Conversion of Diesel and Gas-Fired Power Plants to Solar Power Plants Could Save Rp73.9 Trillion Annually
The government is accelerating the development of solar power plants (PLTS) as a strategy to curb national energy costs while reducing reliance on fossil-fuel-based power plants. The transition in the electricity generation system is seen as capable of delivering long-term efficiency.
The Ministry of Energy and Mineral Resources (ESDM) said the conversion of gas- and diesel-based power plants to PLTS could save up to Rp73.9 trillion in generation costs annually.
Jisman P. Hutajulu, Senior Expert Staff to the Minister of ESDM for Strategic Planning, said the efficiency stems from comparing the cost of generating electricity from PLTS integrated with a battery energy storage system (BESS) against gas- and diesel-fired plants still in operation in several regions.
‘If the 100 gigawatt (GW) PLTS programme is completed, it will replace the very energy-inefficient PLTD, in the eastern regions as well as in Java–Bali, which is also quite substantial,’ Jisman said at the HIPMI Power Development Forum 2026 in Jakarta on Wednesday (20 May 2026).
The government aims to build PLTS with a total capacity of 100 GW during 2026 to 2028 as a strategy to accelerate national energy transition. To achieve this target, investment is estimated at 71.3 billion US dollars or around Rp1,140 trillion.
In addition to electricity cost efficiency, the development of PLTS is projected to deliver broad economic impacts. The project could create around 2.8 million jobs in the construction sector and between 1.5 million and 3.1 million jobs in the manufacturing sector.
Large-scale solar development is also seen as capable of reducing energy imports, with substitution values ranging from 14.4 to 28.9 billion US dollars, and contributing up to 26.6 billion US dollars to gross domestic product (GDP).
However, solar energy development faces challenges in the readiness of the electricity grid infrastructure. The government estimates the need to build a supergrid transmission network of around 48,000 kilometres to ensure renewable-energy-based electricity distribution operates optimally.
According to Jisman, the construction of a supergrid is an essential factor in addressing the mismatch between the locations of renewable energy resources and the power demand centres, which are currently concentrated on Java island, while renewable energy potential lies largely outside Java.
In PLN’s 2025–2034 Electricity Supply Business Plan (RUPTL), the government aims to add 69.5 GW of capacity. Of this total, 42.6 GW or about 61 percent will come from new and renewable energy with the support of a total energy storage system of 10.3 GW.