Indonesia’s Current Energy Situation
Although the market for renewable energy has improved, the commitments and policies of the Indonesian government are still far behind in achieving its first emission reduction target in 2030.
Indonesia has targeted to achieve 23% of renewable energy capacity in the primary energy mix by 2025. However, until December 2023, there was only 13.1% or approximately 13 GW within the primary energy mix, while crude oil represented 30.18%, coal 40.46% and natural Gas 16.28%. (Kementerian ESDM, 2023)
To ensure the energy transition progress is on track, Indonesia needs a stronger commitment and strategy to boost renewable energy generation.
Key Challenges
Indonesia faces several key challenges in its transition to RE:
- Reliance on coal, currently comprises around 35% of Indonesia’s energy mix.
- Limited RE Infrastructure, including insufficient transmission grids (geographical challenges), and lack of energy storage capacity.
- Regulatory.
- Sustainable energy financing (investment),
- Technological innovation, and 6. Public awareness and behavioural changes, this involves educational campaigns and policies that incentivise energy efficiency. By addressing these challenges, Indonesia can unlock the vast potential of renewable energy sources and achieve a clearer, more sustainable future.
Windows of Opportunity
CASE activities in Indonesia seek to provide research and evidence to support:
- Mid-term National and Planning and Long-term Regional Planning (RPJMN and RPJPD) under the Ministry of National Development Planning/Bappenas
- National Energy Policy (KEN) under the National Energy Council/DEN
In its implementations, CASE Indonesia provides a platform for dialogues, assistance, workshops and training among energy and non-energy stakeholders. For example the Indonesia Sustainable Energy Week, a flagship event of CASE Indonesia, will take place in the second half of 2024.
To raise the awareness of the public, CASE Indonesia conducts various digital campaigns and builds relationships with the media. One such example is the making of the third Kiara Campaign in 2024.
Windows of opportunity for the energy transition in Indonesia
Following a series of coordination meetings with key stakeholders including MEMR, MEF, PLN and MoF, CASE will focus primarily on planning documents released by BAPPENAS. National documents under MEF were not chosen because the development process of this LTS is relatively exclusive. As for the current energy and electricity planning in Indonesia under MEMR tend to use a pragmatic approach that considers the current pandemic condition in Indonesia which requires massive amounts of state budget to quickly recover the economy. As a consequence, it is expected that plans to increase the share of renewable energy will be challenging, at least until the completion of the 35 GW mega project by the end of 2028.
Based on this condition, the CASE Indonesia team set another strategy to change the Indonesian narrative towards the energy transition: to strengthen the background study for RPJMN or RPJP in order to increase the commitment to renewable energy and climate action. Through RPJMN or RPJP, CASE ID can provide a long-term strategy of the energy transition that can influence derivative regulations in Indonesia both for mid- and long-term policy.