Renewable Energy Electricity Supply Requires Investment Of Up To IDR 9000 Trillion

Electricity supply from PLN

In line with the government’s energy transition commitment, the State Electricity Company (PLN) is ready to fully support the program. However, the costs of renewable energy electricity supply are very large. PLN needs thousands of trillions of rupiah to maximize this support.

PLN estimates that the investment needed to increase the capacity of renewable energy-based power plants until 2060 can reach the range of Rp. 7,000 trillion to Rp. 9,000 trillion.

PLN President Director Darmawan Prasodjo said that currently PLN’s electricity consumption is in the range of 300 terawatt hours (TWh) and is expected to increase to around 1,000 TWh in 2060. To meet this need, at least an additional 220 gigawatts (GW) of power plants are needed, the majority of which are based on EBT.

“This means that an additional US$500 billion to US$600 billion of investment is needed, or around Rp. 7,000 trillion to Rp. 9,000 trillion,” said Darmawan at the SOE International Conference in Nusa Dua, Bali, Tuesday (18/10/2022).

However, Darmawan explained, the amount of the investment value could decrease following the cost of installing clean energy plants which have recently become cheaper.

“Many say that NRE is expensive. However, if we look at the past 30 years, the cost of NRE has been much reduced,” he said.

Darmawan said the price of electricity supply based on new and renewable energy could be kept down. Through technological innovation and collaboration, he said, clean energy prices will be more competitive. He believes that with the current innovations, in the future the price of clean energy will compete with fossil energy.

“We did some innovations. In the past, if we wanted to get cheap energy, it was dirty. We got expensive clean energy, this is a polemic that must be faced, this is what we have to solve by innovating, collaborating,” he said.

The decline in prices also occurred in wind power. He explained that 5-6 years ago, the cost of providing electricity from wind power plants was around 13 cents per kWh and then dropped to 9 cents per kWh.

Meanwhile, PLN is pushing to stop the operation of the 5.5 GW power plant before 2030 as the company’s first step to providing space for green investment into the national electricity system. The maneuver is estimated to cost an investment of US$6 billion.

It’s just that the PLTU termination program entirely until 2050 is projected to be difficult to carry out.

The Center for the Global Sustainability University of Maryland estimates that the funds needed to be secured by PLN will reach US$32.1 billion or equivalent to Rp475.4 trillion (assuming an exchange rate of Rp14,810).

Meanwhile, PLN must increase the capacity and ecosystem of EBT plants with an investment value of the US $ 1.2 trillion or equivalent to Rp. 17,772 trillion until 2050.