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View all search resultsUnlocking the full value of green power in Indonesia
Through a structured policy approach to monetizing its nearly limitless renewable potential, Indonesia has the resources necessary to become ASEAN's green energy powerhouse.
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A farm worker carries sacks of manure on Aug. 19, 2020, past the geothermal power facility of PT Geo Dipa Energi at the Dieng Plateau in Banjarnegara regency, Central Java. (Antara/Anis Efizudin)
I
ndonesia stands at a pivotal moment in its energy transition. With more than 3,600 gigawatts (GW) of untapped renewable energy potential, the country can be Southeast Asia’s green energy powerhouse if it can harness its full capacity.
The new Electricity Supply Business Plan (RUPTL) signals strong ambition: Indonesia aims to quadruple clean energy production from 44 terawatt-hours (TWh) in 2024 to 172 TWh by 2034. This demands a shift in how renewable electricity is valued, traded and integrated into the market.
Despite its significant potential, renewable electricity is treated primarily as a commodity valued by the kilowatt-hour, with limited mechanisms to monetize its differentiated characteristics. Indonesia needs to enable the monetization of the entire renewable energy value chain to unlock the true value of this remarkable resource.
By focusing on maximizing value rather than just generation, Indonesia can accelerate renewable energy deployment, attract high-quality investments and ensure the energy transition delivers sustainable benefits.
Challenges in growing value
Achieving the 2034 power generation target will require an additional 27.4 GW of renewable power plants over the next decade. Between 2021 and 2024 however, Indonesia added only 1.75 GW of grid-connected renewable projects.
To achieve this goal, the country must overcome considerable obstacles, including its underdeveloped renewable energy certificate (REC) and carbon markets, the absence of a structured corporate power purchase agreement (PPA) model and lack of integrated infrastructure.
