Ambiguities versus Ambition: A Review of Indonesia’s Energy Transition Policy

The report analyzes the contradictions between Indonesia's climate commitments and its energy planning, highlighting a significant oversupply of fossil fuel capacity and the risks of relying on 'false solutions' like biomass and ammonia co-firing.

• Indonesia's electricity grid is suffering from significant overcapacity. In 2021, 33% of the 58 GW of total installed fossil fuel capacity was in excess of what was needed to meet peak demand and maintain a 15% reserve margin, costing approximately IDR 16 trillion (USD 1.2 billion) annually in fixed operating and maintenance (FOM) costs.
• There is a lack of alignment regarding Net Zero Emission (NZE) targets across Indonesian government entities. PLN and the Ministry of Energy and Mineral Resources (MEMR) set a target of 2060, the Ministry of Environment and Forestry (MoEF) set 2070, and Bappenas recommended 2045.
• Despite a moratorium on new coal plants, the 2021-2030 RUPTL includes 40.6 GW of planned capacity, with 34% (13.8 GW) coming from coal and 14% (5.8 GW) from gas and diesel. Additionally, nearly 6 GW of new coal-fired power plants (CPPs) are 'shelved' for potential future use, primarily in Sumatra (2.59 GW) and Java (2.66 GW).
• The report characterizes biomass co-firing as a 'false strategy' because the biomass portion is only 15%, meaning 95% of the fuel remains coal. PLN plans to implement this in 144 units with a capacity target of 18.3 GW by 2025, which the authors argue may be used to extend the life of aging coal plants.
• Ammonia co-firing is identified as an unproven and potentially costly technology in Indonesia, largely driven by cooperation with Japan. PLN plans to implement it in 7 units with a total capacity target of 4 GW, but the authors warn it could divert funds from renewable energy.
• Carbon Capture, Utilization and Storage (CCUS) is described as commercially unavailable and extremely expensive for power projects. A World Bank and PLN study indicated that CCUS could double the levelized cost of electricity (LCOE) and reduce a plant's generating capacity by 20% to 30% due to its energy-intensive nature.
• Clean Coal Technology (CCT) is criticized as a 'myth' that does not guarantee the reduction of greenhouse gas emissions or air pollution, as plants using CCT still emit CO2, sulfur dioxide, nitrogen dioxide, and particulate matter.
• The 'take-or-pay' (TOP) payment schemes between PLN and independent power producers (IPPs) create a heavy financial burden, as PLN must pay for capacity regardless of whether the power is dispatched. In 2021, PLN was estimated to pay approximately IDR 103 trillion to IPPs through this scheme.

APA

Prasetiyo, A., Suarez, I., Parapat, J., & Amali, Z. (2023). Ambiguities versus Ambition: A Review of Indonesia’s Energy Transition Policy. Trend Asia. https://trendasia.org/wp-content/uploads/2023/03/EN_Ambiguities-versus-Ambition-2.pdf

Chicago

Prasetiyo, Andri, Isabella Suarez, Jobit Parapat, and Zakki Amali. Ambiguities versus Ambition: A Review of Indonesia’s Energy Transition Policy. Trend Asia, 2023. https://trendasia.org/wp-content/uploads/2023/03/EN_Ambiguities-versus-Ambition-2.pdf.

Wikipedia

{{cite report |last1=Prasetiyo |first1=Andri |last2=Suarez |first2=Isabella |last3=Parapat |first3=Jobit |last4=Amali |first4=Zakki |title=Ambiguities versus Ambition: A Review of Indonesia’s Energy Transition Policy |publisher=Trend Asia |date=March 2023 |url=https://trendasia.org/wp-content/uploads/2023/03/EN_Ambiguities-versus-Ambition-2.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{prasetiyo2023ambiguities, author = {Prasetiyo, Andri and Suarez, Isabella and Parapat, Jobit and Amali, Zakki}, title = {{Ambiguities versus Ambition: A Review of Indonesia’s Energy Transition Policy}}, institution = {Trend Asia}, year = {2023}, month = mar, url = {https://trendasia.org/wp-content/uploads/2023/03/EN_Ambiguities-versus-Ambition-2.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }