Electrifying the Last Mile: Community-Based Renewable Energy for Eastern Indonesia

This report by the Climate Policy Initiative examines the role of community-based renewable energy (RE) mini-grids in providing electricity to remote areas of Eastern Indonesia. Through four case studies in East Nusa Tenggara and East Kalimantan, the report identifies community ownership and consensus as critical factors for the success and sustainability of decentralized RE projects, contrasting these with the significant lack of private sector interest due to high costs and perceived risks.

• Private sector investment in small-scale renewable energy projects in Indonesia is hindered by high unit costs, high interest rates, perceived investment risks, and a lack of de-risking instruments, resulting in "very little interest from the private sector to invest in such projects".
• Successful renewable energy implementations in Eastern Indonesia share a common requirement: a community-driven approach involving "full ownership and consensus on various financing and management aspects", even when private sector involvement is absent.
• In Muara Enggelam, a 35 kWp communal solar grid (later expanded to 45 kWp) funded by a IDR 3.9 billion Special Allocation Fund has enabled local enterprises, such as swallows nest farming, and reduced monthly electricity costs from IDR 80,000 for diesel to IDR 50,000.
• The Watukarere case illustrates how a lack of community ownership and capacity can lead to project failure; despite a 30 kWp mini-grid, the system operates at half capacity due to high spare part costs and a lack of skilled workers, with residents receiving free electricity because of an "unwillingness to pay".
• The Mata Redi project, funded by the UKs MENTARI program, utilizes two solar units (60 kWp and 35 kWp) to power 220 households and 13 public facilities, while fostering economic growth through energy use for agricultural products like ginger and lemongrass.
• Treweng Island demonstrates the risk of stranded assets; after a 30 kWp communal grid was established in 2016, a subsequent 110 kWp PLN grid in 2020 led the village government to abandon the older grid because there was "no budget available to cover operating costs".
• The report recommends that the Indonesian government treat community-based RE as part of broader village economic development rather than just electrification, and prioritize frameworks that use public finance to "crowd in international donors and private finance".

APA

Saio, R. (2024). Electrifying the Last Mile: Community-Based Renewable Energy for Eastern Indonesia. Climate Policy Initiative. https://www.climatepolicyinitiative.org/electrifying-the-last-mile-community-based-renewable-energy-for-eastern-indonesia/

Chicago

Saio, Rindo. Electrifying the Last Mile: Community-Based Renewable Energy for Eastern Indonesia. Climate Policy Initiative, 2024. https://www.climatepolicyinitiative.org/electrifying-the-last-mile-community-based-renewable-energy-for-eastern-indonesia/.

Wikipedia

{{cite report |last1=Saio |first1=Rindo |title=Electrifying the Last Mile: Community-Based Renewable Energy for Eastern Indonesia |publisher=Climate Policy Initiative |date=31 July 2024 |url=https://www.climatepolicyinitiative.org/electrifying-the-last-mile-community-based-renewable-energy-for-eastern-indonesia/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{saio2024electrifying, author = {Saio, Rindo}, title = {{Electrifying the Last Mile: Community-Based Renewable Energy for Eastern Indonesia}}, institution = {Climate Policy Initiative}, year = {2024}, month = jul, url = {https://www.climatepolicyinitiative.org/electrifying-the-last-mile-community-based-renewable-energy-for-eastern-indonesia/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }