Page 5 - AfrElec Week 44 2022 1

GLNG COMMENTARY GLNG

A replacement for coal project is a distant prospect, and will first serve
With the decline in Indonesia’s gas output, the Singapore’s needs.
country’s prioritisation of domestic gas supply If, then, Indonesia is serious about replac-
has not led to higher volumes for the home mar- ing coal, the near-term solution is expanding
ket. As a result, Indonesian gas consumption fell domestic gas use, and that will only be possible
from 42.7 bcm in 2011 to only 37.1 bcm in 2021, with LNG imports. State energy regulator SKK
while the share of gas in primary energy supply Migas has estimated that domestic gas output
dropped from 22% to 17%. Instead, Indonesia could double to 124 bcm by 2030, but with the
has ramped up coal-fired generation, which problems with investment looking unlikely
now accounts for 61.4% of total power genera- to clear up, that is unrealistic, to say the least.
tion, versus 54.5% in 2016. This shift, which has It would also be hard for Indonesia to source
been very detrimental to Indonesia’s climate imported gas via pipeline, in the short term. The
objectives, has been supported by a substantial solution, then, is LNG imports.
increase in domestic coal production. There are already a number of facilities that
But as the country comes under increasing currently serve as liquefaction plants that could
international pressure to commit to reducing be repurposed relatively easily to regasify LNG.
emissions, and with less and less gas available, But a substantial amount of new capacity would
the question is what energy source will serve also be needed. Exactly how much of regasifica-
as coal’s replacement. Renewables potential in tion capacity will depend on how serious Indo-
Indonesia is significant – it is estimated that the nesia’s government is about kicking its coal habit.
country could host 94.3 GW of hydropower, In the short term, the high cost of gas compared
207.8 GW of solar, 60.6 GW of wind, 28.5 GW with coal is a disincentive. However, with a large
of geothermal and 18 GW of tidal energy. But amount of under-utilised gas power generation
the deployment of projects has been very slow, capacity, connected already with LNG terminals
because of high costs and Indonesia’s perennial that could be repurposed, there is a clear ration-
problems securing investment. Indonesia could ale in the long term for pursuing this strategy.
receive clean energy from the proposed Aus- w™
tralia-Asia Transmission Link, but the 20-GW

Week 44 03•November•2022 www. NEWSBASE .com P5