Indonesia Weighs Coal-Plant Phase-out Against Energy Security
Main Takeaways
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JAKARTA, investortrust.id – Indonesia keeps its coal-fired power stations running as lawmakers argue that shutting them prematurely could jeopardise the country’s energy security, even while analysts warn that the longer the nation clings to coal the higher the economic, environmental and health costs become.
The debate took centre stage after House Commission XII—the parliamentary committee that oversees energy affairs—signalled it would not back an early retirement programme for coal plants, known locally as pembangkit listrik tenaga uap, or PLTU. Commission member Ramson Siagian of the Gerindra Party said the state utility PT Perusahaan Listrik Negara (PLN) should consider decommissioning units only when their independent-power-producer contracts expire and replacement capacity is ready.
“If electricity demand remains high and alternative supply is not yet in place, phasing out coal plants cannot be forced,” Ramson told reporters at the House complex on Wednesday, April 23, 2025.
The government has promoted solar, hydro, geothermal and even nuclear power, yet Ramson noted that such projects “take longer to build than coal facilities.” He added that the United States’ decision to lean once again on fossil fuels after walking away from the Paris Agreement underscored the primacy of energy security.
To mitigate emissions, Ramson urged investment in carbon-capture and storage (CCS) or carbon-capture, utilisation and storage (CCUS), technologies he acknowledged remain costly but could keep power prices competitive once deployed at scale.
Analysts urge faster retreat from coal
The call for caution met swift push-back from think-tank Center of Economic and Law Studies (Celios). Executive Director Bhima Yudhistira argued that persisting with coal plants was already draining state finances through subsidies and compensation to PLN amid a growing electricity oversupply.
“Accelerating retirement would ease pressure on the state budget,” Bhima said on Thursday, April 24, 2025, adding that abundant wind, solar and micro-hydro resources across Java, Sulawesi and Nusa Tenggara Timur could fill the gap.
Celios’ plea echoes analysis by the Institute for Essential Services Reform (IESR), which estimates that 72 coal plants with a combined 43.4 GW must close by 2045 to align with Indonesia’s net-zero pledge.
New regulation sets the roadmap
Jakarta moved a step closer to that target with the issuance of Energy and Mineral Resources Ministerial Regulation (Permen ESDM) No. 10/2025, which lays out criteria—plant age, utilisation, greenhouse-gas intensity, economic value and funding availability—to decide which units will be retired. The rule also requires officials to weigh grid reliability, electricity-tariff impacts and a “just transition” for affected workers and communities.
Still, the regulation leaves timing open, and Commission XII’s stance suggests any exit will be gradual. The tug-of-war between security and sustainability therefore remains at the heart of Indonesia’s power-sector transition.