The growth of the electricity sector is closely linked to economic development and Gross Domestic Product (GDP), making electricity availability a key driver of economic progress. This has led to an increasing demand for national energy, particularly in the power sector.
However, a heavy reliance on fossil fuels not only heightens the risk of an energy crisis due to limited energy resources but also contributes significantly to greenhouse gas emissions.
To accelerate the energy transition in the electricity sector, the government has introduced several strategic policies, one of which is the early retirement (ER) of coal-fired power plants (PLTU) before the end of their planned operational life.
Professor Mailinda Eka Yuniza, a lecturer at the Faculty of Law, Universitas Gadjah Mada (FH UGM), stated that Indonesia’s energy mix remains heavily dependent on fossil fuels.
In 2023, the share of new and renewable energy (EBT) in the primary energy mix reached only 13.1 percent, which is still far from the 23 percent target set for 2025. This indicates that the current capacity of renewable energy has not yet significantly rivaled the contribution of fossil fuels.
Professor Yuniza also explained that the core provisions for ER implementation are outlined in Article 3 of Presidential Regulation No. 112 of 2022.
First, ER implementation must begin with the formulation of a roadmap by the Minister of Energy and Mineral Resources. Second, ER can be applied to PLTU facilities owned by PLN (the State Electricity Company) as well as those developed through public-private partnerships between PLN and independent power producers. Third, to support ER implementation, the government also enforces complementary policies aimed at limiting coal-fired power plants and promoting renewable energy power plants (PLT EBT).
She also emphasized the importance of benchmarking in shaping effective energy transition policies, both from developed countries that have already implemented such measures and from developing nations.
“Advanced economies pushing for ER provide Indonesia with valuable lessons on the importance of a strong regulatory framework and a long-term commitment to decarbonization,” she remarked during her inauguration as a professor on Tuesday (Jul. 8) at the UGM Senate Hall.
At the same time, benchmarking against developing countries reveals that their energy transition efforts are often driven by a combination of international support and national policy. These experiences offer valuable lessons for Indonesia to attract international support, develop well-planned strategies, and adopt an inclusive approach to ensure social justice in the energy transition process.
By studying these international practices, Professor Yuniza highlighted how Indonesia could design a context-specific approach to implementing ER by identifying domestic opportunities and challenges.
These opportunities include reducing the operating costs of aging coal-fired power plants, unlocking access to international financing, accelerating the integration of renewable energy into the national energy mix, signaling strong political will for global climate mitigation efforts, and driving green economic transformation.
“The national energy mix, still dominated by coal and oil, also requires comprehensive planning guidelines and well-aligned policy support,” she concluded.
Author: Ika Agustin
Editor: Gusti Grehenson
Post-editor: Anisa Nurliana
Photographer: Donnie Trisfian