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PLN wants environment ministry to undo power plant emissions cap

Jakarta Post - September 1, 2020

Norman Harsono, Jakarta – State-owned electricity company PLN has called on the Environment and Forestry Ministry to revise emission caps for fossil fuel-fired power plants, arguing they would increase the costs of power suppliers.

The cap would result in an increase of Rp 140 per kilowatt-hour (kWh) and raise subsidy spending by Rp 10.7 trillion (US$729.58 million) each year to pay for emission control equipment, PLN president director Zulkifli Zaini said on Aug. 25.

The environment ministry's latest regulation tightens emission limits for four key pollutants, including for particulate matter (PM) – the most dangerous pollutant to human health – by 33 percent to 100 milligrams per cubic meter.

He did not ask the ministry to revoke the cap but to make it applicable only for new power plants, specifically those that had not signed power purchase agreements (PPAs) with PLN. The cap is based on Ministerial Regulation No. 15/2019 replacing Regulation No. 21/2008.

"They complied with the old regulation but not the new one, so we're asking for a softer transition," Zulkifli told House of Representatives (DPR) lawmakers in Jakarta.

PLN's presentation on Aug. 25 noted that 87 existing coal power plants, which had a total capacity of 20,752 megawatts, required emission control equipment to comply with the regulation. Indonesia's total coal plant capacity is 34,743 MW as of last year.

Responding to PLN's request, the ministry's air pollution control director, Dasrul Chaniago, told The Jakarta Post in a text message on Wednesday: "When we made that regulation, PLN representatives were intensively involved."

PLN's request reflects conflict between various ministries' policies that aim to suppress electricity prices, curb subsidy spending and slash air pollution, the leading cause of respiratory health problems.

PLN's request also challenges government claims that thermal power plants, particularly coal-fired power plants, were the cheapest means of electrifying the country, said Indonesian Center for Environmental Law (ICEL) researcher Fajri Fadhillah on Thursday.

"The costs do not take into account the social costs that burden the public, such as deteriorating public health," he told the Post via text message.

Coal plants contribute 50 percent of the total 69,600 MW of installed power-generation capacity in Indonesia, a country with the world's sixth-largest coal reserves, according to Energy Ministry data and BP's statistical review.

PLN and the environment ministry signed a deal in November 2019 to adjust implementing the new cap to each plant's financial readiness. PLN will create such an adjusted 10-year roadmap that is slated to come out later this year.

PLN's Zulkifli noted that the company had other strategies to reduce thermal plant emissions. These included using lower-sulfur coal in its plants and using natural gas in diesel power plants.

The Indonesian Private Electricity Producers Association (APLSI) declined to comment for this story.

Source: https://www.thejakartapost.com/news/2020/09/01/pln-wants-environment-ministry-to-undo-power-plant-emissions-cap.html