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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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
In a surprising turn of events to cap off the year, Nahdlatul Ulama (NU), Indonesia's largest Muslim organization, has been shaken by turmoil that many observers are calling an internal coup. At the center of the storm is the sudden political ousting of Yahya Cholil Staquf as chairman of NU’s executive body Tanfidziyah.
The catalyst for his removal was Yahya's invitation of Peter Berkowitz, an academic described by critics as having ties to an "international Zionist network", to an internal NU event in August. Yahya, who has a history of engagement with Israel, apologized for the invitation, but it was to no avail.
While Yahya has refused to yield his position, the Syuriah, the organization’s supreme council, moved unilaterally. In an official plenary session held in Jakarta on Dec. 9, the council named senior NU cleric Zulfa Mustofa as the group's acting chairman. The move carried significant political weight, evidenced by the attendance of high-profile government officials and senior NU members: Religious Affairs Minister Nasaruddin Umar, Social Affairs Minister Saifullah Yusuf and East Java Governor Khofifah Indar Parawansa.
At face value, the move against Yahya appears paradoxical. Since his election as chairman of PBNU’s Tanfidziyah in 2021, Yahya has been widely perceived as a staunch ally of the ruling government. Under his leadership, NU has taken pragmatic, some say controversial, steps to align with state policies. Most notably, this included accepting mining concessions under a government scheme allowing mass organizations to manage coal mines.
This concession was formalized through a controversial revision of the Mining Law earlier this year. The law was ratified in just three days without meaningful public or expert consultation, sparking significant backlash. Supporters framed the deal as a path to financial independence for NU, while critics viewed it as a moral compromise that tethered the religious organization too closely to extractive interests and state patronage.
That said, internal power struggles are not new to the current political climate. Late last year, when President Prabowo Subianto was still president-elect, the Indonesian Chamber of Commerce and Industry (Kadin) underwent a similar upheaval. Its then-chairman, Arsjad Rasjid, who had led rival candidate Ganjar Pranowo's campaign, was ousted in favor of the Prabowo-backed Anindya Bakrie. Arsjad initially contested the move as unconstitutional but eventually stepped aside after a compromise was reached.
However, the current NU debacle presents a crucial difference. The Kadin coup was a move against a political rival. Yahya, by contrast, has given no indication of opposing state authority. If Yahya is indeed aligned with the government, why has he become the target of an internal purge?
Observers point towards a proxy war between business factions. One faction within NU is believed to be close to Garibaldi ‘Boy' Thohir, a prominent coal magnate and brother of Youth and Sports Minister Erick Thohir. Another faction is linked to Hashim Djojohadikusumo, a key political financier and Prabowo's brother. Yahya has often been associated with figures close to Hashim, raising the question: why would a faction linked to the President's inner circle allow, or perhaps even orchestrate, his removal?
The contradictions deepen when considering the role of former vice president Ma'ruf Amin. A senior NU cleric, Ma'ruf has long been one of Yahya's most important allies. Yet, Yahya's replacement, Zulfa Mustofa, happens to be Ma'ruf's nephew. Zulfa claims he received his uncle's blessing to assume leadership.
This claim, however, clashes with the former vice president's public stance. Ma'ruf has openly rejected the manner of Zulfa's appointment, declaring Yahya's ousting illegitimate. He argues that under the group's constitution, a change in leadership cannot occur through a mere plenary session; it requires an Extraordinary Muktamar (Congress), reserved for emergency situations.
With NU now effectively split into dual leaderships, and Yahya continuing to assert his legitimacy, the organization is trapped in a stalemate marked by paradoxical power plays. Given the magnitude of the rift, it remains to be seen whether the Prabowo administration will intervene to resolve this quiet coup d'état.
