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
The first batch of Indonesians evacuated from war-besieged Iran landed back home on March 11, after an overland journey that took them through Azerbaijan and Turkey before they were flown to Jakarta. Following this group of 22 people will be a few more batches in the coming days and weeks as citizens flee the ongoing United States-Israelis attacks.
This successful first evacuation attests to the government’s current plan to transport its citizens to safety from conflicts around the world.
More than 300 Indonesians, mostly university students, were living in Iran when the latest round of US-Israeli attacks began on Feb. 28. With the war not only escalating but also widening to involve more Gulf countries, the government may face its biggest test regarding its evacuation contingency plan, which is yet to be activated.
The government says more than 500,000 Indonesians live and work in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates; countries that are being dragged into the war because they host US military bases.
The real number could be much higher, since many Indonesians don’t register with the embassies or consulates in these countries. The bulk of Indonesians who reside in the Middle East are domestic helpers or construction workers, but there are also some white-collar workers, including oil professionals.
If the government is prompted to activate its contingency plan, the scale will likely be much higher and more complicated than it has ever experienced before, given that the geography of these countries offers limited escape routes.
The Foreign Ministry, which leads the interagency team for managing evacuations, says it has formed a crisis response team to prepare for this eventuality so the government can move quickly if security conditions deteriorate further. This crisis team involves the military, including the Air Force, which in the past has deployed transport planes to evacuate citizens from troubled spots like Afghanistan, Egypt, Iraq and Ukraine.
Meanwhile, embassies in the region have been ordered to closely monitor the situation and alert the government if and when the plan needs to be activated.
Santo Darmosumarto, the ministry's director general of Asia, Pacific and Africa, said several Gulf governments had asked Indonesia not to activate its evacuation plan. While they did not provide any guarantees, they asked that expatriate Indonesians stay home to stay safe.
In the end, however, this is ultimately Indonesia’s call and not the host nations'. On the other hand, the US ordered on March 8 that nonemergency government employees and their dependents leave Saudi Arabia, and many of its travel advisories may give a clue about the scale of the danger.
The ministry says it has not received any report of Indonesian fatalities from the current war in the Middle East, though three Indonesian sailors are missing after a tugboat explosion the Strait of Hormuz. Another seaman who survived the explosion in the world’s busiest shipping corridor, which has now been crippled by war, is being treated at a hospital in Oman.
The Foreign Ministry and overseas missions in the Gulf region have also been busy arranging the repatriation of thousands of citizens stranded due to canceled or delayed flights and airport and airspace closures as the conflict escalates.
When the war began on Feb. 28, more than 50,000 Indonesians were performing umrah (minor pilgrimage) to Mecca, to which the country contributes over 1.2 million pilgrims each year. The government has been working with tour operators and airlines since to ensure their safe return, with embassies providing them temporary accommodation.
Following the issuance of a government advisory to postpone nonessential travel to the region, tens of thousands of Indonesians canceled their departure for umrah. The war is now looming large over the scheduled haj in May, in which more than 200,000 Indonesians are registered to take part.
The best-case scenario as far as Indonesian civilians are concerned is, of course, for the war to end soon. But the government has made preparations for the worst-case scenario: a full-scale war that could put more than half a million Indonesian lives in danger.
The bigger question is whether the current evacuation contingency plan will suffice.
