Indonesia and Japan agree to implement three priority energy transition projects

The construction of a geothermal power plant in West Sumatra, a waste-to-energy power plant in West Java and a peatland management for food project in Central Kalimantan were discussed.


Coordinating Economic Minister Airlangga Hartarto witnesses the signing of an agreement regarding three priority projects as part of the implementation of the Asia Zero Emission Community (AZEC). PHOTO: BPMI SETPRES/ THE JAKARTA POST

December 20, 2023

Indonesia – President Joko “Jokowi” Widodo and Japanese Prime Minister Fumio Kishida met in the latter’s office in Tokyo on Dec. 16 to discuss three priority projects pertaining to energy transition under the Asia Zero Emission Community (AZEC) framework, namely the construction of a geothermal power plant in Muara Laboh, West Sumatra, a waste-to-energy power plant (PLTSa) in Legok Nangka, West Java and a peatland management for food project in Central Kalimantan.

To follow up the results of the meeting by the two countries, the government along with private sector payers from both countries made a commitment to carry out the projects. Airlangga and Japan’s Minister of Economy, Trade and Industry (METI) Saito Ken witnessed the signing of the agreement to implement the AZEC in the METI Office in Tokyo on Dec. 18.

The commitment cemented by the signing of the agreements includes a power purchase agreement (PPA) for the Muara Laboh Geothermal Power Plant (PLTP). The PPA for the Muara Laboh PLTP regulates a contract with state-owned electricity company (PLN) and PT Supreme Energy Muara Laboh for the purchase of power from the PLTP and sets standard prices for power that PLN will purchase from the PLTP.

The meeting also saw the signing of a memorandum of understanding (MoU) on carbon credits for the Legok Nangka PLTSa between PLN and Sumitomo Corporation Consortium – PT Energi Prima Nusantara Hitachi Zosen. The MoU regulates the sharing of carbon credits produced by the project undertaken by Indonesia and Japan and is adopted as part of the Japan Fund for the Joint Crediting Mechanism (JF-JCM) by the Asian Development Bank (ADB).

The event was followed by the signing of preliminary understanding between the West Java administration, PLN and the Sumitomo Corporation on implementing the joint Legok Nangka PLTSa. Regarding the joint Legok Nangka PLTSa, the West Java administration, PLN and Sumitomo Corporation will work together in solving the issues related to the construction of Legok Nangka PLTSa, especially scaling up the public capacity and providing education on waste management to safeguard the waste volume and quality that will be utilized by Legok Nangka PLTSa.

Airlangga pointed out that implementing the waste-to-energy project in Legok Nangka had been based on the consideration that the PLTSa was an effective solution for treating waste and reducing dependence on fossil fuels.

The PLTSa will be able to tackle waste management problems in urban areas by treating waste and utilizing it as a renewable energy source.

Energy and Mineral Resources Minister Arifin Tasrif and interim West Java governor Bey Triadi Machmudin were among those present to accompany Airlangga at the signing event.

This article was published in collaboration with Coordinating Ministry for Economic Affairs Republic of Indonesia

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