PLN commits to net-zero emission by 2060 with newest, greenest RUPTL
When state-owned electricity company PLN announced that it aimed to phase out coal by 2060, it received applause backhanded with skepticism. Indonesia’s electricity sector relies heavily on coal, with 61 percent of electricity generated in the country sourced from the commodity, so the task sounds almost impossible. However, PLN shows seriousness in its commitment with its newest long-term electricity procurement plan (RUPTL), which is also the greenest RUPTL that PLN has ever issued.
Demand for electricity deteriorated with the COVID-19 pandemic and the global pressure to achieve carbon neutrality has forced PLN and the government to come up with a new electricity-procurement plan. In the previous plan, the 2019-2028 RUPTL, demand for electricity was projected to grow at 6.4 percent on average every year in the next 10 years. In the newest plan, the 2021-2030 RUPTL, the demand is estimated to grow at 4.9 percent, which has led PLN to lower its capacity installation target to 40.6 GW. This is 15.4 GW lower than the previous 56 GW target installation.
However, from the 40.6 GW target installation, most will be allocated for renewable energy-based power plants. PLN is aiming for 20.9 GW, 51.6 percent, of the new installation to be sourced from new and renewable energy sources. It is specifically aiming for 10,391 MW (25.6 percent) of new installation being powered by hydro/mini-hydro/micro-hydro energy, 4,680 MW (11.5 percent) powered by solar energy, 3,355 MW (8.3 percent) powered by geothermal, 597 MW (1.5 percent) powered by wind energy, and another 590 MW (1.5 percent) powered by bioenergy, among others.
This has created an opportunity for the private sector to take part in developing the country’s renewable energy sector. PLN will support the private sector to develop 26.3 GW (64.8 percent) of the 40.6 GW new installation target, with 11.8 GWp (56.3 percent) of the 20.9 GWp renewables-based new installation target is open to the private sector. Especially for off-grid solar power-based installation, 2.98 GWp (63.7 percent) of the 4.68 MWp new installation target is open to the private sector. The figure is 1.8 GWp (54.4 percent) of the 3.2 GWp new installation target for on-grid solar power-based installation.
However, PLN recognizes the challenges in implementing its target for energy transition. Looking at the trilemma of security of supply (availability and accessibility), affordability and low emissions (acceptability), for example, renewable energy sources are mostly affordable and have low emissions, but supply is not always guaranteed, while geothermal has consistent supply and low carbon emissions, but is expensive. Because of that, PLN also invites collaboration with the government and international agencies to support the country’s energy transition.
In order to reach its target of 23 percent of its primary energy mix coming from renewable energy, PLN also plans to replace diesel-based power plants with renewable energy and implement co-firing using biomass in coal-powered plants.
Indonesia currently has 1,601 diesel-based power plants with 499 MW capacity. PLN will convert 1.22 million kWp into solar power, 2.29 million kWh into battery power, and 131,310 kW into other renewable energy sources by 2025.
Meanwhile, for biomass co-firing, PLN has implemented a pilot project with 5 percent biomass in 32 existing coal-based power plants that will be expanded to 52 locations. It is looking to reach 10-20 percent biomass co-firing in order to reach the target by 2025, which will require 8-14 million tons of biomass per year. New coal-based power plants must be designed to accommodate at least 30 percent biomass co-firing. Therefore, challenges for the bio-mass co-firing include long-term biomass supply, a prohibitive biomass price, higher investment costs for the greater biomass co-firing portion, and therefore an impact on efficiency and electricity supply costs (BPP).
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