Yogyakarta, June 4, 2025 – The energy transition towards renewable sources is key to reducing Indonesia’s dependence on coal while encouraging a sustainable economy. In the Public Seminar on Coal Policy Reform organized by the Institute for Essential Services Reform (IESR) in collaboration with the Center for Energy Studies (PSE) of Gadjah Mada University (UGM) in Yogyakarta, Fabby Tumiwa, Executive Director of IESR, explained that there are 333 GW of renewable energy potential in Indonesia that are financially feasible. This potential includes 166 GW of solar energy and 127 GW of wind energy.
“Reforming the coal price policy (Domestic Market Obligation, DMO) is important to make renewable energy competitive. Only 1.6 GW of the 10.9 GW renewable energy plan in the 2021 RUPTL has been realized,” he said.
Prof. Sarjiya, Head of PSE UGM, in his speech stated that energy security is the main prerequisite for attracting investment and driving the economy, while the energy transition opens up new job opportunities.
Alhaqurahman Isa, Coordinator of Services and Supervision of Various New and Renewable Energy Businesses of the Ministry of Energy and Mineral Resources, explained that the roadmap for the electricity sector energy transition based on ESDM Ministerial Regulation No. 10/2025 targets Indonesia to gradually reduce its electricity sector emissions. Utilization of renewable energy is a key strategy.
“We will gradually increase the mix. Specifically, the 2025-2034 RUPTL targets an additional renewable energy capacity of 42.6 GW and 10.2 GW of energy storage systems,” said Haqi.
Leo Yudha Rio Putro, Head of the Energy and Electricity Section of the PUP-ESDM Office of the Special Region of Yogyakarta (DIY), explained that the DIY province is experiencing its own challenges in meeting its energy needs.
“Although our province is small in area, our energy needs are high, and we do not have local power plants. We are fully dependent on nine substations from the Java-Bali network,” said Leo.
Leo added that with this situation, his party has difficulty achieving the target of the regional renewable energy mix as stated in the Regional Energy General Plan (RUED). Therefore, his party plans to review the DIY RUED and make adjustments.
The energy transition is a systematic change that will have an impact on one of them, the economy, especially regions or provinces that depend on the mining economy.
Rachmawan Budiarto, Acting Chair of the UGM Center for People’s Economic Studies, explained that to ensure the energy transformation process occurs, the economic diversification process must first occur. Several proposed sectors are the agricultural sector and MSMEs.
“The key to regional economic transformation is political inclusion where the involvement of all stakeholders is ensured so that the green economic transformation that occurs will be stronger,” said Rachmawan.
Technological innovation is also crucial in the energy transition process, especially for the manufacturing sector and other sectors that have high emission intensity. Akmal Irfan Majid, a researcher at the UGM Center for Energy Studies (PSE) said that the use of hydrogen as a fuel or energy carrier has been considered. The relatively high economic price is one of the challenges in the widespread use of hydrogen.
“Green hydrogen has the potential to reduce steel emissions by up to 50%, but electrolysis innovation is needed to reduce costs,” he explained.
Action and innovation in decarbonization of various sectors require a strong legal umbrella for policies. Irine Handika, UGM Center for Energy Studies explained that currently Indonesia has a number of policy regulations for the energy transition. However, several regulations are not harmonious regarding several crucial targets such as the retirement of PLTU which in ESDM Regulation No. 10/2025 requires early retirement of PLTU while RUKN 2024 tends to avoid the early retirement mandate and supports natural retirement of PLTU.
“The existence of clear and consistent legal norms that are in line with higher laws such as the RPJPN Law and RUKN will provide legal certainty to act for executors such as PLN,” he said.
Irine also added that the process of formulating energy transition policies must involve stakeholder input to ensure a rational legal basis.
