On December 4, 2024, Indonesian Energy and Mining Minister Bahili Lahadalia praised coal as a cheap and competitive source of energy in an address to a mining conference. The minister added that Indonesia will “gradually” transition to renewable energy, but was sure to emphasize that coal will remain a vital part of Indonesia's economy for the foreseeable future.
A day earlier, the president director of state electricity company Darmawan Prasodjo addressed parliament about the government's plans to phase out coal-fired power plants over the next 15 years. Prasodjo said that the government's actions must be budget neutral. Importantly, the president director asserted that the cost of transitioning to renewable energy for the sake of reducing carbon emissions should not be borne by the Indonesian government alone.
The recent remarks from Bahlil and Darmawan are reminiscent of Indonesia's reaction to the Just Energy Transition Partnership ("JETP"), a multilateral financing platform which initially targeted energy transition assistance. Indonesian officials criticized JETP for offering unfavorable interest rates and financing terms that were no better than commercial loans and demanded more concessional loans and grants to help achieve carbon emission reduction targets.
Indonesia has made it clear that developed nations must spend more if they want to accelerate the country's transition away from coal. With the newly inaugurated President Prabowo Subianto looking to deliver on his expensive campaign promises of free meals for school children and increasing the affordable housing supply, investors and developers in the renewable energy sector must remember that competition from fossil fuels will continue for the foreseeable future.
Slowly we will enter renewable energy. However, as long as coal is (still) an energy source that is competitive enough, cheap, and price-competitive, do not hesitate. So, coal companies, keep going. There is no problem if production is good, non-tax state revenue is good, and economic growth is good," Bahlil said before approximately 800 attendees at the Indonesia Mining Summit in Jakarta, Wednesday (4/12/2024). ”Perlahan-lahan kita akan masuk pada energi terbarukan. Namun, selama batubara (masih) sebagai salah satu energi yang cukup kompetitif, murah, dan menghasilkan biaya yang kompetitif, tidak usah ragu. Jadi, perusahaan-perusahaan batubara, lanjut terus. Tidak ada masalah kalau produksi bagus, PNBP (penerimaan negara bukan pajak) bagus, dan pertumbuhan ekonomi bagus,” kata Bahlil di depan sekitar 800 peserta Indonesia Mining Summit (IMS) 2024, di Jakarta, Rabu (4/12/2024).
https://www.kompas.id/artikel/bahlil-batu-bara-masih-kompetitif-silakan-jalan-terus
