Attended by hundreds of foreign investors, the Tropical Landscapes Summit in Jakarta was supposed to promote environmentally friendly infrastructure projects, but instead the Indonesian government was busy dodging attacks directed at its plan to build the biggest coal-fired electrical plant in Asia.
Finance Minister Bambang Brodjonegoro claimed that the government effectively had no cheaper economic alternative than to build a 2,000-megawatt (MW) power plant in Batang, Central Java, to support economic growth and meet the country’s growing electricity needs.
“Of course, we had a good discussion yesterday with president Calderón. I know he’s not too happy with the coal-powered plant,” Bambang said Monday, referring to former Mexico president Felipe Calderón, who spoke before him and called on Indonesia to move away from fossil fuel-based infrastructure utilizing coal and oil.
“Unfortunately, this [coal] is an abundant energy source available in Indonesia and it is still relatively cheap in financial terms,” the finance minister said Tuesday in his keynote speech delivered at the summit.
President Joko “Jokowi” Widodo has set an ambitious target to build power plants with a combined capacity of 35,000 MW over five years, with his government currently working to invite more private sector investors into the country’s electricity industry.
But such an ambitious goal has also raised questions among environmental activists, who fear that the government might prioritize building cheap, environmentally unsustainable power plants to ensure the targets can be met.
Calderón, who is also the chair of think-tank Global Commission on the Economy and Climate, noted that the costs for solar and wind energy had been declining on the last few years, suggesting the Indonesian government should capitalize on the trend.
“It is not true that fossil fuels, either oil or coal, will be cheap forever,” stated Calderón. “Indonesia has an incredible capacity and the natural resources to go all the way to renewables.”
The US$4 billion coal-powered plant in Batang, which was developed by a joint consortium that includes Jakarta-listed PT Adaro Energy and Japanese investors J-Power Electric Power Development Co. Ltd. and Itochu Corp., was seen as one of the most controversial infrastructure projects in Indonesia, especially among environmental groups.
“We and our colleagues in Japan have been working actively to campaign against the development of the power plant in Batang, as long as the environmental issues are not yet settled,” Nyoman Iswarayoga, the advocacy director of the World Wide Fund for Nature in Indonesia, said on Tuesday.
“It is no secret that, among all energy sources available in the world, coal remains the dirtiest,” he stated.
The coal-fired power plant, however, was seen as the icon of the government’s public-private partnership (PPP) projects, with President Jokowi himself pledging to be directly involved in the project so that it would run smoothly.
The development of the Batang power plant itself has been hampered by land acquisition issues, as the 226-hectare project would be built on productive farms belonging to local people, many of whom refused to sell their land.
Nevertheless, government officials have claimed that the problem of acquiring the land from the locals has been settled and the construction of the Batang power plant is slated to begin as early as the end of this month.
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