Indonesia announces Plan to replace Coal-fired Plants with Renewable: Reports

According to the market reports, Indonesia plans to plans to remove old coal-fired power plants with plants using renewable energy, the country's Energy and Mineral Resources Minister Arifin Tasrif said today.

He further added that the country's state utility company 'Perusahaan Listrik Negara' is taking the check of inventory of those plants that will be replaced by renewable energy plants. He said the government may replace up to 69 units of coal-fired power plants and coal gas-fired power plants, with a combined power capacity of over 11,000 megawatts of electricity.

Indonesia, a major coal exporter, uses coal to power around 60% of its electricity needs but the government is aiming to double the contribution of renewables, which include solar power, geothermal and hydropower, among others.

Recently, Indonesia has ordered coal mines to cut their output not out of environmental concern but because record exports last year reduced prices. The country has set a production target at 550 million tonnes for 2020, 9.8% lower than the 610 million tonnes produced last year.

The country's government is insisting that the producers must stick to the limits as it doesn't want coal production to be too massive and drive prices lower and cause government revenue to drop. Apart from this the coal firms are required to sell 25% of their output domestically at a fixed price. The Indonesian government further added that it was motivated by financial concerns rather than any obligation to cut carbon emissions.

The Indonesian coal price fell by 28% during 2019, marking a third consecutive year of declines. The falling price reduced government revenue in Indonesia, where coal remains the largest export.

Coal production in 2019 exceeded government targets with approximately 1,000 firms starting new operations with newly issued permits. The government would track coal output through electronic reporting and regular monitoring and royalty payments.