Energy security as positive force for green growth in Indonesia?

Indonesia faces imminent energy security challenges, with demand for electricity and transport fuel expected to grow rapidly by 2030. While the government has set ambitious targets for renewable energy (23% by 2025) and emission reductions (29-41% by 2030), current investments follow a 'business as usual' fossil fuel path. Structural barriers include policy inconsistency, limited fiscal space, and a political culture of transactional politics and decentralisation that often favours the exploitation of domestic coal. However, opportunities exist in geothermal energy, waste-to-energy, and energy efficiency, alongside governance reforms like the 'One Map' initiative and increased foreign direct investment to mitigate the financial risks of transitioning to a low-carbon economy.

• Indonesia is experiencing deteriorating energy security, with total primary energy demand, electricity demand, and transport fuel demand all expected to more than triple or quadruple by 2030.
• The country's energy transition is hindered by a 'business as usual' investment pattern focused on fossil fuels, despite a national target to reach 23% renewable energy in the primary energy mix by 2025.
• Significant structural political challenges impede green growth, including a proportional democracy that leads to loose coalitions and policy inconsistency, as well as transactional politics that blur public and private interests.
• Decentralisation has created governance issues where local officials may prioritise land grabbing and natural resource exploitation over national sustainability goals.
• There is a strong internal political pressure to exploit domestic coal reserves to ensure energy security, which often outweighs climate change priorities in the eyes of politicians and the public.
• The state-owned electricity company, PLN, faces conflicting incentives: it is pressured to maintain profitability and expand capacity quickly (often via cheap coal) while being tasked with increasing the share of renewables.
• Indonesia's fiscal space is limited, with a low tax-to-GDP ratio (averaging 10.9%), making the country dependent on foreign direct investment and international public finance to fund low-emissions infrastructure.
• The 'One Map' initiative is identified as a key opportunity to improve governance by synchronising official maps to resolve land-use conflicts and improve spatial planning.
• Specific 'win-win' technologies that can simultaneously improve energy security and support green growth include geothermal energy, waste-to-energy, and energy efficiency measures.
• The financial sector is beginning to integrate sustainability, with the Financial Services Authority (OJK) drafting regulations to restrict bank lending to environmentally damaging projects by 2018.

APA

van Tilburg, X., Villaveces-Izquierdo, S., Indriani, G., Rawlins, J., & van Schaik, L. (2016). Energy security as positive force for green growth in Indonesia? Climate and Development Knowledge Network. https://cdkn.org/sites/default/files/files/Energy-security_green_growth_Indonesia.pdf

Chicago

van Tilburg, Xander, Santiago Villaveces-Izquierdo, Gustya Indriani, James Rawlins, and Louise van Schaik. Energy security as positive force for green growth in Indonesia? Climate and Development Knowledge Network, 2016. https://cdkn.org/sites/default/files/files/Energy-security_green_growth_Indonesia.pdf.

Wikipedia

{{cite report |last1=van Tilburg |first1=Xander |last2=Villaveces-Izquierdo |first2=Santiago |last3=Indriani |first3=Gustya |last4=Rawlins |first4=James |last5=van Schaik |first5=Louise |title=Energy security as positive force for green growth in Indonesia? |publisher=Climate and Development Knowledge Network |date=December 2016 |url=https://cdkn.org/sites/default/files/files/Energy-security_green_growth_Indonesia.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{vantilburg2016energy, author = {van Tilburg, Xander and Villaveces-Izquierdo, Santiago and Indriani, Gustya and Rawlins, James and van Schaik, Louise}, title = {{Energy security as positive force for green growth in Indonesia?}}, institution = {Climate and Development Knowledge Network}, year = {2016}, month = dec, url = {https://cdkn.org/sites/default/files/files/Energy-security_green_growth_Indonesia.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }