The rapid advancements in green energy contribute to reducing electricity costs. In Indonesia, solar photovoltaic prices are even approaching those of coal-fired power generation. This gives the Indonesian government ample reason to prioritize renewable energy, accelerating the energy transition and achieving the net-zero goal.
The Secretary General of the Indonesian Ministry of Energy and Mineral Resources, Dadan Kusdiana, stated in a press conference on December 17th that the lower electricity prices in Indonesia's renewable energy sector are attributed to technological advancements and innovations, particularly in solar and wind power generation.
Dadan highlighted the increasingly affordable prices of green energy in Indonesia, stating, "There is no reason not to switch to renewable energy now." (Photo: Ministry of Energy and Mineral Resources)
He mentioned South Sulawesi Wind Power Plant (PLTB) which was built in 2016, where the contract electricity price was 10.9 USD per kWh. However, for the wind power plants that signed contracts earlier this year, like the South Kalimantan Wind Power Plant with a similar capacity of about 75MW, the contracted electricity price is significantly cheaper. "Compared to 7 years ago, the price is now below 6 USD per kWh."
Furthermore, he also mentioned the Cirata Floating Solar Power Plant, with an electricity price of 5.8 USD per kWh, which is nearly equivalent to the coal-fired power generation cost of 4.77 USD per kWh. "From this, we can conclude that renewable energy is already competitive with fossil fuels in certain aspects. Therefore, there is no reason not to switch to renewable energy now."
Cirata Floating Solar Power Plant. (Photo: PLN)
Darmawan Prasodjo, the Chairman of the Indonesian state electricity company (PLN), has also acknowledged that the production costs of solar and wind power plants will decrease in the future. 5 to 7 years ago, coal-fired power generation was the cheapest at 5.5 USD per kWh. However, with the innovation and development every year, the prices of renewable energy have become increasingly affordable. "Currently, the price for wind power plants has already dropped to 5.5 USD per kWh, and for solar power plants, it is 4.5 USD per kWh. When compared to hydropower, natural gas, and geothermal, wind and solar energy are even more cost-effective."
However, Zainal Arifin, the Vice President of the Renewable Energy Division at the PLN, expressed that the development of renewable energy in Indonesia is hindered due to the requirements for local player in green energy projects, preventing investors from investing. Therefore, he hopes the government will relax this domestic content requirements, especially for projects in receiving international funding.