Sector

Energy

Indonesia possesses vast, distributed, and diverse energy resources. The country’s energy subsectors include gas, clean water, and electricity, with demand projected to increase to 464 terawatt-hours (TWh) by 2024 and further increase to 1,885 TWh by 2060. The use of renewable energy is a top priority and the government has set ambitious goals in the General Planning for National Energy (RUEN) and General Planning for National Electricity (RKUN) to integrate 23 percent renewable energy into the national energy mix by 2025. At least US$41.8 billion of investments are needed to fully realize the goal.

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Energy

Indonesia possesses vast, distributed, and diverse energy resources. The country’s energy subsectors include gas, clean water, and electricity, with demand projected to increase to 464 terawatt-hours (TWh) by 2024 and further increase to 1,885 TWh by 2060. The use of renewable energy is a top priority and the government has set ambitious goals in the General Planning for National Energy (RUEN) and General Planning for National Electricity (RKUN) to integrate 23 percent renewable energy into the national energy mix by 2025. At least US$41.8 billion of investments are needed to fully realize the goal.

Despite having a renewable energy potential estimated at around 3,000 gigawatts (GW), current utilization is merely about 12.74 GW or 3 percent. This renewable energy potential includes solar energy, which is widely spread across Indonesia, especially in East Nusa Tenggara, West Kalimantan, and Riau, with a potential of approximately 3,294 GW and utilization of 323 megawatts (MW). Another renewable energy, hydro energy, with a potential of 95 GW, is primarily found in North Kalimantan, Aceh, West Sumatra, North Sumatra, and Papua, with utilization reaching 6,738 MW.

Additionally, bioenergy, encompassing biofuel, biomass, and biogas, is distributed throughout Indonesia with a total potential of 57 GW and utilization of 3,118 MW. Wind energy (>6 m/s) found in East Nusa Tenggara, South Kalimantan, West Java, South Sulawesi, Aceh, and Papua has a substantial potential of 155 GW, with utilization of 154 MW.

Furthermore, geothermal energy, strategically located in the “Ring of Fire” region covering Sumatra, Java, Bali, Nusa Tenggara, Sulawesi, and Yogyakarta has a potential of 23 GW and utilization of 2,373 MW. Meanwhile, marine energy, with a potential of 63 GW, especially in Yogyakarta, East Nusa Tenggara, West Nusa Tenggara, and Bali, remains untapped.

Among the renewable energy sources and their potential, these projects entail significant investments. According to the Electricity Supply Business Plan (RUPTL) of the State Electricity Company (PLN), from 2021 to 2030, geothermal power plants require an investment of US$17.35 billion, large-scale solar power plants necessitate US$3.2 billion, hydropower plants require US$25.63 billion, and base renewable energy power plants require US$5.49 billion. Additionally, bioenergy power plants require an investment of US$2.2 billion, wind power plants US$1.03 billion, peaker power plants US$0.28 billion, and rooftop solar power plants IS$3 billion.

As of 2022, hydro and geothermal are the primary drivers of growth. Private entities had enhanced the capacity of hydro power by adding 603.66 MW in mini, micro, and standard hydro facilities, reaching a total of 2,459.72 MW. Meanwhile, the geothermal sector experienced a 412 MW increase over the last five years from the private sector, bringing the total capacity to 1,782.8 MW by 2022. Aside from these two renewable energy, sources solar energy has also presented significant opportunities, particularly given Indonesia's potential for floating solar systems on reservoirs and dams.

Furthermore, the country’s other national energy subsector of gas underscores Indonesia’s wealth in natural gas. Indonesia’s natural gas reserves are predominantly methane (80-95 percent), which can be used directly or processed into Liquefied Natural Gas (LNG). However, demand has greatly increased over the past decade for Liquefied Petroleum Gas (LPG). From 2018 to 2022, domestic LPG production reached between 1.9 to 2 million tons, which is insufficient to meet national needs, leading to increasing imports that reached 6.74 million tons in 2022.

Currently, the Energy and Mineral Resources Ministry is working to attract new investments for LPG refineries through a cluster-based business scheme for the construction or future development of new LPF refineries. The ministry has identified the potential of rich gas to produce an additional 1.2 million tons of LPG cylinders domestically.

Latest News

March 11, 2026

Indonesia’s official response to the attack on Iran by Israel and the United States is unusual to say the least. The Foreign Ministry in a statement said Indonesia deeply regretted the breakdown of the negotiations between the US and Iran, offered to mediate to break the impasse between the two countries, and added that President Prabowo Subianto Prabowo Subianto Djojohadikusumo, 72, is a retired Army lieutenant general, a businessman and the incumbent Defense Minister (2019-present). Due to his proximity to power throughout his military career, he entered politics in 2004 to pursue his dream of becoming the nation’s president. had “stated his readiness to launch diplomatic visits straight to the heart of the conflict, if necessary”.

While Prabowo may be genuine in his intentions for peace, the more pertinent question is would the US and Iran take him seriously? Would Israel?

Iranian Ambassador to Indonesia Mohammad Boroujerdi poured cold water on the proposal, saying Iran would not launch any new negotiations “with the enemy”. Out of diplomatic courtesy, the ambassador said his government appreciated Prabowo’s gesture.

There has not been any official response from the US. Israel, which is a party to the conflict, has not responded, but that is probably because the Indonesian statement makes no reference to Israel, with which Jakarta has no diplomatic relations.

The statement also fell short of condemning the attack as an act of aggression in violation of international law, just as Indonesia also refrained from condemning the US bombing of Venezuela and the abduction of its president, Nicolas Maduro, in January.

This time, the statement expressed deep regret at the breakdown of the negotiations and the ensuing escalation of the conflict. There was not even any recognition of the attacks.

At any rate, President Prabowo may lack the qualifications or credentials to be a peacemaker.

His decision to sign up to the Board of Peace set up in January by US President Donald Trump has undermined his claim to be an honest broker, especially given widespread criticism of the board, which was set up to enforce Trump’s peace initiative in Gaza.

At home, critics are still not convinced that joining the board will afford Indonesia the voice to convince Israel and the US to work toward the creation of an independent Palestinian state under the two-state solution. Nevertheless, they were willing to give him the benefit of the doubt on his claim that this was the only option available to stop Israel’s killing of Palestinians in Gaza.

Prabowo may appear to have the attention of Trump through their encounters in the lead up to the formation of the Board of Peace, but he has no direct link with Israel, and has not established a rapport with the Iranian leadership, or what is left of it following the death of Supreme Leader Ali Khamenei and several other top leaders by Israel-US bombing.

Prabowo has visited just about every country that matters in the Middle East, with the exception of Iran. If his Middle East campaign was played out as part of his strategy to get Indonesia involved in the peace process in the region, Iran should have been on his itinerary.

Prabowo, a former Army general, also lacks the personal credentials as peacemaker, at home or abroad. Former vice president Jusuf Kalla built his peace-making track record in resolving conflicts in Indonesia’s Maluku and Aceh regions, and he had been sent on missions to Myanmar and several other hot spots in the region to help find peace.

Critics say tackling the dispute between US and Iran, and presumably Israel, is almost an impossibility or certainly beyond Indonesia’s or Prabowo’s capability.

If he wants to build his peace-making credentials, he may want to start small and on something closer to home, for example the border dispute between Cambodia and Thailand, India and Pakistan over Kashmir, or now between Pakistan and Afghanistan. 

The suggestion for Prabowo to mediate the peace between the US-Israel and Iran nevertheless prompted a debate at home.

Former deputy foreign minister Dino Pati Djalal questioned Indonesia’s effectiveness now that it has become clear that the intention of the attacks is to bring about regime change in Tehran and no longer about dismantling Iran’s nuclear and weapons’ capability.

Describing the proposal as unrealistic, Dino said Trump is not likely to allow anyone to intervene in his campaign against Iran. He also said Indonesia may not have gained the trust of Iran given the minimum contacts between Prabowo and Iranian leaders in Tehran, while the idea of Prabowo meeting with Israel’s Prime Minister Benjamin Netanyahu, should that happen, could be a “political suicide” for him at home.

Some politicians, however, support Prabowo’s peace initiative.

Sukamta, the deputy chair of the House of Representatives Commission I on foreign affairs, said the proposal was consistent with Indonesia’s free and active foreign policy principle and the constitutional mandate for Indonesia to promote global peace.

But unlike the Prabowo administration, Sukamto of the Prosperous Justice Party (PKS) condemned the US-Israel attack on Iran as military aggression that threatens regional stability.

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