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6,500MW power plants, mostly coal, set for delay amid pandemic

Jakarta Post - August 10, 2020

Norman Harsono, Jakarta – The completion of seven big power plants and four power distribution projects have been delayed indefinitely due to the health crisis, causing power sector investment and plans to slow entering the second half.

Seven of the delayed plants are coal-fired – contributing 74 percent of total capacity – but there is also one gas-fired and one hydropower plant, according to Energy and Mineral Resources Ministry data made available to reporters on Aug. 2.

Meanwhile, the delayed power distribution projects comprise substations in South Sulawesi, Aceh and Riau and a transmission line in Banten. All 11 projects were delayed due to international lockdowns that restricted the movement of skilled workers and materials.

"This was a global issue," said the energy ministry's electrification director general, Rida Mulyana, on July 30. "Hopefully, once the lockdown is relaxed, and with the new normal, we can accelerate projects in July and August."

Due to the project delays, power sector investment only reached US$3.97 billion in the first half, which is 33 percent of the year-end target of $11.95 billion.

Realized investment had been above target until April, but began falling under target ever since that month, which was when Indonesia began entering partial lockdown, said the energy ministry's electrification director, Jisman Hutajulu.

"What's clear is that $11.95 billion, based on current conditions, we'll likely be under that," he told reporters at an online briefing.

The International Energy Agency (IEA) estimates global power sector investment, including for renewable energy power plants, to fall 10 percent from last year.

The delayed projects set Indonesia back from adding 5.7 gigawatts (GW) of new power plants and achieving a 100 percent electrification ratio this year as part of the government's energy plans.

Energy analysts have, however, criticized the plans as being overly reliant on coal power and as being financially unsustainable for state-owned electricity giant PLN, which is the country's sole electricity distributor.

Power and renewables analyst Allen Wang of consultancy IHS Markit said power project delays were common around Southeast Asia during the pandemic but also that Indonesia slightly differed from its peers in terms of investment choices.

"Definitely, there will be some delay but so far we haven't seen any of the conventional project cancellation. The projects will still come online but it's just a matter of time," he told The Jakarta Post via phone call on Friday, Aug. 7.

"Indonesia is still slightly focusing on coal in project development but the rest of the [Southeast Asian] countries have shifted a little bit to the renewables section," he added.

Cases in point, Myanmar and Malaysia have tendered 1GW worth of solar projects each and the Philippines 2GW of renewables. Vietnam also has plans for a solar tender this year.

Furthermore, Indonesia's continued reliance on coal plants goes against a larger global trend to transition out of coal. According to fossil fuel watchdog Global Energy Monitor (GEM), much more coal plants were retired than commissioned in this year's first semester.

GEM recorded 21.2GW of coal plants retired between January and June compared to 18.3GW worth of new plants being commissioned.

"The COVID-19 pandemic has paused coal plant development around the world and offers a unique opportunity for countries to reassess their future energy plans," said GEM program director for coal Christine Shearer in a statement.

Source: https://www.thejakartapost.com/news/2020/08/10/6500mw-power-plants-mostly-coal-set-for-delay-amid-pandemic.html