Getting to 23 Per Cent: Strategies to scale up renewables in Indonesia

Indonesia is currently off target for its 2025 renewable energy goals, with installed capacity at 9.4 GW by the end of 2018, failing to meet the Ministry of Energy and Mineral Resources' target of 15.5 GW. The report identifies a 'trilemma' where the government struggles to simultaneously keep electricity tariffs low, maintain low subsidy costs, and meet renewable targets. To address this, the authors recommend a moratorium on new coal plants, a massive scale-up of rooftop solar, a shift from biofuels to bioenergy, and a revamp of the pricing mechanism to reflect full economic costs rather than just the local average generation cost (BPP).

• Indonesia is failing to meet its renewable energy targets; total renewable installed capacity was 9.4 GW at the end of 2018, significantly below the Ministry of Energy and Mineral Resources' target of 15.5 GW for the second quarter of 2018.
• The power sector is dominated by coal, with an oversupply in Java and Bali. Indonesia had approximately 39 GW of operational coal-fired capacity in 2018, and the RUPTL 2019–2028 plans another 25 GW of new coal plants.
• The use of the local average generation cost (BPP) as a price benchmark is non-transparent and biased against renewables, as it is linked to subsidized coal prices and often caps renewable purchase prices at 85 per cent of the BPP.
• Rooftop solar development is hindered by Regulation No. 49/2018, which limits installation capacity to 100 per cent of grid-installed capacity and only credits exported energy at 65 per cent of the customer tariff.
• The government's focus on biodiesel (B20) to create a domestic market for crude palm oil (CPO) has negatively impacted the trade balance, losing USD 553 million from May 2018 to April 2019 due to the opportunity cost of not exporting CPO.
• Biodiesel policies risk increasing greenhouse gas emissions and deforestation; some estimates suggest palm oil biodiesel can have three times the emissions of diesel oil due to peatland drainage and forest expansion.
• The Indonesian electricity grid consists of over 600 isolated local grids, many of which are too fragile to absorb significant amounts of intermittent renewable power without upgrades in interconnectors and storage.
• The report proposes a 'win-win-win' strategy to provide subsidized 900 VA customers with 700 W rooftop solar panels, which could save the government IDR 3.35 trillion (USD 232 million) in annual electricity subsidies.

APA

Suharsono, A., McCulloch, N., Mostafa, M., Bridle, R., Lontoh, L., & Gass, P. (2019). Getting to 23 Per Cent: Strategies to scale up renewables in Indonesia. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/23-per-cent-renewables-indonesia.pdf

Chicago

Suharsono, Anissa, Neil McCulloch, Mostafa Mostafa, Richard Bridle, Lucky Lontoh, and Philip Gass. Getting to 23 Per Cent: Strategies to scale up renewables in Indonesia. International Institute for Sustainable Development, 2019. https://www.iisd.org/system/files/publications/23-per-cent-renewables-indonesia.pdf.

Wikipedia

{{cite report |last1=Suharsono |first1=Anissa |last2=McCulloch |first2=Neil |last3=Mostafa |first3=Mostafa |last4=Bridle |first4=Richard |last5=Lontoh |first5=Lucky |last6=Gass |first6=Philip |title=Getting to 23 Per Cent: Strategies to scale up renewables in Indonesia |publisher=International Institute for Sustainable Development |date=July 2019 |url=https://www.iisd.org/system/files/publications/23-per-cent-renewables-indonesia.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{suharsono2019getting, author = {Suharsono, Anissa and McCulloch, Neil and Mostafa, Mostafa and Bridle, Richard and Lontoh, Lucky and Gass, Philip}, title = {{Getting to 23 Per Cent: Strategies to scale up renewables in Indonesia}}, institution = {International Institute for Sustainable Development}, year = {2019}, month = jul, url = {https://www.iisd.org/system/files/publications/23-per-cent-renewables-indonesia.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }