- Two new coal-fired power plants, PLTU 9 and 10, are being constructed in northwestern Java to provide an additional 2,000 MW of installed electricity capacity in Indonesia.
- Residents complain the cluster of eight existing coal plants in the area have already caused problems with public health, agriculture and water pollution.
- Analysts question the logic of constructing new plants in the Java-Bali grid, where supply already exceeds demand, and in light of the state utility’s mounting debts.
BANTEN, Indonesia — Every day, Subur and his wife walk past giant chimneys, painted red and white at the crown, pouring smoke out of a cluster of coal plants.
Subur, 70, says he had no idea that two new coal-fired plants were to be built around his village of Suralaya: the ninth and 10th plants to be built in this corner of Java, the world’s most populated island.
“I didn’t know,” he tells Mongabay Indonesia. “I’m not part of the project.”
The atmosphere in the community around the coal plant is tense. In September 2020, whispers began to circulate of a demonstration against construction of the new units.
Police initially moved to prevent demonstrations from taking place during the coronavirus pandemic, citing risks of transmitting the virus, according to one resident.
“We didn’t want to take risks,” a resident says.
But a small demonstration did take place three weeks later, in early October, with several people from three affected villages unfurling banners calling for the project to be dropped.
“Stop PLTU 9 and 10,” read one banner.
“The people need rice, not pollution,” read another.
PLTU 9 and 10 are being constructed on the coast of the northwestern tip of Java to provide an additional 2,000 megawatts of installed electricity capacity in Indonesia, one of the world’s largest consumers and producers of coal. The project is part of government plans to install an additional 35,000 MW to the grid to power Southeast Asia’s largest economy.
The new units are being constructed by Indonesia Power, a subsidiary of state-owned utility PLN. Jakarta-listed Barito Pacific Group and KEPCO, South Korea’s biggest utility, together retain a 49% stake in the project.
Seven coal-fired units already operate in Suralaya, with one other located in nearby Bojonegara village. The eight facilities, with a combined capacity of 4,025 MW, burn coal day in and day out to feed demand for power in the nearby capital, Jakarta, and its densely populated periphery.
But many residents who have to live next to these smokestacks and stockpiles are unhappy.
“[It’s] already enough,” Suralaya resident Edi Suriani said at the demonstration in October. “Agricultural land, water sources, erosion — public health has already been damaged.”
Community anxiety over the construction goes beyond concern over additional air pollution and impact on landscape.
Jumani, a former ward chief in Suralaya, says he understands there are plans to dispose of coal waste near his own neighborhood. He says he asked Indonesia Power about the plan at a meeting between company representatives and the community in 2019. Jumani says the company told residents no decision had yet been made concerning waste disposal.
“The electricity is fine here,” Jumani says. “So who else is it for? Where do they want to send it?”
Jumani’s complaint is common among the communities the world over who are forced to live in the shadow of coal plants.
Rice fields and community farms are often replaced by chimneys and stockpiles. Beaches are reclaimed and food crops can struggle as communities confront new tensions and resentment caused by invasive construction.
In November 2020, the Indonesian Forum for the Environment (Walhi) initiated a lawsuit seeking the cancellation of the environmental permits issued for PLTU 9 and 10. The permits were issued in 2017, but Walhi says the construction should not have been approved because the specifications failed to meet the government’s own air pollution regulations.
Walhi cites an environment ministry regulation from 2019, which sets caps on emissions of sulfur dioxide, nitrous oxide, fine particulate matter and mercury, all of which are byproducts of coal-fired energy generation.
The group adds the public had very limited access to the plants’ environmental permits, inhibiting open scrutiny of the impact on public health.
“Without disclosure people will lose their voice in the fight against PLTU 9 and 10,” says Ronald Siahaan, a lawyer with Walhi.
The Mulia meeting
The Mulia Hotel in Jakarta’s Senayan district is about a three-hour drive from Suralaya — and just across the street from Indonesia’s parliament building.
There, in 2016, the PLN chief executive, Sofyan Basir, met with Eni Maulani Saragih, a high-ranking member of the parliamentary committee overseeing energy, and coal tycoon Johanes Budisutrisno Kotjo.
Kotjo had previously written to PLN requesting that his company, PT Samantaka Batubara, be considered as a supplier for electricity projects. But he had yet to receive a response.
Kotjo had sought to get his foot in the door by contacting Setya Novanto, who at the time was the powerful speaker of parliament. Setya then introduced Kotjo to Eni, the parliamentarian, and Sofyan, who ran PLN.
“It’s only going to be possible for you in Riau [province],” Sofyan reportedly told Kotjo at the time. “Don’t even consider Java because [electricity generation on Java] is already over capacity.”
Kotjo left the meeting, arranged a Rp 4.7 billion ($334,000) bribe for Eni — and a mine-mouth coal plant in Riau was subsequently included in Indonesia’s 2017-2026 development plan.
In 2018, Eni was caught red-handed taking the bribe in a sting by the country’s antigraft commission. Kotjo was also arrested.
The scandal also brought down the social affairs minister, Idrus Marham, who had tasked Eni with raising funds for the annual meeting run by Golkar, their political party.
Eni received a six-year prison term, while Kotjo was sentenced to four-and-a-half years. Idrus was jailed for three years. Sofjan, the PLN chief, was acquitted after prosecutors failed to prove he had received any payments. Setya, the speaker of parliament, was convicted earlier in a separate corruption case and sentenced to 15 years in prison.
The corruption scandal over the Riau mine-mouth plant raised broader questions: If the grid covering Java and Bali, by far the country’s most energy-intensive network, was running at surplus capacity, why was the government going ahead with an additional 2,000 MW of coal in Suralaya that would lock the state grid into surplus purchasing agreements for decades to come?
Locked into coal
The government’s strategic plan to construct 35,000 MW of new capacity was predicated on an expected 8.3% annual increase in electricity demand. But the real growth has been closer to 6.9%, resulting in an excess of power capacity.
The coronavirus pandemic has exacerbated this supply-demand problem.
Last year, reduced factory shifts and restrictions on movement resulted in a 46.6% oversupply on the Java-Bali grid in the year to end-November, according to PLN.
At the end of 2019, the total national installed generating capacity was 62,800 MW, 69% of which was on the Java-Bali network.
Coal will remain the dominant energy source powering Indonesia’s residential and commercial premises for the foreseeable future. The medium-term development plan from 2019-2028 expects coal to account for 62.7% of new electricity generation.
Government expectations that new technology will increasingly remedy the polluting effects of coal mean PLN is under less pressure to phase out its use in the immediate term.
“We have a lot of coal potential,” said Ikhsan Asaad, a director at PLN.
PLN considers some renewable projects to be unreliable, preferring cheaper coal plants that will pump out power without interruption.
Hindun Mulaika, climate and energy campaigner at Greenpeace, says the current oversupply is a consequence of inflexible guaranteed purchase agreements, which require PLN to meet defined obligations — even in a downturn — over the lifetime of contracts running up to 30 years.
A PLN report notes the company’s debt was 655 trillion rupiah ($46.6 billion) in 2019, which increased to 694 trillion rupiah ($49.3 billion) in the first quarter of 2020, even before the COVID-19 pandemic began to take hold in Indonesia.
Zulkifli Zaini, PLN’s current CEO, said most of the company’s debt was due to power plant construction.
The purchase price of coal is another cost that falls on PLN. Indonesia Corruption Watch (ICW), a Jakarta-based NGO, found discrepancies totaling more than 100 trillion rupiah ($7.1 billion) in the 473.6 million tons of coal used in the decade between 2009 and 2019.
At the Suralaya cluster of power plants, ICW said it could not account for 1.24 trillion rupiah ($88 million) in coal every year.
Civil society groups in Indonesia say the country’s energy policies perpetuate the coal business to the benefit of coal tycoons, several of whom serve in the cabinet.
“Because all calculation errors are borne by PLN, it is consumers and government who are on the hook,” Hindun says.
“Who is certain to benefit is the coal suppliers,” says Merah Johansyah, who runs the Mining Advocacy Network (Jatam), an NGO.
Merah says the industry blocks regulatory change by funding coal-friendly candidates in regional elections, recouping the investment in political leverage once the candidate assumes office.
Regional elections took place across much of the country in December. Of the 270 districts and cities that elected new leaders, there were 229 areas with more than 4,100 mining permits, Merah says.
Several of the largest companies supplying coal to power plants last year were affiliated with policymakers.
“Big coal companies and power plants have been controlled by wealthy elites who either occupy or are connected to public positions,” says Firdaus Ilyas, a senior researcher at ICW.
On the northwestern coast of Java, residents of Suralaya continue to go about their days in the shadow of the coal industry.
Subur and his wife walk past a nearby “eco park,” dozens of goats in tow, near the construction site for the new coal plants.
The nearby Kelapa Tujuh beach had previously been a place where residents could earn a living. Now the beach has been reclaimed for the coal project.
One resident of Suralaya, speaking at the demonstration last year, said the people faced a complex crisis.
“The situation here is an emergency,” they said.
Former ward chief Jumani speaks for many here living alongside the tall red-and-white chimneys belching pollution over Suralaya.
“The electricity goes elsewhere,” he says, “while we’re left with the smoke and dust.”
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