Indonesia’s plan to increase its gas-fired power plant capacity by up to 10.3 gigawatts (GW) in the 2025-2034 Electricity Supply Business Plan (RUPTL) could impose a staggering cost of up to Rp155.8 trillion (US$9.6 billion) per year, while exacerbating the country’s dependence on gas imports and hindering the nation’s energy transition.

Sartika Nur Shalati, Policy Strategist at CERAH, said that the expansion would significantly increase State electricity company PLN’s gas purchase costs. According to the RUPTL, gas demand is expected to surge by 60 percent, reaching 2,352 billion British thermal units per day (BBTUD) by 2034. Assuming the maximum gas price is US$6 per million British thermal units (MMBTU), the total cost of gas procurement would hit US$5.15 billion (Rp84.98 trillion) annually.

Moreover, with the ongoing policy of a capped gas price (HGBT), the price differential that the government must absorb will rise. CERAH’s calculations show that with a typical price differential of US$5/MMBTU, the government would need to shoulder an additional Rp70.82 trillion for the gas power plant expansion.

“This increase in gas-fired plants by 10.3 GW is expected to push total costs up to Rp155.8 trillion per year,” Sartika said as quoted in a statement on Friday, August 8, 2025. “This is nearly equivalent to the state revenue target from the oil and gas sector, which stands at Rp208.48 trillion in 2025. These figures do not even include the cost of gas infrastructure development.”

She further emphasized the high cost and long payback period of gas infrastructure projects, such as regasification facilities and pipelines, which could lock Indonesia into further fossil fuel dependency. She warned that this could hinder investments in renewable energy, energy storage systems, and grid infrastructure.

"The RUPTL document fails to clarify the timeline for gas usage, reduction targets, or phase-out strategies. Without clear direction, gas could shift from being a 'bridging energy' to a 'permanent energy,' derailing Indonesia’s transition goals and weakening its position in global climate diplomacy," Sartika said.

Another significant risk is the declining national gas production and reserves, which could make Indonesia a net gas importer after 2037. The situation is further compounded by the rising domestic gas consumption across various sectors, including industry, fertilizer, household, and electricity, potentially leading to sectoral competition as reserves dwindle.

Adila Isfandiari, Climate & Energy Campaigner at Greenpeace Indonesia, added that expanding gas-fired power plants would worsen Indonesia’s climate crisis, especially with the rising frequency of extreme weather events. Methane, the primary component of natural gas, has a global warming potential 80 times greater than carbon dioxide, and methane leakage along the supply chain could exacerbate the situation. If leakage exceeds 3 percent, natural gas would have a more detrimental climate impact than coal.

“Indonesia is one of the countries most vulnerable to the risks of climate crises, especially extreme weather events,” Adila said. "The government and (Central Bank) Bank Indonesia have acknowledged that these extreme events have already caused economic losses amounting to trillions of rupiah."

Adila concluded that expanding fossil gas infrastructure would lock Indonesia into long-term fossil fuel dependence, weakening the country’s ability to ramp up renewable energy capacity in line with the Paris Agreement commitments.

“Fossil gas is not the climate solution nor the energy transition solution. The gas expansion plan in the RUPTL must be canceled, as it would trigger a fossil gas lock-in. This contradicts the energy self-sufficiency agenda promoted by the Prabowo administration,” she stressed.