Despite its stated commitment to start phasing out the use of fossil fuels, Indonesia is in the middle of building several new industrial coal-fired power plants. The use of most of these plants will be to feed nickel, cobalt, and aluminum smelters needed to make electric car batteries, a project the government is promoting to turn Indonesia into a manufacturing hub for battery chain production. Unfortunately, this comes at a greater cost for those residing in Indonesia. Currently coal accounts for 43% of the country’s electricity grid, this makes Indonesia one of the top global C02 emitters, exceeding all countries but India and China. This seems to not be dying down anytime soon as a recent report indicates that there was a set 18.8 gigawatt (GW) coal plant under consideration for construction by the end of 2022.

Around 69% of these new plants will be “captive” plants, meaning their production won’t feed into the electricity grid, but will be redirected to powering industrial and commercial consumers. These new plants make it harder for Indonesia to step away from the use of coal and other fossil fuels for their means of production, burying themselves deeper and deeper under the thick fog. Shutting down all 118 coal plants by 2040 would cost around $37 billion, a number that Indonesia can not meet by itself. Denmark, Norway, and other industrial countries have signed a deal, the Just Energy Transition Partnership, that would help fund $20 billion into the transition into alternative energy production. The JETP money would allow Indonesia to halt 5.2 GW of existing coal power, and together with the other funding they would be able to retire 9 GW of coal power in the near future. But, these numbers are superfluous when the captive plants become active, more coal power will be added on and generated than that of retired.

Unless Indonesia wants to stay as a hostage to coal power and fossil fuels, the transition to another energy source needs to be immediate and prevalent across the country. They not only pose an extreme environmental and human well-being risk, they have been found to give financial risk as well. Coal will always be set with a fluctuating price, and the various strings of new coal plants will now act as a money pit for investors and other governments. In order for the globe to reach pre-industrial temperature levels of 1.5 Celsius, as stated in the Paris Agreement, 60% of oil and gas reserves and 90% of known coal plants need to remain unused. The development of new plants are redundant and will eventually cause a plunge in funding due to early retirement. To date, about 132 banks across 41 countries have pulled out of coal mining and power plant funding as a commitment to the UN’s Net-Zero Banking Alliance. Let's keep that momentum going!