Legal fight over Bali coal power plant illuminates Indonesia energy dilemma

By Reuters   June 27, 2018 | 08:01 pm PT
Legal fight over Bali coal power plant illuminates Indonesia energy dilemma
Fisherman Iputu Gede Astawa stands by his boat on Muding beach, northern Bali, Indonesia, with the coal power plant in the background on June 8, 2018. Photo by Thomson Reuters Foundation/Michael Taylor
Local residents are fighting to stop the planned expansion of the Celukan Bawang power plant.

Over the last three years, fisherman Iputu Gede Astawa has watched his daily catch off the northern tip of Indonesia’s Bali island fall at an alarming rate.

Having swapped his paddle for an outboard motor in a futile effort to fish further out to sea where waters are more dangerous, Astawa blames a nearby coal power plant for harming his livelihood.

“My catch is totally different to what it was before the power plant began operating,” said Astawa, a third-generation fisherman based near the port town of Singaraja who heads a group of about 30 other fishermen. Where once they caught 400 buckets of fish a day, they now net just 10.

Astawa is one of three local residents fighting a legal battle to stop the planned expansion of the Celukan Bawang power plant, about 120 km (75 miles) from the main tourism hub of Denpasar, which began operating in 2015.

“All the fishermen will be impacted and we will lose our jobs,” said Astawa, 43, who now makes furniture to get by.

The legal bid, backed by environmental group Greenpeace, claims the planned expansion - which would more than double power capacity at the site - will be a setback to the remote area’s fledgling tourism industry.

The legal action also warns of worsening air and water pollution, crop damage and a negative effect on wildlife at a nearby national park.

PT General Energy Bali, which runs the Celukan Bawang power plant, could not be reached for comment, while the company’s majority owner, China Huadian Corporation, did not answer calls.

Building additional coal or gas-fired power capacity at Celukan Bawang or elsewhere on Bali is needed to meet rising power demand, Jisman Hutajulu, a senior electricity official at Indonesia’s energy ministry, said by email.

But the decision on whether to opt for more fossil fuel capacity or renewable energy is for local governments to make, he said, adding that energy security, the environment and cost should all be considered.

Central government policy on renewable energy has sought to encourage investment while keeping electricity prices affordable for consumers, he noted.

Indonesia is among the fastest-growing countries for energy consumption due to a steadily increasing population, economic development and a rise in urbanization.

Like other Asian nations, Jakarta also faces the challenge of boosting electricity access while meeting its pledge to cut climate-changing emissions under the Paris Agreement.

Indonesia’s emissions targets can only be achieved by reducing its reliance on coal power and ramping up investment in clean, renewable energy projects, several power experts said.

King coal

Indonesia currently has about 54.6 gigawatts of installed electricity capacity but to meet rising demand, especially on the main power-hungry islands of Java, Bali and Sumatra, the country wants to more than double this over the next decade.

With huge coal resources, the archipelago relies heavily on coal-fired power stations to generate more than half of its power, according to experts.

Natural gas contributes about 23 percent, renewable energy 13 percent, and diesel the rest. But having committed to cutting greenhouse gas emissions by 29 percent by 2030 under the Paris accord to curb global warming, Jakarta wants renewable projects to provide almost a quarter of its power needs by 2025, and nearly a third by 2050.

The Celukan Bawang power plant in Singaraja, northern Bali, Indonesia on June 8, 2018. Thomson Reuters Foundation/Michael Taylor

The Celukan Bawang power plant in Singaraja, northern Bali, Indonesia on June 8, 2018. Photo by Reuters/Michael Taylor

Dolf Gielen, director of innovation and technology with the International Renewable Energy Agency, said Indonesia was focused on coal for power generation as recently as a couple of years ago, but “that seems to be somewhat changing”.

With more than 17,000 islands scattered atop the volcanic Pacific Ring of Fire, power experts say Indonesia has plenty of options on renewable sources - especially geothermal.

The United States is the world’s biggest geothermal energy producer, but largely untapped Indonesia is second since the massive Sarulla geothermal power plant on Sumatra was expanded earlier this year.

Hydro-power is another good renewable energy option for Indonesia, said Yuichiro Yoi, head of Indonesia infrastructure finance at the Asian Development Bank (ADB) in Manila.

North Sumatra’s Asahan hydroelectric power plant, which began operating in 2011, has helped Indonesia reduce its reliance on fossil fuels, he added.

Solar, tidal and wind farms are also suitable for many parts of Indonesia, experts said.

Indonesia’s first wind power project - the 100-hectare (247-acre) Sidrap wind farm on the island of Sulawesi - began operating earlier this year, and is a source of national pride.

There are also plans to build the world’s largest tidal power plant in East Flores, media reports say.

Clean energy hurdles

Although a clean and abundant power source, Indonesia’s geothermal resources are often located on or near protected forest areas, which can put off many financial backers.

One solution may be to exploit them on a smaller scale, said Almo Pradana, energy and climate manager at the World Resources Institute (WRI) Indonesia.

Similar to challenges facing other renewable projects, Indonesia’s complicated land ownership structures and land acquisition procedures can create further risks, said ADB’s Yoi.

New renewables plants also have to reach a power supply agreement with the state-owned utility and such discussions can lack transparency and lead to delays, power experts added.

In addition, government legislation stipulates new renewable energy projects must provide electricity at a price about 15 percent cheaper than existing power plants in a province.

As a result, renewables often cannot compete with coal.

The WRI is working with international corporations operating in Indonesia that have pledged to cut their emissions to try and force the government to change tack.

“If you don’t facilitate a company to switch to renewables, they will move to the Philippines or Vietnam where renewable energy regimes are more friendly,” Pradana said.

Last stand

Back in northern Bali, Surayah, who goes by one name, is the only resident left on cleared land that was Pungkukan village - where 50 residents once lived.

All her neighbors have been paid to leave their homes over the last decade to make way for the Celukan Bawang plant’s planned expansion.

Surayah did reach an agreement to sell, but it collapsed due to last-minute changes, she said, strengthening her resolve.

Living alongside six family members, the 64-year-old is adamant she will not leave despite her family’s regular hospital trips to treat fevers and respiratory problems, she said.

“I feel the coal power plant doesn’t care about me anymore,” said Surayah, whose on-grid house is more than three hours’ drive from the sprawl of hotels and restaurants in southern Bali that need the power from the plant. “I feel exhausted.”

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