South Korea’s state-owned utility Korea Electric Power (Kepco) has announced that will move ahead with investments in the construction of two coal-fired power plants on the Indonesian island of Java.
According to media sources, Kepco’s board approved the acquisition of a 15% stake in a joint-venture entity that will see the construction of the two planned units of 1GW each, expanding the existing Java 9-10 coal power facility.
According to IEA Clean Coal Center, the expansion is being undertaken by PT Indo Raya Tenega, a joint venture of Barito Pacific (49%) and Indonesia Power (51%). It is being undertaken as part of the Indonesian government’s plans to increase the power generation capacity in the country.
Java 9 is expected to be commissioned in the fourth quarter of 2023, while Java 10 is scheduled for commissioning in the first quarter of 2024.
The plant has however caused a great deal of controversy. A petition was filed by Korean and Indonesian litigants in August 2019, requesting Korean banks to stop funding the project.
The litigators have objected to the development of the project in the region citing environmental reasons. The Suralaya power plant is located approximately 122km north-west of Jakarta, a region already populated with 22 coal-fired power plants. The Banten region is also populated with 52 coal power projects.
In November 2019 Greenpeace also lobbied the South Korean government and financial agencies to stop funding coal-fired projects in countries such as Indonesia.
It appears as if the opposition is causing delays for the project.
South Korea is the third biggest public financier of coal and this project investment indicates that the government may not be ready for 100% commitment to its green climate pledge.
Indonesia, on the other hand, has recently partnered with with International Energy Agency to expedite its energy transition to greener fuels.