The use of coal in the transition to green energy has sparked intense debate. As countries strive to adopt cleaner and more sustainable energy sources, the role of coal is being called into question due to its negative impact on the environment and its potential to discourage the use of renewable energy.
The crux of the debate revolves around the role that coal should play in the energy mix and whether it would be more beneficial to accelerate its phase-out in favor of renewable alternatives. However, the reliability of coal as a baseload power source and its abundance in certain regions make it challenging for some countries to completely eliminate it from their energy portfolios.
This delicate balance between energy security, economic considerations, and environmental responsibility has made coal a contentious issue in the global push for a greener future. In this article, we will delve into this context and explore the role of coal in Indonesia’s energy transition.
Indonesia is one of the world’s top producers of coal, and as such, this resource is a crucial component of the country’s energy grid and a significant source of state revenue. In fact, the mineral and coal sector contributed approximately 173 trillion rupiah (US$10.9 billion) in non-tax state revenue in 2023, accounting for 58% of the national total.
Despite the global pressure to phase out coal, which is responsible for over 40% of the increase in global carbon dioxide emissions in 2021, Indonesia remains heavily reliant on this fuel. However, in response to international initiatives, such as those presented at last year’s UN climate change conference, the country has committed to a gradual phase-down of coal, which is a more practical approach for its unique circumstances.
Indonesian President Prabowo Subianto has announced plans to retire all fossil fuel-driven power plants within the next 15 years. Additionally, state-owned power producer Perusahaan Listrik Negara is working towards decarbonizing electricity generation by introducing alternative fuels, such as biomass, hydrogen, and ammonia, in coal-fired plants.
This shift towards cleaner energy sources is not only driven by environmental concerns but also by the economic benefits of reducing reliance on coal. As the world moves towards a greener future, it is essential for countries like Indonesia to carefully balance their energy needs with their responsibility to protect the environment. By gradually phasing out coal and embracing renewable alternatives, Indonesia is taking a significant step towards a more sustainable and prosperous future.