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Dam-delay hinders move away from coal

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,TNB is developing the Hulu Terengganu hydroelectric dam.

JAKARTA: Deep in Borneo’s jungle, a US$17bil (RM80bil) hydropower project touted as the backbone of Indonesia’s green industry ambition is struggling to take off.

Kayan Hydro Energy, which counts China Power Investment Corp as an investor, kicked off the project in 2014 at a groundbreaking event attended by top Indonesian military and government officials.

Powered by five dams, the plant would supply 9,000 megawatts of electricity to an industrial park being built nearby.

It would make it the biggest hydropower plant in South-East Asia.

Eight years on, not a single dam has been built and only part of the road leading to the site has been completed.

Slow permit approvals and initial refusal from residents to give up their land have led to construction delays and higher costs, said chief executive officer Andrew Suryali.

These issues highlight the challenges facing the developing countries in attracting renewable energy investment to wean off coal, which remains abundant and cheaper in the world’s largest exporter of the dirtiest fuel.

In Kayan’s case, such delays would necessitate the construction of a new temporary coal-fired plant in North Kalimantan province.

“We kept being ping-ponged back and forth” during the approval process, Suryali said in August during a media briefing in Tanjung Selor in Kalimantan, about 2,475km north of Jakarta.

“Our hope is to finish first so they don’t need to build that coal plant after all. We can be 100% green.”

The case also exposes the limitation of Indonesia’s new job creation law in speeding up approvals, despite its promise for being pro-business, as more rules need to be issued or amended to comply with the new legislation.

Hydropower is the biggest source of clean energy and it can be used whenever it’s needed, similar to fossil fuels.

Indonesia however will need to tap its entire 75-gigawatt hydropower potential –enough to meet the whole archipelago’s demand – to be able to shutter all its coal-fired plants and reach a target for net-zero emissions by 2060.

Kayan Hydro spent no less than a decade to secure the site in the forest, which was chosen by the company’s founder as an ideal location to build the plant. But various permits are needed to utilise the forest and to negotiate land acquisitions with local residents who feared that promised jobs at the site wouldn’t come through if they give up farming and sell their land.

In addition, the company said the permit process was set back when North Kalimantan split from East Kalimantan to become a new province in 2012, while changes to investment regulations in 2019 meant it had to request approval from a different agency for the project.

Kayan Cascade, as the plant is called, is to be built on the eponymous 28,600 sq km watershed that is largely comprised of primary and secondary forests, a home to hornbills, honey bears, leopards, as well as the indigenous Dayak tribe.

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