ING supports the energy transition in Asia

04 February 2019 ... min read Listen

4 January 2019

As our energy-hungry world battles to cut greenhouse gas emissions, all the talk is of shifting from fossil fuels to renewable sources such as solar and wind. But a part of the energy transition is moving to cleaner fuels, such as liquefied natural gas or LNG.

Indonesia relies heavily on coal to meet its massive electricity demand, with coal production accounting for about half of the country’s electricity production.

Indonesia relies heavily on coal to meet its massive electricity demand, with coal production accounting for about half of the country’s electricity production.

LNG can help in reducing greenhouse gas emissions to combat global warming. Considered the planet’s cleanest fossil fuel, it’s non-toxic, non-corrosive and emits no soot or fumes. It’s an interesting option for a country like Indonesia, where about half of the electricity production still comes from coal production.

Introducing Jawa 1, Indonesia’s and Asia Pacific’s first integrated LNG-to-power project. ING acted as financial advisor for the 1.5 billion-euro project.

Jawa 1 is expected to power 11 million Indonesian households from 2021. It involves the construction of a 1,760MW gas-fired power plant, a floating storage regasification unit and other supporting infrastructure.

“Java Island is one of Indonesia’s main areas of electricity consumption. This LNG-to-power project is a big step in the region’s transition to clean and affordable energy,” said Erwin Maspolim, head of Utilities, Power and Renewables for Asia Pacific at ING.

How does LNG work?

When cooled to -162 degrees Celsius, natural gas forms LNG and shrinks its volume 600 times, making it safer and easier to store and transport. When it reaches the receiving terminal, it’s turned back into gas at regasification plants, and then piped into homes or power plants where it is burned to generate electricity.

While it’s not a renewable fuel like solar or wind power, natural gas is a ‘cleaner’ alternative to coal or oil. LNG power plants emit around 50 percent less carbon dioxide compared with emissions from typical coal plants.

That’s why LNG is now playing a much larger role in the energy mix, with the number of countries importing it quadrupling since the start of the century.

Yet in Indonesia, the rise in urbanisation is increasing the country’s already high reliance on coal power because it’s considered a cheap and affordable solution to meet the growing energy demand. Diversification in the provision of energy is therefore essential to ensure a sustainable supply of energy to Indonesia’s 264 million inhabitants.

“Jawa 1 will hopefully encourage the region to move away from coal as a primary source of electricity and help Indonesia in its pledge to keep the rise of global temperatures to well below 2 degrees Celsius under the Paris Agreement,” said Erwin.


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