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
Several private companies, including Garibaldi "Boy" Thohir's Adaro Energy, have been dragged into the spotlight after prosecutors charged PT Pertamina and its subsidiary, PT Pertamina Patra Niaga (PPN), with corruption that allegedly cost the state trillions of rupiah. The case centers on the underpricing of unsubsidized Solar and Biosolar, Pertamina's diesel and biodiesel fuel brands, sold to numerous private sector buyers. The indictment, which could result in state losses of up to hundreds of trillions of rupiah, has sparked a heated debate among experts and civil society. Some caution against the potential criminalization of private sector buyers, while others insist on pursuing all possible corporate links to the corruption scheme.
In the indictment against former PT PPN President Director Riva Siahaan at the Central Jakarta District Court, prosecutors alleged that Pertamina (2018–2021) and PPN (2021–2023) sold unsubsidized Solar and Biosolar below the official floor price to 73 industrial consumers. The prices were reportedly even lower than the base price and cost of goods sold for subsidized fuels, causing an estimated Rp 9.41 trillion (US$566.7 million) in state losses. Pertamina also allegedly failed to regularly evaluate and adjust the erroneous pricing.
According to the indictment, the sales violated Pertamina's Guidelines for Marketing Management of Industrial and Marine Fuels No. A-001/F00000/2016-S9, which require fuel prices to reflect both the landed cost (total cost from production to delivery) and the pocket margin (the profit margin above costs). Pertamina was accused of not setting a pocket margin during 2018–2019 and of failing to issue a price negotiation guideline.
As for Siahaan, prosecutors charged that he signed contracts for the sale of Solar and Biosolar below the minimum price, violating PPN's Guidelines for Marketing Management of Industrial and Marine Fuels No. A02-001/PNC200000/2022-S9 and failing to establish a price negotiation procedure as required under President Director Decree No. Kpts034/PNA000000/2022-S0. His actions allegedly caused Rp 2.45 trillion in state losses.
Thirteen companies reportedly purchased underpriced fuel from PT PPN between 2018 and 2023, collectively saving significant sums:
- PT Pamapersada Nusantara (Astra Group) — Rp 958.38 billion
- PT Berau Coal Energy (Sinar Mas Group) — Rp 449.1 billion
- PT Bukit Makmur Mandiri Utama — Rp 264.14 billion
- PT Merah Putih Petroleum (Energi Asia Nusantara / Andita Niaisjah Hanafiah) — Rp 256.23 billion
- PT Adaro Indonesia (Adaro Group) — Rp 168.51 billion
- PT Ganda Alam Makmur (Titan Group / LX International JV) — Rp 127.99 billion
- PT Indo Tambangraya Megah (Banpu Group) — Rp 85.8 billion
- PT Maritim Barito Perkasa (Adaro Group) — Rp 66.48 billion
- PT Vale Indonesia (Vale S.A.) — Rp 62.14 billion
- PT Indocement Tunggal Prakarsa (Heidelberg Materials AG) — Rp 42.51 billion
- PT APP Purinusa Ekapersada (Sinar Mas Group) — Rp 32.11 billion
- PT Aneka Tambang / Antam (MIND ID) — Rp 16.79 billion
- PT Nusa Halmahera Minerals (Indotan Halmahera Bangkit) — Rp 14.06 billion
The underpricing case is part of a broader web of alleged corruption within Pertamina, which prosecutors say caused up to Rp 285 trillion in total state losses. The scandal included a scheme for fraudulent oil import contracts involving PT Tanki Merak and PT Orbit Terminal Merak and fuel adulteration between 2018–2023 that implicated the "godfather of oil" Muhammad Riza Chalid. Riza's son Muhammad Kerry Adrianto Riza, beneficial owner of PT Navigator Khatulistiwa, allegedly got marked-up contracts to ship Pertamina's fuel products.
Some legal experts have urged caution, warning that criminalizing corporate buyers could scare off investors and mischaracterize legitimate business transactions. They note that the private companies were not active participants but passive beneficiaries of Pertamina's pricing decisions. Others, however, argue that the Attorney General's Office (AGO) must enforce the law without bias, even against powerful corporations, since any proven wrongdoing amounts to robbing the public of their rights and should result in revoked business licenses.
Indonesia's oil and gas sector has long been plagued by what is often called the "oil and gas mafia." How the government handles Pertamina's sprawling corruption scandal, including the Solar and Biosolar underpricing, may determine whether this entrenched influence can finally be dismantled. Yet, recent executive interference in the judiciary, such as during the Tom Lembong case, which broadened the definition of state losses, could complicate both the verdict and its enforcement.
