Jakarta, April 22, 2025 – In an effort to realize the Net Zero Emission (NZE) target of 2060, decentralized energy is a strategic element that cannot be ignored. Unlike a centralized system, decentralized energy offers a more inclusive and adaptive approach, especially for areas that are difficult to reach by conventional electricity networks. This model allows local communities to utilize local renewable energy potential, such as solar energy in coastal areas to highlands or microhydro in mountainous areas, to generate and manage energy independently.
The Director of Various New and Renewable Energy at the Ministry of Energy and Mineral Resources, Andriah Feby Misna explained that the government has built various infrastructures to increase energy access, especially in remote areas, with funding support from the State Budget (APBN) and Special Allocation Funds (DAK) for small-scale energy projects.
“One of the flagship programs is the de-dieselization program, which aims to replace 5,239 Diesel Power Plants (PLTD) throughout Indonesia with renewable energy-based power plants according to local potential. The first phase of this program includes two large clusters, namely the Sumatra, Kalimantan, Java, and Madura (Sumkaljama) cluster, and the Sulawesi, Maluku, and East Nusa Tenggara (Sulmana) cluster,” Feby emphasized in the Regional Dialogue: Promoting Decentralized Energy Access in Southeast Asia organized by the Institute for Essential Services Reform (IESR) on Tuesday (22/4/2025).
However, Feby said, although decentralized energy systems promise sustainable energy solutions in remote areas, there are five main challenges that must be overcome. First, policies that are still focused on grid systems. Second, limited investment attractiveness for small-scale projects. Third, local industries have not developed optimally. Fourth, minimal support from local communities. Fifth, limited technical and local human resources. Lack of local expertise is an obstacle to the implementation and maintenance of decentralized energy systems.
“To address the above challenges, acceleration efforts are needed through strengthening local technical capacity, initiatives to share knowledge and experience between regions, and multi-sector collaboration for the development of the domestic renewable energy industry. With synergy between the government, private sector, and society, Indonesia’s energy transition towards NZE 2060 will not only strengthen national energy security, but also realize inclusive and equitable sustainable development,” said Feby.
Yaowateera Achawangkul, Department of Alternative Energy Development and Energy Conservation, Ministry of Energy, Thailand stated that one example of the real application of energy decentralization is the Bannamagun Village Semi-Hydro project. This village is located about 180 kilometers from the city center, without access to the national electricity grid, and its geographical conditions do not support the availability of abundant water.
“However, by utilizing magnetic waste as an energy source, this village has succeeded in building a 45 kWh power plant that serves 43 households. This project has been running for nine years since 2030, independently managed by the local community for daily operations and maintenance,” said Achawangkul.
According to Achwangkul, the success of the project lies not only in the technical aspects, but also in the “pay-as-you-go” payment system, where funds raised are used for the development of new systems or capacity expansion. Solar and semi-hydro energy have proven to be very important in addressing the challenge of energy access in rural areas.
Vernon Ray N. Vinluan, OIC – Supervisory Science Research Specialist of the Rural Electrification Administration and Management Division, Bureau of Electric Power Industry Management, Department of Energy, Philippines, said that to accelerate electrification in remote areas, the government introduced two innovative service models, namely microgrid service providers, regulated by the Energy Regulatory Commission. To date, 11 microgrids have been built serving about 9,990 households, nine of which are in Luzon Island and one in Visayas. The project includes the installation of 3.8 MW of generating capacity, 4.2 MW of Battery Energy Storage System (BESS), and 2.3 MW of solar power generation.
“The key to this success is the strong political commitment of the Philippine government. Cross-sectoral policy harmonization and direct engagement with the community—by meeting and engaging directly with residents on the ground—were critical factors in ensuring that the project was truly accepted and utilized by the community. The program’s consistency with the 2040 ambition shows that the Philippines is not only targeting total electrification, but also strengthening the foundation for long-term sustainable development through renewable energy,” Vernon explained.
Rumaizi A Halim, Director of Strategic Planning & Communications, Energy Commission, Malaysia explained that based on the World Bank’s 2022 report, Malaysia has succeeded in achieving 100% access to electricity for its entire population. This achievement is not just a statistic, but the result of the government’s long-term commitment and strategic programs, especially in bringing electricity to previously isolated areas such as Sabah and Sarawak.
“One of the key initiatives driving this achievement is the Rural Electrification Program, which involves close collaboration between the federal government, local governments, non-governmental organizations (NGOs), and the private sector to provide electricity access to remote communities. A widely used solution is the installation of solar power plants (PLTS) in villages that were previously not covered by the national electricity grid,” Rumaizi emphasized. Rumaizi emphasized that this rural electrification effort has been started since 2011, and is supported by various supporting policies, such as feed-in tariffs introduced at the beginning of the development of solar energy. This scheme encourages communities and companies to produce renewable energy and sell it back to the national electricity system, which ultimately increases public participation and adoption of environmentally friendly technologies.
