The need for sustainability premium of the early retirement of coal plants: Evidence from Indonesia

IF 9.2 2区经济学 Q1 ECONOMICS

Energy Policy Pub Date : 2025-08-14 DOI:10.1016/j.enpol.2025.114810

Bahar Celikkol Erbas , Niccolò Manych , Kevin P. Gallagher , Rishikesh Ram Bhandary

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引用次数: 0

Abstract

To fulfill climate commitments and attain net zero emission goals, there is a global effort to retire coal fired power plants (CFPPs) early. Carbon prices alone are insufficient to retire CFPPs early. Financial tools capturing all sustainability aspects are needed. Development finance institutions (DFIs) have important roles in implementing these tools and facilitating early retirement of CFPPs. This study creates a novel financial tool, ‘sustainability premium’ based on a Cost-Benefit-Analysis (CBA) capturing sustainability aspects of early retirement. The sustainability premium can be used alone or with carbon credit prices in early retiring CFPPs. The CBA is applied to the Tenayan Riau CFPP in Indonesia based on three scenarios: business-as-usual where the plant continues to operate (BAU), early retirement without any substitute (RE) and with a renewable alternative (AR). BAU and RE impose significant welfare costs on Indonesia. Welfare loss is roughly seven times smaller in AR than RE. The benefits in AR include improvement in public health, water quality, visibility, and smog and carbon emissions. The sustainability premium can be adjusted for retirement age to provide enough incentives and used with carbon credit schemes to make early retirement welfare enhancing. DFIs can use the sustainability premium in just energy transition.

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燃煤电厂提前退役的可持续性溢价需求：来自印度尼西亚的证据

为了履行气候承诺并实现净零排放目标，全球正在努力早日淘汰燃煤电厂。单靠碳价格不足以让cfpp提前退休。需要具备所有可持续性方面的金融工具。开发金融机构在实施这些工具和促进cfpp提前退休方面发挥着重要作用。本研究基于成本效益分析（CBA）创造了一种新颖的金融工具“可持续性溢价”，该分析捕捉了提前退休的可持续性方面。可持续性溢价可以单独使用，也可以与提前退役的cfpp的碳信用价格一起使用。CBA适用于印度尼西亚的Tenayan Riau CFPP，基于三种情况：工厂照常运营（BAU），提前退役而没有任何替代（RE）和可再生替代（AR）。BAU和RE给印尼带来了巨大的福利成本。AR的福利损失大约是可再生能源的七分之一。AR的好处包括改善公共卫生、水质、能见度、雾霾和碳排放。可持续性溢价可根据退休年龄进行调整，以提供足够的激励，并与碳信用计划一起使用，以提高提前退休福利。发展金融机构可以在能源转型中利用可持续性溢价。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Energy Policy 管理科学-环境科学

CiteScore

17.30

自引率

5.60%

发文量

540

审稿时长

7.9 months

期刊介绍： Energy policy is the manner in which a given entity (often governmental) has decided to address issues of energy development including energy conversion, distribution and use as well as reduction of greenhouse gas emissions in order to contribute to climate change mitigation. The attributes of energy policy may include legislation, international treaties, incentives to investment, guidelines for energy conservation, taxation and other public policy techniques. Energy policy is closely related to climate change policy because totalled worldwide the energy sector emits more greenhouse gas than other sectors.