Bahlil Emphasizes Government's Ongoing Commitment To Early Retirement Of Coal Power Plants

Funding issues threaten the early retirement of coal-fired power plants (PLTU). However, Minister of Energy and Mineral Resources Bahlil Lahadalia emphasized the government's commitment to retiring coal-powered PLTUs early. "As part of our commitment, Indonesia is retiring the 660 MW Cirebon 1 PLTU. We are retiring it seven years earlier than planned," Bahlil stated during a press conference on ESDM's performance in Jakarta on Monday, February 3, 2025. He noted that the early retirement of Cirebon-1 is possible because funding has been secured from the Asian Development Bank (ADB).

According to a report from the Coordinating Ministry for Economic Affairs, Indonesia has received a policy-based loan from ADB amounting to $500 million, equivalent to IDR 7.5 trillion. "The process of early retirement is now underway, thanks to ADB funding," Bahlil said. He mentioned two conditions for implementing the early retirement of PLTUs. First, there must be a clear funding source that does not burden the economy or the state. "We want to retire early, and if someone is funding it economically, it won't burden the state, PLN, or the people. If the funding is affordable, that's great," he explained.

Second, if the funding is in the form of a loan, it should have low interest rates and a long repayment period. "The funds should come with low interest and be long-term loans, ensuring that the costs remain affordable for the public. If subsidies are needed, that's fine, but prices shouldn't increase," he clarified. Bahlil also pointed out that some funding institutions have yet to provide financial support for Indonesia's early PLTU retirement. "So, I want to ask which institutions will fund us if we retire now?" This is quite a dilemma. If necessary, we should retire everything, as long as there is funding available," he stated.

According to the Ministry of Energy and Mineral Resources, to replace the electricity generated by the Cirebon 1 coal power plant, several alternative energy sources need to be developed. This includes building a Solar Power Plant (PLTS) along with a Battery Energy Storage System (BESS) with a capacity of 700 megawatts (MW). Additionally, a Wind Power Plant (PLTB) of 1,000 MW, another Solar Power Plant (PLTS) of 346 MW, and a Waste Power Plant (PLTSa) of 12 MW are also required. For context, the Cirebon 1 coal power plant is scheduled for early retirement in 2035, which is seven years earlier than the original plan set for July 2042.

Tag: Bahlil Lahadalia PLTU