G-20 News

Indonesia G20: the country prepares the energy transition for a pilot project

The energy transition becomes the pilot project or the beacon. A package on the retirement of coal-fired power plants (PLTU) must be prepared

Jakarta (ANTARA) – Energy transition is one of the pilot projects that Indonesia will present when hosting the G20 presidency, said Coordinating Minister of Economic Affairs Airlangga Hartarto.

“The energy transition becomes the pilot project or the flagship. We need to prepare a package on how to phase out coal-fired power plants (PLTU),” Hartarto remarked at the 12th Kompas 100 CEO Online Forum here on Thursday.

Hartarto noted that for the early retirement of PLTU, Indonesia was demanding a pay bonus which is currently under discussion with the Asian Development Bank (AfDB).

“When the PLTUs are retired and the funding comes in, it replaces the rest of the internal rate of return (IRR),” he explained.

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Given PLTU’s age and its retirement fund amount, the minister expressed optimism that the funding would then be funneled into revolving investments. So Indonesia can create a prototype.

If the prototype is successful, it will be replicated in a sustainable payment model specifically for the energy transition, according to Hartarto.

The Minister stressed that energy is the main factor in Indonesia’s economic competitiveness. Hartarto noted that PLTU has since provided the base load for Indonesia’s energy mix.

The Minister explained that if the base load is no longer supported by the PLTU, it can be provided by hydropower. However, the government had encountered obstacles in building hydroelectric facilities on the island of Java due to the current conditions.

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Hartarto noted that the greatest demand for hydroelectric facilities was in Java.

“If we are building hydroelectric facilities in North Kalimantan or in Mambaro, it is far from Java. Therefore, what needs to be done is to build a buffer zone, like a transmission network,” a- he explained.

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At the forum, he also presented the results of the 26th Conference of the Parties (COP) in Glasglow, Scotland, while drawing attention to three important issues.

The three critical areas of concern were to prevent the earth’s temperature from exceeding the limit of 1-1.5 degrees under the Paris Agreement; change the term of PLTU processing from “face out” (abolish) to “face down” (reduce); and pledged funding availability for developing countries to the tune of US $ 100 billion per year.

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