Indonesia seeks reciprocal benefits before approving green electricity exports to Singapore

Indonesia has signalled that it will not approve the export of renewable electricity to Singapore unless it receives clear reciprocal benefits. In February 2025, Minister of Energy and Mineral Resources, Bahlil Lahadalia, stated that the government would withhold green electricity export permits until Indonesia’s economic and energy security concerns were addressed. Singapore, which relies on imported energy due to its limited land and renewable resources, has been working towards securing low-carbon electricity imports as part of its decarbonisation strategy. On 5 September 2024, during the Indonesia International Sustainability Forum in Jakarta, Singapore’s Energy Market Authority (EMA) granted Conditional Licences for 2GW of electricity imports from Indonesia and issued Conditional Approvals for an additional 1.4GW. According to the EMA, “Low-carbon electricity imports are part of Singapore’s overall efforts to decarbonise the power sector.” Initially, Singapore had aimed to import 4GW by 2035, but this target has now been increased to 6GW to meet growing demand.

Singapore’s conditional approvals and licences

Singapore has received over 20 proposals from multiple source countries for electricity imports. Of these, five Indonesia-based projects have progressed to receiving Conditional Licences, meaning they are in the advanced stages of technical and commercial viability. The five projects awarded Conditional Licences include:

• Pacific Medco Solar Energy Pte Ltd – 0.6GW
• Adaro Solar International Pte Ltd – 0.4GW
• EDP Renewables APAC – 0.4GW
• Vanda RE Pte Ltd – 0.3GW
• Keppel Energy Pte Ltd – 0.3GW

These companies had previously received Conditional Approvals in September 2023. Since then, they have conducted marine surveys, feasibility studies, and regulatory assessments to demonstrate their projects’ viability. The companies plan to begin commercial operations from 2028. Additionally, two new projects have been granted Conditional Approvals to export 1.4GW of electricity:

• Singa Renewables Pte Ltd (a joint venture between TotalEnergies and RGE) – 1GW
• Shell Eastern Trading (Pte.) Ltd, in partnership with Vena Energy – 0.4GW

While these approvals are significant, a Conditional Licence does not allow immediate electricity exports. Companies must still fulfil additional obligations before receiving an Electricity Importer Licence from EMA, and they must also obtain final approval from the Indonesian government.

Indonesia’s concerns and potential benefits

Despite Singapore’s progress in securing agreements, Indonesia has raised concerns over domestic energy security, economic benefits, and resource allocation. The Indonesian government does not want renewable energy exports to undermine domestic clean energy supply and is also seeking fair economic returns from its land and resources. According to Mutya Yustika of the Institute for Energy Economics and Financial Analysis (IEEFA), Indonesia stands to gain significantly from this deal. Potential benefits include:

• Annual foreign exchange earnings of US$4.2 billion to US$6 billion
• Tax revenue increases of US$210 million to US$600 million per year
• Strengthened renewable energy manufacturing and supply chain industries
• Creation of over 80,000 jobs in solar and battery energy storage sectors

However, the Indonesian government wants clear guarantees before approving exports. To ensure equitable benefits, Indonesia could introduce:

• Capacity quotas to balance domestic and export needs
• Special export tariffs reflecting market value and transmission costs
• Local content requirements (LCRs) to develop domestic manufacturing
• A fair distribution of carbon credit benefits between Indonesia and Singapore
• Strengthening Indonesia-Singapore energy cooperation

The Memoranda of Understanding (MOUs) signed between Indonesia and Singapore in January 2022, March 2023, and September 2023 highlight a growing commitment to regional energy cooperation. These agreements cover renewable energy investments, cross-border electricity trading, and infrastructure development. According to EMA, Singapore will continue exploring hydrogen, solar, deep geothermal, and nuclear energy as part of its long-term decarbonisation strategy. However, electricity imports remain a key pillar in achieving Singapore’s net-zero ambitions. If an agreement can be reached that satisfies Indonesia’s concerns, this deal could set a precedent for cross-border energy trade in Southeast Asia, benefiting both economies and supporting global climate goals.