Captive coal power capacity in Indonesia surges to 19.3 GW, raising economic and emissions risks
Wednesday, January 28 2026 - 07:56 AM WIB
By Romel S. Gurky
Indonesia’s captive coal-fired power plant capacity has expanded rapidly to 19.3 gigawatts (GW) in 2025, driven largely by industrial projects linked to nickel downstream processing, according to a joint analysis by the Centre for Research on Energy and Clean Air (CREA) and Global Energy Monitor (GEM).
The report shows that between July 2024 and July 2025, Indonesia added 4.49 GW of captive coal capacity, accounting for around 80% of total coal power additions during the period. In contrast, new coal plants connected to the national PLN grid reached less than one-third of their targeted capacity.
Growth has been concentrated in Central Sulawesi and North Maluku, where captive coal capacity has more than doubled since 2023. Over the past 25 years, captive coal capacity has grown eight times faster than grid-connected coal and now represents about half of all new power generation capacity added nationally.
CREA and GEM project Indonesia’s captive coal capacity could rise to more than 31 GW, with 19.3 GW already operating, 3.6 GW under construction, and a further 8.16 GW in the planning stage.
CREA analyst Katherine Hasan said the expansion is being reinforced by regulatory loopholes in Presidential Regulation No. 112/2022, which provides exemptions for captive coal plants associated with national strategic projects.
Read also : China, India, and Indonesia on course to peak power sector emissions by 2030 — CREA
“The energy landscape in Indonesia is experiencing a radical split where a stagnant national grid is being overtaken by a surge in captive coal driven by downstream industrialisation,” Hasan said.
According to CREA’s estimates, continued exemptions for captive coal plants could lead to 27,000 additional premature deaths and an economic burden of about US$20 billion. In major nickel industrial zones, air pollution is projected to cause around 5,000 deaths annually by 2030, with related economic costs of US$3.42 billion per year. Environmental degradation could also result in losses of US$235 million for local farmers and fishers over the next 15 years.
Hasan said Indonesia would need to explicitly include captive coal units in its national coal phase-out target for 2040 and establish a public monitoring framework to meet its 35% emissions reduction mandate.
GEM senior researcher Lucy Hummer said data transparency is essential for planning the replacement of coal power with renewable energy.
“This is especially true for privately operated captive coal plants, which have grown rapidly in recent years. Knowing where these plants are, their size, and their industrial purpose is critical to fully integrate captive coal into long-term transition planning and effectively phase out coal power in Indonesia,” Hummer said.
The joint briefing is the third in a series by CREA and GEM examining Indonesia’s off-grid industrial coal power sector.
Editing by Alexander Ginting