TEMPO.CO, Jakarta - Risk Management Director of PT PLN (Persero) Suroso Isnandar estimates that the state electricity company needs funds of up to US$235 billion to realize the energy transition by 2040. This amount is equivalent to Rp4,000 trillion at the current exchange rate in Indonesia.

Suroso outlined the need for the energy transition in the electricity sector while attending the Business Indonesia Economy Outlook 2025 on Tuesday, December 10, 2024, at Raffles Hotel, South Jakarta.

PLN plans to replace coal-fired steam power plants (PLTU) in the coming years. One of the steps is to build additional renewable baseload, which will function as a generator of new renewable energy sources.

The additional renewable baseload to be built will have a capacity of 33 gigawatts, requiring US$80 billion over the next 15 years. Subsequently, PLN also needs US$33 billion to build gas-fired power plants (PLTG) with a capacity of 22 gigawatts.

Meanwhile, for the development of additional Variable Renewable Energy (VRE) - renewable energy sources that depend on weather conditions, such as wind and solar - PLN claims to need US$43 billion.

There are still several other projects to be built as part of PLN's energy transition plan, namely the Accelerated Renewable Energy Development (ARED) for the period 2025 - 2040.

"To build all that by 2040, we need US$235 billion. That's approximately Rp4,000 trillion," said Suroso.

Through ARED, PLN plans for 75 percent of new renewable energy and 25 percent gas to reduce emissions.

In the next 15 years, PLN will add generator capacity of 102 gigawatts. Of this total, 75 gigawatts will come from renewable energy. The breakdown includes 15 gigawatts of wind power, 27 gigawatts of solar power, 25 gigawatts of hydro power, and 32 gigawatt hours (GWh) of battery energy storage systems (BESS).

Among the mix of renewable energy sources are also seven gigawatts of geothermal energy and one gigawatt of biomass.

The utilization of both energy sources is often criticized by environmental activists. The use of biomass for co-firing in coal-fired power plants is referred to as a "pseudo-solution" to the energy transition by Greenpeace Indonesia. Meanwhile, geothermal projects are often rejected by indigenous communities as they are seen to pollute the surrounding water sources.

Based on the ARED program of PLN, coal energy sources are no longer used at all. Although gas is still used, with gas-fired power plants with a capacity of 22 gigawatts. Suroso claims, "But gas emissions are roughly half, even a third, of coal-fired power plants. This is what we will pursue."

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