Indonesia Energy Transition Outlook 2024: Tracking Progress of Energy Transition in Indonesia: The Trend and Transformation in Achieving Indonesia Net Zero Ambition


In 2023, through the presidential decree lifting the COVID-19 pandemic situation, it became a stimulus for economic recovery and national development to accelerate. Until the second quarter of 2023, economic growth in Indonesia was recorded at 5.17% (yoy) and showed economic strengthening in several regions in Indonesia. Meanwhile, Indonesia is projected to experience a population increase of 0.9% by 2023. This will certainly boost the level of domestic energy demand. On the other hand, external factors of energy security are caused by conflicts in Russia and Ukraine and the stability of the Middle East region, which will be able to affect the world energy commodity market. Indonesia is also a country that feels the impact.

Indonesia, as a country that has ratified the Paris Agreement through Law No. 16/2016, has emphasized its position to achieve net zero emissions by 2060 or earlier. This commitment is emphasized by increasing the national contribution target, or Enhance-NDC, by 31.89% with its own efforts and 43.20% with international assistance. In line with this, through the Just Energy Transition Partnership (JETP) commitment between the Government of Indonesia and donor countries that are members of the International Partner Group, Indonesia targets to achieve 44% of the renewable energy mix by 2030 and retire 1.7 GW of power plants from the operation of power plants in the network. However, the JETP target is considered less ambitious for efforts to achieve the target of controlling temperature rise by 1.5 oC. This is because it does not include the intervention of captive PLTU, which has a large role in contributing emissions in Indonesia.

Apart from the electricity sector, Indonesia’s energy transition also needs to be encouraged and accelerated in various other energy sectors, such as transportation and industry. On the demand side of national energy needs, the industrial sector is recorded to have a demand of 44.21% in 2022, of which 56.5% is met by coal. This condition is influenced by government policy through the Domestic Market Obligation (DMO) regulation. This policy can support the development of domestic industries that use national natural resources, but on the other hand, the use of coal in the industrial sector also increases greenhouse gas emissions. So it is necessary to control emissions and innovate in energy transformation in the industrial sector. Some large industries that need attention are the cement, iron and steel, and ammonia industries. In the transportation sector, through Ministerial Decree No. 8 of 2023, 38 mitigation action steps have been established that focus on the electrification of land vehicles, including motorcycles, cars, and public vehicles, as well as the use of low-carbon fuels in sea and air transportation.

These developments show that Indonesia’s energy transition is entering the take-off phase. The question is, is the current energy transition process in line with Indonesia’s climate crisis mitigation and sustainable development ambitions? If not, what options can Indonesia focus on to accelerate the energy transition in the near future?

The progress and development of energy transition in Indonesia are specifically reviewed in one of IESR’s flagship reports launched at the end of each year: the Indonesia Energy Transition Outlook (IETO). Published since 2017, the IETO, previously titled Indonesia Clean Energy Outlook (ICEO), aims to regularly monitor the development and progress of Indonesia’s energy transition and identify challenges and opportunities for the following year. The report covers policy analysis and review, technology status updates, and the energy transition ecosystem.

Over the years, IESR has worked to improve the coverage and rigor of its analysis in this report. The sixth edition of the IETO also gathers various perspectives from stakeholders in the energy sector and addresses them with in-depth studies to deliver strategic analysis on the energy transition and transformation to a low-carbon energy system in the country.

Through the IETO, the IESR intends to inform policymakers and all stakeholders in the energy sector on the effectiveness of policies and improvements needed to help accelerate the development and transition of clean energy in the country. By doing so, it is hoped that Indonesia can ensure energy security, a competitive economy, and transition to a sustainable energy system in the near future.

IETO 2024 will be launched in a special meeting to get views and perceptions from policymakers and actors on the upcoming trends in the energy transition. Discussions in this meeting will highlight the energy transition processes taking place in various energy sectors in Indonesia and be followed by an analysis of the energy transition readiness framework in Indonesia’s electricity sector, as well as lessons learned in 2023 to address challenges in driving the energy transition in 2024.


The Indonesia Energy Transition Outlook (IETO) 2024 launch meeting and discussion was organized with the following objectives:

  1. Inform and introduce the IESR flagship report, Indonesia Energy Transition Outlook (IETO).
  2. Review and evaluate the development of the energy transition (fossil energy, renewable energy, and energy efficiency) in Indonesia during 2023 in the context of the impact of government policies and regulations issued to relevant stakeholders, as well as the review in 2024.
  3. Review the evaluation and transition readiness framework for Indonesia’s electricity sector with policymakers and stakeholders.
  4. Provide a policy dialogue space for stakeholders, including policymakers and businesses, as well as civil society organizations, in the process of formulating and implementing more sustainable energy transition policies.

Racing in Indonesia’s Energy Transition Momentum

Jakarta, 15 December 2022 – Various global geopolitical events throughout 2022 have affected the increase in the price of fossil energy commodities. As a sector that influences and drives other sectors, the energy sector plays an important role in various aspects ranging from socio-economic to political. The global energy crisis in 2022 can be an opportunity for Indonesia to take advantage to accelerate the energy transition.

Indonesia’s energy market, which still relies heavily on subsidies, has made Indonesia feel less impacted by the global energy crisis due to soaring fossil commodity prices. However, it cannot be denied that the government’s fiscal capacity is no longer as large as the past 2-3 years considering that so many energy subsidies have been issued.

This was conveyed by Dannif Danusaputro, President Director of PT Pertamina New & Renewable Energy at the launch of the Indonesia Energy Transition Outlook 2023 report, by the Institute for Essential Services Reform (IESR), Thursday 15 December 2022.

“The increasingly narrow fiscal space will inevitably force the government to adopt unpopular policies and this can be captured as a momentum for accelerating renewable energy,” explained Dannif.

It is not only the global energy crisis that can become a momentum for accelerating renewable energy, but also the commitment to finance the energy transition in Indonesia. At the G20 Summit in November 2022, Indonesia received US$20 billion in energy transition funding through the Just Energy Transition Partnership (JETP) scheme. This fund is disbursed by the International Partners Group which consists of the G7 countries plus Denmark and Norway.

Suzanty Sitorus, Executive Director of Viriya ENB, said that JETP’s funds are not sufficient to finance the energy transition process in Indonesia, but that does not mean that its role is not important.

“What is more important is what (these funds) are intended for. Will the USD 20 billion lay the foundations for us to have a faster transition or not,” said Suzanty.

She added that it is important for Indonesia to learn from South Africa (a previous recipient of JETP funding), about an investment plan that suits the needs of the recipient country.

Harris, Director of Geothermal, Directorate General of Electricity at the Ministry of Energy and Mineral Resources, stated that since the G20 Summit, the interest of entrepreneurs to invest in renewable energy, especially geothermal, has increased. This is a good thing for pursuing renewable energy targets in RUPTL.

“I don’t think the current RUPTL needs to increase the target, but we have to make sure that the existing target of 51% renewable (around 20.9 GW) is actually achieved,” said Harris.

He added that it was important to ensure that the RUPTL target was achieved because several times the government did not achieve the RUPTL target.

In addition to adding the installed capacity of renewable energy, energy efficiency is also one of the strategies to achieve net-zero emission status, especially in the industrial sector. Octavianus Bramantya, a member of the Net Zero Hub daily work team, KADIN, explained that the industrial sector is quite aware of the need to transition to cleaner energy sources, but they are still waiting for regulatory certainty.

“There has been an explosion of net-zero pledges from companies. Companies are no longer competing through price and product quality, but because there is a carbon footprint assessment for exports, companies have started to be motivated to think about their carbon footprint,” said Bramantya.

Companies engaged in foreign markets have considered this. Local companies still see this carbon calculation as an obstacle, so it is a challenge for KADIN Net-Zero Hub to help restructure capex values and show that low carbon development is actually profitable.

Indonesia Energy Transition Outlook (IETO) 2022

IETO 2022 will be launched in a webinar that is also intended to obtain views/perceptions from policymakers and actors on the trends that will occur in the coming year in the energy transition. Discussions at this meeting will focus on the energy transition readiness framework in Indonesia’s electricity sector as well as various lessons learned in 2021 to overcome the challenges of encouraging the energy transition in 2022.

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