Nine Years On, Indonesia Still Fails to Meet Renewable Energy Targets Reporter Irsyan Hasyim November 22, 2025 | 12:00 am TEMPO.CO, Jakarta – Indonesia has fallen short of its renewable energy targets for the past nine years, raising concerns about the nation’s ability to achieve net-zero emissions by 2060.Initially set at 23 percent by 2025, the country’s renewable energy mix has reached only around 16 percent by mid-2025. Experts warn that continuing reliance on fossil fuels could push emissions up by 17 percent by 2040 and make the country’s economic and climate targets more difficult and costly to achieve.The Institute for Essential Services Reform (IESR) highlighted these challenges in its latest report, Indonesia Energy Transition Outlook (IETO) 2026: Rhetoric or Reality – Aligning Economic Growth with Energy Transition, released on Thursday, November 20, 2025.The report, published annually since 2018, tracks Indonesia’s progress in energy transition and its supporting infrastructure.Renewable Energy Potential vs. Fossil DependenceIESR stressed that Indonesia must move beyond rhetoric to strengthen policies, expand infrastructure, and close financing gaps.The report notes that falling costs for renewable energy, growing supporting industries such as electric vehicles and batteries, and the availability of ready-to-build projects are significant opportunities that could position Indonesia as a regional renewable energy leader.“There is a paradox: Indonesia has abundant renewable resources but is reluctant to move away from fossil fuels,” said IESR CEO Fabby Tumiwa.He added that the continued focus on coal-fired power plants (PLTU) contradicts global trends, where many developed nations are phasing them out. Global investment in clean energy in 2024, for example, was ten times higher than in fossil fuels.Structural Barriers Slowing the TransitionFabby identified three main structural obstacles hindering Indonesia’s energy transition: incoherent regulatory frameworks, fiscal policies favoring fossil fuels, and fragmented institutional priorities.“The government’s inability to address these barriers has slowed the development of renewable energy and energy efficiency, while worsening the investment climate for clean energy,” he said.He called for urgent reforms, including better policy coordination between agencies, restructuring the electricity sector, halting new coal-fired power projects, retiring existing PLTUs, and providing incentives and financing instruments for renewable energy development.Electricity Demand and Renewable PotentialAbraham Octama Halim, IESR’s electricity systems analyst, said Indonesia’s electricity demand grows rapidly, between three and ten percent annually. He noted that this growth should be met with renewable energy to accelerate the energy mix.Outside the Java-Bali grid, renewable power can replace diesel and coal-fired plants, reducing electricity production costs. Simulations using solar PV and battery storage in Timor and Sumbawa show potential cost reductions of 3-21 percent with reliable systems.However, Abraham noted that actual implementation lags far behind potential. The on-grid renewable energy share declined from 13 percent in 2020 to 11.5 percent in 2024, missing the 15 percent target set in the 2021-2030 RUPTL plan. He emphasized the persistent gap between renewable energy potential and actual projects on the ground.Investment and Policy GapsUsing the Transition Readiness Framework (TRF), IESR assessed eleven factors supporting energy transition, finding four—including policy, leadership, and investment—remain low as of 2024. While renewable energy investment fell short of targets, fossil fuel subsidies have risen, totaling Rp1,023 trillion between 2022 and 2026. Public awareness is moderate, but meaningful participation remains limited.Putra Maswan, IESR financial and economic analyst, highlighted that provincial budgets for renewable energy in 2025 were relatively small, totaling just Rp426.7 billion across 33 provinces.Limited budgets restrict local governments from building renewable infrastructure, keeping the national renewable energy share low. Bali, for instance, achieved less than three percent of its 11 percent renewable target despite having up to 21 GW of solar potential.IESR’s RecommendationsTo accelerate Indonesia’s transition, IESR recommends six key steps:Develop clear, measurable plans to phase out fossil energy.Reform institutions and regulations to support renewable growth.Expand solar PV, wind, and battery deployment.Relocate or build industries in regions with clean energy supply.Strengthen renewable energy financing and reduce fossil subsidies.Ensure meaningful public engagement in the energy transition. Editor’s Choice: UK Prioritizes Clean Energy and Multilateralism in Its ASEAN Agenda Click here to get the latest news updates from Tempo on Google News Nine Years On, Indonesia Still Fails to Meet Renewable Energy Targets Reporter Irsyan Hasyim November 22, 2025 | 12:00 am TEMPO.CO, Jakarta – Indonesia has fallen short of its renewable energy targets for the past nine years, raising concerns about the nation’s ability to achieve net-zero emissions by 2060.Initially set at 23 percent by 2025, the country’s renewable energy mix has reached only around 16 percent by mid-2025. Experts warn that continuing reliance on fossil fuels could push emissions up by 17 percent by 2040 and make the country’s economic and climate targets more difficult and costly to achieve.The Institute for Essential Services Reform (IESR) highlighted these challenges in its latest report, Indonesia Energy Transition Outlook (IETO) 2026: Rhetoric or Reality – Aligning Economic Growth with Energy Transition, released on Thursday, November 20, 2025.The report, published annually since 2018, tracks Indonesia’s progress in energy transition and its supporting infrastructure.Renewable Energy Potential vs. Fossil DependenceIESR stressed that Indonesia must move beyond rhetoric to strengthen policies, expand infrastructure, and close financing gaps.The report notes that falling costs for renewable energy, growing supporting industries such as electric vehicles and batteries, and the availability of ready-to-build projects are significant opportunities that could position Indonesia as a regional renewable energy leader.“There is a paradox: Indonesia has abundant renewable resources but is reluctant to move away from fossil fuels,” said IESR CEO Fabby Tumiwa.He added that the continued focus on coal-fired power plants (PLTU) contradicts global trends, where many developed nations are phasing them out. Global investment in clean energy in 2024, for example, was ten times higher than in fossil fuels.Structural Barriers Slowing the TransitionFabby identified three main structural obstacles hindering Indonesia’s energy transition: incoherent regulatory frameworks, fiscal policies favoring fossil fuels, and fragmented institutional priorities.“The government’s inability to address these barriers has slowed the development of renewable energy and energy efficiency, while worsening the investment climate for clean energy,” he said.He called for urgent reforms, including better policy coordination between agencies, restructuring the electricity sector, halting new coal-fired power projects, retiring existing PLTUs, and providing incentives and financing instruments for renewable energy development.Electricity Demand and Renewable PotentialAbraham Octama Halim, IESR’s electricity systems analyst, said Indonesia’s electricity demand grows rapidly, between three and ten percent annually. He noted that this growth should be met with renewable energy to accelerate the energy mix.Outside the Java-Bali grid, renewable power can replace diesel and coal-fired plants, reducing electricity production costs.
Source: en.tempo.co
