Supporting the subnational development of renewable energy: Lessons from West Nusa Tenggara, Indonesia

This report examines the challenges and opportunities for subnational renewable energy development in West Nusa Tenggara, Indonesia. It highlights that while the region has significant mini-hydro potential, development is hindered by a combination of technical, institutional, and policy barriers, including land acquisition issues, slow asset transfers, and poor coordination between on-grid and off-grid electricity supply. The document advocates for a Public-Private-People Partnership (PPPP) approach and improved capacity building at the provincial level to unlock investment from Independent Power Producers (IPPs) and community-level producers.

• West Nusa Tenggara possesses significant untapped renewable energy potential, particularly in mini-hydro, which far exceeds its current capacity. As of 2015, the existing total renewable energy capacity (both on-grid and off-grid) was only 14 MW, whereas mini-hydro schemes alone could potentially provide more than 96.5 MW.
• Independent Power Producers (IPPs) face substantial barriers to entering the energy sector in Indonesia. These primary obstacles include limited access to finance, a lack of technical capacity and skills, and restrictive local permitting regulations imposed by the government.
• The development of mini-hydro projects is obstructed by several governance and technical issues. These include volatile land prices that spike when projects are announced, unclear land designations between protected areas and community forests, and excessively long asset transfer processes involving the Ministry of Finance and the Ministry of Energy and Mineral Resources.
• There is a lack of coordination between the state electricity company (PLN) and off-grid providers. PLN may develop grid infrastructure in remote areas that renders existing or planned off-grid facilities obsolete, as local populations generally prefer PLN's more reliable service.
• Recent legislative changes in Indonesia have shifted the primary authority for decentralised energy planning to the provincial level. Law No. 23/2014 stipulates that provincial governments are now responsible for issuing licences, establishing off-grid tariffs, and developing renewable energy.
• Financial resources for renewable energy are available at the subnational level, but require better management. The 2014 Village Governance Law provides top-up funds of nearly US$750,000 per village to Indonesia's 72,000 villages, which could be used for climate-compatible development if coordinated across villages to achieve economies of scale.

APA

Indrawan, M., Muchtar, R., Cameron, L., & Arumdatin, N. (2016). Supporting the subnational development of renewable energy: Lessons from West Nusa Tenggara, Indonesia. Climate and Development Knowledge Network. http://cdkn.org/wp-content/uploads/2016/06/West-Nusa-Tenggara-Inside-Story_WEB-final.pdf

Chicago

Indrawan, Mochamad, Rosmaliati Muchtar, Lachlan Cameron, and Niken Arumdatin. Supporting the subnational development of renewable energy: Lessons from West Nusa Tenggara, Indonesia. Climate and Development Knowledge Network, 2016. http://cdkn.org/wp-content/uploads/2016/06/West-Nusa-Tenggara-Inside-Story_WEB-final.pdf.

Wikipedia

{{cite report |last1=Indrawan |first1=Mochamad |last2=Muchtar |first2=Rosmaliati |last3=Cameron |first3=Lachlan |last4=Arumdatin |first4=Niken |title=Supporting the subnational development of renewable energy: Lessons from West Nusa Tenggara, Indonesia |publisher=Climate and Development Knowledge Network |date=June 2016 |url=http://cdkn.org/wp-content/uploads/2016/06/West-Nusa-Tenggara-Inside-Story_WEB-final.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{indrawan2016supporting, author = {Indrawan, Mochamad and Muchtar, Rosmaliati and Cameron, Lachlan and Arumdatin, Niken}, title = {{Supporting the subnational development of renewable energy: Lessons from West Nusa Tenggara, Indonesia}}, institution = {Climate and Development Knowledge Network}, year = {2016}, month = jun, url = {http://cdkn.org/wp-content/uploads/2016/06/West-Nusa-Tenggara-Inside-Story_WEB-final.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }