Wahyu Dwi Anggoro
IDXChannel - The 660-megawatt coal-fired power plant (CFPP) Cirebon-1 in Indonesia will likely be retired almost seven years earlier than scheduled as a result of discussions with the plant’s owners and the Government of Indonesia under the Energy Transition Mechanism (ETM) program of the Asian Development Bank (ADB).
A nonbinding framework agreement signed at COP28 on Sunday (3/12/2023) by ADB, Indonesian state-owned power utility company PT PLN, independent power producer PT Cirebon Electric Power (CEP), and the Indonesia Investment Authority (INA) stated that they have conditionally agreed to shorten the power purchase agreement for Cirebon-1 and end the plant’s obligation to provide electricity in December 2035 instead of the original July 2042. The transaction is to be finalized in the first half of 2024.
Indonesia Minister of Finance Sri Mulyani gave a keynote speech at the event where she witnessed the signing together with ADB President Masatsugu Asakawa.
CFPPs typically operate for 40 years or longer. Since Cirebon-1 was commissioned in 2012, retiring the plant in 2035 would avoid over 15 years’ worth of greenhouse gas emissions. Replicating this transaction with other power plants in Asia and the Pacific and beyond, would achieve significant carbon dioxide emission reductions.
“This framework agreement is a key development for this transaction and Indonesia’s energy transition that will lead to a significant cut in greenhouse emissions,” said Asakawa in a media release.
