Five years after Chinese President Xi Jinping announced a commitment to stop building coal-fired power plants overseas and promote renewable-energy investment, the growth of China-affiliated coal-fired power plants in Indonesia remains substantial. The capacity of China-affiliated coal-fired power plants in Indonesia has reached 17.1 gigawatts (GW) since the 2021 commitment, even though 61.5 GW of similar projects have been canceled globally—equivalent to 6.4 billion tons of CO₂ emissions over their operational lifetimes. Indonesia’s energy-policy signals are one factor driving this expansion.
A recent report by the Centre for Research on Energy and Clean Air (CREA), titled Five Years On: China Seeds Overseas Renewables Growth But Coal Ban Gaps Persist, found that although 61.5 GW has been canceled, 36.6 GW of China-related coal-fired power capacity overseas had entered operation between President Xi’s commitment and July 2026. Indonesia is one of the largest contributors, with 17.1 GW, far exceeding Vietnam’s 3.8 GW and Pakistan’s 3.4 GW.
Of this total, captive coal-fired power capacity accounts for the largest share, increasing from 0.3 GW in 2021 to 12.5 GW in 2026. It should be noted that the 0.3 GW figure for 2021 does not include capacity that was already operating before President Xi’s commitment, making the 12.5 GW figure entirely additional capacity developed after the commitment. Indonesia also recorded the largest capacity of coal-fired power plants under construction among the countries analyzed, followed by India and Zimbabwe.
CREA Industry Analyst, Syahdiva Moezbar said the increase in coal-fired power capacity in Indonesia is partly driven by regulatory loopholes. Although Presidential Regulation No. 112/2022 restricts the construction of new coal-fired power plants for the electricity grid, exemptions remain in place for national strategic projects and downstream industrial development. As a result, industrial expansion has become a catalyst for the growth of captive coal-fired power plants, particularly to support the nickel and aluminum industries. Indonesia accounts for the majority of the operational China-related captive coal-fired power capacity identified in the analysis—94% of the total 13.2 GW.
“These findings show that Indonesia’s energy-transition challenges cannot be viewed solely from the perspective of financing sources or the origin of investment. Indonesia’s downstream industrial expansion, particularly in nickel and aluminum, has created substantial energy demand. At the same time, limited electricity-grid infrastructure and available energy options can drive dependence on captive coal-fired power plants. Therefore, China’s involvement needs to be viewed in a broader context: how industrial investment, energy planning, and downstreaming policies collectively shape the direction of Indonesia’s energy transition,” Syahdiva said in a written statement on Friday, September 25, 2026.
Of the 12.5 GW of operational China-affiliated captive coal-fired power capacity in Indonesia, the nickel sector accounts for more than 9 GW, while around 6 GW is associated with aluminum and projects producing both nickel and aluminum. Industrial estates account for approximately 2.7 GW.
Chinese private companies dominate the nickel sector, while Chinese companies listed on stock exchanges have significant involvement in the aluminum sector. Several Chinese state-owned enterprises are also involved in captive coal-fired power projects in Indonesia as engineering, procurement, and construction (EPC) contractors.
At the same time, Chinese companies are also involved in developing renewable-energy projects in Indonesia, including 13.6 GW of hydropower projects and 8.2 GW of solar-power projects. However, most of these projects are still in the pre-construction or construction stages, while the total operational capacity is only around 0.5 GW.
These developments illustrate the trilemma faced by Chinese stakeholders in Indonesia: how to balance industrial expansion, limited electricity-grid infrastructure, and the need for reliable and affordable green energy sources.
Bhima Yudhistira, Founder and Executive Director of the Center of Economic and Law Studies (CELIOS), said Chinese investment in Indonesia’s critical-minerals sector needs to be directed toward supporting the energy transition, particularly by replacing captive coal-fired power plants with renewable-energy generation in industrial areas.
He said that, to encourage this shift, the government should revise Presidential Regulation No. 112/2022 to provide incentives and guidance for investors, particularly in the steel and battery sectors, to transition to green power generation.
“If Indonesia wants to increase the value added of its critical minerals, Chinese investment must also provide low-carbon power sources in every industrial area. PLN also needs to help strengthen the transmission network so that renewable energy can reach industrial areas. This momentum is important for maintaining the reputation of Indonesian investment in the global arena,” Bhima said.
These findings come amid the launch of China’s 15th Five-Year Plan. To strengthen implementation of its commitment, China needs to cancel or repurpose overseas coal-fired power plants that have not yet been built, establish retirement pathways for operating coal-fired power plants, and extend the commitment to captive coal-fired power plants. Integrating renewable energy into industrial areas, developing low-carbon industrial zones, and establishing more transparent monitoring mechanisms are also needed to support global climate targets, energy security, and the energy transition.
