Celios Economist Says About The Closure Of Coal PLTU Using The State Budget

ILLUSTRATION PHOTO VIA BETWEEN

JAKARTA - Economist and Director of the Center of Economic and Law Studies (Celios) Bhima Yudhistira opened her voice regarding government policies regarding the financing of energy transition programs using the state budget (APBN).

Given, the Minister of Finance (Menkeu) Sri Mulyani has released Minister of Finance Regulation Number 103 of 2023 concerning Providing Fiscal Support Through Funding and Financing Frameworks in the Context of Accelerating Energy Transition in the Electricity Sector.

The regulation, which was stipulated on October 4, 2023, supports early retirement financing for coal power plants using state funds.

Bhima said the presence of technical regulations was quite important in accommodating APBN funding support in accelerating the closure of coal power plants.

"So far, the commitment to accelerate the closure of coal power plants has often been hindered by the small mobilization of domestic funds, especially from the state budget," said Bhima in a written statement, quoted on Saturday, October 21.

He said, the form of support from the APBN could be in the form of transferring fossil fuel energy subsidies to the closing program of the PLN coal PLTU. If the assumption is that one coal PLTU with a capacity equivalent to the Cirebon-1 PLTU requires Rp13.4 trillion for early retirement, saving energy subsidy spending worth 28 percent of the 2024 APBN energy subsidy allocation of Rp189 trillion results in the closure of 4 coal PLTUs.

"The saving of energy subsidies is certainly not always in the form of an increase in prices or a reduction in quotas for consumers," said Bhima.

As for the regulation, it is stated that the source of funding for energy transition platforms can come from the APBN and/or other legitimate sources in accordance with the provisions of the legislation.

This energy transition platform facility can be used for the purposes of the PLTU project for a period of time whose operations have ended more quickly, the PLTU project whose PJBL contract period ends faster, and/or renewable energy generation development projects.

According to Bhima, another way to get a source of income for the energy transition is to implement a carbon tax.

"The carbon tax regulation already exists, so it remains to be executed as soon as possible," he said.

In addition, the government can reduce various tax incentives from the fossil-based sector so that wider fiscal space is created for energy transition funding.

"However, the government must also ensure that funding from public funds and the state budget is transparent and participatory," said Bhima.

For example, Bhima continued, for the early retirement of the coal power plant, it is necessary to include compensation funds to the surrounding community and affected workers.

The form of compensation can be in the form of cash funds to the public, additional BPJS Employment funds, as well as reskilling or increasing skills from existing workers.