BandungBergerak.id – The energy transition has become a crucial agenda for curbing the climate crisis. As a coal exporting country whose emissions are contributing to the climate crisis, countries around the world are looking to Indonesia's energy transition agenda. Indonesia is not only a coal exporter but also heavily dependent on coal for its electricity sector. Without Indonesia's involvement in the energy transition, global climate change efforts will fail.

The energy transition in Indonesia is a political-economic issue. The political-economic issues within this energy transition policy are related to the potential for conflicts of interest. These potential conflicts of interest involve not only national elites but also international ones.

Indonesia's dependence on coal means that one of the first steps in the energy transition is to retire coal-fired power plants. Without early retirement, renewable energy development will only increase Indonesia's electricity oversupply. If that happens, the State Electricity Company (PLN) will go bankrupt.

The early retirement of these coal-fired power plants requires significant funding. For this early retirement, Indonesia secured a loan from the Asian Development Bank (ADB) through the Energy Transition Mechanism (ETM) scheme. The financing for this early retirement was then included in the Just Energy Transition Partnership (JETP) funding scheme.

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Conflict of Interest in the Early Retirement Coal-fired Power Plant

In 2023, PLN together with PT Cirebon Electric Power (CEP), and the Indonesia Investment Authority (INA) signed a non-binding framework agreement for the early retirement of the Cirebon 1 coal-fired power plant. The question is, of all the coal-fired power plants in Indonesia, why was the Cirebon 1 coal-fired power plant chosen for retirement?

This question arose because the agreement for the early retirement of the Cirebon 1 Coal-Fired Power Plant was issued in 2023, while Indonesia's energy transition roadmap was only released in 2025. In April 2025, the Ministry of Energy and Mineral Resources (ESDM) issued Ministerial Regulation No. 10 of 2025 concerning the Roadmap for Energy Transition in the Electricity Sector. Normally, agreements regarding the early retirement of coal-fired power plants follow the Indonesian government's roadmap, not the other way around.

Article 12 of Ministerial Regulation 10/2025 states that the early retirement of a coal-fired power plant must be preceded by a feasibility study. The feasibility study must be conducted within a maximum of six months from the date of the assignment from the Minister of Energy and Mineral Resources. In other words, the agreement for the early retirement of the Cirebon 1 coal-fired power plant was made without a prior feasibility study. Why did this happen? Is there a potential conflict of interest in the early retirement plan for the Cirebon 1 coal-fired power plant?

Concerns about a conflict of interest in the early retirement of the Cirebon 1 coal-fired power plant were raised by Celios, an Indonesian think tank, in 2022. According to Celios, as reported in an online publication, Japanese companies wield significant influence over the ADB's decision. Celios Director Bhima Yudhistira once warned against prematurely retiring coal-fired power plants that are preferred by the lending country.

The shareholders of the Cirebon 1 coal-fired power plant are Japanese companies (Marubeni and JERA Co), South Korean companies (Komipo, Samtan), and Indonesian companies (Indika Energi). Meanwhile, according to the Minister of Finance, as previously reported online, the largest shareholders of ADB are Japan and the United States, each with 15.57% ownership.

The potential conflict of interest in the early retirement of coal-fired power plants apparently doesn't stop there. According to research from the Center for Research on Energy and Clean Air (CREA) and Global Energy Monitor (GEM), PLN owns 83 coal-fired power plants. Meanwhile, private power producers operate 49 coal-fired power plants. Meanwhile, ESDM Ministerial Regulation 10/2025 states that PLN conducts early retirement studies for coal-fired power plants upon assignment from the minister. Wouldn't a conflict of interest arise if the party conducting the study for early retirement of coal-fired power plants were the same party that owns the power plants?

The potential for conflicts of interest in the early retirement of coal-fired power plants is further heightened by research by Indonesia Corruption Watch (ICW), which found that at least 10 of Indonesia's richest individuals are behind the power plant project. Some of these individuals also have close ties to the political elite. So, how can the government avoid potential conflicts of interest in the early retirement of coal-fired power plants?

Public Participation in the Energy Transition Policymaking

The potential for conflicts of interest in the energy transition is also evident among coal mine owners in Indonesia. They are the super-rich with political connections to the government. In fact, according to the Mining Advocacy Network (JATAM), President Prabowo Subianto himself once owned a coal mine. Coal mine owners have the opportunity to protect their economic interests from being disrupted by the energy transition agenda. Again, the question is how can the Indonesian government avoid this potential conflict of interest?

In the renewable energy sector, potential conflicts of interest also arise. The ICW research report states that some players in the renewable energy sector are companies that previously operated in fossil-based extractive industries. Unfortunately, they also have ties to the political elite currently in power in the Indonesian government.

One way the government can avoid conflicts of interest in energy transition policies is by creating a policy space for public involvement in energy transition policymaking. Opening up this space for public involvement not only fulfills transparency and public participation requirements but also limits the dominance of actors with economic and political interests in energy transition policies, both national and international.

Unfortunately, the government has yet to fully open up policy space for public involvement. For example, the JETP energy transition funding scheme, which was originally intended to create a transparent and participatory policy space for the public, has been ineffective. In the JETP funding scheme, the public appears to be involved, but the decisions remain in the hands of elites.

The same thing happens in the energy transition policy space outside the JETP funding scheme. In projects claiming to promote energy transition, the government often fails to provide sufficient information for public participation. In fact, many projects claiming to promote energy transition actually hinder active public participation. Security forces have even resorted to intimidation and violence against local communities and journalists. The intimidation and violence against residents of Pocoleok, East Nusa Tenggara (NTT), who opposed the expansion of a geothermal project serves as an example. Even local journalists covering the Pocoleok community's protests were victims of intimidation and violence.

The public must continue to urge the government to open up policy space for civil society to participate in energy transition policymaking. Transparency and public involvement in energy transition policies will prevent the domination of political and economic elites in Indonesia, which causes conflicts of interest. Without transparency and public involvement, the energy transition agenda will not only fail but will also benefit economic and political elites, both international and national, while neglecting the interests of citizens as taxpayers.