In Indonesia, Who is Jambi Coal Power Plant For?
Cek Endra's smile widened. His five-year effort to present a large-scale coal-fired power plant project in Sarolangun in Jambi, Indonesia, was not in vain. On February 1, 2018, in an open field about two kilometers from Pemusiran Village, Mandiangin District, Sarolangun Regency, the groundbreaking ceremony for the construction of the Jambi-1 coal-fired power plant began.
Not far from Cek Endra, President Director of PT Sumber Segara Primadya Sadiman, Director of Jambi Power Ahmad Ilham, President Director of D&C Engineering Frank, Director of Jambi Prima Coal Rendi, Doris and Ceng also beamed happily.
"Alhamdulillah, we have been struggling for five years. Today it has come true," said Cek Endra.
In front of reporters, the two-term regent of Sarolangun built a narrative that the Jambi-1 coal-fired power plant is the solution to the electricity crisis in Sarolangun and even nationally. The project, which is predicted to cost more than 13 trillion rupiah, will absorb a lot of local workers and the regional economy will grow.
The project is part of President Joko Widodo's ambition to build a 35,000 Megawatt power plant and has obtained environmental permit Number 75 of 2019, issued by the Sarolangun Regency Environmental Service.
According to Walhi Jambi's report, this mega project will be supported by Chinese financiers and PLN Indonesia Power. Jambi Prima Coal, Surya Global Makmur and Dinar Kalimantan Coal in Mandiangin Regency will be the coal suppliers for the power plant.
"So, we don't have to bother selling coal outside the region," said Cek Endra optimistically.
Some of the electricity from the coal-fired power plant will later be used to support the production of the Semen Baturaja factory which will be built in the Bukit Bulan area, Limun District, Sarolangun Regency. The rest will be distributed through the Sumatra network.
Jambi Power—a joint venture formed by PLN Indonesia Power with Sumber Segara Primadya—responsible for building the Jambi-1 coal-fired power plant has reportedly been dissolved. However, this project is still included in the PLN Electricity Supply Business Plan 2021-2030, and is targeted to operate in 2027.
The results of the Walhi Jambi study stated that Jambi-1 requires a coal supply of 3.7 million tons per year or equivalent to 10,200 tons per day. This means that every hour the power plant will burn 425 tons of coal.
The Energy and Clean Air Research Center (Puslitbang Energi dan Udara Bersih) found that the air emission quality standards used by Jambi-1 still refer to the Ministerial Regulation of the Environment and Forestry Number 2008 which is no longer in accordance with the provisions. The emission quality standards should refer to the latest provisions in accordance with the Ministerial Regulation of the Environment and Forestry Number 15 of 2019 because the environmental impact analysis of Jambi-1 was only submitted in 2019. The Center for Energy and Clean Air Research also projects the emergence of negative impacts due to the construction of the coal-fired power plant, especially related to the loss of the right to a good and healthy environment.
The operation of the coal-fired power plant will increase the concentration of ambient air pollutants in the form of PM 2.5, SO2, NOx every year, as well as the deposition of mercury and other toxic heavy metals that can cause the risk of disease and acute chronic symptoms, especially in the surrounding community.
If the coal-fired power plant operates for 30 years, it is predicted that it will have an impact on health in the form of 1,100 premature deaths, 680 premature births, and the loss of life expectancy of 55,900 years due to exposure to air pollution.
The losses due to the health impacts are estimated to increase treatment costs and economic losses equivalent to 640 million US dollars, or about 9.05 trillion rupiah over a 30-year operating period.
False solution
In mid-2023, I visited the groundbreaking site of the Jambi-1 coal-fired power plant (PLTU Jambi-1). The piles whose installation was previously questioned by Cek Endra and mining entrepreneurs remained unchanged.
Not far from there, a wooden stilt hut was covered with a banner that read Experimental Area, Jambi University and PT Indonesia Power "Development of Energy Wood Plantation Demonstration Plot for Implementation of Jambi-1 Co-Firing PLTU." In 2022, Jambi University together with PT Indonesia Power planted calliandra and gamal trees.
Co-firing PLTU is claimed to be a green solution to meet the target of 23% renewable energy mix. The government is even targeting 107 PLTUs in 52 locations to use the co-firing scheme by 2025, with the aim of achieving net zero emissions by 2050.
Amalya Reza Oktaviani, Trend Asia's bioenergy program manager, said that biomass co-firing PLTU is a false solution. PLN's claim that co-firing biomass wood pellets is the right solution to reduce greenhouse gas emissions and energy transition has not been proven. Research conducted by Trend Asia found that the use of co-firing still produces carbon emissions from upstream to downstream.
Trend Asia also revealed that co-firing 10% biomass in 107 PLTU units has the potential to produce total emissions of up to 26.48 million tons of carbon dioxide equivalent (CO2e) per year. These emissions arise from deforestation, energy plantation forests (HTE) management and wood pellet production. Instead of decreasing, this biomass-coal mixture actually increases emissions from PLTU which in the 2021-2030 RUPTL is projected to continue to increase to 298.9 million tons of CO2e in 2030.
"PLN's argument that the use of wood biomass does not produce emissions, aka carbon neutral, is not proven," he said.
Trend Asia's calculation results, assuming the type of biomass used is wood pellets and has a co-firing rate of 10%, shows that the biomass requirement for 107 PLTUs with a total capacity of 18.8 gigawatts reaches 10.23 million tons per year.
The amount of required biomass raw materials, according to Amalya, can only be met from large-scale industrial plantation forests such as HTE. Trend Asia estimates that the need for HTE land is at least 2.33 million hectares or equivalent to 35 times the land area of Jakarta.
"Building HTE extensively has the potential to cause deforestation," said Amalya.
Biomass burning also does not reduce the use of coal for PLTUs. Based on PLN Statistics in 2021, PLN used 282,628 tons of biomass, a significant increase from 2020 which was only 9,731 tons. Meanwhile, coal usage also increased to 68.47 million tons, from 66.68 million tons in 2020. This shows that PLN has failed to implement the fuel switching strategy in PLTU by replacing some coal with biomass.
"What happens is that the use of co-firing actually extends the life of coal-fired PLTUs. So the ones who benefit are the business actors. They have new business opportunities with HTE," he said.
PLTU Jambi-2
A one-and-a-half hour drive from Pemusiran, I met Marhoni, an Indigenous Batin Telisak community who lives in Dusun Trans 3, Sepintun Village, Pauh District. He often looks for information on the construction PLTU Jambi-2 in Lubuk Napal Village, Pauh District, Sarolangun Regency, about an hour's drive from his village.
If the project continues, the coal mine near the village will resume operations. He is worried that the spontaneous fire that occurred during the dry season in 2023 will happen again.
"When the company's coal stockpile caught fire due to the hot weather, many children got colds," he said.
The smoke from the coal piles has also driven away the Sialang bees that want to produce honey.
"In the months of eight to nine, natural wood starts to flower, at the beginning of the dry season many bees come to produce honey, but because there is smoke, many bees leave because they are afraid," he said.
He admitted to a loss, because so far the economy of the Batin Telisak Indigenous community has been largely supported by the harvest of Sialang honey.
Marhoni invited me to see several stockpile locations in the Bakti Sarolangun Sejahtera permit area that were burned. He said that the company had not been operating for four years. The coal that was excavated was simply piled up and left to burn due to the hot weather. In several places, the piles of coal were eroded by rain and polluted the tributaries.
One of the mining points we visited was land owned by former Sarolangun Regent Cek Endra. There were traces of heavy equipment that had just repaired the road around the mine. "Maybe they are going to operate again," said Marhoni.
PT BSS is said to be the coal supplier for the Jambi-2 Mine Mouth PLTU, together with Sinar Anugerah Sukses and Anugerah Jambi Coalindo. The majority—99.75%—of the shares of the three companies are controlled by Artha Nusantara Mining, while the remaining 0.25% is owned by Artha Nusantara Resources. The total concession permits for the three of them reach 7,600 hectares.
PLTU Jambi-2 is a proposed mine-mouth coal-fired power plant with a capacity of 2x300 megawatts which will be built by Pembangkitan Perkasa Daya, with capital support from China Huadian Group Corp (80%), Nusantara Energy Limited (15%) and Pembangunan Perumahan Energi (5%). China Energy Construction Southwest Design Institute is said to have won the tender for the survey and design contract.
Global Energi Monitor said that in April 2019, China Huadian signed a power purchase agreement with PLN and committed to developing PLTU Jambi-2 on a Build, Own, Operate, Transfer (BOOT) basis. Based on the May 2019 agreement, this project will involve two units with supercritical technology, a 118-kilometer-long 500-kilovolt transmission line, and a coal mine with a production capacity of 3.1 million tons per year. PLTU Jambi-2 will produce 4.9 million kilowatt-hours of electricity per year.
The PLTU Jambi-2 project, which is planned to operate in 2026, is estimated to require a large investment. The latest report from Inclusive Development International, Recourse and Trend Asia, found an indirect funding relationship from a multinational development bank, namely the International Finance Corporation (IFC), part of the World Bank, to the PLTU Jambi-2 project. In 2015, IFC invested equity in the Postal Saving Bank of China amounting to 300 million US dollars. After becoming an IFC client, the Postal Saving Bank of China still provided a loan facility up to a certain limit that could be withdrawn as needed worth 16 billion US dollars to China Huadian Corporation. The credit line period is still valid until 2022. Postal Savings Bank has also become an underwriter for more than 1 billion US dollars of China Huadian's debt and equity securities. Here we see the indirect exposure of the IFC to the PLTU Jambi-2 project. The IFC, which has committed not to finance coal projects, should also exercise control over corporate entities with which the IFC has a funding relationship.
Wilson, an official at the Public Works and Spatial Planning Department of Sarolangun Regency who was involved in the planning of the PLTU Jambi-2 project, said that the electricity generated from the PLTU in Sarolangun could support the electricity needs of the Rempang Eco-City project.
This project involves Mega Elok Graha (MEG), Group Artha Graha owned by Tommy Winata, as well as investors from Singapore and Malaysia. MEG has the right to manage and develop the area for 30 years which can be extended to 80 years.
In July 2023, the government also signed a memorandum of understanding with the Xinyi Group from China for the construction of a glass and solar panel factory on Rempang Island, as part of the Rempang Eco-City concept with a project value of 11.5 billion US dollars. The project, which is included in the National Strategic Program, is estimated to be able to attract investment of up to 318 trillion rupiah.
"Maybe later the electricity from Sarolangun will go there—Rempang," he said.
Sinta Hendra, a Jambi Province Environmental Service official, in a public discussion and research publication entitled "Jambi Mine Mouth Steam Power Plant For Whom?" held in Jambi, February 7, 2024, said that PLTU Jambi-2 has also pocketed Environmental Feasibility Letter Number 01 of 2021 issued by DLH Sarolangun.
The construction of PLTU Jambi-2 will threaten dozens of families. Based on the design of the Bappeda of Sarolangun Regency, PLTU Jambi-2 will be built at Km 20-23 Lubuk Napal Village on an area of 150 hectares. More than 40 families live at Km 20.
Residents met by Mongabay admitted that they did not know the dangers of coal-fired PLTUs. They actually support the construction of PLTUs. According to them, the construction of large-scale power plants will actually benefit the community because it will open up job opportunities and improve the economy.
"We don't know what the impact will be, because so far there has been no outreach from the government," said Kemat, Head of RT.06.
Learning from the Semaran PLTU
The people of Semaran Village, Pauh District, Sarolangun Regency are a real example of the negative impacts of coal-fired power plants. The PLTU Semaran began operating in 2012, with a capacity of 2x7 megawatts managed by Permata Prima Elektrindo.
After several years, the impacts began to be felt by the people around the PLTU. Coal dust and the noise from the PLTU disturbed the community every day. Ramli, who lives on the road leading to the PLTU, complained about the dust from coal trucks that passed in front of his house every day. Wike, his son, once complained of itching, but did not know the cause. He suspected that the well water was contaminated with coal dust and waste from the PLTU's coal combustion.
Several other residents also complained that the zinc roofs of their houses were quickly rusting and rotting, which was suspected to be due to the PLTU's coal combustion dust containing acid. "This is a new roof, it's been rusty for less than a year," said Ragil (not his real name).
Raden Andri also said that 40 people living around the power plant were suffering from bronchitis.
"That's only what is recorded in the RT, maybe there are still many outside of that."
Data from the Sarolangun Regency Health Office shows that children aged one to five years at the Pauh Health Center are susceptible to ARI. In 2022, 146 children were recorded. Meanwhile, from January to August 2023, 133 cases were recorded.
Raden Andri also showed the Ale River which was heavily polluted by waste from the Samaran PLTU combustion. He suspects that the waste overflowed during the flood. As a result, the river is now shallow and cannot be used again.
On Sunday, March 3, 2023, Mongabay tried to contact Poltak, Head of Section at the Semaran PLTU for an interview. However, the message sent by Mongabay was not responded to.
Abdullah, executive director of Walhi Jambi said that the PLTU Jambi with a capacity of 1,200 megawatts or 85 times that of the PLTU Semaran will have a much worse impact than that felt by the residents of Semaran. He urged the government to cancel the two projects.
China Huadian withdraws
At the United Nations General Assembly in September 2021, President Xi Jinping said that China would stop building coal-fired power plants abroad. Xi's statement immediately raised major doubts about the future of the PLTU Jambi-2 project.
In October 2022, Huadian through the China Electricity Council announced that it was withdrawing from the project. Until now, the PLTU Jambi-2 construction project has not made any significant progress. However, this project is still included in PLN's 2021-2030 RUPTL.
China Huadian's statement was denied by PLN. Based on a letter sent by Trend Asia to PLN on September 3, 2023, PLN stated that China Huadian was still committed to developing the project and the power purchase agreement between the two parties was still valid. PLN also said that the project was approaching the financial completion stage.
On February 22, 2024, Mongabay sent a question to PLN via email regarding the certainty of China Huadian's investment in the PLTU Jambi-2, but until now there has been no reply.
Meanwhile, Jambi Governor Al Haris said that the construction of one of the Jambi-1 and Jambi-2 PLTUs would continue.
"The information I got is that one will proceed, because the capital is quite large," said Haris.
The former Regent of Merangin admitted that he fully supports the plan to build a PLTU in Sarolangun. Moreover, Jambi Province has the second largest coal reserves in Sumatra.
"Because this is a central government policy, I just follow it, but the point is that the region is ready. We already have the raw materials, the land has also been prepared by entrepreneurs who will build the PLTU, all the permits are there. It's just a matter of running it to start."
Meanwhile, Haris said the negative impacts of the PLTU have been calculated. "There must be an impact, that's why we need an AMDAL (Environmental Impact Analysis), which calculates the environmental impact and everything is studied by experts.
"Every time there is an AMDAL. The AMDAL's job is to detail and study the impacts that arise from all existing aspects," said Haris.
Who is the PLTU for?
Based on the 2022 PLN Statistical Report, the total installed capacity in the country is 69,040 megawatts, of which PLN operates 6,314 units with a total combined capacity of 44,940 megawatts, or around 65%. The remaining 24,100 megawatts (35%) is operated by IPPs.
Jambi Province, which is part of the Sumatra network, currently has an excess supply of electricity of up to 34%. This figure could grow to 52.2% by 2025 and remain above 39% by 2030 if the PLTU construction plan continues. Sumatra also has excess power of up to 40% of the installed capacity.
"So who is the PLTU Jambi for?" said research manager at Trend Asia, Zakki Amali.
Zakki said this excess supply makes PLN lose money in the take-or-pay (TOP) scheme. Because PLN has to pay for electricity from IPPs even though the power supplied is not used. This condition will be worsened by the construction of coal-fired power plants such as PLTU Jambi-1 and Jambi-2.
In 2017, the Institute for Energy Economics and Financial Analysis (IEEFA) estimated that for every 1 gigawatt of unused electricity, PLN paid at least 3.16 billion US dollars. Meanwhile, in 2021, PLN is estimated to pay around 103 trillion rupiah to IPPs through the TOP scheme.
"The money should have been used for early retirement costs for PLTUs or energy transition," said Zakki.
The CREA and Trend Asia report entitled "Ambiguity versus Ambition: A Review of Indonesia's Energy Transition Policy," found that around 33% of the 58 gigawatts of total installed fossil fuel capacity in Indonesia exceeds what is needed to meet peak demand in 2021. This excess supply exceeds the national electricity reserve limit of 30-35%. Not to mention the maintenance costs reaching 16 trillion rupiah that must be borne by PLN.
Trend Asia noted that there are 13.8 gigawatts of new PLTUs that will operate until 2030, according to the Electricity Supply Business Plan PLN 2021-2030. This condition is not in accordance with the government's efforts to achieve net zero or zero emissions. It is even likely to worsen the oversupply.
Zakki said that the government must cancel the planned PLTU Jambi-1 and Jambi-2 development projects and remove them from the Electricity Supply Business Plan document.
He also urged all financial institutions to stop financing dirty energy and coal projects.
The government must also encourage the potential for environmentally friendly and sustainable energy in Jambi. In the Jambi Province Regional Energy General Plan in 2019, Jambi has a target of using 24% renewable energy by 2025, reaching 40% by 2050. Jambi Province has a renewable energy potential of 447 megawatts from microhydro and minihydro energy, and 37 megawatts from wind energy.
Impact of coal-fired power plants
Research results from CREA and the Institute for Essential Services Reform (IESR) state that air pollutant emissions from coal-fired power plants in Indonesia have increased by 110% in the last decade.
The report, entitled "Health Benefits of a Just Energy Transition and Phase-Out of Coal in Indonesia," also estimates that there will be an increase of up to 70% by 2030 if all planned coal-fired power plants, including captive power plants, are completed and operational.
CREA indicates that air pollutant emissions from coal-fired power plants in Indonesia in 2022 were responsible for 10,500 deaths due to air pollution and health costs of 7.4 billion US dollars.
CREA also stated that Jambi Province is among the 10 provinces most affected by coal-fired power plant emissions and the 10 provinces most responsible for the highest number of deaths per year. Jambi is ranked 10th with a death toll of 187 people.
The government's policy to increase the capacity of coal-fired power plants from 45 gigawatts to 63 gigawatts before 2028 is feared to have an impact on the spike in the number of deaths due to air pollution from coal-fired power plants in Indonesia. It is estimated that the number will increase to 16,600 per year and health costs will increase to 11.8 billion US dollars per year.
Under current policies, the cumulative health impacts from 2024 until the end of operation of all coal-fired power plants will result in 303,000 deaths in Indonesia related to air pollution and health costs of 210 billion US dollars.
The installation of air pollution controls will avoid 8,300 deaths and health costs of 5.8 billion US dollars, related to air pollution in 2035 under the current policy scenario. CREA analysis shows that installing air pollution controls at all coal-fired power plants operating after 2035 will reduce SOX emissions by 73%, NOx by 64%, dust by 86% and mercury by 71%.
Energy transition
Stopping the development of new power plants for fossil fuel power plants is an important step in the energy transition. The use of fossil fuels will drive global warming and worsen climate change.
IESR proposed that the 9.2-gigawatt capacity of the PLTU be retired. However, PLN's calculations only show that 5 gigawatts will be retired. The government is concerned that the closure of the PLTU will have an impact on PLN. Based on 2022 data, PLN operates 6,314 generating units with a total capacity of 44,940 megawatts or around 65% of the total installed capacity in the country.
"The government thinks that if the PLTU is retired, it means that there is a loss of asset value, the country loses. If it is considered detrimental to the country, it will be troublesome," said the executive director of IESR, Fabby Tumiwa.
He considered that the gradual cessation of coal was a great opportunity to clean up Indonesia's electricity system. "We talk more about the problem, but don't come up with a solution."
So far, the government has never calculated the costs that must be borne by the community due to the use of fossil fuels, especially coal-fired power plants. Air pollution caused by coal-fired power plants has been proven to increase health risks.
"People get sick easily because of air pollution and health costs increase, but work productivity decreases. So it has an impact on the economy."
In a report released by CREA and IESR, the cessation of coal use earlier in 2040, in line with the Paris Agreement target of 1.5 degrees celsius, will avoid a cumulative total of 182,000 deaths related to air pollution and health costs of 130 billion US dollars from 2024 until the end of the life of all power plants.
"If you calculate all that—the impact, the high cost of the energy transition is much smaller when compared to the impact that must be borne by the community due to the use of fossil fuels."
According to the former Coordinator of the Indonesia Climate Action Network, the energy transition will benefit Indonesia, because it can reduce energy costs that are much cheaper and safer in the long term, compared to using fossil fuels that are vulnerable to the influence of the global market and conflict.
"By making the energy transition, we build a new industry based on renewable energy, so that we have competitiveness. Our products are also low carbon, they can be more accepted in the international market."
This story was produced with support from Internews' Earth Journalism Network. It was first published in Bahasa Indonesia in Mongabay Indonesia on March 6, 2024. It has been translated and lightly edited for length and clarity.
Banner image: The groundbreaking location of the Jambi-1 Mine Mouth PLTU in Pemusiran Village, Mandiangin District, Sarolangun Regency / Credit: Teguh Suprayitno for Mongabay Indonesia.
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