Analysis of Indonesia’s Renewable Energy Policy: Status, Barriers, & Opportunities

By Yoga Wienda Pratama, Widodo Wahyu Purwanto | Publication, Scientific Paper

Modern energy is the foundation of economic and social development. Thus, providing energy in a sustainable manner for Indonesia has always been the main priority of the government. As an archipelagic state with more than 17,000 islands and possesses abundant renewable resources, Indonesia’s energy demand is growing rapidly to support the stable economic growth. Despite the fact that reliance on fossil fuels has increased in recent years, Indonesia has begun inserting more renewable to its energy supply mix. The country aims to achieve policy target of 23% renewable energy use by 2025 and 31% by 2050. Recent progress of renewable energy deployment is in modest level. The current policies have already provided a basis for establishing the industry, however, ensuring policy certainty and more attractive incentives for the players to develop new projects are required to reach ambitious target of stepping-up renewable energy development. This study aims to analyze the current status of renewable energy deployment in Indonesia, to identify barriers the development in the aspects of policy and regulation, market design and technical, and proposes key insights on the opportunities to harness the potential in expanding use of renewable energy in the country to meet the target. We would like to acknowledge the valuable contribution of Chairman Masyarakat Energi Terbarukan Indonesia (METI), Dr. Surya Darma, in preparation of this report. The financial support from Hibah Program Pengabdian Kepada Masyarakat DRPM Universitas Indonesia (No.2174/UN2.R3.1/ HKP.05.00/2017) is gratefully acknowledged.