State-Owned Electricity Distribution Company Cancels New Energy Projects

Spotlight Activity: State-Owned Electricity Distribution Company Cancels New Energy Projects

Indonesia’s state-owned electricity distribution company also generates a large portion of Indonesia’s power. PLN is canceling 22 GW in new energy projects that would have been created through independent power producers (IPPs). The majority of these projects were in cycle gas turbines and renewables. This moves Indonesia further away from reducing its dependence on coal. The agency’s plan for the next decade was to increase capacity by 88.5 GW, providing electricity to many communities with poor access to power and greening its energy mix. The new plan will cut PLN’s new capacity; 10,000 MW in natural gas, 6,600 MW in renewables, and 5,000 MW in coal. PLN blames falling demand for axing 22 GW in new energy capacity. PLN claims that the national energy mix under the revised plan is still on target to reach 23% renewables by 2025.

Status: Falling Behind

Although the agency still claims that this cut will keep Indonesia on track to achieve 23% renewables by 2025, slashing more renewables than coal is moving in the wrong direction. The agency must also decrease overall investment in coal. Coal under the PLN’s plan through 2025 takes the largest percentage of the energy mix. The Indonesian government needs to ramp up its efforts to promote the generation of new renewable sources. 2025 is not far away, and this work needs to be done now. Indonesia must tap its great potential for renewable energy, especially geothermal which is currently much underutilized.

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