As stated in the National Energy Plan, Indonesia is committed to develop renewable energy to make up to 23% of the national energy mix in 2025. However, the transition to renewable energy will take time and requires big investment. In this period of transition, natural gas has become an option for cleaner energy to reduce CO2 emissions and air pollution.
A report by the International Energy Agency (IEA) mentioned that coal to gas switching has saved around 500 million tons of CO2 emissions during the 2010 to 2018 period. In the Sustainable Development Scenario, the usage of natural gas as a flexible transition fuel in power plants will also increase until the late 2020’s.
For Indonesia, the Energy and Mineral Resources Ministry consider that natural gas will play an important role as a backbone of national energy supply as well as the economic driver. It is predicted that Indonesia will enjoy a surplus of gas supply in 2023, following the expiry of gas export contracts and the commencement of several new gas projects.
Now, the Government will push gas consumption in power plants. They plan to switch several diesel power plants to become gas power plants. There are 52 diesel power plants with a total capacity of 1,697 megawatt (MW) that are going to be switched.
In regards to Indonesia’s energy mix target in 2025, natural gas will remain and will play a role in supplying the energy demand. From the total energy demand projection in 2025, the natural gas portion will be the third biggest at around 89.5 MTOE or 22.3%.
Based on data from the Energy and Mineral Resources, we have proven gas reserves of around 97.5 trillion cubic feet (TCF) and these reserves have not been developed yet. Government should handle carefully the management of gas from the upstream sector until the end user in order to achieve future national energy security. (*)