Western Countries Not Ready to Finance Early Retirement of Coal-Fired Power Plants, Says Indonesian Official
NUSA DUA, Indonesia – Western countries have shown reluctance to provide financing for the early retirement of coal-fired power plants, according to an Indonesian official. The discussions took place as part of the Just Energy Transition Partnership (JETP), in which Indonesia became the second country to join last November.
The JETP aims to deliver $20 billion in funds from developed countries to help reduce the dependence on fossil fuels in emerging market nations. However, Indonesia’s announcement of investment plans has been delayed, causing concern for the country’s officials.
“During the discussion, it is very clear that they are not eager to provide financing for early retirement,” said Septian Hario Seto, Indonesia’s deputy of investment and mining coordination at the Coordinating Ministry for Maritime and Investment Affairs. He added, “Our demands are very clear – early retirement of coal-fired power plants and building a smart grid.”
According to Septian, Western countries have shown greater interest in renewable commercial projects rather than financing coal plant retirements. This poses a challenge for Indonesia, as it currently faces an excess supply of electricity. Septian emphasized the importance of focusing on coal retirement or increasing demand to address this excess.
“If we continue adding renewable [energy], it will impact our budget,” Septian warned.
However, he noted that the phase-out of coal use would still require concessional funds from developed countries. While there is a push for renewable energy adoption, financial support will be crucial in facilitating the transition away from coal.
Indonesia, being heavily reliant on coal for its energy needs, is keen to reduce its dependence on fossil fuels. The country has set renewable energy targets, but securing financing for the transition remains a significant hurdle.
The delay in investment plans from the JETP raises concerns about Indonesia’s ability to meet its energy transition goals. As the country grapples with excess electricity supply, it will need the support of developed nations to retire coal plants and build a sustainable energy grid.
Indonesia is not alone in its struggle to transition away from coal. Many emerging market nations heavily depend on coal-fired power plants, and financing the retirement of these plants is essential for a successful transition to a more sustainable energy mix.
The delay in investment plans highlights the challenges faced by both developing and developed countries in aligning their interests and implementing effective energy transitions. Dialogue and collaboration remain crucial in finding solutions that meet the goals of reducing greenhouse gas emissions while ensuring reliable energy access.
As discussions continue, it is hoped that Western countries will recognize the importance of providing financial support for the early retirement of coal-fired power plants. By doing so, they can contribute to a cleaner and more sustainable global energy sector, supporting emerging nations in their efforts to address climate change and achieve their renewable energy goals.
This article was edited by Jane Flowers