Indonesia plans to retire 3 GW of coal power annually and increase renewables to 65% of its energy mix by 2040. This target, announced during the G20 summit, is part of the country’s efforts to reduce carbon emissions and transition to cleaner energy. It also aligns with Indonesia’s net-zero emissions goal, which was recently brought forward to 2050 from 2060.
The shift away from coal poses challenges, as coal has historically dominated Indonesia’s energy supply. The domestic coal price mandate has allowed the country’s state utility company, PLN, to rely heavily on coal for low-cost electricity. Transitioning to renewable energy will require substantial funding to decommission coal plants and build renewable energy infrastructure, as stated by Ember
Recent renewable energy projects in Indonesia include the Cirata Floating Solar Power Plant, Southeast Asia’s largest floating solar project, which is expected to generate 145 MW of electricity. The country has also expanded its geothermal energy projects, such as the Sarulla Geothermal Power Plant, which has a capacity of 330 MW. These projects highlight Indonesia’s focus on solar, geothermal, and other renewable sources.
To meet rising electricity demand, projected to grow by 5% annually, Indonesia is exploring technologies like solar power combined with battery energy storage systems (BESS). Solar is seen as the most practical renewable energy option, while bioenergy remains one of the most expensive. PLN’s future plans include developing smart grids and flexible power generation to support more variable renewable energy sources.
According to Indonesia’s Draft Electricity Supply Business Plan (RUPTL) for 2024-2033, the country aims to add 22 GW of natural gas capacity and 5 GW of nuclear capacity as part of its energy mix. Additionally, Indonesia’s Just Energy Transition Partnership (JETP) supports investment in solar, wind, geothermal, hydro, and bioenergy to meet its 2040 electricity demand, estimated at 806 TWh.
To stabilize solar energy output, the plan includes 68 GWh of battery storage capacity. By 2040, solar energy is expected to contribute 20% of the power mix, wind 11%, and other renewables, including geothermal and hydro, 34%. These steps aim to ensure a reliable supply of clean energy while phasing out coal.
