Accelerating emission reduction from the coal sector in Indonesia

Coal Power Plant Indonesia. Image: Canva Pro

Thought paper by Prof Lesley L Sloss, International Project Manager

1) Thoughts on reducing emissions from the coal sector

The aim of the USDOS project work in Indonesia was to accelerate mercury emission reduction from the coal utility sector. Since mercury control is currently low on the list of environmental concerns in the country, the project focussed on strategies which would accelerate the emissions of all pollutants from coal utilities with the understanding that almost every strategy for emission reduction, be it enhancing plant efficiency or retrofitting control technologies for pollutants (such as particulate matter, SO2 and NOx), will reduce mercury as a co-benefit. Mercury co-benefit reduction is commonly over 10% at even the most poorly performing coal plant but this can easily be increased to over 50% and even to over 80% with low-cost intervention.

By analysing data on a plant-by-plant basis, we demonstrated that fewer than 15 coal units out of over 110 in operation would be responsible for around half of the emissions from the existing fleet before they close. This allowed us to propose a strategy which focussed on cost-effective action at a few targeted plants rather than a broad requirement across the whole fleet – the latter would be wasteful in terms of time and resources. We then created a catalogue of options, both for optimising plant performance and for mercury-specific reduction technologies available from specified international vendors and consultants. We concluded that the most effective emission reduction strategy should involve:

  • Regular assessment of emissions across the fleet to maintain a watching brief on the plants of most concern
  • Focus retrofits and emission reduction strategies on those plants with the greatest emissions over their remaining operating lifetimes
  • Maximise co-benefit effects of technologies for particulate matter, SO2, NOx and mercury
  • Work with international consultants and equipment vendors to determine those technologies which are most appropriate for the Indonesian challenge (considering fuel characteristics, plant configuration and so on)
  • Share experiences and lessons learned swiftly throughout the fleet.

Whilst this theoretically provides a roadmap for mercury reduction from the coal sector – the basis of a UN Minamata Convention compliance strategy for Indonesia – there are significant barriers to be considered, including several current issues which have arisen since this project was initiated in 2021:

  • Economics – Indonesia is still the world’s 3rd largest producer of coal, and this forms a sizeable portion of government income. Millions of Indonesians are employed with the coal sector and so a rapid transition from coal could mean significant job losses and potential social unrest. Retrofitting the Indonesian coal fleet with control technologies will be expensive and international financing for coal plant upgrading and modification is all but non-existent. Indonesia has been offered $50 billion from the Just Energy Transition (JET) fund but this has been earmarked for the construction of VRE with equivalent output to that of the Cirebon coal-plant, with the aim of closing Cirebon 10-15 years early. Whilst this will achieve an overall emission reduction from Cirebon over its lifetime (Cirebon is the highest polluting plant in Indonesia), this $50 billion is to be spent on one unit out of over 100 in Indonesia. Would this not be more effective if it were to directly reduce a greater volume of emissions from a greater number of plants and therefore a more considerable proportion of the fleet?Some coal plants in Indonesia are hesitant to invest in expensive clean-up retrofits for several economic reasons including the concern that coal phase out or replacement by biomass may happen before full return on investment is achieved. Currently, there do not appear to be any government policies place to assist utilities with this additional operating cost other than prioritisation of cleaner plants into the grid.
  • Technology – with no gas or nuclear power available, Indonesia must move directly to variable renewable energy (VRE). The country does not yet have the infrastructure to deploy VRE at large scale. Until a VRE-based grid is established with supporting dispatchable energy storage (decades away), coal is the only option for maintaining grid stability for the growing economy. As has been shown from the sister project work in India, using coal plants in “flexing” mode (ramping them up and down to offset the variable output from VRE) can lead to lower plant efficiency and greater emissions as well as significant grid outages when overworked plants fail. Indonesia will therefore continue to rely heavily on its coal fleet for the near future.

Our final report on Indonesia listed techniques and technologies which could accelerate emission reduction from the existing coal fleet. In addition to retrofitting flue gas treatments, several consultants recommended the use of chemical reagents to clean up the boiler during combustion. These work by reducing and removing deposits within the plant, increasing the efficiency of heat transfer, and reducing outages required to deal with corrosion and fouling. At least two commercial companies claimed that their treatments could reduce emissions significantly (for example, over 10% CO2 reduction on average CO2 emissions from the plant prior to upgrading) and one has already  demonstrated this effectively at a plant in Indonesia (Ombilin). It is suggested that the increase in plant efficiency (using the Indonesian Suralaya plant as a theoretical example) could offset coal costs sufficiently within the first two years to potentially cover the cost of retrofitting further controls for pollutants such as mercury. If this is true, then there is the potential for plants to self-fund their own emission reduction with a 2–3-year payback period. This has yet to be confirmed, but EPRI is moving forward to confirm the results obtained from trial studies.

Another option which could be particularly relevant for Indonesia is the co-firing of biomass. By offsetting coal with biomass materials, all emissions are reduced. In 2023, the Indonesian power company PLN  co-fired 1 MT of biomass at 43 coal-fired plants, achieving a reduction of 1 Mt CO2. The plan is to expand this to 52 plants by 2025. PLN also confirmed that it had run one coal plant in Kalimantan at 100% biomass for 15 days. Increasing biomass use will rely on consistent availability and affordability of sustainable biomass resources. It will also require increased plant maintenance to ensure consistent plant output as coal plants fire increasing volumes of biomass. However, if the conversion of the Indonesian coal fleet to biomass cofiring proves technically and economically feasible, then the retrofitting of control technologies for mercury reduction may be unnecessary. Although the move to significant biomass cofiring may appear to be a simple solution, plants such as Drax in the UK have shown that there are significant economic and technical challenges to be faced before plant operation is stable and reliable. This is a challenge for even one plant, so moving this across an entire fleet will not be simple.

  • Social – Indonesia is not as anti-coal as many western economies. Many Indonesians work in the coal sector and, by default, support its persistence. At the government level, stakeholders know that change is needed to achieve compliance with international emission reduction conventions, but without economic assistance, published opinion appears to reflect a sense that too much is being expected from Indonesia by western economies without any support, financial or otherwise. The Indonesian President, Mr Joko Widodo, has recently been vocal on the lack of international financial support, noting that the significant majority of international finance comes in the form of loans rather than funds, and thus add to the national debt rather than actually funding change. Further, international financing comes with strict implementation requirements, focussing on predicted global benefits (net zero) without full consideration of Indonesia’s energy challenges and national priorities.

There has been a change in energy policy in Indonesia since this project began. Initially, the concern was that the existing coal fleet, the focus for this work, would continue to operate for decades with no strategy in place to reduce mercury emissions. It was assumed that mercury reduction would rely on the optimisation of emission controls for other pollutants. But strategies for compliance with the  new emission limits for SO2 and NOx are only being considered on a small number of plants now. It is unlikely that many plants will go down the standard route of retrofitting flue gas controls, but rather they will consider options such as biomass or even ammonia co-firing to maintain plant operation whist reducing emissions and avoiding the cost and intrusion of major retrofitting work.Biomass cofiring appears to be seen as a potential “silver bullet” for all emission reduction from the coal fleet in Indonesia. But it will be several years before this can be confirmed. Despite this, the initial success of the biomass trials in 2024 could be used as a means to delay and derogate on the installation of flue gas control technologies. There are valid arguments of both sides – the move to biomass would accelerate the move away from coal and thus effectively solve all related emission problems – this could be a major success for the energy sector; but if biomass co-firing is unsustainable at scale, the result will simply be a delay in the installation of the necessary pollution control technologies on the persisting coal fleet.

Based on the conversations at our workshops in Indonesia, stakeholders (regulators, ministries, and utilities) are in a relative state of limbo. They are aware of the technologies and strategies used in western economies to reduce emissions from their coal fleet but are hesitant to simply cut and paste these onto Indonesian plants. Cost is a major consideration, but there was also the concern that the existing coal fleet is unlikely to continue to operate in its current form to see the existing plants live out their intended lifespan. The return on investment for retrofits is far from guaranteed.

The Paris Convention, the Minamata Convention, JETP initiatives and other international agreements all place a significant burden on Indonesia to phase out coal. Investment in costly retrofits for a fleet that is simultaneously being asked to close does not make sense and many operators may use this argument to stall emission control retrofits. Biomass trialling at plants is the current means to delay if not to avoid retrofits completely. If biomass works, then everyone wins. If it does not, then the necessary retrofits will be delayed, and emissions will continue for even longer than predicted.

It is therefore vital that Indonesian coal plants continue to consider and plan for emission control retrofits to ensure that they can move swiftly if and when these are needed.

2) Thoughts on emissions monitoring

Similar to India, Indonesia has little or no experience in emissions monitoring and therefore faces a steep learning curve to ensure that systems are installed and operated correctly. Unlike India, however, Indonesia appears be focussing on the European methodology rather than a mix of both European and US methods. In short, this means that any continuous emissions monitoring system (CEM) installed in Indonesia must be certified by a European accreditation body to permit its application. This creates a problem for US CEM vendors who are excluded from selling equipment into Indonesia unless they pay out at least $300k to have their equipment certified in Europe.

Currently Tekran, a major US supplier of mercury CEM, has supplied over 18 pieces of equipment (worth over US $200K each) to sources in Indonesia. Although the Tekran CEM systems have been submitted for certification, the European accreditation body has stalled completion of the field testing until the end of 2024 at the earliest. Tekran report that all CEM customers in Indonesia are withholding final payments for all 18 systems until certification is achieved, causing Tekran significant economic challenges. Although this is a specific issue for Tekran, it is relevant to the confusion over potential CEM use in Indonesia. If Indonesia were to use the same approach as India, and allow US performance testing, then expensive certification would not be necessary, and the market would open to all US CEM vendors.

As far as can be determined, Indonesia has not yet created national guidelines on CEM use, nor does it have associated training, supervision/oversight, accreditation of staff or any of the other vital factors required to ensure that CEM systems deliver accurate emission data. This should be addressed as a matter of urgency to ensure that any data produced are fit for purpose.

The delivery of CEM training in Indonesia, based on that developed for India, could catalyse work towards a qualified CEM sector in Indonesia and could open the rapidly closing door for US CEM vendors to establish an Indonesian market. The CEMEG-India (CEM experts’ group) initiative that this project launched in India could act as a template for similar work in Indonesia. During our final workshop in Jakarta, our Indian expert gave a short introduction course on CEM and provided all the training materials developed for India.

There is a real opportunity for India and Indonesia, and others in emerging SE Asia, to cooperate on developing a new skill sector and, simultaneously, opening up a new route for international sales into the region

3) Thoughts on seawater FGD

This USDOS project in Indonesia raised a previously undetected issue. In wet flue gas desulphurisation systems (wet FGD) for SO2 control, mercury is captured effectively in the solid gypsum byproduct. Wet FGD forms the majority of sulphur control systems in western economies. However, in nations such as Indonesia, India, Vietnam, and Thailand, where fresh water is limited but sea water is often readily available, seawater FGD (SWFGD) systems are becoming increasing common. SWFGD is cheaper than wet FGD since the process is simpler and there is no byproduct, other than the discharge water, to be managed. However, whilst releasing increased sulphur into seawater causes little or no environmental impact, releasing mercury directly into potential fishing areas could be a significant health issue for local communities and adds to the global marine mercury budget, an input value which is currently not recorded within any regional or global inventory.

A review of published literature suggests that only a small number of papers have been published on this problem, but all agree that the issue is important – up to 18 t/y of additional mercury could be released to the sea from these sources and this value will increase as SW FGD continues to be installed, largely in Southeast Asia.

In response to this concern, we have raised this issue with USDOS and suggest that a follow-up study be funded.

4) Take home thoughts:

  • Indonesia is being asked by the international community to make significant reductions in emissions from the coal sector, but this is not being supported by external funding. Without financial support, Indonesia will look for the most cost-effective means to reduce emissions and may delay and derogate as it does so.
  • Without gas or nuclear power, Indonesia’s transition to VRE will be challenging. Coal plants will remain necessary to meet grid demand for the growing Indonesian economy until dispatchable VRE and/or supporting battery capacity is available, which could be decades.
  • Coal is the economic backbone of Indonesia and a move away from coal will require significant and potentially expensive socio-economic changes. Now is the time to grow new skillsets in emission monitoring, emission control, plant efficiency, energy transition to VRE and so on. Indonesian stakeholders would benefit from international expertise and capacity building in this area. Public awareness should also be raised to ensure acceptance as Indonesia goes through a meaningful change in its energy sector.
  • International technologies could be appropriate for emission reduction in Indonesia and the market would be significant. However, Indonesia may delay purchases until it is clear that flue gas control technologies are the required option.
  • According to the national goals, Indonesia has until 2030 to peak CO2 emissions and achieve 34% VRE capacity. This is a huge challenge which may not be feasible without external funding. Biomass cofiring could be a significant solution to all emission problems. However, the challenges for efficient, reliable, and sustainable use of biomass are significant – success is far from guaranteed. Despite this, the recent apparent success of biomass cofiring is likely to cause delays and derogations in planned flue gas control retrofits. Plants will not invest in emission control systems if they believe they will not be burning coal in the long term.
  • It is critical that international experts support Indonesia. Stakeholder engagement and inclusive decision-making are imperative to ensure that external support allows Indonesia to form its own path. The international community must recognise that the complex and long-term nature of the energy transition in Indonesia requires ongoing cooperation and adaptability. And for real change to happen, there needs to be the movement of real funding, not just loans, as well as pragmatism with respect to synergies and mismatches between global and regional priorities.

Unless action is taken soon, the potential for real measurable change will be lost.