Questioning the Destructive Power of Coal Power Plants in Industrial Areas, What Are the Alliance’s Findings?

Power of Coal Power Plants in Industrial Areas

“The air in Hamlet 5 of Bunta Village is allegedly shrouded in sulfur dioxide gas (So2) which is a toxic gas produced by burning captive PLTU coal,” said Sunardi Katili, Regional Executive Director of Walhi Central Sulawesi during a press conference last June.

The report stated that some of the PLTUs included the PT Stardust Estate Investment (SEI) industrial area in North Morowali, Central Sulawesi. Within this industrial area are PT Gunbuster Nickel Industri (GNI) covering an area of ​​1,907 hectares and PT Central Omega Resources (COR). Both are nickel refining smelter companies owned by Jiangsu Delong Nickel Industry Co. Ltd, an investor from China. They operate in Bunta Village, Petasia Timur District, North Morowali.

To power the smelter, GNI built a coal power plant. The PLTU construction process dammed the Lampi River, without the knowledge of residents and landowners.

Walhi Central Sulawesi predicts that when the intensity of rain is high, the Lampi River water will overflow and can inundate the rice fields and settlements of local residents.

The construction of a jetty in Tanauge Village, Petasia District as an entry point for coal supply mobilization since early 2023, is suspected of confiscating 65 hectares of community land without a compensation process.

Sunardi said that the community, who are mostly fishermen, also feel suffering because of the PLTU’s operation.

In fact, he said, some have stopped fishing because coal is often spilled, plus the tight guard by the Air and Water Police has become a scourge for fishermen.

Currently, GNI is building three PLTUs in Tanauge Village with a capacity of 300 MW, only 500 meters from the settlement. As a result, said Sunardi, residents around the PLTU have to clean their houses every day, and close doors and windows to avoid the black dust from burning coal.

The same phenomenon is experienced by residents of Morosi, Konawe Regency, Southeast Sulawesi. The presence of PT Virtue Dragon Nickel Industry (VDNI) and PT Obsidian Stainless Steel (OSS) at that location has drastically changed the ecological conditions and lives of the surrounding community because the companies have built a number of PLTUs.

VDNI started operating in 2014 and built a refining plant in 2017, then officially started operating in 2019. It is located in Morosi, Konawe, and the company’s land area is 700 hectares. The company’s annual production capacity is 800,000 tons of nickel pig iron (NPI) with a content of 10-12%.

The remaining residue from burning coal contains Sulfur Oxide (SO2) which causes poisoning in plants. Apart from that, said Andi, coal also contributes to the health problems of the surrounding community.

Since there was a nickel processing plant in Morosi, many residents have experienced acute respiratory infections (ARI).

Apart from VDN, OSS in Tani Indah Village, Konawe Regency also pollutes the environment around the company and makes residents suffer. Based on investigations by Walhi Southeast Sulawesi, since the company started operations in 2018, the ponds in the villages of Labota, Tani Indah, Lalimbue, and Kapoiala have been polluted by ash from burning coal. The three villages are wet areas with superior products such as crabs, shrimp, and milkfish.

Data from the Central Statistics Agency (2018) noted that the production of Konawe aquaculture reached 40,356 tonnes in 2018. This figure continued to decline in line with the massive activity of companies in Morosi.

Andi said that around 151 hectares of community ponds were polluted and could not be used because of the OSS PLTU activity.

Apart from having an impact on the people in Konawe, OSS also has an impact on the people of North Konawe, especially in the villages of Motui and Lambuluo. The company’s location is on the administrative boundary of the two regencies in Southeast Sulawesi. Residents of the two villages in North Konawe were affected by coal.

Andi said that many residents left their homes in the two villages because the ash from burning coal spread to the settlements and affected the quality of the environment. People who migrate or choose to move are also due to the loss of jobs for the majority of pond farmers.

Based on Walhi Southeast Sulawesi’s calculations, the PLTU built by VDN and OSS caused around 4,000 lives to be threatened by black dust, and 18 fishing families lost their jobs. Their catchment area is lost.

In addition, the community’s clean water is no longer fulfilled because it is polluted by coal dust belonging to the two smelter companies.

The PLTU in Jeneponto, South Sulawesi has also made the surrounding community suffer. At that location, there are two PLTUs supplying electricity to the Bantaeng Industrial Area (KIBA) in Bantaeng.

Data from the Investment Service and PTSP Bantaeng that Walhi Sulsel found, from 2010-2017 there were 13 companies with various business fields.

One of the big companies in KIBA, PT Huadi Nickel-Alloy Indonesia (HNI), is a nickel processing and refining company with 100 hectares of land. The capacity of the first stage HNI furnace or large furnace is 16,500 KVA with a total investment of US$80 million. For this reason, this smelter company needs large electricity from two PLTUs in Jeneponto.

The presence of the two PLTUs in Jeneponto has had various social, environmental, and health impacts on the community. Fishermen, seaweed cultivation, and fish and shrimp ponds, he said, are the groups most affected by the ash left over from the coal combustion of the two PLTUs. Horticultural crop farmers, salt farmers, traders, and civil servants (PNS) also experienced the same thing.

Muhammad Al Amin, Walhi Regional Executive Director for South Sulawesi, said that the impacts felt by the people around the two coal-fired power plants PT PLN Persero and PT Bosowa Energi were more or less the same as the conditions for residents in North Morowali (Central Sulawesi), Konawe and North Konawe (South Sulawesi).

Communities that depend on the sea and various agricultural potentials are squeezed by their economy.

Ambiguous energy transitions 

The energy needs of large-scale industries using coal are contradictory amid Indonesia’s climate commitments. Moreover, the Government of Indonesia has signed the Global Coal to Clean Power Transition Statement at COP26. Commitment to stop using coal gradually and will not build a new PLTU. This was followed by the launch of PLN’s roadmap for carbon neutrality in 2060 and is one of the actions to align with the 1.5°C target such as the Paris Agreement.

In September 2022, through the Enhanced Nationally Determined Contributions (NDCs) document, Indonesia increased its emission reduction target unconditionally from 29% to 31.89% in 2030. With international assistance, it increases from 41% to 43.2%.

 The Climate Action Tracker assesses that Indonesia’s revised NDC is “grossly inadequate” in reducing the country’s carbon emission contribution to a level appropriate to meeting the 1.5°C target.

At the end of 2022, the Government of Indonesia and the International Energy Agency (IEA) will release a net zero emission (NZE) or zero carbon emission roadmap which proposes three different transition scenarios namely optimistic, moderate, and pessimistic.

This roadmap, together with the Just Energy Transition Partnership (JETP) commitment, advances Indonesia’s NZE target for the power sector from 2060 to 2050 and increases the share of renewable electricity to 34% by 2030.

Based on the results of a study by Trend Asia and the Center for Research on Energy and Clean Air (CREA), entitled “Ambiguity vs. Ambition: Review of Indonesia’s Energy Transition Policy”, it was explained that the government’s policy on energy transition has so far been inadequate, even seemingly ambiguous.

One of the main ambiguities is the Indonesian Government’s verbal commitment to stop building new PLTUs by 2025. In May 2021, the government announced a moratorium on PLTU construction. The deadline for the construction of the new plant was initially set in 2023 but was changed to 2025 shortly after the government announced the completion of the 35 GW mega project in the remaining time.

Next, the attitude of ambiguity also occurs with the issuance of Presidential Decree 112/2022. The policy clarifies that the construction of new PLTUs is prohibited other than those stipulated in the 2021-2030 electricity supply business plan (RUPTL).

This condition, said the report, provides concessions for new fossil fuel capacities as part of the 35 GW mega project. In fact, the ambitions of the NZE are not aligned with the Paris scenario.

In addition, the regulation also includes an exception for captive power plants or those that are integrated with industry and registered with national strategic projects.

Data from the Global Energy Monitor ( GEM ) show that more than 22.6 GW of captive power plants are for industry, including nickel smelters in Central Sulawesi, South Sulawesi, Southeast Sulawesi, and North Maluku. This exception is considered risky because it allows operators and owners to extend coal assets.

Wanhar, Director of Electricity Program Development at the Directorate General of Electricity at the Ministry of Energy and Mineral Resources also spoke about this captive PLTU.

This condition made the Sulawesi Renewable Alliance furious and asked the Indonesian government to immediately stop operating coal-fired captive power plants in all nickel industrial areas.

They asked, immediately restore the condition of environmental damage that occurred around the nickel industrial area in Sulawesi. PLTU, he said, had damaged the ecology and the lives of the surrounding community.

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