Jakarta – The cost of producing electricity from natural gas-based power plants is recorded to be much higher than that of coal. This cost difference reaches Rp5 trillion per gigawatt (GW) per year, according to Energy and Mineral Resources Minister Bahlil Lahadalia.
In his presentation at the Indonesia Economic Summit in Jakarta on Wednesday, February 19, Bahlil explained that the national energy transition plan must consider cost aspects not to burden industry and society. He highlighted that switching from coal to gas as the primary energy source has the potential to increase the country’s economic burden significantly.
“If we build 10 GW of gas power plants until 2029, the cost difference that must be borne can reach Rp50 trillion annually. And if the development plan reaches 21 GW by 2034, the total additional cost could reach Rp500 trillion,” Bahlil said.
According to him, the large cost difference leaves two main options: raising electricity tariffs or increasing energy subsidies from the state budget. However, the subsidy option is feared to burden state finances in the long run.
In addition, Bahlil highlighted the limited domestic gas supply. To meet the electricity needs of a 10 GW gas-based power plant, Indonesia needs around 250 cargoes of liquefied natural gas (LNG) per year. This figure is almost equivalent to the current total national gas production.
“If all of our gas is allocated to power plants, what about other industries that also need gas? This is an extraordinary dilemma,” he said.
Furthermore, he mentioned that many large countries, such as China and India, still rely on coal as their main energy source. Both countries use a blending strategy: mixing coal with renewable energy to reduce carbon emissions without abandoning coal altogether.
Bahlil also proposed a similar approach for Indonesia. According to him, by implementing carbon capture and storage (CCS) technology in coal-fired power plants, Indonesia could continue to use coal without significantly increasing emissions.
“I have told President Prabowo Subianto that we still have abundant coal reserves. Instead of following the direction of developed countries that have their interests, we should find solutions that align with Indonesia’s conditions,” he said.
This strategy, Bahlil said, not only maintains the stability of electricity prices but also ensures the competitiveness of the national industry. He said that the balance between energy transition and economic growth must still be considered.
“We cannot rush to leave coal without careful calculation. What is important is how we manage this transition wisely and still maintain economic sustainability,” he concluded. (Hartatik)
Banner photo: PLN/handout
