Indonesia has unveiled ambitious plans to significantly expand its renewable energy capacity, as state-owned utility PT PLN commits to adding 47 gigawatts (GW) of renewable energy to the grid by the end of 2034. This forms part of the government’s broader push to transition towards cleaner energy sources and reduce reliance on fossil fuels.
The proposed renewable capacity represents 70% of the 68GW of new electricity generation PLN aims to develop over the next decade. The remaining 30% will be supplied by fossil fuel-based power plants. This marks an upward revision of the company’s earlier draft, which outlined plans for 47GW of new electricity generation by 2033, with 33.2GW from renewable sources.
Investment Needs and Infrastructure Challenges
According to Jisman Hutajulu, Director General of Electricity at the Energy and Mineral Resources Ministry, the expanded capacity will require an estimated investment of 600 trillion rupiah ($37.87 billion) for generation facilities alone. A further 400 trillion rupiah will be necessary to develop the transmission and substation infrastructure needed to support the new capacity.
“The government will play a key role in developing the transmission and substation network, as the economic returns from power generation are more attractive than from transmission projects,” Hutajulu said at the 2024 Electricity Connect exhibition in Jakarta. He expressed confidence that private investment in renewable power plants would be forthcoming.
Long-Term Vision: 102GW by 2040
Deputy Energy and Mineral Resources Minister Yuliot Tanjung announced a long-term goal of adding 102GW of electricity capacity by 2040, with 75GW to come from renewable energy sources, including solar, wind, hydro, and geothermal. The remainder will consist of 22GW from natural gas plants and 5GW from nuclear energy.
To meet these targets, Indonesia plans to construct an estimated 70,000 kilometers of transmission lines to connect new generation facilities with demand centers.
Falling Costs of Renewables Bolster Optimism
PLN CEO Darmawan Prasodjo welcomed the ambitious goals, noting that the declining cost of renewable energy makes achieving them more feasible. Solar energy costs, for instance, have fallen dramatically from 25 US cents per kilowatt-hour (kWh) in 2015 to just five cents today. Similarly, wind power costs have decreased from 20 cents to 12 cents per kWh over the same period. Battery storage costs—a critical component for managing the intermittency of renewable energy—have also dropped from over 20 cents to nine cents per kWh in the past decade.
“Renewable energy has become increasingly cost-competitive year by year,” Darmawan said, underscoring that Indonesia’s clean energy shift is underpinned by these economic trends.
Global Commitments and Climate Diplomacy
Indonesia’s renewed focus on renewable energy aligns with its international climate commitments. Speaking at the 29th United Nations Climate Change Conference in Baku earlier this month, Hashim Djojohadikusumo, Indonesia’s special envoy for energy and the environment, reiterated the country’s determination to accelerate clean energy adoption. Hashim, who is also the brother of President Prabowo Subianto, announced a 15-year target to add 75GW of renewable capacity.
With significant infrastructure investments and favorable market dynamics, Indonesia appears poised to play a leading role in Southeast Asia’s clean energy transition, signaling a new chapter in its efforts to tackle climate change and secure a sustainable energy future.
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