Indonesia is among countries that has signed the agreement and as one of the main contributors of global carbon dioxide emissions has expressed its commitment to transition toward cleaner energy sources. The country believes energy transition will contribute to achieving the Paris Agreement goals and help fulfill its national aspiration to achieve energy security and affordability.

Indonesia is a net importer of crude oil and petroleum products and is often impacted economically by the fluctuations of these products’ global pricing. To be self-sufficient in domestic energy provision and ensure affordable energy for all Indonesians, diversification toward renewable energy is inevitable.

Despite the country’s commitment, five years in, the realization remains far from ideal. Indonesia continues to rely and will continue to rely on fossil fuel generation in the coming years and shows poor signs of renewable energy adoption to fulfill its energy self-sufficiency and affordability aspirations. This is a result of several fundamental issues that hinder the country from realizing the energy transition plan.

First, Indonesia relies on a single entity with conventional energy generation assets to consolidate generation and transmit power within the national energy industry. This results in state electricity firm PLN being trapped into a vicious cycle of conventional energy generation to fulfill the goal of being a successful and reliable transmitter to the retail end customer.

Coal-based power plants dominate power generation in Indonesia and PLN owns 50 percent of the total capacity. In addition to that, coal is a reliable source of energy to ensure energy provision and grid stability. Disastrous grid failures, such as the 2019 blackouts in Jakarta and West Java impacting 22 million customers, could have been easily avoided. PLN established conventional assets combined with the reliability of coal-based energy provision provide PLN with little incentive to explore renewable energy as a new energy source.

Second, Indonesia partially relies on PLN to regulate and conduct national power planning. This is problematic since it poses a conflict of interest for the country. As a semi-regulator and national planner, the budget for renewable energy should probably be the priority since it will yield unquestionable benefits for the country in the long-term.

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