No new coal power stations in Java, Indonesia energy minister says

JAKARTA, Oct 12 (Reuters) - Indonesia will not approve any new coal-fired power stations on the heavily-populated island of Java as the country strives to reach its renewable energy development targets, the energy minister said on Thursday.

“We will not approve any coal-fired power plants in Java, this island, any more,” Energy and Mineral resources minister Ignasius Jonan told a press conference.

Java is home to about two thirds of Indonesia’s population of 250 million, but the island is also far better supplied with electricity than the rest of the archipelago, particularly eastern Indonesia.

“We will push, very hard, in the near future that Java should build the renewables, as well as geothermal especially, as well as gas-fired power plants,” Jonan said, referring to gas power plants “at the well head.”

The government has also revived plans to develop high voltage undersea power cables linking the islands of Sumatra, Java and Bali, he said.

“So whenever Java needs the power, Sumatra can send it to Java and the other way around.”

Indonesia is committed to a target to increase the renewable portion of the energy mix to 23 percent by 2025 from about 12 percent at present, and expects to reach 18 percent in the next three years, Jonan said.

However, the government will continue to prioritise price in deciding power sources, he added.

“While I do understand that it’s not easy to compete with coal-fired power plants, especially with mine-mouth power plants, they do have to compete with gas power,” Jonan said, referring to “strict” power tariff negotiations.

In the first nine months of this year, Indonesia signed a total of 1,023 megawatts of renewable energy contracts, about double the total amount signed in the three years before that, Jonan said.

Coal makes up around 57 percent of the energy mix in Indonesia, the world’s top thermal coal exporter, with consumption expected to reach 101 million tonnes this year.

State electricity utility PLN, tasked to oversee President Joko Wiododo’s target to build 35 gigawatts (GW) of new power stations in Indonesia, is under pressure to improve its efficiency and reduce costs.

Widodo recently “advised” that PLN could halve its target to contribute 5 GW to the programme from more than 10 GW at present, Jonan said.

“If PLN thinks their financial position in the long term or even in the mid term will not be quite sound, it’s acceptable for them not to continue,” he said. “They can offer it to the private sector.” (Reporting by Fergus Jensen; Editing by Mark Potter)