The Indonesian government has demonstrated its seriousness in pursuing its ambition to become the “world’s green energy leader.” This step became more concrete following the signing of a memorandum of understanding (MoU) with the Singaporean government on electricity export cooperation.
Responding to this cooperation, Dr. Rachmawan Budiarto, a lecturer at the Department of Nuclear Engineering and Engineering Physics, Faculty of Engineering, Universitas Gadjah Mada (FT UGM), considered the initiative a major opportunity for Indonesia.
He highlighted that the agreement enables the country to export products with higher added value rather than merely exporting raw materials.
“Electricity export is one way to achieve this, as we are no longer selling raw materials but processed products,” he explained on Tuesday, Sep. 10, 2025.
Furthermore, Dr. Budiarto emphasized that the project would bring significant added value to the national economy.
Electricity exports will drive the construction of power plants in the country, creating extensive job opportunities and increasing the use of local components.
In addition, Dr. Budiarto noted the advantage of competitive pricing.
Since the electricity will be sold at international market prices, the scheme will be attractive to businesses while also providing benefits to the state.
He is confident that if electricity export runs smoothly, it would accelerate the growth of a green economy, particularly because revenue will be generated from electricity produced using low-emission commodities.
“We are generating income through low-carbon activities,” he added.
Addressing concerns about domestic electricity supply, Dr. Budiarto explained that Sumatra has vast areas with abundant energy potential, such as hydroelectric power plants (PLTA), combined-cycle power plants (PLTGU), and solar power plants (PLTS).
“This means that if we only utilize a small portion of Sumatra’s capacity for electricity exports to Singapore, I believe it will not significantly impact the electricity supply for surrounding regions,” he said.
Nevertheless, he underlined the importance of maintaining a balance between export and domestic needs.
Special restrictions may be necessary if the power plants designated for export are located in areas that still require substantial improvements in electricity supply.
Commenting on the business scheme, Dr. Budiarto stressed the importance of thorough calculations to ensure it is attractive for all parties involved, including Singapore and private companies.
He explained that if the scheme is not competitive, private investors might prefer to invest in neighboring countries.
“If that happens, we will lose this major opportunity,” he said.
According to him, the electricity export cooperation scheme must be designed to attract investors so that Indonesia remains a key player in this project.
Finally, Dr. Budiarto noted that the development of submarine cable infrastructure is no longer a technical obstacle, as engineers and experts already have sufficient experience and comprehensive studies in this field.
However, he reminded stakeholders that special attention is needed during construction and implementation to avoid disrupting shipping lanes.
“Careful planning is essential to minimize the impact on maritime activities in the area,” he concluded.
Author: Aldi Firmansyah
Editor: Gusti Grehenson
Post-editor: Lintang Andwyna
Illustration: Antara