Home ECONOMY State Budget Insufficient for Coal Power Plants’ Early Retirement, Warns Commission VII

State Budget Insufficient for Coal Power Plants’ Early Retirement, Warns Commission VII

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State Budget Insufficient for Coal Power Plants’ Early Retirement, Warns Commission VII
Deputy Chairman of Commission VII of the House of Representatives Eddy Soeparno

JAKARTA, Timerilis.com – Eddy Soeparno, Deputy Chair of Commission VII at the Indonesian People’s Consultative Assembly (DPR RI), voiced concerns. He highlighted that the state budget (APBN) falls short in covering the early retirement costs of Steam Power Plants (PLTU). Moreover, he suggested reallocating these funds for other national priorities.

On Monday (30/10/2023), Eddy remarked, “Relying solely on the state budget for the early retirement of coal-fired PLTUs isn’t feasible. The APBN simply isn’t sufficient. Consequently, we must explore alternative funding sources.”

Currently, an estimated IDR 25 trillion is required for the early retirement of the Pelabuhan Ratu PLTU and PLTU Cirebon. The breakdown is IDR 12 trillion for Pelabuhan Ratu and IDR 13 trillion for PLTU Cirebon-1. Notably, the Asian Development Bank (ADB) has already committed to back PLTU Cirebon-1.

Given the significant costs associated with just two PLTUs, Eddy emphasized the urgency for additional funds. He pointed out potential solutions, such as the Just Energy Transition Partnership (JETP) and further support from the ADB.

In a recent move, the Ministry of Finance rolled out the Minister of Finance Regulation (PMK) No. 103 of 2023. This regulation aims to provide fiscal support to expedite the energy transition in the electricity sector. As a result, the APBN will shoulder the expenses for the early shutdown of several PLTUs.

For this initiative, the government has selected Pelabuhan Ratu PLTU and PLTU Cirebon-1 as pilot projects. The former underwent a management shift from PT PLN to PT Bukit Asam, reducing its operational span from 24 to 15 years. Meanwhile, the latter will adopt the Energy Transition Mechanism (ETM) scheme, with the ADB also pledging to fund its early retirement in Kanci, Cirebon Regency, West Java.