Jakarta, March 26, 2025 – Indonesia has committed to achieving net zero emission (NZE) by 2060 or sooner. In 2022, Indonesia agreed to the USD 20 billion Just Energy Transition Partnership (JETP), one of whose targets is peak emissions of 290 million tons of CO2 and a renewable energy mix of 34 percent by 2030. This commitment reflects a major investment opportunity to accelerate the energy transition. The availability of renewable energy project data, planning and tendering information is a key factor in attracting clean investment.
The Institute for Essential Services Reform (IESR) encourages the availability of data on the potential of renewable energy projects so that they can trigger significant emission reductions. IESR’s Energy System Transformation Program Manager, Deon Arinaldo, said that although Indonesia’s renewable energy technical potential reaches more than 3,700 GW, its utilization, especially solar and wind power plants, is still far from optimal.
Through its latest study, Unlocking Indonesia’s Renewable Future, IESR analyzes the potential of renewable energy projects based on current tariff regulations, such as Presidential Regulation No. 112/2022 as well as the availability of electricity grid infrastructure such as substations and transmission. The study identifies the development potential of up to 333 GW of renewable energy projects, which can be supplied by solar power plants, wind power plants and thermal power plants.
“Seeing this potential, of course there is a contradiction with the reality of renewable energy utilization in Indonesia. However, this finding shows that we can move faster in utilizing this renewable energy, especially solar PV and wind energy,” Deon explained in a discussion with the media entitled Editorial Forum: Raising Optimism for solar PV and wind power as the Backbone of Indonesia’s Energy Transition on Tuesday (25/3).
Pintoko Aji, Research Coordinator of the Data and Modeling Group, IESR revealed that in the study, 333 GW of renewable energy development potential consisted of onshore wind power plants (167 GW), ground-mounted solar power plants (165.9 GW), and thermal power plants (0.7 GW). This figure was obtained from the results of financial simulations and private-public partnership schemes at 1,500 locations with technical potential. Of this amount, 205.9 GW or about 61 percent of the total financially feasible potential is indicated to have an Equity Internal Rate of Return (EIRR) above 10%, indicating promising investment potential.
“For example, minihydro resources are abundant in Sumatra, while wind power potential is greatest in Sulawesi, Nusa Tenggara, Maluku, and Papua. On the other hand, solar energy has promising potential in areas such as Sumatra, Kalimantan and Sulawesi. To realize this potential, the development of supporting infrastructure, especially in terms of energy transmission and distribution, is very much needed,” said Pintoko.
IESR encourages the government to accommodate land use allocation for renewable energy in regional spatial planning, simplify the land acquisition process to reduce investment risk, and set specific targets per region in renewable energy utilization. Meanwhile, to accommodate the integration of renewable energy locations with high profit potential, PLN can organize planning and network expansion to these identified locations and reform the procurement mechanism. Meanwhile, to determine the priority scale of renewable energy development, IESR encourages developers to prioritize projects with high profit potential and optimize design and financial planning.
Meanwhile, Herman Darnel Ibrahim, Chief Expert of the Indonesian Solar Energy Association (AESI) emphasized that with the increasingly urgent challenges of energy transition, solar energy is becoming a dominant resource and plays an important role in Indonesia’s energy future. The development of solar energy technology is now mature and increasingly competitive, especially compared to nuclear and gas power plants.
