Indonesia Puts Domestic Power First as Pricing Dispute Clouds Singapore Electricity Plans

Jakarta sets conditions for a 3.4 GW electricity plan

Indonesia is unlikely to export electricity in the near future, Energy and Mineral Resources Minister Bahlil Lahadalia said in Jakarta on November 2, 2026, putting a price condition on plans to supply Singapore with 3.4 gigawatts of electricity from sources producing lower carbon emissions by 2035.

Bahlil, who also serves as coordinating minister for downstreaming and energy transition, said Indonesia still needed the electricity at home. Speaking at the Presidential Palace, he left open the possibility of exports if buyers accepted the price set by his government.

The warning follows Indonesia's decision to divert 31 million standard cubic feet of natural gas each day from exports to domestic electricity generation. Singapore generates about 95 per cent of its electricity using natural gas, making the supply relationship important to both countries.

Electricity exports and existing gas deliveries are separate parts of that relationship. The proposed electricity projects require new generation facilities, transmission cables and further agreements. Gas already moves through pipelines under commercial contracts, whose delivery requirements have become a point of disagreement.

What price would unlock exports?

Bahlil said the government had calculated its proposed electricity export price. He did not disclose that price or give a date when exports could begin.

At the Presidential Palace, the minister described the condition prospective buyers would have to meet:

As long as the price is right and they agree to our price, then of course it's possible. But if the price is not right, we will prioritise domestic needs.

Earlier that day, at the 2026 Mineral and Coal Convention and Exhibition in Jakarta, Bahlil said electricity exports were unlikely soon because Indonesia still needed the power. His palace remarks made clear that an acceptable price remained a route to an agreement.

Indonesia's position continues an argument Bahlil made on May 11, when he called for fair terms and benefits for both countries. In July, he said negotiations over green electricity prices were continuing. The November comments put domestic supply and government pricing at the centre of the decision.

Who controls the export decision?

Danantara, Indonesia's sovereign investment agency, has a leading role in developing electricity trade with Singapore. President Prabowo Subianto appointed it to oversee Indonesia's participation, and its portfolio includes state electricity utility PLN.

Bahlil nevertheless said the authority to issue electricity export permits belonged to the Ministry of Energy and Mineral Resources. He urged Danantara to reject lobbying from countries seeking to buy Indonesian electricity at lower prices.

At the mining convention, Bahlil stated the division of responsibilities directly:

I have reminded Danantara, do not let them lobby you. The permit rests with ESDM, not Danantara.

ESDM is the Indonesian abbreviation for his ministry. Danantara can help organise investment and commercial agreements, while the ministry decides whether exports receive permission. Companies negotiating projects therefore need both workable business arrangements and government authorisation.

Domestic industrial development is part of Jakarta's calculation. Smelters, industrial estates and data centres require reliable electricity. Batam, an industrial and data centre hub close to Singapore, features in both Indonesia's domestic energy plans and the proposed export network.

How much electricity is at stake?

Singapore aims to import 6 GW of electricity from sources producing lower carbon emissions by 2035. The planned 3.4 GW from Indonesia would equal about 57 per cent of that import target, calculated from those two figures.

A gigawatt measures power capacity, or how much electricity can be supplied at a given moment. The Indonesian projects would contribute a substantial part of Singapore's planned import capacity, with renewable generation, including solar power, expected to provide much of the supply.

Singapore's Energy Market Authority granted conditional licences to five Indonesian projects totalling 2 GW in September 2024. Two more projects received conditional approvals for another 1.4 GW. By August 2026, six Indonesian projects had advanced to conditional licences, according to Singapore's trade ministry.

Developers still need further approvals and agreements before commercial deliveries can begin. The plans involve subsea electricity cables, with some supply expected from the Batam, Bintan and Karimun area of Indonesia's Riau Islands.

For Singapore, which has limited land and renewable energy resources, imports would provide another way to reduce reliance on fossil fuels. For Indonesia, the projects could bring investment into renewable generation and transmission infrastructure. The price negotiations determine how the benefits and costs would be shared.

How the negotiations reached this point

Indonesia and Singapore have built the electricity initiative through agreements and leaders' meetings over several years. Bahlil's latest conditions come after both governments had reaffirmed their support for moving it forward.

• September 2024: Singapore granted conditional licences for 2 GW of Indonesian electricity imports and conditional approvals for another 1.4 GW.
• June 2025: The countries signed three memorandums of understanding covering electricity trade, carbon capture and storage, and a sustainable industrial zone in the Riau Islands.
• May 11, 2026: Bahlil said electricity exports required fair terms and benefits for both sides.
• July 2026: Prime Minister Lawrence Wong and President Prabowo reaffirmed the initiative at their leaders' retreat and witnessed agreements on electricity purchases, transmission infrastructure and a road map.
• October 24, 2026: Indonesia began reducing pipeline gas exports to Singapore to supply domestic power generation.
• November 2, 2026: Bahlil said electricity exports were unlikely soon, while leaving them open if buyers accepted Indonesia's price.

The July agreements covered electricity offtake, meaning commitments to purchase the power a project produces. Such commitments help developers plan revenues and seek financing. The November statements place another condition on turning those arrangements into operating projects: agreement with Jakarta on the export price.

Where Indonesia is redirecting gas

Indonesia's upstream oil and gas regulator, SKK Migas, said the gas diversion was intended to protect the reliability of domestic fuel supplies for electricity generation. The total was 31 million standard cubic feet a day, comprising 15 million from Natuna and 16 million from Sumatra.

Natuna gas was sent to PLN Batam through the WNTS–Pulau Pemping–Batam pipeline. Supplies from Sumatra were redirected through the TGI pipeline to meet electricity needs in Batam, Bintan and Sumatra.

Singapore's Energy Market Authority said importers had notified it of a reduction of 17 billion British thermal units a day over 18 days, representing less than 2 per cent of Singapore's daily gas demand. British thermal units measure energy content, while cubic feet measure gas volume.

Bahlil put the reduction at about 8 per cent of the affected exports. His percentage concerns those export supplies; Singapore's figure compares the lost energy with its total daily gas demand. The two percentages describe different shares of the energy system.

For the Indonesian areas receiving the redirected fuel, the immediate purpose is to supply power stations. For Singapore, the reduction affects an existing fuel supply while the proposed electricity imports remain projects being developed for later operation.

What the two sides say about contracts

Bahlil said the reduced gas deliveries remained within minimum contractual requirements of around 91 to 92 per cent. He attributed the situation partly to maintenance needs and domestic demand.

The minister described his understanding of the contractual limits:

We have only reduced it by about 8 per cent. We would only be in breach of contract if we were to cut by 10 per cent.

Singapore's energy ministry said Gas Supply Private Limited would engage its suppliers to determine whether the reduction amounted to a breach. That review leaves the contractual assessment unresolved between the parties.

A ministry spokesperson welcomed Bahlil's assurance that deliveries would respect the agreements:

We welcome the clarification that Indonesian suppliers will honour their contracts.

Prime Minister Lawrence Wong had said on October 25 that Singapore expected parties to honour their commercial commitments. Bahlil responded the next day that Indonesia had fulfilled its obligations. The disagreement concerns what existing gas contracts require, alongside a separate negotiation over the terms of future electricity exports.

Why LNG trading entered the dispute

Bahlil also raised concerns about liquefied natural gas, or LNG, sold to companies in Singapore. LNG is gas cooled into a liquid so that ships can carry it. Indonesia also supplies Singapore with gas through pipelines.

On October 29, Bahlil said he believed some of 148 LNG cargoes sent to Singapore had been traded and exported elsewhere. He did not identify particular shipments or give a period for the 148 cargoes. He also said Indonesia had no immediate plans to reduce LNG exports to Singapore.

Singapore's energy ministry responded on October 30 that more than 50 companies based in Singapore buy, market and trade LNG from around the world. Their supplies include gas from Indonesia, the United States, Australia and Malaysia.

A ministry spokesperson explained how those companies arrange deliveries:

While Singapore-based traders make the commercial decisions relating to the cargo, the actual LNG cargo usually moves from source to destination country directly and does not physically pass through Singapore.

The ministry said Indonesian gas imported through pipelines was used domestically and was not exported. Singapore's role as an LNG trading centre involves companies arranging purchases and sales across borders, with ships usually travelling directly between the producing country and the final customer.

Bahlil returned to the trade issue on November 2, arguing that Indonesian resources should be exported directly to destination countries rather than through intermediary nations. His concern focused on who receives the commercial benefits from trading Indonesia's resources.

Cooperation continues despite the disagreements

Singapore Foreign Minister Vivian Balakrishnan addressed the balance between domestic needs and energy cooperation during a visit to Jakarta from October 27 to 29. He said governments had a responsibility to secure essential supplies for their populations, while international energy contracts could attract investment, expand infrastructure and reduce costs through greater scale.

Balakrishnan described the two goals as compatible:

Working together and looking after your own needs – it's not either or. It's not a binary.

Indonesia's Investment Minister Rosan Roeslani said on October 29 that Singapore's investment commitments remained intact despite differences over gas and haze. Singapore has been Indonesia's largest source of foreign direct investment since 2014, with investment reaching US$17.4 billion in 2025.

Shinta Kamdani, deputy chair of the Indonesian Chamber of Commerce and Industry and chair of the Indonesian Employers Association, said she had observed no decline in Singaporean investment interest in the real economy. She nevertheless said tensions could affect financial market sentiment.

The governments also agreed during Balakrishnan's visit to establish a joint task force on haze, focusing on information sharing and coordination of enforcement. That agreement and the continued investment discussions show cooperation proceeding alongside the energy disagreements.

The electricity initiative forms part of the broader ASEAN Power Grid effort to connect the region's electricity systems. Its next practical steps remain tied to prices, permits and commercial arrangements. The existing gas relationship, meanwhile, depends on suppliers and buyers resolving delivery requirements under their contracts.

Key Points

• Indonesia says domestic electricity needs come first, with exports possible if buyers accept its price.
• The planned 3.4 GW supply from Indonesia equals about 57 per cent of Singapore's 6 GW electricity import target for 2035.
• Indonesia's energy ministry controls export permits; Danantara is leading investment and commercial coordination.
• Indonesia has redirected 31 million standard cubic feet of gas daily towards domestic electricity generation.
• Singapore says the notified gas reduction represents less than 2 per cent of its daily gas demand.
• The contractual assessment of reduced gas deliveries remains unresolved, while both countries continue investment and energy discussions.