JAKARTA – Indonesia’s plans to retire a swathe of its coal-fired power plants over the next three decades are drawing a lukewarm response from potential supporters.
The country plans to eliminate 15 gigawatts of coal-generated electricity – about 60 per cent of the total.
That will require more than US$600 billion (S$845 billion) in capital support, Mr Erick Thohir, the state-owned enterprise minister, said Thursday.
The government has been on roadshows to several countries, including Saudi Arabia and the United Arab Emirates, as well as some European nations, to promote its energy-transition plans.
“But no one responded to our offer,” Mr Thohir said.
Indonesia does not want to rely on bond issuance to support the shift, and it needs developed countries to invest, he said.
The cost and scale of the work, and the lacklustre response to the plan, are a reminder of the challenges the world faces in weaning developing nations off fossil fuels.
“If investment flows in and our company’s cash flow stays positive, then it can reinvest itself into renewable energy,” he said.
Indonesia wants to strike a balance between boosting growth and developing green energy, he said. It seeks to reduce fossil fuel demand by promoting the use of electric stoves and vehicles, as well as developing alternative energy sources.
“We want our energy mix later to consist of electricity, palm-based biodiesel and ethanol, just like Brazil and India,” Mr Thohir said.
To support the plan, the government has been telling state-owned firms to use 700,000ha of sugarcane land to produce ethanol and cutting imports.
The government also plans to push projects for processing coal into dimethyl ether, a colourless gas that can be used in fuel, in three to four years to help lower the nation’s US$4 billion-a-year bill for liquefied petroleum gas.
“We must have energy security, and we agree for transformation with our own pace, not what other countries want us to do,” he said. BLOOMBERG