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Unlocking the value of Indonesia’s substantial renewable energy potential
As Southeast Asia’s largest economy and most populous nation, Indonesia will be pivotal in dictating the direction of renewable energy with the total installed renewable capacity expected to triple from 8 gigawatts (GW) to 24 GW by 2030.
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A worker inspects solar panels on top of the Energy and Mineral Resources Ministry Electricity Directorate General’s office, in Jakarta, on Aug. 31, 2020. (JP/Dhoni Setiawan)
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Asia-Pacific’s (APAC) renewable energy capacity will grow substantially over the next decade, projected to expand 7 percent annually, adding 2 terawatts of capacity by 2030. This growth will be driven by rising populations, strong economic prospects and lucrative potential in a market with relatively low renewable penetration.
Southeast Asia will itself be a vital part of this growth journey, with electricity demand expected to grow at twice the global average over the coming years. The region’s overall electricity demand is expected to double by 2040. As Southeast Asia’s largest economy and most populous nation, Indonesia will be pivotal in dictating the direction of that growth. Total installed renewable capacity in Indonesia is expected to triple from 8 gigawatts (GW) to 24 GW by 2030, revealing the potential for green energy to drive electricity supply opportunities.
In Boston Consulting Group’s (BCG) recent report, Riding the Renewables Wave in Asia-Pacific, it sets out the substantial potential for renewable energy investors and operators in this rapidly expanding market. This is an environment with an expected US$3.7 trillion of investment under current stated policies, more than the combined renewable investment commitments of North America and Europe.
Green post-pandemic recovery commitments are likely to deepen this shift, expanding government revenues by up to 30 percent as a result of coal subsidy elimination, and offering a valuable investment landscape for new and existing market players.
