Japan trading houses explore Indonesia coal-fired power exits

Net-zero emissions target pressures investors to turn to renewable energy

20230731 Indonesia power plant

Units 5 and 6 of the Tanjung Jati B coal-fired power plant went into commercial operation in 2022 in Central Java province. (Photo by Koya Jibiki)

KOYA JIBIKI and TOMOYA ONISHI, Nikkei staff writers

JAKARTA/TOKYO -- Japan's major trading houses are exploring how they might exit their Indonesian coal-fired power generation businesses, whose emissions present difficult challenges to the global trend toward decarbonization.

The Tanjung Jati B coal-fired plant, partly built with Sumitomo Corp. funds, is located in a rural area facing the sea in the Jepara Regency. It is about a three-hour drive north of Semarang, the capital of Central Java province. Units 1 through 4, fully funded by the trading company, were in commercial operation by 2012. In September 2022, units 5 and 6, funded by the Kansai Electric Power Co. and other investors, also began operating. The total generation capacity of all six units exceeds 4.6 million kilowatts, equivalent to that of four nuclear power plants, making it one of Southeast Asia's largest power stations.

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