Chaos AGM, Adaro’s Shareholders Reject the New PLTU Development Plan


General Meeting of Shareholders (GMS) PT Adaro Energy Indonesia Tbk was in chaos when a shareholder rejected the development plan power plant new coal in North Kalimantan for the company’s aluminum smelter of 1.1 gigawatts.

The shareholder conveyed his message by unwrapping a banner that said rejecting the construction of a new coal-fired power plant. The PLTU is a captive PLTU, the term for a power plant dedicated to providing electricity to an industrial facility.

One of Adaro’s shareholders named Ganjar said that the climate crisis threatens the future and that of posterity.

“Adaro must show a serious transition intention by moving away from the coal business and investing more aggressively into the renewable energy sector,” he said.

Abdi, another Adaro shareholder, also said the same thing. He reminded that financial institutions should not need to support Adaro’s business if the company does not make an energy transition.

“If Adaro still doesn’t make a serious transition out of the coal business, responsible financial institutions should not support Adaro’s business,” he said.

Adaro himself claims that he will make an energy transition. This can be seen from the theme of their financial report, ‘Transforming into a bigger and greener Adaro’.

However, Greenpeace Indonesia Energy Campaigner Bondan Andriyanu said that until now Adaro still relies on the coal business.

He said Adaro’s coal production had increased by almost 20 percent from 52.7 million tons to 62.8 million tons in 2021, and targeted an increase in production this year.

“The construction of a new coal-fired power plant will only exacerbate the impact of the climate crisis, pollute the environment, harm society and undermine Indonesia’s commitment to reducing carbon emissions from the energy sector,” Bondan said in an official statement, Friday (12/5).

Adaro’s smelter is planned to produce 500 thousand tons of aluminum every year. Assuming that the PLTU uses the best current technology, namely ultra super critical, this PLTU is predicted to produce 5.2 million tonnes of CO2 equivalent per year. It goes against the spirit of energy transition.

According to the International Energy Agency (IEA), in the 2050 Net Zero Emission (NZE) scenario, to keep the global temperature rise below 1.5 degrees Celsius, there should be no more construction of new coal-fired power plants after 2021.

On the other hand, Adaro has signed a PPA with PLN for a 70 MW wind power plant in Kalimantan.

Based on Adaro’s 2022 financial report, the company has US$2.7 billion in cash.

According to Greenpeace, Adaro’s transition should be carried out by stopping plans to build new coal-fired power plants and prioritizing capital expenditures to invest in renewable energy. Moreover, now the world is starting to switch from using coal.

The IEA NZE 2050 scenario states that coal supply will decrease by up to 48 percent during 2021-2030 and 91 percent during 2021-2050.

This shows that coal investment has a high transition risk. Adaro’s dependence on the coal business carries a very high risk for the company’s investors.

The IEEFA report states that currently more than 200 financial institutions have policies on coal investment restrictions. From the banking sector, DBS, Standard Chartered and OCBC have stated that they will not be involved in financing Adaro.

In addition, HSBC also has a special policy not to finance the construction of captive coal power plants for industry.

[Gambas:Video CNN]



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