"We need to allocate a budget to compensate for the replacement of existing coal-fired power plants and construct new sustainable power plants under the energy transition mechanism scheme," Nazara stated during a webinar monitored here on Thursday.
Under the energy transition plan, the government can request coal-fired power plant operators to cease power plant operations whilst adhering to contract terms normally inked for a long-term period between the operators and state electricity company PT PLN, he affirmed.
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After fulfilling their obligation to compensate the coal-fired power plant operators affected by the scheme, the government will continue with the next stage to construct renewable energy-fueled power plants, he noted.
"The compensation scheme is necessary to maintain a friendly investment climate with power plant operators," Nazara affirmed.
The government will employ a blended finance scheme to compensate coal-fired power plants ceasing operations and construct new green energy-based power plants, he noted.
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"We need to plan the percentage of the budget to be procured from the state budget and through international funding," Nazara stated.
The deputy minister deemed the transition to green and sustainable energy sources as an indispensable step to achieve zero carbon emissions by 2060 or sooner whilst ensuring properly planned transition to prevent losses to related parties.
"If we decided to request operational cessation of coal-fired power plants, we should respect the operational contract and provide compensation to power plant operators," Nazara stated.
Meanwhile, Director General of Electricity at the Energy and Mineral Resources Ministry Rida Mulyana confirmed that the government will no longer accept a proposal for a new coal-fired power plant, as the future national energy policy will focus on new and renewable energy and green economy.
"After 2030, no fossil fuel-fired power plant construction will take place, and all power plants will be new and renewable energy-based,” Mulyana noted.
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