INDONESIA – The Indonesian government, in conjunction with the Asian Development Bank (ADB) and independent power producer Cirebon Electric Power (CEP), has entered a nonbinding framework agreement aimed at retiring a 660MW coal-fired power plant almost seven years earlier than planned.
Sealed during the COP28 summit in Dubai, UAE, this agreement forms an integral component of the ADB’s Energy Transition Mechanism (ETM) program.
Collaborating entities, including ADB, the Indonesian state-owned power utility PLN, CEP, and the Indonesia Investment Authority (INA), will curtail the operational lifespan of Cirebon-1 from its initial closure date of July 2042 to December 2035.
Concurrently, the power purchase agreement will be adjusted accordingly, with the finalization expected in the first half of 2024.
Typically, coal-fired power plants boast a longevity of 40 years or more. The premature retirement of Cirebon-1, commissioned in 2012, averts over 15 years of greenhouse gas emissions.
A memorandum of understanding to this effect was initially inked during the G20 Leaders’ Summit held in Bali, Indonesia, in November 2022.
Masatsugu Asakawa, President of ADB, hailed this framework agreement as pivotal for Indonesia’s energy transition, emphasizing the substantial reduction in greenhouse emissions it will bring.
Asakawa expressed gratitude to the Indonesian government and Cirebon Electric Power for their unwavering commitment and leadership in advancing the energy transition.
He reiterated ADB’s dedication to collaborating closely with Indonesian partners and regional stakeholders, demonstrating the possibility of early retirement for coal and other fossil fuel plants in an equitable and financially feasible manner, benefiting both the climate and local communities.
Darmawan Prasodjo, President Director of PLN, reaffirmed PLN’s dedication to spearheading Indonesia’s energy transition toward achieving net-zero emissions.
Prasodjo highlighted PLN’s ardent efforts in decarbonization by canceling planned 13.3GW of Coal-Fired Power Plants (CFPP), terminating a power purchase agreement involving 1.3GW CFPP, and halting further CFPP developments.
The early retirement of coal aligns with PLN’s vision for clean energy and symbolizes collaborative endeavors undertaken to expedite Indonesia’s energy transition.
In September 2023, Reuters reported PLN’s strategic plans to construct 32GW in renewable energy projects and invest in transmission systems facilitating renewable energy integration.
This significant move is part of PLN’s broader strategy aimed at diminishing reliance on coal and expediting the adoption of renewable energy sources.
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