Carbon Tax For PLTU Is Considered Unrealistic To Reduce Emissions In The Midst Of Electricity Surplus, The Government Needs To Lower Production Targets

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA - Economist from the Institute of Development of Economics and Finance (INDEF) Arba Talattov said the government must find a way out to overcome the national electricity surplus. According to him, this needs to be done so that there is no policy imbalance regarding the planned implementation of a carbon tax for steam power plants (PLTU).

“Over the last nine years, our electricity sector has experienced a surplus of approximately 25 percent. This of course has consequences on the production of the resulting emissions. So the government is not only focused on carbon taxes but also how to increase electricity demand and consumption so that this surplus is running low,” he said in a webinar some time ago.

Arba is called if another way to suppress the stun surplus is by updating policies and the number of targets to be achieved.

“The second way is to reduce the electricity production target in the RUPTL (Electricity Supply Business Plan). Now this will have a significant impact on reducing greenhouse gas emissions in the electricity sector," he said.

Based on the data presented by Arba, the basic cost of providing electricity (BPP) is Rp. 1,348 per kWh (2020), so the over supply that occurred last year resulted in a waste of Rp. 120 trillion which had to be borne by PLN. Meanwhile, electricity compensation in the 2020 State Budget is Rp. 19.9 trillion.

“So it's not only downstream to impose a carbon tax, but on the upstream side the government must also focus on how to project electricity supply according to needs. This carbon tax is a downstream policy, the government should be able to direct the right steps on the upstream side, namely how to produce electricity itself,” he explained.

Just so you know, the Ministry of Energy and Mineral Resources (ESDM) reports that fossil energy is still the main supporter of electricity generation in Indonesia with a percentage of 85.3 percent. From this figure, PLTU is the most burning coal with a national contribution of 49.6 percent.