Phasing out coal power in two major Southeast Asian thermal coal economies: Indonesia and Vietnam

Abstract

The phase-out of unabated coal power is crucial for meeting climate agreements in coal-dependent economies such as Indonesia and Vietnam. Despite both countries committing to the 2021 Global Coal to Clean Power Transition Statement, translating phase-out pledges into action poses considerable challenges. Drawing insights from interviews with government, civil society, and industry experts, this study identifies the key barriers hindering coal phase-out in each country. Concerns about potentially escalating electricity prices and power shortages loom large, with the former being more prominent in Indonesia and the latter more prominent in Vietnam. The obstacles appear particularly significant in Indonesia for reasons including its higher coal dependence. We conclude that prioritizing renewable energy growth, as well as halting the construction of new coal plants, would be the most practical and viable way forward for both countries rather than an oversized early focus on coal plant closures. The analysis is of high relevance to informing plans under the two countries' Just Energy Transition Partnerships.