Efforts to shut down coal plants in emerging economies are winding down

The climate pledge to shut down coal-fired power plants early in emerging economies is already behind schedule, as the deadline to close a coal-fired plant in Indonesia has expired.

Earlier this year, G7 Energy and Climate Ministers pledged, in a first consensus commitment, to phase out existing coal-fired electricity generation in power systems by the first half of the 2030s.

The G7 and other developed economies have also established Just Energy Transition Partnerships (JETPs) with many developing economies to create conditions for attracting finance to help countries such as Indonesia, South Africa, Senegal and Vietnam withdraw early coal-fired power generation as part of a shift away from fossil fuels.

In South Africa, state utility Eskom has received government approval to keep five of its polluting old coal-fired power plants operating for five years after the country implements a cap on the plants’ emissions in 2025, on background of energy supply constraints.

So developed economies and development banks were betting on the early retirement of Indonesia’s coal plants.

Under a non-binding agreement signed at the COP28 summit in Dubai late last year, Indonesia’s 660 megawatt Cirebon-1 coal-fired power plant was expected to be decommissioned nearly 7 years earlier than scheduled, instead in December 2035 .from July 2042 initially. This was the result of discussions with the plant owners and the Indonesian government under the Energy Transition Mechanism (ETM) program of the Asian Development Bank (ADB).

However, a July 2024 deadline to agree to shorten the power plant’s life until 2035 has passed without a deal being signed, officials told Reuters.

Indonesia, where a new government will take over next month, is worried about the higher costs of replacing coal-based power with renewables in the form of subsidies.

Separately, state power company PLN recently said it would need 2.4 gigawatts (GW) of renewable energy to offset the early retirement of the Cirebon 1 coal plant.

Moreover, Indonesia, Southeast Asia’s largest economy, is still waiting for much of the $20 billion in funding promised by the richest nations to ease its shift away from coal.

By Tsvetana Paraskova for Oilpirce.com

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