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View all search resultsIndonesia’s leadership in ASEAN’s energy transition
Following up on its G20 presidency with its ASEAN chairmanship, Indonesia can do more to lead the bloc in its energy transition toward energy security and sustainability, and thus regional stability and development.
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I
ndonesia secured one of the largest climate investments in the world during its Group of 20 presidency. Still, there are signs of concern regarding Indonesia’s modest ambition. More robust target and strategy will be the key drivers in attracting more clean energy investments.
Indonesia has placed itself in a global position by holding the ASEAN chairmanship in 2023, after successfully hosting the G20 Bali Summit in 2022. As the new ASEAN chair, Indonesia finds on its plate the 2025 ASEAN targets on renewable energy (RE) and energy efficiency (EE) as reflected in the ASEAN Plan of Action for Energy Cooperation (APAEC) Phase II: 2021-2025, on top of the G20-initiated programs, such as the Just Energy Transition Partnership (JETP), a financing scheme to retire the country’s coal power plants.
With its gross domestic product (GDP) of US$1.28 trillion, the Indonesian economy is the largest in Southeast Asia. Indonesia’s population makes up 40 percent of the total ASEAN population. Its large population reflects on the total final energy consumption (TFEC) equaling 22 million tonnes of oil equivalent (Mtoe), or a quarter of ASEAN’s TFEC (87 Mtoe) in 2020, indicating that the country could set higher clean energy targets and nationally determined contributions (NDCs).
Indonesia set the RE target for the primary energy supply mix to at least 23 percent in 2025 and at least 31 percent in 2050, as promulgated in Presidential Regulation No. 22/2017.
According to a foreign ministry spokesperson, Indonesia will carry over the priority issues from its G20 presidency to its ASEAN chairmanship. One example is the Bali Energy Transition Roadmap, a roadmap to double worldwide progress in EE by 2030 and to boost RE shares in the primary energy mix by 2025 to at least 30 percent, or 7 percentage points higher than the current ASEAN target of 23 percent. Another is the Indonesia Energy Transition Mechanism Country Platform, a platform with a vision similar to the JETP.
Through the Office of the Coordinating Economic Affairs Minister, Indonesia has set its priorities for the energy sector via the Priority Economic Deliverables for Indonesia’s ASEAN chairmanship in 2023, which includes developing the energy transition financing mechanism and energy security through robust RE utilization.
According to the 7th ASEAN Energy Outlook (AEO7), RE has made up 15.3 percent of Indonesia’s total installed capacity as of 2022. The AEO7 projects that Indonesia can expand its RE share to 45.2 percent by 2050 by maintaining the current RE policies (AMS target scenario). However, coal will still comprise up to 34 percent of installed capacity in this projection. Therefore, Indonesia needs to accelerate its RE attainment to align with its target of reaching net zero by 2060.
