Energy and Mineral Resources Minister Bahlil Lahadalia is encouraging investments in the country’s coal industry, highlighting solid prospects despite the global energy transition. As one of the largest coal producers in the world, the government recognized opportunities to optimize its resources while maintaining its efforts toward climate and environmental resilience, he said.

“Coal players [companies], rest assured, please invest [in Indonesian coal]. It’s OK, it’s still good. Even Europe is still asking for a 20-year contract with Indonesia for coal exports,” Bahlil said in his speech on Wednesday at the Mandiri Investment Forum in Jakarta.

Emphasizing the continued profitability of the commodity, the energy minister nonetheless noted that some adjustments should be made to reduce emissions from coal-fired power plants.

“I want coal-fired power plants to use carbon capture technology to provide us with affordable energy with low carbon emissions,” Bahlil told the forum, adding that coal plants fitted with carbon capture and storage (CCS) technology could be a “cheaper option for the energy transition”.
 

Experts have stated the opposite, however, arguing that CCS adoption would be challenging in Indonesia, given the technology was still new and costly.

According to Bahlil, producing 1 kilowatt-hour (kWh) of electricity from coal would cost just 5-6 US cents, while electricity from renewable power plants could cost more than 10 US cents.

Meanwhile, his calculations showed that the cost of electricity from coal power plants was around Rp 6 trillion (US$367 million) lower than that that of gas-fired power stations.

“In 10 years, it will add up to Rp 50 trillion to Rp 60 trillion. If we convert it to 10 gigawatts [GW], we multiply it by 10, so in 10 years [it would be] Rp 600 trillion. That’s the price difference,” Bahlil said.

Experts say the price of electricity generated from coal is artificially low however, given the government’s price cap on the fossil fuel, reserves of which the country has in abundance. In contrast, Indonesia has been struggling to increase its supply of natural gas, which has recorded a steady decline in annual production over the years.

Bahlil added that the energy ministry was planning to use a combination of coal and renewable power plants to generate electricity in the future, with the adoption of CCS technology at coal plants.

The government would still consider retiring coal power plants early, albeit gradually, he continued, reaffirming a commitment to close the deal on the long-delayed early retirement project for the 660-megawatt Cirebon power plant.

Bahlil also observed a shift in global efforts toward clean energy after United States President Donald Trump signed an executive order on the US withdrawal from the Paris Climate Agreement on his first day in office.

The entire world had flocked to draw up a green energy road map under the 2015 Paris Agreement, the minister said. “But once Trump became the US president, all those [plans] were thrown out. We thought coal was finished, but it has come back to life,” he said.

This article was published in thejakartapost.com with the title "". Click to read: https://www.thejakartapost.com/business/2025/02/14/businesses-should-jum....

Download The Jakarta Post app for easier and faster news access:
Android: http://bit.ly/tjp-android
iOS: http://bit.ly/tjp-ios