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.
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The flash floods and landslides that ravaged Aceh, North Sumatra and West Sumatra should prompt far deeper scrutiny than they have so far received. While Cyclone Senyar intensified the rainfall, the scale of destruction reflects decades of unchecked ecological degradation that have left communities acutely exposed.
As of Dec. 10, the National Disaster Mitigation Agency (BNPB) reported 969 deaths, 262 missing persons and more than 5,000 injured. The disaster also damaged 157,900 homes and 1,200 public facilities. Economically, the Center of Economic and Law Studies (CELIOS) has placed losses at Rp 68.67 trillion (US$4.1 billion), while BNPB expects recovery costs of at least Rp 51.82 trillion.
Given these figures, it is increasingly difficult to treat the catastrophe as a purely natural event. Since the floods struck on Nov. 25, videos circulating on social media have shown neatly cut logs swept downstream, a stark indication of extensive upstream logging activity and a reminder that severe ecological degradation magnified the impact of extreme weather.
Data from the Environment Ministry, Forestry Ministry and Statistics Indonesia underscore the pattern. In 2024 alone, net deforestation reached 11,208 hectares in Aceh, 7,035 ha in North Sumatra and 6,634 ha in West Sumatra, together accounting for 24,877 ha, or 14.2 percent of Indonesia’s total net forest loss that year. Just five years earlier, the combined figure in these provinces stood at 3,926 ha, or 3.4 percent of the national total.
Not only are these provinces losing trees rapidly, they are experiencing one of the steepest upward trends in deforestation nationwide. Reforestation efforts lag far behind: over the past five years, forest rehabilitation in the affected areas has never exceeded 20 percent of the land cleared. The gap points to systemic failures in forest governance and long-standing neglect of Sumatra’s ecological vulnerabilities.
The government has acknowledged the environmental dimension of the disaster. Forestry Minister Raja Juli Antoni said at least 12 companies in North Sumatra were suspected of violating environmental regulations, and the ministry is preparing to revoke 20 Forest Utilization Business Permits (PBPH) covering 750,000 ha across the three provinces. He has also asked National Police Chief Gen. Listyo Sigit Prabowo to investigate the origins of the logs filmed drifting through towns during the floods, raising the possibility of widespread illegal logging.
In parallel, Environment Minister Hanif Faisol Nurofiq has taken action by stopping the operation of four firms accused of intensifying ecological pressures in upstream areas: PT Agincourt Resources, PTPN III, PT North Sumatera Hydro Energy and one unnamed company.
Despite these moves, President Prabowo Subianto has so far avoided linking the tragedy to deforestation. His public comments have centered on reconstruction, farmland rehabilitation and microcredit relief for smallholder farmers, priorities aligned with his administration’s food security agenda. But he has offered no indication of whether he intends to confront the environmental drivers that worsened the disaster.
The timing is politically awkward. Prabowo’s recent trip to Islamabad, where he discussed climate cooperation, coincided with growing domestic calls for environmental accountability. While climate change contributes to the severity of hydrometeorological disasters, Indonesians are demanding answers about the deforestation that directly amplified the floods’ impact. The absence of a clear presidential stance risks reinforcing perceptions that the Palace is sidestepping the issue.
Complicating matters further are renewed questions about the President’s own concession holdings. In the 2024 presidential debate, Prabowo acknowledged managing hundreds of thousands of ha in forest concessions. Reports have also linked him to PT Tusam Hutani Lestari, which holds a 97,000-ha concession in the upstream area of hard-hit Central Aceh and is currently led by former Gerindra deputy chairman Edhy Prabowo. In July, President Prabowo said that he had entrusted all of his forest concessions in Central Aceh to the World Wide Fund for Nature (WWF) for elephant conservation.
Taken together, these associations raise potential conflict-of-interest concerns that could weaken the President’s credibility in confronting Sumatra’s environmental crisis.
The scale of the tragedy should mark a turning point in Indonesia’s approach to environmental governance. As long as deforestation remains unaddressed, disasters of this magnitude will recur. Physical reconstruction may restore damaged infrastructure, but without political resolve to tackle problematic concessions, strengthen oversight and recognize the link between policy choices and ecological vulnerability, Indonesia risks being caught unprepared once again when nature exacts its next toll.
