Indonesia's path toward decarbonizing its power sector is undermined by the unexpected expansion of off-grid coal power plants and blurry plans for curbing their emissions, Reuters reported, citing researchers on January 27.

Built by industries to generate electricity for their own use, these captive power plants have multiplied swiftly, largely fueled by the surge in Indonesia's nickel industry, according to a report by the Center for Research on Energy and Clean Air (CREA) and Global Energy Monitor (GEM).

Authorities are struggling to track the surge in new projects and ensure transparent implementation of emission reduction strategies, the report said.

GEM researcher Lucy Hummer emphasized that comprehending the full scale of existing and proposed coal capacity is a prerequisite for effectively planning a transition to renewable energy sources.

Indonesia has miscalculated the scale of captive coal pipeline. The combined capacity of plants already operating, under construction, or in planning stages exceeds 31 GW. The figure surpasses about 28.6 GW estimated for 2024 under the Just Energy Transition Partnership (JETP). The agreement, signed with several developed nations in 2022, is designed to fund Indonesia's shift away from fossil fuels.

As a leading global emitter of greenhouse gases and the world's largest thermal coal exporter, Indonesia has formally targeted net-zero emissions by 2060 and pledged to cease commissioning new coal-fired power plants.

However, the captive power sector was notably exempted from the goal, conditional on plants pledging to cut emissions by 35% within a decade of operation.

CREA and GEM cautioned that no public evidence or monitoring framework currently exists to verify whether these facilities are fulfilling their pledged emission reductions. This absence, they noted, risks conveying a weakened commitment to climate objectives.

Initially excluded from the JETP initiative, a non-binding plan published in November estimated that transitioning Indonesia's captive plants would require roughly $31 billion in investment by 2030.