OPINION : “Lessons in Gas and LNG Governance: ‘Bridging Energy’"

For years, discussions about the energy transition have often been framed as though they represent a battle between two opposing sides: fossil fuels on one side and new and renewable energy on the other.

If renewable energy is to grow, it seems as though natural gas must immediately be phased out. If Net Zero Emissions is the ultimate goal, LNG is considered to be heading toward the past.

However, there is something interesting when we examine the energy transition from the perspective of the Directorate General of New, Renewable Energy and Energy Conservation (EBTKE).

In a presentation titled "Indonesia's Pathway to Energy Transition," delivered by Harris, Secretary of the Directorate General of NREEC, at the IndoPacific LNG Summit 2026 in Bali in July 2026, there was one simple yet highly important message for the gas industry:

"Gas as bridging of energy transition."

Gas is positioned as a bridge in the energy transition.

Not an opponent of renewable energy.

Nor is it the ultimate destination.

Rather, it is a bridge needed to move Indonesia's energy system from a high-carbon condition toward low carbon, and ultimately free carbon.

For me, this is precisely where we need to revisit the lessons of gas and LNG governance.

The Energy Transition Is Not Simply About Replacing Energy Sources

There is a reason why Indonesia's energy transition cannot be achieved through a simplistic approach, such as shutting down fossil fuels, building renewable energy facilities, and considering the task complete.

Indonesia is navigating a period of global geopolitical uncertainty.

Conflicts in the Middle East, trade tensions between the United States and China, crises in several energy-producing countries, economic slowdowns, and climate change can all trigger domino effects, including disruptions to energy transportation routes, tighter supply, rising oil prices, pressure on the rupiah, and increasing energy subsidy and compensation burdens.

The Directorate General of EBTKE's presentation even positioned National Energy Security & Self Sufficiency as a central response to these challenges.

Indonesia's National Energy Security Index in 2024 was recorded at 6.74.

This means that Indonesia's energy transition must never focus on just one objective: decarbonization.

We must pursue at least three objectives simultaneously: cleaner energy, continued reliability, and greater energy self-sufficiency.

And in reality, these three objectives do not always progress at the same pace.

2060: The Journey from High Carbon to Free Carbon

The roadmap presented by the Directorate General of EBTKE is particularly interesting to examine.

Indonesia remains committed to achieving Net Zero Emissions by 2060 or sooner.

In the projected energy sector emissions chart, the journey toward 2060 is conceptually divided into three phases: high carbon, low carbon, and ultimately free carbon.

Toward the end of this period, energy sector emissions are projected to reach approximately 129 Mt CO₂e.

This transition will not be achieved through a single technology.

It involves geothermal, solar and wind power, biofuels, nuclear energy, green hydrogen, green ammonia, CCS/CCUS, electrification, and energy efficiency.

The NZE 2060 strategy outlined in the presentation includes the development of on-grid and off-grid renewable energy and biofuels; CCS/CCUS; new energy sources such as nuclear, hydrogen, and ammonia; electrification of transportation, cooking, and agriculture; energy efficiency; as well as a moratorium on new coal-fired power plants and a gradual coal phase-down.

Interestingly, gas remains part of this journey.

Not merely as a footnote, but explicitly positioned as:

"Bridging of energy transition."

This is important because, even from the perspective of the Directorate General of EBTKE itself, the energy transition does not mean that gas must disappear tomorrow morning.

Why Is Gas Still Needed?

Indonesia has enormous new and renewable energy potential. Data from the Directorate General of EBTKE indicate that the country's total potential reaches approximately 3,687 GW.

The largest source is solar power, at approximately 3,294 GW, followed by wind at 155 GW, hydropower at 95 GW, ocean energy at 63 GW, bioenergy at 57 GW, and geothermal at 24 GW.

The potential is immense.

However, this potential does not automatically translate into energy that is available at all times.

Solar power generates electricity when sunlight is available.

Wind power depends on wind conditions.

Meanwhile, consumers need electricity when they need it, not merely when nature happens to make it available.

This is where the challenge of energy governance changes.

The question is no longer simply:

"How much renewable power generation capacity can we build?"

But rather:

"How do we maintain the stability of the electricity system as renewable energy penetration increases?"

Storage is certainly an important part of the answer.

And the direction toward greater storage deployment is already clear.

Under PLN's 2025–2034 Electricity Supply Business Plan (RUPTL), as presented by EBTKE, additional national renewable power generation capacity of 42,569 MW is planned.

This comprises approximately 12,170 MW during 2025–2029 and 30,398 MW during 2030–2034.

Alongside this expansion, storage capacity of 10,256 MW will be required, including approximately 3,027 MW in the first period and 7,229 MW in the following period.

The investment required is also substantial, estimated at approximately US102 billion,with Independent PowerProducers (IPPs) accounting for around US81.3 billion and PLN approximately US$20.6 billion.

Therefore, as more renewable energy enters the electricity system, the system's balancing capabilities become increasingly important.

And as long as storage cannot economically and extensively fulfill all these functions, gas-fired power generation will continue to play a strategic role as flexible generation.

Interestingly, under the government's new strategy presented by EBTKE, the development of large-scale solar power is accompanied by the "optimization of gas-fired PP," alongside on-grid RUPTL development, rooftop solar, de-dieselization, rural electrification, hydro hybrid systems, and off-grid PV.

In my view, this is a very important message.

Gas and renewable energy do not have to exclude each other.

Instead, both can be designed to complement one another.

From "Baseload" to "Balancing"

This is where Indonesia's gas and LNG industry must also change its way of thinking.

For decades, gas has primarily been regarded as an energy source that must flow in large and relatively constant volumes.

Producers favor take-or-pay arrangements.

LNG infrastructure is designed around high volumes and utilization rates.

Power plants also aim to achieve high capacity factors.

However, an electricity system with increasing penetration of solar and wind requires different characteristics.

Gas may no longer be needed solely as baseload energy, but increasingly as balancing energy.

This shift has significant implications for gas and LNG governance.

What needs to be sold is not merely gas molecules, but also availability, flexibility, deliverability, reliability, and response time.

Gas must be available when clouds suddenly cover the sun, solar power output declines, winds weaken, demand surges, or the system requires rapid ramping.

In other words, in the era of energy transition:

"The value of gas is determined not only by its volume, but also by when it can be made available."

This is the paradigm shift that I believe needs to be incorporated into the design of gas and LNG contracts, receiving terminal infrastructure, FSRUs, pipelines, storage facilities, and power plant operations.

LNG Can Actually Make the Transition More Flexible

What about LNG?

For an archipelagic country like Indonesia, LNG offers advantages that cannot easily be replicated by pipeline systems alone.

Gas production is located in one area.

Demand centers are located elsewhere.

Even the best renewable energy resources are unevenly distributed.

Therefore, LNG can serve as a virtual pipeline.

LNG can be transported from gas production sites to demand centers without waiting for the construction of expensive and time-consuming inter-island pipeline networks.

However, once again, future LNG development cannot be managed using the old paradigm.

We need an increasingly flexible system.

Receiving terminals, FSRUs, small-scale LNG, storage, regasification facilities, pipelines, and power plants must be viewed as "one energy supply chain," rather than as separate projects operating independently.

This is where a concept I have frequently emphasized throughout the Lessons in Gas and LNG Governance series becomes relevant again:

"Deliverability is more important than mere availability."

Gas may be available in a reservoir.

LNG may be available aboard a vessel.

But if electricity is needed tonight and the infrastructure cannot deliver that gas, then from the perspective of the energy system, that gas is effectively unavailable.

Do Not Let the Energy Transition Compromise Energy Security

Indonesia must indeed move toward cleaner energy.

However, we must avoid repeating the mistakes of several countries that pursued the transition too quickly on the supply side without preparing sufficient firm capacity, networks, storage, and system flexibility.

The energy transition must strengthen, not weaken, energy security.

This is why I consider the Directorate General of EBTKE's policy of positioning gas as a bridging energy source to be quite realistic.

A bridge is certainly not the final destination.

But anyone wishing to cross a river still needs a bridge until they actually reach the other side.

The question is: how long should that bridge be?

If it is too short, we may fall before reaching the other side.

If it is too long, we risk overbuilding gas infrastructure that could eventually become stranded assets.

Therefore, the issue is not about being pro-gas or anti-gas.

The issue is how to determine:

"Right scale, right infrastructure, right contract, and right timing."

Renewable Energy Is Growing Rapidly, and Gas Must Adapt

Data show that the share of new and renewable energy in Indonesia's energy mix has continued to increase: from 10.88% in 2022 to 12.23% in 2023, 14.68% in 2024, and 15.75% in 2025.

For 2026, the target is set within a range of 17–21%.

In 2025, this achievement was primarily supported by approximately 16 GW of installed renewable power generation capacity and the utilization of 14.9 million kiloliters of biodiesel.

The direction of the transition is therefore clear.

Renewable energy will continue to expand.

At the same time, policies aimed at decarbonizing transportation are also progressing.

The B40 biodiesel mandate has been in effect since early 2025, with the 14.9 million kiloliter target achieved.

E5 bioethanol is also being prepared, while Sustainable Aviation Fuel has been tested in both military and commercial aircraft.

This means that pressure on hydrocarbons is not limited to the electricity sector.

Transformation is taking place across almost the entire energy system.

Therefore, the gas industry cannot sustain its position merely by saying:

"Gas is cleaner than coal."

That is true, but it is not enough.

Gas must find a new value proposition within a low-carbon energy system.

Beyond Gas: Hydrogen and Ammonia

Another interesting aspect is the direction of the next phase.

The Directorate General of EBTKE's presentation outlined the National Hydrogen and Ammonia Roadmap, identifying four main sectors of utilization: industry, transportation, power generation, and export commodities.

The roadmap progresses from an initiation phase to development and integration, and ultimately to an acceleration and sustainability phase through 2060.

Its broader objectives evolve from energy sovereignty toward domestic decarbonization, and eventually positioning Indonesia as a global key player in hydrogen and its derivatives.

For the gas and LNG industry, I actually see this as an opportunity.

Why?

Because many of the capabilities developed by the LNG industry over decades—gas processing, compression, cryogenic technology, storage, pipelines, shipping, terminal operations, process safety, and cross-border energy molecule trading—do not suddenly lose their relevance.

Some of these capabilities can become valuable foundations for developing a hydrogen and ammonia ecosystem.

Therefore, the energy transition should not be understood as:

gas → dies → renewable energy.

Instead, it should be viewed as an evolution:

coal and oil → gas/LNG → low-carbon gas + CCS/CCUS → hydrogen/ammonia + renewable energy → an increasingly low-carbon energy system.

Of course, the actual pathway will not be as simple as this straight-line progression.

However, this paradigm allows today's investments to be designed with the potential to adapt to future energy systems.

Energy Conservation: The Often-Forgotten "Energy Source"

There is one aspect of the Directorate General of EBTKE's presentation that often receives less attention than solar panels, geothermal energy, hydrogen, or electric vehicles.

It is the "KE" in EBTKE: Energy Conservation.

Yet the cheapest and cleanest energy is the energy we do not need to consume because we have successfully conserved it.

The NZE roadmap identifies energy efficiency as one of its main strategies.

The government has also incorporated Mandatory Energy Efficiency, Minimum Energy Performance Standards, and energy management into its policy direction.

The presentation referred to Minister of Energy and Mineral Resources Regulation No. 3/2025 concerning energy conservation by central and regional governments, as well as Ministerial Regulation No. 8/2025 concerning energy management.

This has interesting implications for the gas industry.

We should no longer measure success in the energy business solely by how much gas has been sold.

If an industrial consumer can produce the same output using 10% less gas because of improved efficiency, that is actually a national achievement.

The gas saved can be redirected to other sectors, reduce energy import requirements, extend the productive life of gas reserves, or even generate greater economic value.

Therefore, energy conservation is an integral part of security of supply.

Do Not Pit Molecules Against Electrons

I do not see Indonesia's energy future merely as a battle between molecules and electrons.

We will need both.

Electrons will become increasingly green through solar, hydropower, geothermal, wind, and other renewable energy sources.

However, molecules will still be needed for industry, certain transportation applications, flexible power generation, feedstocks, hydrogen, ammonia, and various needs that are difficult to fully electrify.

Therefore, the future challenge of energy governance lies in integrating:

gas + LNG + renewable energy + storage + CCS/CCUS + hydrogen + ammonia + energy efficiency.

Not in developing each of these elements in separate silos.

Even the regulations presented by the Directorate General of EBTKE indicate that the transition framework is beginning to take shape across multiple areas: the National Energy Policy, electricity sector transition, the National Electricity General Plan (RUKN), RUPTL 2025–2034, biofuels, domestic content requirements (TKDN), renewable energy Power Purchase Agreements (PPAs), hybrid power plants, and energy conservation and management.

What is needed now is "orchestration."

Gas Must Know When to Serve as a Bridge

I am increasingly convinced that gas will continue to play a very important role in Indonesia's energy future.

However, its role is changing.

Gas can no longer regard itself as the "king of energy" that must always be given priority.

It must be willing to serve as a "bridge."

A bridge between fossil fuels (oil and coal) and renewable energy.

A bridge between intermittent power and reliable power.

A bridge between today's energy system and the hydrogen economy of the future.

A bridge between the need for decarbonization and the need for energy security.

And for Indonesia, as an archipelagic country, LNG can serve as one of the primary means of extending that bridge to islands that are not connected to pipeline networks.

However, we must also remember one thing:

"A good bridge is one that takes us to our destination—not one that leaves us stranded halfway."

Therefore, the development of gas and LNG infrastructure today must begin considering its compatibility with the future energy landscape: greater flexibility, higher efficiency, lower emissions, and, wherever possible, the potential to be adapted for low-carbon molecules.

Lessons from EBTKE

There is something I found particularly interesting about EBTKE's presentation at an LNG Summit.

Rather than suggesting that the future belongs exclusively to renewable energy, the government's roadmap acknowledges that the journey toward NZE requires multiple instruments working together.

Renewable energy development must be accelerated.

Energy efficiency must be improved.

Electrification must be expanded.

Biofuels must be developed.

CCS/CCUS is necessary.

Hydrogen and ammonia must be prepared.

Coal utilization must be gradually reduced.

And throughout this journey, "gas serves as a bridge."

The more relevant question is:

"Is Indonesia's gas and LNG industry ready to transform itself so that it can remain part of the solution?"

If the answer is yes, then we need to stop viewing new and renewable energy as a threat to gas and LNG.

On the contrary, we must begin designing a governance framework in which, as more renewable energy enters the system, gas and LNG become increasingly effective and intelligent in fulfilling their supporting roles.

Until one day, when technology, storage, networks, hydrogen, and other low-carbon energy sources are capable of taking over most of these functions, gas must be willing to reduce its role.

Because that is precisely the purpose of a bridge.

It is not the destination.

But without a strong bridge, we may never reach the other side.