Jakarta, CNBC Indonesia – The Ministry of Energy and Mineral Resources (ESDM) revealed that the government’s program to retire domestic coal-fired steam power plants (PLTU) is still hampered by uncertain funding.

The Director General of New, Renewable Energy and Energy Conservation (Dirjen EBTKE) of the Ministry of Energy and Mineral Resources, Yudo Dwinanda Priaadi, said that currently investment for the coal-fired power plant early retirement program is still waiting for financial certainty.

“We are still continuing with that (investment in PLTU early retirement). Right, financial friends, we can launch one financial plan at COP 28, but that’s just the financial problem,” he explained on the sidelines of the National Electricity Day event, in BSD , Tuesday (14/11/2023).

Yudo said that the PLTU early retirement project in Indonesia would be informed in more detail at the COP-28 event or at the annual meeting of the United Nations (UN). “Everything has rules. For example, if there is compensation given, there are also rules,” said Yudo.

Meanwhile, for the funds that will be used to retire the Cirebon-1 PLTU, which is being attempted to be retired this year, so far it still relies on the Energy Transition Mechansim (ETM) scheme with funding from the Asian Development Bank (ADB). “Temporary (funding) from ETM, a large part of that,” he added.

Previously, the Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif said that his party was preparing a plan to stop operating a number of Steam Power Plants (PLTU) sooner than the initial plan, aka early retirement.

There are at least two PLTU candidates who are included in the early retirement program, both PLTU Pelabuhan Ratu and PLTU Cirebon-1.

Arifin targets that one of the two PLTUs can be executed or transacted this year through the Just Energy Transition Partnership (JETP) financing scheme. “So we are really trying to have at least 1 JETP that can go forward, because this is what we are focusing on first, secondly, we are preparing 4.8 GW, but at least there is one with 600 MW that can start,” said Arifin at the Ministry of Energy and Mineral Resources Building, quoted Monday (6/11/2023).

Furthermore, Arifin assessed that in the future there is a need to think about opening up early retirement opportunities for PLTUs with a mutually beneficial cooperation scheme. In addition to funding that involves the APBN.

“When asked about the use of the APBN, we look at the availability of budget in the APBN first and then also what the benefits are for, because the pollution problem in Jakarta was yesterday there was no wind, no rain, we all felt it was dark, right? Now it’s a bit brighter ,” he said.

As is known, the Ministry of Finance has just issued Minister of Finance Regulation (PMK) Number 103 of 2023 concerning Providing Fiscal Support through the Funding and Financing Framework in the Context of Accelerating the Energy Transition in the Electricity Sector.

Through this new regulation, financing related to the cessation of operations of a number of Steam Power Plants (PLTU) faster than the initial plan, aka early retirement, will use the APBN.

[Gambas:Video CNBC]

(pgr/pgr)