Chapter 12 focuses on the retirement of coal-fired power plants (CFPPs) and the closure of associated coal mines and supply chains. Shutting down coal-fired power plants and closing coal mines is a big but important step in moving to cleaner energy.
This chapter discusses how Strategic Environmental Assessment (SEA) is critical in guiding decision-making for the early retirement of these facilities, as it helps identify and manage the environmental and socio-economic risks, as well as the cumulative impacts of multiple closures. The chapter highlights the complexities of closing coal facilities, particularly in regions heavily dependent on coal, and stresses the need for a transition plan that addresses job losses, economic impacts, a just transition and opportunities for redevelopment.
12.1 Why SEA is Important to Coal-Fired Power Plant Retirement and Coal Mine Closure
12.2 Existing SEA Guidance/Guidelines for Retirement of Coal-Fired Power Stations and Closures of Coal Mine and Supply Chains
12.3 Coal-Fired Power Stations: Installed Capacity
12.4 Background to Coal Energy Generation
12.5 Environmental Issues of Operational Coal-Fired Power Plants
12.6 Issues Associated with the Retirement of Coal-Fired Power Plants
12.7 SEA Considerations for Coal-Fired Power Plant Retirement
Environmental issues of coal such as air and water pollution, waste generation, and land contamination are well known. Coal plants are major polluters, releasing harmful gases like sulfur dioxide and mercury into the air and water. While closing them reduces pollution, there are still concerns about leftover waste, contaminated land, and water pollution from coal ash that need to be handled properly.
The closure of coal plants also affects people and communities that rely on them for jobs and income. When these plants shut down, many workers can lose their jobs, and local economies that depend on the coal industry can suffer. This is especially hard on communities where coal plants are a central part of life. However, with careful planning, old coal plant sites can be turned into new projects, like solar or wind farms, which can create new jobs and opportunities for these communities. Other potential socio-economic impacts are detailed like health risks and the effects on local communities, including vulnerable groups and Indigenous populations.
Retiring coal facilities also involves several stages—shutdown, decommissioning, cleanup of contaminated sites, and planning for new uses—making early, strategic decision-making essential. The graphic below illustrates the stages involved in retiring a coal plant and how SEA supports each step.
Strategic Environmental Assessment (SEA) is essential for ensuring that the implementation of policies, plans, and programs (PPPs) concerned with the energy transition and closing coal-fired plants and coal mines is managed responsibly, mitigating negative impacts and maximizing potential benefits for affected communities and the environment.
SEA makes sure that everyone involved—workers, local residents, and businesses—are part of the policy development, planning and decision-making processes early on. This helps address concerns, avoid conflicts, and ensure the transition away from coal is fair. By focusing on how to protect the environment, avoid or minimize negative social consequences and maximize benefits and opportunities, SEA helps make the shift to cleaner energy smooth and sustainable for everyone.
The Indonesian electricity sector is dominated by coal-fired power plants (CFPPs), which in 2021 contributed at least 5.5% to total GDP.
The potential impacts of retiring CFPPs include regional job losses, reduced business activity along coal supply chains, higher electricity tariffs, and increasing commodity and food prices. State revenues may fall, reducing public budgets for provinces that host many CFPPs. Without replacement electricity sources, major economic hubs—such as shopping malls and factories—may also be affected.
Millions of enterprises rely on the state electricity company, and without proper mitigation measures, CFPP retirement could adversely impact the national economy and intra-country trade in Southeast Asia.
Without proper management of ash ponds, contaminants can pollute soil, groundwater, drinking water, and waterways.
Illegal coal ash disposal has occurred at various locations in East Kalimantan and central Java, Indonesia, with waste dumped near wetlands, mangrove forests, and rivers. Waste in some areas has been burned openly, and hazardous substances, including heavy metals, have likely contaminated water and soils.
Although the companies involved have received criminal sanctions, the full cleanup has not been completed. Coal ash has been dumped on a large scale into vulnerable ecosystems, where runoff can contaminate groundwater and affect community water sources.
Retirement of CFPPs will reduce dust, air, and noise pollution, leading to improved public health. However, overall community health may deteriorate as support from CFPPs and associated businesses is reduced or eliminated.
Betul District in Madhya Pradesh, India, experienced a boom in business and public infrastructure in the 1960s with the development of coal-fired power plants and coal mines. Housing and community facilities grew, including schools, hospitals, roads, and banks, often financed by the coal industry. Communities became reliant on these essential services and facilities.
When this coal infrastructure is retired or closed, nearby communities may lose access to these services, and livelihoods may be severely affected. Vulnerable groups—including women, Indigenous Peoples, and low-income households—may face disproportionate impacts.
During mine closure, a specific water management plan should be developed and measures implemented to prevent potential impacts and to ensure that stockpiles, pits, and other disturbed areas are rehabilitated and revegetated to reduce contaminated runoff. Acid mine drainage issues associated with coal are commonplace around the world, often as a result of dam failure at abandoned mines. Impacts from a number of smaller abandoned mines may also have an effect.
In the Sewanee Coal Seam in Tennessee, United States, there are 300 abandoned coal mines. The seam is surrounded by high levels of pyrite (iron sulfide) that, when exposed to water and air, creates acid mine drainage. Although these mines are no longer operational, there is no known method of preventing acid mine drainage runoff resulting from this chemistry. It is highly toxic to humans, flora, and fauna, and has polluted waterways and affected communities. Although the water is being treated, the runoff continues to impact aquatic flora and fauna and downstream users of the waterway.