It pains Haryono, 40, to look at the sea that borders his village today. Haryono is a lifelong resident of Roban Timur in Batang, Central Java, and he has been a fisherman for more than half his life. However, his work has become increasingly difficult since the Batang Coal Power Plant (PLTU/CFPP) - also known as the Central Java Power Plant (CJPP) - began operations three years ago.

“Coal barges now drift along the Roban Timur shoreline. The sea is dotted with anchors and concrete structures,” he said last May.

With fish no longer found near the coast, Haryono is forced to venture much farther out to sea - which drives up his costs.

“In the past, I could catch plenty of fish within an hour, close to shore. I only needed 20 liters of fuel. Now, sometimes I need 40 or even 50 liters just to make the trip,” he lamented.

What used to be a fuel expense of IDR 136,000 per trip—based on subsidized diesel at IDR 6,800 per liter—has now soared to as much as IDR 340,000.

Adding to his troubles, coastal erosion has caused the shoreline to recede, a problem he links to the collapse of coastal pine trees.

Haryono’s story highlights the profound environmental and economic impacts that the Batang coal-fired power plant has had on local fishermen and the fragile coastal ecosystem.

“Why are the trees falling now? It’s because there is a breakwater to the east of the power plant,” he explained. “The ocean current hits the breakwater and then circles back toward our village, causing damage.”

The Batang Power Plant is an Ultra Super Critical (USC) coal-fired facility with a capacity of 2 x 1,000 MW, located in Batang Regency, Central Java. Construction began with a groundbreaking ceremony led by President Joko Widodo on August 28, 2015.

“From the very start, since the groundbreaking, the project faced strong opposition,” Haryono recalled.

The plant officially started operations in August 2022. It is operated by PT Bhimasena Power Indonesia which sells electricity to state-owned electricity company PLN under a 25-year contract.

Nevertheless, fishermen like Haryono want the plant to shut down.

“(because of the CFPP) Fishing has become very difficult these days,” he said.

The Indonesian government has a plan to retire CFPPs before they reach the end of their expected operational life. This initiative is part of Indonesia’s broader effort to transition to cleaner energy and achieve its net zero emissions target by 2060.

During a session at the G20 Summit in Brazil in November 2024, President Prabowo Subianto pledged to shut down Indonesia’s coal-fired and fossil fuel power plants.

“We plan to phase out coal-fired power plants and all fossil fuel power plants within the next 15 years,” Prabowo declared, as quoted by the Cabinet Secretariat’s official website.

He also announced plans to develop more than 75 gigawatts of renewable energy capacity during the same period.

This is widely perceived to be a continuation of regulations introduced by his predecessor, President Joko Widodo. In 2022, Widodo issued Presidential Regulation No. 112 on the Acceleration of Renewable Energy Development for Electricity Supply, which includes provisions for the early retirement of coal-fired power plants.

The Ministry of Energy and Mineral Resources (ESDM) Secretary-General Dadan Kusdiana confirmed Indonesia plans to retire at least 13 CFPPs early. This decision takes into account economic feasibility while ensuring that electricity supply remains stable and prices do not rise.

“Presidential Regulation 112/2022 outlines several criteria including the plant’s age, performance, efficiency, and productivity,” said Dadan in an August 2024 press release. “We have reviewed all these factors—age, performance, emissions—and thus compiled a list of 13 CFPPs eligible for early retirement.”

CERAH’s policy strategist - Sartika Nur Shalati - highlighted that, above all, financial considerations eventually determine the government’s decision-making process. As such, funding availability is weighted at 27.1% - whilst technical factors such as plant age, capacity, and utilization rate is only weighted for around 4–5%.

“This shows that financial viability is the key driver. Since Indonesia’s Nationally Determined Contribution (NDC) follows an unconditional scenario, (for the retirement plan to work) it needs fiscal support from the state budget (APBN) to be integrated within a blended finance framework. This approach ensures that early retirement does not rely solely on private sector interest or foreign loans,” Sartika concluded.

Subsequently, a technical regulation for CFPP early retirement was also issued earlier this year. Officiated by the Ministry of ESDM, Regulation No.10/2025 detailing the Road Map for the Energy Transition in the Electricity Sector was signed by Minister Bahlil Lahadalia on April 10, 2025.

However, it seems that Indonesia’s energy transition commitment continues to signal more talk than real walk.

In February, Minister Bahlil coolly invited coal magnates to continue investment in Indonesia.

“Rest assured, coal players, please go ahead and invest. It’s alright, it’s good, still good,” he said during a speech at an investment forum attended by various mining enterprises.

In a more recent damning edict, Bahlil confirmed that - out of the 13 plants initially planned for retirement by 2025 - only one plant, the 660 MW Cirebon-1 CFPP, will actually be retired early.

“Only one CFPP - Cirebon - is confirmed for early retirement, the others are not yet confirmed” he asserted at the end of May.

The trend seems to be global. President Donald Trump has preceded this by withdrawing the US from the Paris Climate Agreement.

President Trump even pledged to make his country a major player in energy from oil and coal - in stark contrast to former President Joe Biden’s policies and the Paris Climate Agreement.

“No one can destroy coal, not even bombs,” Trump stated in January during a speech at the World Economic Forum in Davos.

In short, the plan to phase out CFPP and Indonesia’s efforts to transition face various hurdles ranging from policies, high dependence on coal, to funding.

In a report titled “A Thorough Review of President Jokowi’s Energy Transition Policy: Progress or Regress?” (2024), CERAH highlighted the absence of a single law to specifically govern the energy transition since the Jokowi administration. This is argued to have helped create confusion and uncertainty regarding the direction of the energy transition.

It then comes as no surprise that - between the stated pledges to actual practices on the ground - inconsistency runs rampant.

For instance, whilst there are five regulations to govern the energy transition, MEMR (ESDM)’s Ministerial Regulation (Permen) No.10/2025 - which specifically manages the early retirement of CFPPs and the criteria for eligible retirement - is embedded with various gaps.

CERAH’s report suggested various improvements to cover the gaps, including one concerning detailed information on the CFPPs to be retired early.

“This Permen should include a clear list of CFPPs to be retired, especially considering that many studies have been conducted regarding which CFPPs can be retired earlier,” said Sartika Nur Shalati of CERAH.

The Cirebon CFPP, which is planned to be the first to phase out, will - at the earliest - stop operating in 2035.

Despite these plans, Indonesia’s overall coal power capacity has not decreased - but instead consistently increased.

From July 2023 to July 2024, a study by the Centre for Research on Energy and Clean Air (CREA) and Global Energy Monitor (GEM) revealed that Indonesia’s CFPP capacity increased by 7.5 GW (a 15% increase), largely driven by the expansion of captive power plants - coal plants built by industries for their internal energy needs.

Ironically, another recent analysis from the global energy research institute EMBER revealed that the cost of electricity generation from new captive CFPPs will be more expensive than that of renewable energy.

An estimate indicates that the costs to add CFPP capacity could reach 7.71 US cents per kWh - a significant increase than PLN’s 2020 average generation cost of 7.05 US cents per kWh. These numbers are significantly higher than the latest PLN tariffs for solar and wind power projects which range between 5.5 and 5.8 US cents per kWh.

“Indonesia should start reducing emissions from its smelter industry by using renewable energy to enhance sustainability and the competitiveness of its products,” suggests Dody Setiawan, Senior Climate and Energy Analyst for Indonesia at EMBER.

PLN, the sole state enterprise to manage Indonesia’s electricity, affirmed its commitment to support a sustainable transition. Gregorius Adi Trianto, Executive Vice President of Corporate Communications and Social Responsibility at PLN, stated that the company is ready to carry out assignments pertaining to CFPP early retirement to help achieve Indonesia’s net zero emissions target and sustainable development goals.

“PLN will ensure that this step (CFPP early retirement) is carried out in a measured manner, taking into account the reliability of electricity supply for the public,” Gregorius said in a brief message to CNN Indonesia.

AA of 2024, Indonesia’s installed power capacity reached approximately 101 gigawatts (GW), with fossil fuel-based power plants dominating at 86 GW (85%), whilst renewable energy (RE) accounted for only 15.1 GW (15%).

Meanwhile, the 2025-2034 Electricity Supply Business Plan (RUPTL) - a cardinal planning document for the provisions of electricity in Indonesia - reconfirms coal’s dominance by generating around 66.8% of the energy mix in 2024 - compared to only 12.9% from renewables.

Over the last twenty years, coal-based electricity production has surged nearly fivefold - from 52 GWh in 2002 to 249 GWh in 2024. This heavy reliance on coal provides the government with justification to maintain coal usage, especially as it aims to boost economic growth to 8% annually (from 5% annually during the last few years).

At the ESG Sustainability Forum 2025, Indonesia’s Presidential Envoy for Climate and Energy, Hashim Djojohadikusumo, clarified President Prabowo’s plan to phase out coal plants within 15 years.

“We do not want to commit economic suicide by shutting down coal-fired power plants; if we close them, our economy will collapse. Therefore, it will be balanced after 2040, and there will be no new coal-fired power plants built,” Hashim said.

Meanwhile, PLN’s electricity supply remains in surplus - particularly in the Java-Bali region - due to the ambitious 35,000 MW power project launched a decade ago when the government aimed for 7% economic growth.

The ESDM Ministry estimates a measly 4 GW of electricity supply surplus in the Java-Bali region. However, CERAH reports a much larger unused surplus over the past decade—291,000 GWh—costing the state nearly IDR 300 trillion in mandatory purchases, averaging IDR 33 trillion annually. This not only strains state finances but also slows the transition to renewable energy.

This situation strongly signals that Indonesia’s national electricity planning processes require a comprehensive review. Without fundamental corrections to contract schemes, demand projections, and the energy mix the government will remain trapped in a cycle of wastefulness obstructing the development of renewable energy.

“There is still a 4 GW electricity oversupply in the Java-Bali region, so some power plants (operators) are encouraged to delay their commercial operation dates (COD) over the next two years. This is to prevent further supply pile up and to ease the burden on PLN,” said Jisman P. Hutajulu, Director General of Electricity at the Ministry of Energy and Mineral Resources (ESDM), during a press conference in October 2024.

In their 2025-2034 RUPTL (Electricity Provisions Plan), PLN has prepared two capacity expansion scenarios based on the assumption of a 5.2% annual economic growth called the “Renewable Energy Base” and the “Accelerated Renewable Energy Development” scenario.

Nevertheless, despite their designation, both scenarios still include the addition of 2.643 MW of CFPP capacity as follows:

• 2025: 2.326 MW

• 2026: 34 MW

• 2029: 6 MW

• 2030: 2 MW

• 2032: 6 MW

The first scenario, dubbed the “RE Base”, directs the development of the electricity system based on “the practical capacity of PLN and the government to complete projects both from the standpoints of workability and financial capability”..

This scenario does not pursue specific targets such as emission reductions or changes in the energy mix. Instead, the development of the electricity system is optimized for cost efficiency and perceived reliability of supply, while still prioritizing the addition of new power plants based on renewable energy sources.

Meanwhile in the second scenario, the development of Indonesia’s electricity system infrastructure is focused on contributing to emission reductions.

Despite the two scenarios however, no significant reduction in coal usage is within sight—coal still accounts for more than 45 percent of the energy mix.

This is baffling not least because many business leaders in Indonesia have expressed support towards phasing-out of coal.

A 2025 survey conducted by market advisory Savanta titled “Powering up: Business Perspectives on Shifting to Renewable Electricity” revealed 88% of Indonesian company leaders support the advancement of the energy transition and the early retirement of CFPP by 2035 or earlier.

It is important to also keep in mind that - aside from coal - Indonesia is blessed with an abundance of renewable energy potential to further the energy transition.

Despite the various options in RE, a CERAH report titled “Kupas Tuntas Kebijakan Transisi Energi Presiden Jokowi: 19 Maju atau Mundur (A Thorough Review of President Jokowi's Energy Transition Policy: Are the 19 Steps Forward or Backward)?” in 2024 finds that the emission reduction scenario under the Just Energy Transition Partnership (JETP) will also be sourced from “new energy” systems such as nuclear power (with a capacity of 10 GW), as well as stubbornly utilizing fossil fuels through natural gas (with a capacity of 9.5 GW) until 2050.

Dependence on both nuclear and gas not only risks creating a new infrastructure lock-in effect but also leads to a new reliance on imported fuels—which, in turn, burdens the state budget and contradicts the spirit of energy sovereignty.

Financing is one of the most commonly cited challenges the Indonesian government faces in transitioning away from coal. The early retirement of the Cirebon CFPP, for instance, requires a loan from the Asia Development Bank according to Minister Lahadalia.

Such a project could cost the government US$4.6 billion (IDR 74.9 trillion at an IDR 16,300 per USD) if completed in 2030 according to the Institute for Essential Services Reform (IESR). If the timeline is extended to 2050, the cost could balloon to US$27.5 billion (IDR 448.2 trillion).

"Funding support for the early retirement of inefficient, costly, and highly polluting CFPs owned by PLN can come from the state budget (APBN). However, these funds, combined with state capital participation, must be used to accelerate the development of renewable energy and strengthen the electricity grid," said Fabby Tumiwa, Executive Director of IESR, in an official statement released in April.

Whilst costly, ISER strongly supports the retirement citing significant long-term benefits from the reduction in health costs and CFPP subsidies - which could reach up to US$96 billion by 2050.

On the contrary, continuing the development of CFPPs as business per usual carries a major potential for economic losses according to the Center of Economic and Law Studies (CELIOS). Construction of a new CFPP is estimated to cost Indonesia around RP 3.93 trillion, reflecting the negative impacts of coal power development on the overall economic output in affected regions.

“Such losses are largely caused by the environmental damage including challenges faced by fishermen to find livelihood, as well as the impact on the agricultural sector caused by coal mining activities supplying stock for the CFPP operation,” said Bhima Yudhistira, Director of CELIOS.

As a member of the JETP, Indonesia’s energy transition portfolio boasts a planned funding allocation of US$19.6 billion.

But a JETP Secretariat presentation in May highlighted that the majority of the partnership funds—about two thirds—comes from debt including commercial loans, concessional loans, as well as non-concessional loans. The remaining portion consists of equity investments, guarantees, and grants that could lead the funding parties to influence the transition process.

Domestic funding is undoubtedly the ideal solution to ensure Indonesia’s energy sovereignty—but where exactly can this financing be sourced from? This is where banking investments in the Environmental, Social, and Governance (ESG) sector could serve as an important entry point to accelerate the development of renewable energy in Indonesia - particularly from the financing perspective.

Policy+’s ESG Outlook research report titled “Strengthening Indonesia's Banking Sector as Champions of Resilient and Greener Future” (2024), banks have begun channeling financing to renewable energy projects. Their portion, however, remains relatively small.

Bank Mandiri, Indonesia’s largest state-owned bank, has allocated Rp 8 trillion for renewable energy financing - which accounts for just 3% of its total green portfolio valued at Rp 264.1 trillion. Similarly, BCA, the country’s largest private bank, disbursed Rp 2.1 trillion—representing 1% of its Rp 202.6 trillion green portfolio—while UOB contributed Rp 242 billion, or 1.4% of its Rp 16.8 trillion green portfolio.

“Banks in Indonesia have indeed committed to achieving net-zero emissions targets and have demonstrated financing for renewable energy through the implementation of ESG. We see ESG investment as a gateway for banks to increase their financing portfolios in renewable energy sectors,” said Raafi Seiff, Founder and Director of Policy+, in a statement released last February.

However, Jalal, ESG expert and Chair of the Advisory Board at Social Investment Indonesia (SSI), stressed that true climate progress demands financial institutions to halt all funding for fossil fuel projects.

“If banks finance renewable energy but continue to fund fossil energy as well, it is essentially dishonest. Banks should gradually divest by stopping financing for new fossil energy projects,” he said.

According to a 2024 Climate Policy Initiative Indonesia report, the average annual investment in renewable energy power plants between 2019 and 2021 was US$2.2 billion—significantly below the required average of US$9.1 billion per year. This amount also pales in comparison to the average annual investment in fossil fuels during the same period which reached US$3.7 billion.

Indonesia has established the Sustainable Finance Taxonomy to guide financial institutions in responsibly channeling their funds. However, there is currently no legal enforcement to ensure its full implementation. Subsequently, it is important to note that coal-fired power plants (CFPPs) are classified as “yellow” within this taxonomy - meaning they are considered sectors that support the transition to a low-carbon economy and remain eligible for financing.

Tata Mustasya, Executive Director of SUSTAIN, highlighted several government options to accelerate the energy transition, including progressively increasing royalties and taxes on coal production.

“If the government has the political will to raise coal levies, Indonesia could actually finance its energy transition,” Tata said.

He also proposed implementing a carbon tax specifically targeting coal-fired power plants, with appropriate emission limits and pricing. Such a measure would reduce CFPP profits, thus discouraging coal operations and encouraging a shift toward renewable energy.

Indonesia could further generate funds to phase out coal-fired power plants by introducing a carbon tax. Although the carbon tax regulation was enacted under Law No. 7 of 2021 on Tax Harmonization, its implementation has been delayed until this year. Additionally, the current minimum carbon tax rate is only Rp 30 per kilogram of CO₂, far below the OECD’s recommended minimum price of US$60–75 per ton to effectively meet medium-term decarbonization targets.

Indonesia urgently needs a stronger legal framework to effectively drive its energy transition policies forward.

Currently, the cornerstone of energy legislation is Law No. 30 of 2007 on Energy, which broadly governs the electricity sector but lacks detailed provisions specific to renewable energy. To fill this gap, the government is drafting the New and Renewable Energy Bill (RUU EBET), aiming to establish a comprehensive legal foundation for renewable energy development.

A critical feature of the Renewable Energy and New Energy Bill is the introduction of incentives for the energy transition. Business entities that contribute to renewable energy growth and emission reductions will benefit from a carbon pricing mechanism.

“If the Renewable Energy and New Energy Bill (RUU EBET) is enacted, the carbon economic value mechanism will be implemented. If this law is not passed, there will be no incentives. This incentive is the most important aspect of the RUU EBET,” said Eniya Listiani Dewi, Director General of New, Renewable Energy, and Energy Conservation (EBTKE), in a recent statement.

Regarding the early retirement of coal-fired power plants (CFPPs), legal researcher Muhamad Saleh from the Centre of Economic and Law Studies (CELIOS) points to at least four policies that safeguard the process while mitigating financial risks. The main challenge now lies in the government’s political will to enforce these measures.

First, Presidential Regulation No. 112 of 2022 clearly defines the types and criteria of coal-fired power plants slated for closure and encourages the establishment of financing schemes to support this transition.

Second, Minister of Finance Regulation No. 5 of 2025 (PMK No. 5/2025) introduces the energy transition platform as a fiscal tool to accelerate CFPP closures and the termination of Power Purchase Agreements (PJBL).

Complementing these regulations are the National Electricity General Plan (RUKN) and the Electricity Supply Business Plan (RUPTL), which outline Indonesia’s strategic direction for the electricity sector.

Together, these regulations lay the groundwork for Indonesia’s energy transition, but success still hinges on cohesive implementation and political commitment.

“These four regulations provide a sufficient foundation for the government to carry out the energy transition. The only mandate from Presidential Regulation No. 112/2022 that has not yet been implemented by the Ministry of Energy and Mineral Resources (ESDM) is the detailed roadmap for the early retirement of coal-fired power plants (CFPPs), which should specify the criteria and financing schemes,” said Saleh.

“This is very crucial, which is why we should urge the Ministry of Energy and Mineral Resources (ESDM) to immediately issue the roadmap. Currently, that (the lack of a clear roadmap) is the only obstacle,” he added.

Such swift and measured government action would be a welcome relief for individuals like Haryono as well as all the other fishermen along the Batang coast of Central Java.

Their collective aspiration is straightforward: to pursue their livelihoods at sea unburdened by the clamor of coal barges or the pervasive pollution which impairs their community.