean coal technology] capabilities among local engineers, and I believe industry should also follow. However, I think the challenge for implementing the required energy mix which is still 50% based on coal, it’s not about the planning itself, the challenge is more in the implementation. How to deliver the … the IEPTL (Electricity Supply Business Permit)… We are talking about a $45-50 billion investment over 10 years. Where will the money come from?”

The panel discussion consisted of Harlen, EVP Coal Division | PLN, Heru Dewanto, Coordinator, MKI’s Expert Working Group & Former President Director | Cirebon Power, Adrian Lembong, Director | PT Adaro Power, Osamu Ono, Managing Director and Chief Executive Officer | Mitsubishi Hitachi Power Systems Asia Pacific.

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