"Continuing the construction and the use of coal-fired power plants will negatively impact Indonesia's economy and environment," Muhamad Andri Perdana, a researcher for the Center for Economic and Law Studies (CELIOS), said on October 11, 2022.    

He said Chinese President Xi Jinping had announced at the UN General Assembly meeting on September 21, 2021, that China would cease to develop coal-fired power plants overseas. He stated that combining political, economic, and practical considerations encourages this commitment.

"China has decided not to develop coal-fired power plants due to diplomatic pressures and its energy transition policy. China is trying to stop it because profitable investment is a sustainable investment in renewable energy for the future. After all, it is a global trend," Perdana said.

Ongoing power plant constructions

However, according to the data collected by CELIOS, three coal-fired power plants are currently being constructed in Indonesia following the Chinese 2021 commitment. They are:

• PT Bintang Delapan of Indonesia and Tsingshan Holding Group of China are constructing a 3x380 MW captive coal-fired power plant in Morowali Industrial Park. The project began in December 2021.
• Harita Group of Indonesia and Ningbo Lygend of China are building a 4x380 MW captive coal-fired power plant. As of February 2022, the project has been underway on Obi island, North Maluku.
• Indonesia's Weda Bay Industrial Park in North Maluku and Chinese firms Tsingshan Group, Huayou Group and Zhenshi Group are building a 380 MW coal-fired power station. The project began in July 2022. 

Additionally, several Chinese coal-fired power plants are currently under construction, including:

• 530 MW Delong Nickel Phase I and 135 MW Delong Nickel Phase II in Virtue Dragon Nickel Industrial Park
• 750 MW Weda Bay Power Station
• 250 MW Youshan Nickel Power Station, etc.

Industrial parks such as Morowali, Southeast Sulawesi, Konawe and Weda Bay are managed to develop captive coal-fired power plants.

"All investments came from China and are part of the Belt and Road Initiative," Perdana explained. 

Challenges for gas emission reduction

Indonesia has also committed to unconditionally reduce greenhouse gas emissions by 30% by 2030 and more than 30% if foreign aid is available. The government must adhere to its commitment because the consequences will not only affect Indonesia's reputation but will also affect investors financing in the future based on how Indonesia adheres to its Nationally Determined Contribution (NDC) target.

"At present, Indonesia is trying to secure investment for the energy transition. If Indonesia is unable to meet this target, there will be a negative impact on Indonesia's competitiveness in terms of financing and investor interest," Perdana added.   

Public health and environmental impacts are also associated with developing coal-fired power plants. In addition to sulfuric and nitrogen dioxide, coal-fired power plants emit coal ashes that workers and residents may inhale. The black particles emitted from the coal burning in Konawe, Southeast Sulawesi, have been observed to spread until three kilometers outside the Konawe regency, where the Virtue Dragon Nickel Industrial Park is located. 

Data collected at the Bahodopi community health center in Morowali, Southeast Sulawesi, revealed that in 2018, 52% of the locals who took medical examinations at government facilities suffered from acute respiratory infections.

"A report from the Morowali Industrial Park clinic in 2019 indicated that 34,000 workers at the industrial estate suffered from acute respiratory infections," Perdana said. 

Green cars irony

A Bloomberg report predicts that the demand for Nickel and Aluminium will increase 14 times between 2019 and 2030 due to the industry's shifting trend. In addition to supporting environmental issues, the enterprise participates in climate change initiatives. From 2021 to 2030, the electric vehicles (EVs) industry is projected to grow 11 times, reaching 20% of total vehicle sales by 2030.  

Nickel and aluminum are essential raw materials for the lithium-ion battery required for EVs. Lithium nickel cobalt aluminum (NCA) and lithium nickel manganese cobalt (LNMC) batteries are typically employed in electric cars. NCA is usually used by Tesla while Nissan, Chevrolet and BMW use NMC.   

Ironically, the increasing global demand for nickel and aluminum has led to the developing of a captive coal-fired power plants in Indonesia. For instance, nickel industrial estates in Obi island, Morowali, and Weda Bay plan to establish 14 captive coal-fired power plants. The number is double the capacity of 6,109 MW for the entire nickel industry in Indonesia.

The aluminum industry in Bintan, Riau Islands, plans to develop 31 captive coal-fired power plants with a capacity of 3,180 MW. PT Bintan Alumina Indonesia owns the majority of the power plant. The company is owned by the Chinese company Shandong Nanshan Aluminium, a subsidiary of the Nanshan Group.

The nickel and aluminum for EVs come from a coal-fired power plant in Indonesia that is dangerous for the environment and human health. Indonesia is committed to net zero emissions in the Paris Agreement.