Indonesia is a megabiodiversity area and the island of Sumatra is the second richest island in terms of biodiversity in Indonesia after Papua. The stability of the ecosystem is important to support human life physically, biologically, economically, and culturally.
The negative impact on local biodiversity has intensified with the development of mine-mouth coal-fired power plants, which are already operating in South Sumatra Province, and are also planned to be built in Jambi and Riau provinces.
According to the sixth assessment report from the Intergovernmental Panel on Climate Change (IPCC), nature absorbs the majority of greenhouse gas emissions (56%), therefore climate mitigation and biodiversity loss prevention efforts need to be done in parallel. Discontinuation of coal-fired power plants in megabiodiversity areas would make the Paris Agreement goals and commitments in the Convention on Biological Diversity achievable at low cost, provided that it does not exclude local residents and indigenous peoples.
The results of this research can be used as a consideration for canceling the new coal-fired power plants in Sumatra and developing renewable energy. Furthermore, it can be a factor for the consideration of coal-fired power plants that are included in the early termination scheme related to climate change.
South Sumatera Province, Indonesia, has 21.926 megawatt (MW) renewable potential. It uses only 67 MW, around 0,3 percent.
The province has its vision energy management, “To Create reliable and optimising local source energy with environment and sustainability perspective.” One of its Regional General Planning on Energy’s policy direction is using new and renewable energy by reducing fossil fuel export particularly gas and coal.
This vision prone can not be reach if low quality coal infrastructure support continue to be developed, in kind of increasing coal railway carrying capacity and mine mouth coal power plants with Foreign Direct Investment support.
South Sumatera province has potential to create low carbon development and avoiding community from ecological destruction caused by low quality coal invesment.
Read AEER’s publication on suggestion for government institutions, financiers, and community how to achieve low carbon development in South Sumatera.
The mineral and
coal mining sector which is a mainstay of Indonesian government has decreased
because the companies have difficulty to maintain business performance during
the period ofCovid-19 pandemic. The Ministry of Energy and Mineral Resources
recently released a report on 2019 Non-Tax State Revenue (PNBP) prior to the
pandemic that there was a 9.4% decline due to depressed coal prices reaching an
average of US$ 77.89 per ton in 2019 was
smaller than US$ 85,92 per ton in 2018.
The downward trend
in Indonesian benchmark coal prices has continued throughout 2020 and reached
the lowest price in July 2020 since the last 4 years of to become US $ 52.16
per ton. This condition is not only worrying for mining companies, but also for
the country’s revenue which relies on coal as the largest export commodity
reaching around 15 percent export revenue. This decreasing benchmark would be a
risk in the realization of PNBP from the target of 44.4 trillion.
Indonesian coal production is being sold at the lowest price, the demand in the
global market has also declined during pandemic time. The biggest coal importer
from Indonesia over the past a decade such as China and India reduced their
demand due to unstable national economic conditions. The two countries also
diverted electricity consumption to renewable energy during the lockdown
period, so that the portion of RE increased significantly from 19% to 28%,
inversely proportional to coal from 72.3% to 63.4%. While Gas, Oil and Nuclear
remain stable and low.
Source : International Energy
Agency (IEA), 2020
The reduction of
coal demand is indeed happening in almost all countries. In addition, the
increasing global market competition since many coal exporter countries to
Europe forced to increase their target markets in Asian. This is happened to
Russia which is the biggest coal exporter to Europe due to declining European
demand trends. While other coal exporting countries to Europe such as the United
States experienced a reduction in exports by 11 million tons and Columbia
experienced export constraints due to the access blockade during Covid-19.
This proves that besides coal is not environmentally friendly fuel, it is also
vulnerable to the crisis situation like Covid-19 compared to renewable energy.
decisions of the Ministry of Energy and Mineral Resources even strengthened the
portion of coal in the national energy mix by increasing its production targets
each year. In 2020, the government plans to produce coal to 550 million tons,
which is higher than in 2019, which amounted to 489.10 million tons. Of this
total, around 395 million tons are planned for export. But until July 2020, the
realization only reached 146.50 Million Tons (37.09%) which is still far from
the target. Meanwhile the allocation for the Domestic Market Obligation (DMO)
which meet 92.23 million tons (59.51%) until July 2020 from the planned 155
million tons. To force the coal absorption, the government is trying to
optimize domestic marketing and looking for new opportunities in the global
market. But this action potentially reduce the focus of the government to reach
development of renewable energy.
This is increasingly proven due to the reduction of the Ministry of Energy and Mineral Resources’s budget to develop renewable energy. This was announced at June 25, 2020. The government has categorized Covid-19 as national disaster so funds are allocated to tackle the Covid-19. Fund for renewable energy development and conservation has been cut down IDR 562,8 billion (38 million USD), which was originally planned to reach IDR1.173 trillion (80 million USD).
As coal mining located in forest area, such as PT. Triaryani and PT. Musi Mitra Jaya mining area sending a threat for Hutan Harapan ecosystem restoration area in Jambi, and healthy tropical forest ecosystem is important to avoid spill over pathogen to human habitat, maintain and increasing support for safe renewable energy should be part of effort to tackle covid19 pandemic.
Besides the PLN (PT Perusahaan Listrik Negara,the State-owned electricity), domestic and foreign private companies also built and own a number of coal-fired power plants. The domestic and foreign private companies set joint venture agreements through in the Independent Power Producer (IPP) scheme. Among the foreign private companies, Japan and China are have produced high electricity capacity after the commercial operation date (COD).
For the last eight years (2011-2018), companies from Japan and China companies have commercialized electricity with a capacity of 3,956 MW, consists of 2,805 MW own by Japan electricity, while China own 1,151 MW. Meanwhile, in the same period, the operating coal-fired power plant wholly owned by PLN is 8,836 MW.
Source: Processed from sourcewatch.org; Electricity Supply Business Plan 2018-2027; and various other sources.
In addition to those that have been commercially operated, there are also joint venture companies involving Japan and China still under-construction throughout the archipelago.
Some of the coal-fired power plant technologies from Chinese and Japanese investments utilize ultra-super critical boilers, which is claimed to be clean technology. Nevertheless, the amount of greenhouse gas emissions produced is still high, at least 195 times the Republic of Vanuatu, a threatened country by sea level rise due to climate change.
The involvement of Japan and China in the joint venture illustrates that the energy sector, especially coal-based power plants, are important for source of profit. A survey on energy actors in Indonesia conducted by the PWC in 2018, reported that the energy industry investment players, including fossil energy in Indonesia, expected the equity return in Indonesia to be 15% – 20%, this figure is higher than global equity returns, 10.6%.
China and Japan are listed as the largest sources of public founding for overseas coal plants (Global Coal Finance Tracker, December 2018). Companies or financial institutions from these two countries have been deeply involved in procuring overseas coal plants, including Indonesia. For example, the Java-7 coal-fired power plant. This power plant has a capacity of 2x 991 MW and will be commercial in 2020. It is owned by Shenhua Group (70%) and PT Pembangkitan Jawa-Bali (30%), a subsidiary of PLN. In 2017, a fund of 1.8 billion US dollars was disbursed by the China Development Bank.
In the past eight years, Japan and China have commercialized electricity with a capacity of almost four gigawatt. For some few years ahead, the involvement of Japan and China in the fossil energy coal sector will increase. However, the consequential damaging effects have to be taken into account. Environmental damage, health problems, and the loss of people’s access to the economy due to the negatively affected livelihood areas cannot be avoided if the coal-fired power plant continues to develop, and impedes Indonesia ‘s route to low carbon economy.
From the use of electronics, electricity and telecommunications to transportation, all our infrastructure involves the use of copper. It was thanks to the use of copper that human civilization left the Stone Age and entered the Bronze Age. Initially, humans only mined copper ore when its copper content was high enough, including ‘native copper’ with 100% copper content, which produces very little mining waste. The tools were still simple, the need for copper was still relatively low, and it wasn’t efficient to mine and process ore containing low copper content.
In modern times, particularly since the discovery of electricity, advancements in mining and extraction technology have enabled copper exploitation on a massive scale. With powerful modern equipment capable of large scale exploitation, copper mining now supports many aspects of modern life. Even ore containing less than 2% copper is now mined, generating much more slurry waste per metal unit recovered, and resulting in extensive environmental damage.
Meanwhile, mining has not helped local people around the mining sites and tailings zones to modernise in terms of their housing, or supporting their healthy traditional fishing and food gathering. The community’s livelihoods at the mine site remain underdeveloped, and they live with deteriorating environmental conditions due to mine waste disposal. One of the communities experiencing severe negative impacts of mining is the coastal area of Mimika District, Papua Province, Indonesia.
This issue needs urgent public and government attention, so that the life of the local community can still develop within a healthy living environment. This report is an effort to raise public and government awareness of the lives of the local traditional communities around the tailings sites of Freeport Indonesia.
Air pollution is a big risk for health, ranked as number 4 after high blood pressure, dietary and smoking risk globally. Estimated, there are 6.5 million premature death due o air pollution. Fine particle is the most dangerous along with sulfur dioxide, nitrogen oxide and above ground ozone that causing several illness.
Coal power plant is one of sources of these pollutants. This publication is exploring health problem related to air pollution in Tegal Taman Village, Indramayu District, West Java Province.
Near from Tegal Taman Village, less that 4 km eastward, exists Indramayu Coal Power Plant I. It has been in operation phase since 2010. Project construction started year 2007 by a consortium of China National Machinery Industry Corp (SINOMACH), China National Electric Equipment Corp (CNEEC) and PT. Penta Adi Samudra. The coal power plant is using low rank coal.
Financing for this project come from Consortium of China Construction Bank, PLN (Indonesia’s state owned electric utility), and Indonesians bank. Indramayu Coal Power Plant I, located in previously active as 83 hectares agriculture land. Coal power plant has capacity 3×330 megawatt (MW).
Next to the existing coal power plant, another coal power plant with capacity 1000 MW is in the planning process, supported financially by JICA Japan.