NEWS

Renewable Energy Potential in Indonesia

Publish at 2021-02-26

In terms of energy consumption, Indonesia is among the world's fastest-growing countries. Robust economic progress, growing urbanization and steady population growth are driving this. In the Association of Southeast Asian Nations (ASEAN), the country is the largest energy user, accounting for nearly 40 per cent of ASEAN members' total energy consumption. Energy consumption in Indonesia increased by almost 65 per cent between 2000 and 2014. It is expected in 2030 to rise to 80 per cent. Therefore Indonesia is in critical condition to have energy transition towards renewable energy.

To meet domestic growth in energy demand, the use of coal is growing. Just about 10 per cent of Indonesia's energy needs were met by coal at the turn of this century. Coal currently accounts for about one-third of the supply of electricity. This rapid expansion results from government policy to meet the high growth in demand for energy while reducing petroleum products imports. Further, Indonesia is the world's fourth-largest coal producer and was the largest exporter in 2014. Not only does this suggest additional greenhouse gas emissions from coal-burning, but it would also worsen air pollution, water contamination and scarcity problems.

In terms of energy consumption, Indonesia is among the world's fastest-growing countries. Robust economic progress, growing urbanization and steady population growth are driving this. In the Association of Southeast Asian Nations (ASEAN), the country is the largest energy user, accounting for nearly 40 per cent of ASEAN members' total energy consumption. Energy consumption in Indonesia increased by almost 65 per cent between 2000 and 2014. It is expected in 2030 to rise to 80 per cent. Therefore Indonesia is in critical condition to have energy transition towards renewable energy.

To meet domestic growth in energy demand, the use of coal is growing. Just about 10 per cent of Indonesia's energy needs were met by coal at the turn of this century. Coal currently accounts for about one-third of the supply of electricity. This rapid expansion results from government policy to meet the high growth in demand for energy while reducing petroleum products imports. Further, Indonesia is the world's fourth-largest coal producer and was the largest exporter in 2014. Not only does this suggest additional greenhouse gas emissions from coal-burning, but it would also worsen air pollution, water contamination and scarcity problems.

The 66 MW Poso Hydropower plant

While domestic coal and imported petroleum products have been increasingly dependent in recent years, Indonesia has begun to add more renewable capacity to its energy mix. As part of its efforts to minimize greenhouse gas emissions in line with the Paris climate agreement goals, the country aims to reach 23 per cent renewable energy use by 2025 and 31 per cent by 2050. A new green power capacity of 176 megawatts (MW) was also added by Indonesia in 2020, bringing its total green power capacity to 10,467 MW. The 66 MW Poso Hydropower plant, followed by 13.4 MW of archipelago-wide solar rooftops, was the biggest plant in Central Sulawesi.

Electricity demands in Indonesia will be more than triple by 2030 because of economic development, which means that electricity for cookers, ventilators, air conditioning, and other appliances is growing. Indonesia is expanding access to electricity in rural areas and islands at the same time. More than 10 per cent of the nation's population still needs electricity, but by 2026, the government aims for almost 100 per cent electrification.

Indonesia also has ample solar, wind, ocean, and bioenergy growth capacity, along with some of the world's greatest geothermal and hydropower potential. These sources may support heating, cooling and transport applications in addition to power generation.

Given the right policies and investments beginning today, Indonesia's renewable energy target for 2050 could be met as soon as 2030. In addition to power generation, energy end-uses need closer attention to reach the maximum potential of renewables. Around the same time, to facilitate the expanding use of modern bioenergy, a sustainable supply chain needs to be in place.

But harnessing this capacity requires an annual investment of over USD 16 billion between 2015 and 2030, from the current modest rate. Recent market developments indicate Indonesia is on the right track, with investments in renewable energy already growing.

If Indonesia continues to pursue this path, it will play a leading role in advancing the global energy transition, regionally and internationally.

Reference:
International Renewable Energy Agency (IRENA) – Renewable Energy Prospects: Indonesia