Indonesia towards Gas and LNG A glimmer of hope to achieve Net-Zero Emissions

(Source: Pertamina)

Jakarta, IO – The future direction of national energy policy, namely the transition from fossil energy to renewable energy, makes the role of gas as an energy transition medium even more important, partly because of its carbon emission factor. This clean energy source will grow mainly across the Asia Pacific. Gas still plays an essential role in developing countries, including Indonesia, which is committed to reducing greenhouse gas (GHG) emissions by 29% by 2030 and up to 41% with international assistance (IA), including technology and finance. The energy sector is committed to reducing GHG emissions by 314 million tons of CO2e to 398 million tons of CO2e by 2030, through the development of renewable energy, the application of energy conservation, and the application of clean energy technology. Therefore, the role of gas as an energy transition medium is very important. 

Gas is considered a bridge during the energy transition period from coal to renewable energy, due to its lower level of carbon emissions. Indonesia’s national electricity capacity can be increased with environmentally-friendly gas-based power plants before renewable energy power plants are included in the national electricity system. Emissions released by gas-based power plants are lower than those emitted by coal-fired power plants. It is hoped that in this transition period, or before a significant transition to renewables, they can be filled with gas. Emissions released from gas are 50% fewer than emissions released from coal. 

Building an environmentally-friendly power plant manifests Indonesia’s commitment to clean energy, as Indonesia has a target to reach Net Zero Emissions (NZE) by 2060, which means that there will be 1.5 Giga Tons of CO2 that must be eliminated in various ways, one of which is by utilizing a cleaner form of fossil fuel, such as gas, and spurring investments in sustainable green energy. 

In addition to the immense potential of renewable energy, Indonesia has significant gas potential that needs to be utilized as an energy transition from fossil fuels to renewable energy. Gas is an essential commodity, primarily to support the energy transition process from heavy fossil energy to medium and then to zero. Furthermore, the current challenge is how to produce cheap energy, which is not only affordable to the public but can also encourage investors to do business in Indonesia. The efficiency in the operation of the power generation unit is vital. 

For instance, the dependency on gas in Europe, which is currently experiencing an energy crisis, has also increased significantly. Europe, which previously abandoned fossil energy to use green energy from the sun and wind, is now forced to revert to natural gas resources. The reason is that amid increasing demand due to the recovery of post-pandemic conditions, it turns out that the energy capacity produced from the sun and wind is insufficient for the needs of the continent. 

Because of this, Europe is severely impacted by the decision that Russia has imposed, by stopping the flow of gas supplies to Europe, as it relies heavily on natural gas from Russia. With this action, it is clear that Russia is trying to pressure Europe to lift all the sanctions it has imposed thus far. The sanctions were actually given to punish Russia for its invasion of Ukraine. In response to this, Russian energy companies such as Gazprom have stopped supplying gas to Europe; they have blocked all exports via Nord Stream 1 pipeline, from 31 August. The gas flow had been opened but is now closed again after the G7 countries, including European countries, supported the proposal to limit the sale price of Russian oil. With the cessation of its gas supply, Europe is threatened with a gas crisis. A cut in supply via the Nord Stream 1 pipeline, which connects Russia to Germany via the Baltic Sea, pushed European gas prices up. It is now feared that many countries in parts of Europe will be forced to ration energy, exacerbating recession risks in the region. 

The Russia-Ukraine conflict inevitably puts economic pressure on G20 members who are just recovering after the COVID-19 pandemic. Therefore, it is crucial for such members, such as Indonesia, to focus on the energy transition, which must be carried out comprehensively and carefully in various stages, considering competitiveness, cost, availability, and sustainability.