Energy transition becomes the pilot project or lighthouse. We must prepare a package on how to retire coal-fired power plants (PLTU)Jakarta (ANTARA) - Energy transition is one of the pilot projects to be presented by Indonesia while hosting the G20 Presidency, Coordinating Minister for Economic Affairs Airlangga Hartarto stated.
"Energy transition becomes the pilot project or lighthouse. We must prepare a package on how to retire coal-fired power plants (PLTU)," Hartarto remarked at the 12th Kompas 100 CEO Online Forum here on Thursday.
Hartarto noted that for the early retirement of PLTU, Indonesia required premium remuneration that is currently being discussed with the Asian Development Bank (ADB).
"When PLTU are retired and the funding comes in, it replaces the remaining Internal Rate of Return (IRR)," he explained.
Related news: G20 Presidency opportunity to lead global economic recovery: Minister
Taking into account the age of PLTU and its amount of retirement funding, the minister expressed optimism that the funding would later be channeled for renewable investment. Thus, Indonesia can create a prototype.
If the prototype is successful, it will be replicated into a sustainable payment model specifically for energy transition, according to Hartarto.
The minister highlighted that energy was the main input for Indonesia's economic competitiveness. Hartarto noted that PLTU had ever since provided the base load for Indonesia's energy mix.
The minister explained that if the base load is no longer supported by PLTU, it can be provided through hydropower. However, the government had met barriers in building hydropower facilities on Java Island due to the current conditions.
Related news: Prioritize national interests through strategic role in G20 Presidency
Hartarto noted that the biggest demand for hydropower facilities was in Java.
"If we build hydropower facilities in North Kalimantan or Mambaro, it is far from Java. Hence, what needs to be done is to construct a buffer, such as a transmission network," he expounded.
Related news: Indonesia's G20 presidency to highlight equitable economic recovery
At the forum, he also delivered the results of the 26th Conference of the Parties (COP) in Glasglow, Scotland, while drawing attention to three important issues.
The three crucial areas of concern were to prevent the earth's temperature from not exceeding the limit of 1-1.5 degrees in accordance with the Paris Agreement; to change the term of handling PLTU from "face out" (abolish) to "face down" (reduce); and promised funding availability for developing countries at US$100 billion annually.
Related news: Jokowi outlines Indonesia's green economy strategy
Related news: Indonesia G20 to contribute to equitable global prosperity: Jokowi
Translator: Kuntum R, Kenzu T
Editor: Fardah Assegaf
Copyright © ANTARA 2021
