Indonesian businesses are increasingly shifting their focus toward cleaner energy sources as part of the national energy transition as companies start to explore alternatives to coal, with natural gas emerging as the most frequently considered option, concluded Bank DBS Indonesia.

“We observe that they see alternatives to coal. The one most widely talked about is gas,” Anthonius Sehonamin, Head of Large Corporate Institutional Banking Group at PT Bank DBS Indonesia, told a media conference in Jakarta on Wednesday, November 26, 2025.

His comments follow the Indonesian government’s launch of the 2025–2034 Electric Power Supply Business Plan (RUPTL) earlier this year, which outlines an ambition to expand electricity generation capacity to 69.5 gigawatts (GW) by 2034. According to the Ministry of Energy and Mineral Resources (ESDM), 76 percent of that future capacity will come from renewable energy and storage systems.

The capacity breakdown:

● 42.6 GW from renewable sources (61 percent);

● 10.3 GW from energy storage (15 percent);

● 16.6 GW from fossil fuel power plants (24 percent)

● Coal Decline Will Be Gradual.

Despite rising renewable commitments, Sehonamin cautioned that industries cannot immediately eliminate coal, noting ongoing coal power development already embedded in the national plan.

The current RUPTL still permits construction of new coal-fired power plants (PLTU) with a combined capacity of 6.3 GW through 2034.

“The most important thing is the need for a consistent energy supply. Meanwhile, renewable energy can fluctuate, unlike coal which is consistent and relatively affordable,” he cited.

Coal’s continued role

ESDM Minister Bahlil Lahadalia previously justified the government’s decision to retain some coal expansion, arguing that global commitments to net-zero targets have shifted.

He pointed out that even the United States ‒ a key initiator of the Paris Agreement ‒ has stepped back from its climate pledges.

“We initially followed them, but now they are not implementing it properly. As the energy minister, I think I have the right to ask what’s behind this?” Bahlil said on May 26, 2025.

The minister also highlighted ongoing European demand for Indonesian coal, despite those nations strongly advocating for renewable transitions.

“If they still use coal, why are they forcing us to stop using it?” he said.

He further emphasized that coal remains crucial as a backup energy source, especially at night when renewable performance drops.

“Coal is used as a trigger, which is why it is combined with batteries as an energy source. It’s used to support the system and not too much,” Bahlil added.

Indonesia’s energy transition continues to advance, with financing institutions, industries, and policymakers aligned toward cleaner energy adoption. However, the pace of transformation will be measured, balancing climate ambitions with economic realities and energy reliability.