by Setyawati Fitrianggraeni, Tanya Widjaja Kusumah, Deviana Bella Saputra

INTRODUCTION

President Joko Widodo has stipulated Presidential Regulation number 112 of 2022 concerning the Acceleration of Renewable Energy Development for the Supply of Electricity (“Perpres 112 of 2022“) on September 13, 2022. Presidential Regulation 112 of 2022, especially in the provisions of Article 3, is considered the beginning of the implementation of the energy transition in Indonesia by initiating the phase-out of Coal-fired Steam Power Plants (“PLTU”). However, the same provision also allows a gap for coal-fired power plants to continue operating until 2050 in industrial estates, so it is considered contradictory to efforts to achieve the energy transition.

PRESIDENTIAL REGULATION 112/2022 AS A LEGAL BASIS FOR THE ELECTRICITY ENERGY TRANSITION

Electrical Energy Transition Efforts to Achieve NZE 2060

The issuance of Presidential Regulation 112/2022 can be considered as a manifestation of President Joko Widodo’s promise at the 26th World Leaders Summit on Climate Change (COP26) in Glasgow on November 1, 2021, which stated that Indonesia will make an energy transition from fossil energy to renewable energy to achieve Net Zero Emission (NZE) by 2060.[1]

To implement NZE 2060, Article 3 paragraphs (1) and (2) of Presidential Regulation 112/2022 mandate to the Minister of Energy and Mineral Resources by coordinating with the Minister of Finance and the Minister of State Owned Enterprises to prepare  a road map to accelerate the end of the operational period of coal-fired power plants through sectoral planning documents.[2] Then Article 3 paragraph (3) specifically stipulates that the road map contains at least

1. reduction of greenhouse gas emissions from coal-fired power plants;
2. strategy to accelerate the end of the operational period of coal-fired power plants; and
3. alignment between various other policies.[3]

The promulgation of Presidential Regulation 112/2022 is considered the legal basis for the implementation of the energy transition which shows the government’s efforts to eliminate the use of coal for power plants which will be implemented in stages. Presidential Regulation 112/2012 aims to accelerate the development of renewable energy[4] while emphasizing the government’s intention to reduce emissions from the energy sector.[5]

Contradiction of Presidential Regulation 112/2022 with Efforts Towards NZE 2060

However, the provisions of Article 3 of Presidential Regulations 112/2022 are considered to be contradictory. Simply put, Presidential Regulation 112/2022 prohibits the development of new coal-fired power plants, but there are exceptions that state that certain coal-fired power plants can operate.

Article 3 paragraph (4) of Presidential Regulations 112/2022 states that coal-fired power plants with certain conditions can still operate, namely

1. coal-fired power plants that have been stipulated in the Electricity Supply Business Plan before the enactment of Presidential Regulation 112/2022; or
2. PLTU that meets the requirements:
3. Integrated with industries that are built oriented to increase the added value of natural resources or are included in National Strategic Projects that have a major contribution to job creation and/or national economic growth;
4. Commit to reduce greenhouse gas emissions by at least 35% (thirty-five percent) within a period of 10 (ten) years since the coal-fired power plant operates compared to the average coal-fired power plant emissions in Indonesia in 2021 through technology development, carbon offset, and/or Renewable Energy mix;
5. It will operate for the longest time until 2050.[6]

CONQUEST

Thus, the provisions of Article 3 of Presidential Regulation 112/2022 have the potential to be contradictory and not in line with energy transition efforts to achieve NZE 2060. On the other hand, it is arranged to prepare a road map to accelerate the end of the operational period of coal-fired power plants, but on the other hand, it seems to provide a gap for coal-fired power plants to continue to be able to operate until 2050.

References  :

[1]https://betahita.id/news/detail/8032/perpres-112-tahun-2022-dan-omong-kosong-energi-terbarukan.html?v=1665779385

[2] Presidential Decree 11/2022 Article 3 paragraphs (1) and (2)

[3] Presidential Decree 11/2022 Article 3 paragraph (3)

[4] Presidential Decree 11/2022 Article 1 number 1, “Renewable Energy is energy derived from renewable energy sources.”

Law Number 37 of 2007 Article 1 Number 6, “Renewable energy sources are energy sources that are produced from sustainable energy resources if managed properly, including geothermal, wind, bioenergy, sunlight, water and waterfall, as well as the movement and temperature differences of layers, seas”

[5] https://www.lpem.org/wp-content/uploads/2023/06/Environmental_Policy_Update_V1_No1_ID.pdf

[6] Presidential Decree 11/2022 Article 3 paragraph (4)

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