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
President Prabowo Subianto’s plan to give more power to the Indonesian Military (TNI) to counter terrorism raises the specter of Indonesia reverting to the days when the military practically ruled the country under President Soeharto for more than three decades.
The draft of a presidential executive order, which has been circulating among policy circles, it may have even been leaked, has prompted civil society organizations to call out Prabowo, saying that besides getting more power to oversee national security, the military under the current wording in the draft could equate government critics with terrorists.
The Civil Society Coalition for Security Sector Reforms, grouping more than 20 non-governmental organizations, recalls that Prabowo had already used the word “terrorist” in describing students as perpetrators of the violent riots in August.
The Presidential Palace said Prabowo had not signed the order but had sent notice to the House of Representatives of his intention. An executive order does not require the approval of the House although the government may invite discussions before the formal signing.
Under the Prabowo plan, the TNI’s involvement in counterterrorism includes “prevention”, which the coalition says would pave the way for domestic intelligence operations and abuse of this power to intrude into the activities of legitimate individuals and civil organizations.
While the 2018 Terrorism Law allows for military involvement, the coalition says it should be regulated by a law rather than an executive order.
If the executive order is signed, it would spell doom for democracy, the coalition warns.
Dismissing the concerns, State Secretary Prasetyo Hadi said people should not rush into drawing conclusions about the substance and impact of the decree. TNI involvement in counterterrorism measures would be conditional, he said without giving further details.
Soeharto ruled with an iron fist by frequently invoking the Subversion Law that allowed the military to take action against any threat it perceived as endangering the nation. The law, which was used to silence and jail critics, was repealed not long after he stood down in 1998.
The 2002 State Security Law provides a clear division of labor between TNI and the National Police, the first focusing on national defense against external threats, and the latter on internal security. The law, however, allows for the military to assist the police in managing internal security under certain circumstances, including in terrorism.
President Prabowo ordered the military to intervene in the midst of the nationwide violent riots in August when police were clearly overwhelmed by the unrest, some of which was directed at the police for their brutal handling of the protests.
The plan to expand the powers of the military nevertheless fits a pattern since Prabowo took office in October 2024 of giving more powers to the TNI to deal with internal security matters.
Prabowo, a retired Army general, has brought in more military figures, both active or retired, into his government. His signature program of providing free nutritious meals for 82 million schoolchildren is mostly run by military figures.
The new TNI Law expands the number of civilian jobs that active TNI officers can hold and extends the mandatory retirement age up to 65 years. The TNI is also bolstering the size of its personnel with the creation of more than 100 Army battalions. The TNI is expanding the number of territorial commands (Kodam), from originally 15 to 21 since August, and the plan is to have a Kodam in each of the 38 provinces in the country.
This contrasts with developments during much of the 15 years until 2024, when the TNI focused on building its capacity to deal with potential external threats under the Minimum Essential Force (MEF) concept. Indonesia was then spending billions of dollars on modernizing its armaments, focusing on Navy and Air Force capabilities. Even then, by 2024, Indonesia had only achieved less than 70 of the MEF target, meaning that the country remains highly vulnerable to external threats.
Now under Prabowo, the focus is more on beefing up the Army, even though the President has repeatedly warned that Indonesia must be prepared for the possibility of a World War III.
Prabowo has denied claims that he is restoring the “dual function” doctrine of the military that was used by Soeharto to justify the military’s active involvement in politics and civilian affairs besides defense.
The trend since he assumed power indicates otherwise.
TNI chief Gen. Agus Subiyanto did not mince words when he said he is not gunning for dual function, but a more “multi-function” military.
