Economic price of renewable energy continues to shrink, threatening fossil energy dominance

Jakarta – New and renewable energy (NRE) in Indonesia is showing a significant improvement in its economics, threatening the dominant position of fossil energy. Secretary General of the Ministry of Energy and Mineral Resources (EMR), Dadan Kusdiana, revealed that the price of electricity from NRE plants is increasingly competitive and even more efficient than that of fossil energy.

According to him, the development of NRE technology, especially in solar power plants (PLTS) and wind power plants (PLTB), has reached a high-efficiency level. This impacts reducing the cost of electricity production, making NRE prices close to or even cheaper than fossil energy.

“Now, the NRE price figure is below 6 cents per kWh, while the PLTU price ranges above that. There is no more reason not to utilise NRE,” Kusdiana said in a written statement.

He emphasised that PLTB Sidrap and PLTB Jeneponto, for which contracts were signed in 2016, showed electricity prices ranging from 10.9 cents per kWh. However, with recent developments, the new contract for the South Kalimantan wind farm 2023 shows a price below 6 cents per kWh.

“This indicates that renewable energy is not only increasingly efficient but also economically competitive,” Kusdiana said.

In a direct comparison with coal-based fossil energy plants (PLTU), Kusdiana said NRE is even more economical. “The electricity price of Cirata solar power plant is USD5.8 cents per kWh, below USD6 cents per kWh, and even cheaper than fossil energy,” he explained.

With the benchmark coal price (HBA) ranging from USD 125 to USD 130 per ton, the price of electricity from renewable energy is seen as a serious competitor to fossil energy.

“With the current HBA at USD 130 per ton, NRE is already competitive. NRE has entered the economic scale and can compete directly with fossil energy. There is no more reason not to switch to NRE,” said Dadan, underlining the urgency of utilising NRE as a more sustainable energy source. (Hartatik)

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