Why Indonesia Cancelled the Early Retirement of the Cirebon-1 Power Plant |
There are many plans bouncing around for how Indonesia can reduce carbon emissions and transition to a cleaner energy profile. One plan, favored by the Asian Development Bank (ADB), takes a two-pronged approach. Indonesia will invest in building more renewable energy like solar, while also shutting down some of its coal-fired power plants before the end of their expected economic life.
Cirebon-1 is a 660 MW coal-fired power plant on the island of Java. It began commercial operation in 2012, and for the last several years has been identified as a prime target for early retirement. A few years ago, the ADB launched the Energy Transition Mechanism, a fund meant to facilitate early retirement of coal-fired power plants like Cirebon-1.
Cirebon-1 is a privately owned power plant, what we call an Independent Power Producer to differentiate it from power plants that are owned and operated by state-owned utilities. Cirebon-1 is owned and operated by a consortium of Indonesian, Japanese, and Korean companies. When the plant became operational in 2012, it signed a 30-year purchase agreement with Indonesia’s state-owned electric utility PLN.........