For plenty of years, we have been consistently using coal as a source of energy to assist us in many ways, especially in our daily lives. However, with the astronomical use of this, multiple impacts that negatively affect our mother planet, Earth, can be triggered. Despite these horrible consequences, many countries still rely tremendously on coal as their main source of energy to produce electricity and more. One of the countries that still clings to the use of fossil fuel, coal, to generate electricity is Indonesia. By 2018, it has been recorded that the amount of used electricity In Indonesia is in the vicinity of 60,000 MW, of which 55% comes from coal, 26% from gas, 7% from oil, and yet only 12% derives from renewable energy sources. This immense use of fossil fuels is blameworthy for the dreadful air pollution, and next to that, the blackout that took place on the 4th of August which was triggered by gas plants failures in Cilegon. Even with these negative outcomes, why does Indonesia still heavily dependent on fossil fuels, more specifically, coal? What is holding Indonesia back from using more renewable energy? Wouldn’t the environment be healthier if Indonesia increases the amount of renewable energy used? This essay will further dive into why Indonesia is so reliant on coal, its benefits and on top of that, its disadvantages.
The first reason that plays a part in why Indonesia is still very reliant on coal is the regulations that are released every year. By 2003, the constitutional court demanded that electricity must be organized by the government through two different organizations which are state-owned enterprises or public-private partnerships since they concluded that electricity is an important state product. This meant that no power companies that work independently would be able to sell straight to consumers. As a substitute, they would have to sell it to PLN (Perusahaan Listrik Negara ) first before anything else. Moreover, in 2017, 20 policies were issued, of which one talked about the requirement of investors to shift their projects to PLN at the end of the agreement period. The fusion of this regulation with the fact that the Minister of Energy and Mineral Resources settles the price of energy for consumers has brought out a rise to many concerns with similar judgment on the return on investment.
Another factor of the burdensome reliance on coal in Indonesia is the financial requirements for using other types of energy (like more renewable energies). A vast investment of Rp 2,000 trillion (US$154billion) in Indonesia would be necessary in order to fulfil the goal of having 23% of renewable energy by 2025. Even so, the nation is unqualified to grant this colossal quantity of money. This implies that private financing would be compulsory, nonetheless, the policies formed are completely against this since the regulatory vulnerability and conflicting approaches are still witnessing critical hesitance from both possible investors and loaning banks to reach out. However, with the current status of more fossil fuels usage, less money is being used, which shows why the state still employs coal to support the daily needs that require energy.
Finally, the third element in why Indonesia is still so dependent on coal is the prodigious coal reserves in Indonesia. This year, in 2021, Indonesia has approximately 38 billion tons of coal reserves. This is owing to the fact that coal is not just abundant, but it is also tremendously inexpensive, where the domestic price (covered at US$70 per ton) is much lower than the global market value which is approximately US$100 in January. Particularly, during this pandemic, the price of fossil fuels like coal has been reduced, meaning that Indonesia will most likely keep its reliance on coal. Thus, it is challenging for a different source of energy like renewable energy (more environmentally friendly power) to go against this incredibly affordable price, predominantly while taking into account how implanted and dominant the fossil fuel industry is.
In closing, Indonesia still has yet to improve their uses of energy for a wiser option. However, as of right now, the state still utilises coal primarily. As time goes by, everything else will move forward with it, including technology and the sources to produce it. Ten years from now, Indonesia could be using a different source of energy. Or perhaps, a new source of energy, which is a lot friendlier to the environment, could be discovered? Who knows?
Bibliography
Hanggi, Hendartyo. “Energy Ministry: Indonesia's Coal Reserves Estimated to Last About 65 Years.” Tempo.Co English Version, 27 July 2021, https://en.tempo.co/read/1487728/energy-ministry-indonesias-coal-reserves-estimated-to-last-about-65-years. Accessed 3 October 2021.
PUSHEP. “It may take years for Indonesia to switch from coal to renewable energy.” Pushep, 19 October 2020, https://pushep.or.id/it-may-take-years-for-indonesia-to-switch-from-coal-to-renewable-energy/. Accessed 3 October 2021.
Statista Research Department. “Energy sector in Indonesia - Statistics & Facts.” Statista, Statista Research Department, 7 September 2021, https://www.statista.com/topics/5781/energy-in-indonesia/. Accessed 3 October 2021.
Walton, Kate. “Indonesia should put more energy into renewable power.” The interpreter, 19 August 2019, https://www.lowyinstitute.org/the-interpreter/indonesia-s-should-put-more-energy-renewable-power#:~:text=So%20why%20does%20Indonesia%20remain%20so%20reliant%20on%20fossil%20fuels%3F&text=The%20rest%20is%20sourced%20from,at%20gas%20plants%20in%20Cilegon. Accessed 2 October 2021.
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