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Ian Kurniawan, Reisya Ichwani, Richa Fionasari, Aryansyah & Adri Huda : Indonesia’s
Renewable Energy Outlook: What to Expect in The Future Renewable
Energy of Indonesia. A Brief Review
298 | Elkawnie: Journal of Islamic Science and Technology Vol. 8, No. 2, December 2022
(www.jurnal.ar-raniry.ac.id/index.php/elkawnie)
DOI: 10.22373/ekw.v8i2.18738
INDONESIA’S RENEWABLE ENERGY OUTLOOK: WHAT TO EXPECT
FROM THE FUTURE RENEWABLE ENERGY OF INDONESIA.
A BRIEF REVIEW
Ian Kurniawan*, Reisya Ichwani**, Richa Fionasari***, Aryansyah****, Adri Huda*****
*Department of Chemical Engineering, Faculty of Engineering, Universitas PGRI Palembang, Palembang,
Indonesia, iankurniawan@univpgri-palembang.ac.id
**Department of Material and Mechanical Engineering, Worcester Polytechnic Institute, Worcester,
Massachusetts, United States of America, richwani@wpi.edu
***Language Center, Universitas Riau, Pekanbaru, Indonesia, richafiona@gmail.com
****Department of Energy, Ministry of Energy and Mineral Source of the Republic of Indonesia, Palembang,
Indonesia, Arik120677@gmail.com
*****Department of Environmental Engineering, Faculty of Engineering, Universitas Sumatera Utara, Medan,
Indonesia, adrihuda@usu.ac.id
Email Correspondence : adrihuda@usu.ac.id
Received : April 17, 2022 Accepted : December 2, 2022 Published : December 31, 2022
Abstract: The government of the Republic of Indonesia has reported that Indonesia
potentially have more than 400,000 Megawatts (MW) of renewable energy by 2021.
However, there is no comprehensive study about the trend of development and priority
movement in the renewable energy sector. The main reason for the absence of this
study is the lack of significant information and reports on the prospects for renewable
energy in Indonesia. The present study aims to provide a basic understanding of
renewable energy sector growth in Indonesia. The study uses quantitative analysis with
the secondary data obtained from the literature. The result showed that the hydropower
plant contributed the highest energy production in Indonesia followed by bioenergy,
solar energy, and wind energy. Furthermore, the production trends of hydropower
plants and bioenergy were relatively stagnant over the last 11 years, and the highest
significant improvement was found in the solar energy sector. However, the number of
solar energy production was far away from the targeted goal in RUEN (National
Energy Master Plan/Rencana Utama Energi Nasional) 2017. The high cost of the solar
energy sector become the main reason for the unsuccessful development of solar
energy in Indonesia. Furthermore, several administrations and regulations were found
to the political reasons which delay the energy transition improvement. The
Government of the Republic of Indonesia must be able to improve and form regulations
in the form of tax reduction regulations and electricity export-import subsidies to spur
the growth and development of renewable energy in Indonesia. Opening up space for
renewable energy investment in the public sector is a real contribution to society and is
a solution to accelerate the achievement of the energy transition in Indonesia.
Keywords: Renewable Energy; Energy Policy; Energy Transition; Green Technology
Indonesia
Abstrak: Pemerintah Republik Indonesia telah melaporkan bahwa Indonesia memiliki
potensi lebih dari 400.000 Megawatts (MW) Energi Baru dan Terbarukan (EBT) di
tahun 2021. Namun, penelitian terhadap pola pengembangan dan pergerakan
Ian Kurniawan, Reisya Ichwani, Richa Fionasari, Aryansyah & Adri Huda : Indonesia’s
Renewable Energy Outlook: What to Expect in The Future Renewable
Energy of Indonesia. A Brief Review
Elkawnie: Journal of Islamic Science and Technology Vol. 8, No. 2, December 2022
(www.jurnal.ar-raniry.ac.id/index.php/elkawnie)
DOI: 10.22373/ekw.v8i2.18738 | 299
pengembangan EBT masih belum banyak ditemukan. Alasan utama dari tidak
ditemukan penelitian ataupun studi tentang potensi EBT di Indonesia adalah
keterbatasan informasi dan laporan terhadap prospek EBT di Indonesia. Studi ini
bertujuan untuk menyediakan pemahaman dasar dari perkembangan sektor EBT di
Indonesia. Studi ini menggunakan analisis kuantitatif dengan menggunakan data
sekunder yang diperoleh dari berbagai literatur. Hasil menunjukkan bahwa Pembangkit
Listrik Tenaga (PLT) Air menjadi sektor yang paling banyak memproduksi EBT di
Indonesia disusul oleh PLT Bioenergi, PLT Surya, dan PLT Bayu. Namun, pola
produksi energi menunjukkan PLT Air dan PLT Bioenergi menunjukkan produktivitas
yang relative tetap pada 11 tahun terakhir dimana peningkatan produktivitas terbesar
berada pada PLT Surya. Namun, jumlah produktivitas PLT Surya masih tergolong
kecil jika dibandingkan dengan jumlah produksi target yang dilaporkan pada
Rancangan Utama Energi Nasional (RUEN) 2017. Biaya yang tinggi dari PLT Surya
menjadi alasan utama dari ketidakberhasilan pengembangan PLT Surya di Indonesia.
Selain itu, beberapa alasan administratif dan regulasi ditemukan menjadi alasan politis
yang dapat memperlambat pengembangan transisi energi di Indonesia. Pemerintah
Republik Indonesia harus mampu memperbaiki dan membentuk regulasi berupa adanya
regulasi pengurangan pajak dan subsidi ekspor-impor listrik untuk memacu
pertumbuhan dan perkembangan energi terbarukan di Indonesia. Membuka ruang
untuk investasi energi terbarukan ke sektor public merupakan kontribusi nyata ke
masyarakat merupakan solusi untuk mempercepat pencapaian transisi
energi di Indonesia.
Kata kunci: Energi Baru dan Terbarukan; Kebijakan; Transisi Energi; Teknologi
Hijau Indonesia
Recommended APA Citation :
Kurniawan, I., Ichwani, R., Fionasari, R., Aryansyah & Huda, A. (2022). Indonesia’s
Renewable Energy Outlook: What to Expect in The Future Renewable Energy
of Indonesia. A Brief Review. Elkawnie, 8(2), 298-313.
https://doi.org/10.22373/ekw.v8i2.18738
Introduction
New and renewable energies become essential for meeting energy demand
all over the world due to the limitation of fossil fuel and the fast growth of the
population (OurWorldinData, 2022). The issue of climate change which made the
earth's surface warmer gives additional stress to each country to provide a green
and environmentally safe energy source. Paris Agreement has limited global
warming to well below 2oC (3.6oF) and is pursuing efforts to limit it to 1.5oC
(2.5oF) (European Commission 2023). Indonesia, the fourth most populated
country in the world, has started to use renewable energies as the national energy
source to meet national energy demands (Hakim, 2020). Indonesia has a potential
renewable energy source to develop, such as hydropower, biofuel, biomass, solar
energy, wind power, nuclear, and geothermal (Hartono et. al, 2020). The
government of Indonesia believes that fossil fuels will be eventually substituted
by new and renewable energy in the future either because of the scarcity of fossil
fuels or other environmental issues. So far, renewable energy only provides 6% of
national energy demand whereas Indonesia mostly depends on non-renewable
Ian Kurniawan, Reisya Ichwani, Richa Fionasari, Aryansyah & Adri Huda : Indonesia’s
Renewable Energy Outlook: What to Expect in The Future Renewable
Energy of Indonesia. A Brief Review
Elkawnie: Journal of Islamic Science and Technology Vol. 8, No. 2, December 2022
(www.jurnal.ar-raniry.ac.id/index.php/elkawnie)
DOI: 10.22373/ekw.v8i2.18738 | 300
energy sources such as fossil fuel (41%), natural gas (24%), and coal (29%) and
Indonesia is the top country which had the highest steam coal power plant among
G20 countries (Ahdiat, A. 2022).
In Southeast Asia, Indonesia is reported as the third country which produces
the most renewable energy as a national energy source where Indonesia
contributes 8.81% of renewable energy. Vietnam is reported as the first rank
where Vietnam uses approximately 21.98% of renewable energy as the primary
energy source followed by Malaysia (15.52%) and Indonesia as the third place
(OurWorldinData, 2022). Indonesia could increase the use of renewable energy as
the primary energy source since there are many potential renewable energy
sources in Indonesia (Halawa & Sugiyatno, 2001). The Ministry of Energy and
Mineral Resources of the Republic of Indonesia reported that several sectors
could boost the contribution of renewable energy mining in Indonesia such as
hydropower, biomass/biofuel, solar power, wind power, and nuclear power. The
government of the Republic of Indonesia has placed a national target in the
renewable energy sector of 23% in 2025 and 31% in 2050 to support the primary
energy source in Indonesia (IESR, 2017). Indonesia also showed its full support
for the transformation to green energy and reduction of carbon emissions by
joining the Paris Agreement or Paris Climate Agreement. The government of the
Republic of Indonesia has targeted to reduce 29% below business as usual of
greenhouse gas emission by 2030 (Tacconi 2018).
However, there is a lack of study shown by the small number of studies and
publications about technology applied or developed in the renewable energy
sector in Indonesia. There are no comprehensive studies or information about
where and how to start the development of the renewable energy sector in
Indonesia. In simple words, it is quite hard for someone or a company to
participate in or support the program of energy transition. Thus, the government
of Indonesia walks alone in the development of the energy transition, and it
became less priority for the people in Indonesia. Furthermore, the regulation about
the development of renewable energy seems incomplete to fully support the
development of green energy in Indonesia. The monopoly system in energy
management could incriminate the private sector to contribute to the development
of green energy in Indonesia.
The present papers aim to provide existing facts about the development of
new and renewable energy in Indonesia. The papers will talk about the statistical
number of the renewable energy sector in Indonesia and some governmental
regulations which have been made to achieve the national energy target. The
discussion will finally drive us to see the Indonesian energy outlook and put hope
in what green energy development will look like in the future.
Ian Kurniawan, Reisya Ichwani, Richa Fionasari, Aryansyah & Adri Huda : Indonesia’s
Renewable Energy Outlook: What to Expect in The Future Renewable
Energy of Indonesia. A Brief Review
Elkawnie: Journal of Islamic Science and Technology Vol. 8, No. 2, December 2022
(www.jurnal.ar-raniry.ac.id/index.php/elkawnie)
DOI: 10.22373/ekw.v8i2.18738 | 301
Methods
The study uses secondary data obtained from works of literature and
connects the data based on the authors' perspectives. The descriptive method was
the study methodology where most of the discussion was made from the author's
perspective with comprehensive support from the literature. The data was mainly
extracted from the International Renewable Energy Agency (IRENA) which is the
intergovernmental organization that supports countries to move to a sustainable
energy future.
The study was divided into three sections which presented (i) the data on the
status of renewable energy development in Indonesia; (ii) the potential source of
renewable energy development in Indonesia; and finally (iii) the regulation and
future direction of renewable energy development in Indonesia. All section aims
to figure out the renewable energy outlook of Indonesia in the past, current, and
future.
Results and Discussions
Current Indonesian Energy Sources
The data published by Our World in Data reported that the non-renewable
energy source still become the main source of primary energy in Indonesia
(Figure 1). Oil, Coal, and Gas based Generators supplied more than 85% of
primary energy sources. Renewable energy sources only contribute approximately
10% of the primary energy source in Indonesia. However, energy production from
non-renewable sources declines the energy production due to the increase of
energy from renewable energy sources.
Furthermore, Figure 1 shows that hydropower became the first renewable
energy source in Indonesia where energy production has been started before 1970.
The second renewable energy source in Indonesia was geothermal and biomass
which were reported by Our World in Data launched in 1990. The following
renewable sources such as Biofuel, Windmill Energy and Solar Energy were
started to produce renewable energy in 2002, 2007, and 2008, respectively.
Ian Kurniawan, Reisya Ichwani, Richa Fionasari, Aryansyah & Adri Huda : Indonesia’s
Renewable Energy Outlook: What to Expect in The Future Renewable
Energy of Indonesia. A Brief Review
Elkawnie: Journal of Islamic Science and Technology Vol. 8, No. 2, December 2022
(www.jurnal.ar-raniry.ac.id/index.php/elkawnie)
DOI: 10.22373/ekw.v8i2.18738 | 302
Figure 1. Primary Energy Source in Indonesia from 1965-2021
The total energy supply in Indonesia also showed a similar result to the
primary energy source. The data published by the International Energy Agency
(IEA.org), a non-profit organization of industrialized countries, reported that
Indonesian energy was dominated by fossil-based energy where 31-35% of
electrical production was coming from oil-based grid system followed by coal-
based grid (20-30%), natural gas power plant (17-19%), biofuel and waste (13-
19%), other renewable energy (7-10%) and hydropower (~1%)(IEA.org. 2020).
Approximately 70% of total electricity was generated from the fossil-fuel-based
power grid. Figure 2 shows the details of the total energy supply as a function of
power sources in Indonesia from 2015 to 2019.
Ian Kurniawan, Reisya Ichwani, Richa Fionasari, Aryansyah & Adri Huda : Indonesia’s
Renewable Energy Outlook: What to Expect in The Future Renewable
Energy of Indonesia. A Brief Review
Elkawnie: Journal of Islamic Science and Technology Vol. 8, No. 2, December 2022
(www.jurnal.ar-raniry.ac.id/index.php/elkawnie)
DOI: 10.22373/ekw.v8i2.18738 | 303
Figure 2. Total Energy Supply (TES) of Different Energy Sources from 2015-2018 in Indonesia
(IEA, 2020)
In the case of Indonesia, most of the national power electricity was in Java
and Bali where 68% of electricity was produced in the accumulation of
powerlines in Java and Bali followed by the power grid in Sumatera (18%),
Sulawesi (6%), Kalimantan (5.56%), Maluku and Papua (0.6%), and Lombok and
Timor (1%) (Pusparisa, Y. 2020, PLN, 2018). The high amount of power grid in
Java and Bali was because of the high energy consumption in Java and Bali
islands where the capital city of Indonesia and other major cities of Indonesia
which run the economic sectors such as Surabaya located in Java Island. On the
other hand, Bali is the most visited city for tourism especially for foreign
destinations making the energy supply and demand in Bali high compared to other
cities in Indonesia. However, the fast economic development in Indonesia
initiated high energy consumption outside the Java and Bali islands. Thus, the
government of Indonesia has built a new power grid outside Java and Bali Island,
especially renewable power grid plants such as Badak Solar Power Plant in
Kalimantan Island, Wind Power Plant in Sidrap, South Sulawesi Island, Solar
Power Plant in North Sulawesi Island, etc (SolarKita 2021).
Renewable Energy Outlook
The progress of renewable energy development in Indonesia showed
progress where the trend of renewable energy development showed a positive
value (IEA.org. 2020). Even though only a small percentage of renewable energy
production has been realized, the development has been made especially in
several sectors such as solar energy, wind energy, and nuclear energy where in
2015, the number installed capacity of renewable energy (excluding hydropower
and biofuel and waste) was approximately 8.5%, where in 2020 reached
approximately 10.1% (Our World in Data. 2022). However, the hydropower
Ian Kurniawan, Reisya Ichwani, Richa Fionasari, Aryansyah & Adri Huda : Indonesia’s
Renewable Energy Outlook: What to Expect in The Future Renewable
Energy of Indonesia. A Brief Review
Elkawnie: Journal of Islamic Science and Technology Vol. 8, No. 2, December 2022
(www.jurnal.ar-raniry.ac.id/index.php/elkawnie)
DOI: 10.22373/ekw.v8i2.18738 | 304
biofuel, and waste power plants showed stagnant progress in the last couple of
years due to several factors (IRENA 2019). In hydropower development, the main
reason was the hydropower infrastructure was not massively improved in the last
several years since the cost and investment values were high and the location of
the water source was in a remote area with the limitation of transportation and
public access which made the development need massive activities and costs
(Patapati, 2021). The government of the Republic of Indonesia has found an
alternative way to improve the hydro-based power system by improving the
marine-based power plant and micro hydropower plant which is considered a
good move since Indonesia is an archipelagos country (Bagherabadi, et al. 2022).
Moreover, as an agricultural country, millions of basins and water irrigation
systems could be exploited as the electrical power source to support the primary
energy source of Indonesia, especially in the rural and remote areas (Didik, et al.
2018).
On the biofuel and waste development, the development was made only for
biodiesel and bioethanol which is used as a substitution for fossil fuel and not to
produce electrical energy. However, the progress is still in the good movement
where in 2021, approximately 9.3 million liters of biodiesel have been used to
substitute the use of fossil fuels (EBTKE, 2022). The other problem in the
development of biofuel was the issue of food security where both biodiesel and
bioethanol used food-based material. Biodiesel and bioethanol used palm oil and
cassava or corn material, respectively, as the main materials to produce the
biofuel. The use of food-based materials is feared to disrupt food supplies in
Indonesia. The trend that occurs in the development of biofuels is relatively
declining from year to year. The Indonesian government must formulate in detail
the regulation about the distribution of the minimum and maximum amount of
food-based fuel from the biodiesel and bioethanol industry or regulate the food-
waste product as the raw material for biofuel.
Renewable Energy Potential in Indonesia
Nowadays, Indonesian energy demand (without traditional biomass uses)
reached 114 million tons of oil equivalent (MTOE) which supplied 40% of
transportation, 36% of industry, 16% of household needs, 6% of commercial
activities, and 2% of other activities (Council, 2020). The Ministry of Energy and
Mineral Natural Resource or Kementerian Energi dan Sumberdaya Mineral
(KESDM) have investigated several sectors that could be potentially the
renewable energy source shown in Table 1.
Ian Kurniawan, Reisya Ichwani, Richa Fionasari, Aryansyah & Adri Huda : Indonesia’s
Renewable Energy Outlook: What to Expect in The Future Renewable
Energy of Indonesia. A Brief Review
Elkawnie: Journal of Islamic Science and Technology Vol. 8, No. 2, December 2022
(www.jurnal.ar-raniry.ac.id/index.php/elkawnie)
DOI: 10.22373/ekw.v8i2.18738 | 305
Table 1. Indonesia’s Renewable Energy Potential
Renewable Energy Sources
Total Produced Energy
Hydropower Plan
94.3 Gigawatts
Geothermal Plan
28.5 Gigawatts
Bioenergy
1. Biopower
2. Biogas
23.6 Gigawatts
200.000 Barrel per hour
Solar/PV Power Plan
207.8 Gigawatts
Windmill Plan
60.6 Gigawatts
Ocean Power Plan
17.9 Gigawatts
The total potential of renewable energy in Indonesia is 442 GW divided into
several sectors (Table 1). The government of the Republic of Indonesia focused
on the development of a solar power plant (SPP) where SPP contributes nearly
50% of the total renewable source coming from SPP (207.8 GW) and higher than
hydropower as the most dominant renewable energy source so far in Indonesia.
The development of SPP was considered a good move by the government of
Indonesia since SPP become the most reliable renewable energy so far in the
world. Solar photovoltaic was recorded as the fastest-growing renewable energy
technology which played a major role in the future of global electricity generation
(IRENA, 2019). The development of SPP in Indonesia was suitable to the
characteristic of Indonesia where Indonesia is a tropical country that has long sun
exposure and high sunlight intensity in all calendar years. In addition, SPP could
reach remote areas which sometimes did not have electricity infrastructure.
Renewable Energy Development Progress in Indonesia
Talking about the potential of green energy in Indonesia, the government of
Indonesia published the Primary National Energy Plant, or Rancangan Utama
Energi Nasional (RUEN) in 2017. According to RUEN, the development of
renewable energy in Indonesia only reached 2% of the total potential in Indonesia.
To be more specific, only 8.215,5 MW of electrical production obtained from the
renewable energy sector was achieved. According to the Indonesia Energy
Transition Outlook (IETO) 2023, Indonesia has the potential for new energy in
every region, including Sumatera, Jawa, Kalimantan, Sulawesi, and Papua. Due to
its easy access to its location and available resources, Sumatra is the only region
in the world with a significant potential for development (Suhono and Sarjiya,
2015). Sumatera has a significant amount of relatively similar biomass and biofuel
potential. However, Sumatera Utara and Aceh have significant geothermal
potential (Siregar et al., 2021; Isa et al., 2021). Table 2 shows the number of
electrical productions coming from renewable energy.
Ian Kurniawan, Reisya Ichwani, Richa Fionasari, Aryansyah & Adri Huda : Indonesia’s
Renewable Energy Outlook: What to Expect in The Future Renewable
Energy of Indonesia. A Brief Review
Elkawnie: Journal of Islamic Science and Technology Vol. 8, No. 2, December 2022
(www.jurnal.ar-raniry.ac.id/index.php/elkawnie)
DOI: 10.22373/ekw.v8i2.18738 | 306
Table 2. Renewable Energy Production Progress in Indonesia
Renewable Energy
Sources
Total Installed Power
(MW)
Target Installed Power
(MW)
% Goal
Hydropower Plan
1,438.5
75,091
6,4
Geothermal Plan
1,438.5
29,544
4,9
Mini and
Microhydropower
197,4
19,385
1,0
Bioenergy Plan
1,671
32,654
5,1
Solar/PV Power Plan
78,5
207,898
0,04
Windmill Plan
3,1
60,647
0,01
Ocean Power Plan
0,3
17,989
0,002
International Renewable Energy Agency (IRENA) in Renewable Energy
Statistic 2019 reported that Indonesia has produced 8.8 GW of renewable energy
which increase of approximately 508 MW of renewable electricity compared to
the source in 2020. Figure 3 shows the renewable energy production reported by
IRENA. The highest energy source came from hydropower which contributed
75% of renewable energy in 2021 followed by Bioenergy (21%), Solar Power
(2.3%), and Wind Energy (1.7%). The result about electrical production from
hydropower was strongly different from the one reported by RUEN 2017, whereas
the result about other renewable energy was slightly different from the one
reported by RUEN 2017.
Figure 3. Renewable energy production in Indonesia reported by the International Renewable
Energy Agency
PT. Perusahaan Listrik Negara (PLN) the company that supplies electricity
in Indonesia also reported the installed power plant in Indonesia where
hydropower is the highest plant-produced electricity (3516.51 MW) followed by
Geothermal (579.26 MW), Microhydro Power (46.12 MW), Minihydro Power
(34.35 MW), and Solar Power Plant (28.62 MW). The number of renewable
Ian Kurniawan, Reisya Ichwani, Richa Fionasari, Aryansyah & Adri Huda : Indonesia’s
Renewable Energy Outlook: What to Expect in The Future Renewable
Energy of Indonesia. A Brief Review
Elkawnie: Journal of Islamic Science and Technology Vol. 8, No. 2, December 2022
(www.jurnal.ar-raniry.ac.id/index.php/elkawnie)
DOI: 10.22373/ekw.v8i2.18738 | 307
energies does not include the power plants that are not connected with the
interconnection or line managed by PT. PLN. Furthermore, the Ministry of
Energy and Mineral Resources of the Republic of Indonesia reported that the
amount of electrical energy produced from the renewable energy sector only
fulfils approximately 14% of the total capacity of renewable energy-based power
plants which reaches 64.5% (ESDM, 2017). The main reason for unsuccessful
development was the high investment values in the renewable energy sector and
the high energy cost per kWh from renewable energy sectors. Table 3 shows the
comparison of electrical prices produced by renewable energy power plants and
fossil-based power plants.
Table 3. Levelized Cost of Energy (LCOE) of Energy
Energy Source
LCOE (Rp) per kWh
Type
Diesel-based Power Grid
3,992
Fossil-based
Energy Source
Natural Gas and Steam-based Power Grid
1,843
Natural Gas Power Grid
806
Steam-based Power Grid
661
Solar/PV Power Plan
8,786
Renewable Energy
Source
Geothermal Plan
1,058
Hydropower Plan
388
Table 3 shows that the electrical price per kilo Watts hour (kWh) from
renewable energy plants is slightly higher than the price from fossil-based power
plants. The high price per kWh of electricity from renewable energy power plants
was because of the high investment values. Forbes (2022) reported that the value
of the investment in SPP with 4 kW – 7 kW reached $15,000-$ 25,000 of
investment (Advisor, 2022). In comparison, the electrical rate of SPP is higher
than the one produced by a diesel-based power grid which is known as the most
expensive fossil-based power plant.
National Renewable Energy Lab (NREL) published the details of the
investment cost of SPP which is shown in Figure 3. The highest investment values
were coming from the high price of the module which was the main process in
SPP. However, the price of modules kept decreasing since the discovery of cheap
material and highly efficient materials (Benda & Černá, 2020). Moreover, it can
be seen from Figure 3 that the soft cost which became the second most costly
process in the development of SPP was relatively stable every year. This cost
could be well maintained by making a good policy or regulation by the
government to cut the soft cost which is mostly related to sales tax, compensation,
or profit (NREL, 2020).
Energy Policy in Indonesia and Future Direction of Energy Development
The government of the Republic of Indonesia has started the transition of
energy from fossil fuel to renewable fuel. The story began by releasing Law
Ian Kurniawan, Reisya Ichwani, Richa Fionasari, Aryansyah & Adri Huda : Indonesia’s
Renewable Energy Outlook: What to Expect in The Future Renewable
Energy of Indonesia. A Brief Review
Elkawnie: Journal of Islamic Science and Technology Vol. 8, No. 2, December 2022
(www.jurnal.ar-raniry.ac.id/index.php/elkawnie)
DOI: 10.22373/ekw.v8i2.18738 | 308
Number 30 of 2007 about Energy. Another regulation is Presidential Regulation
No. 79 of 2014 where the regulation put 23% of primary energy sources coming
from renewable energy sources in 2025 and 31% in 2050. The presidential
regulation became the base of the further movement where the government
arranged the primary national energy planning or RUEN in 2017 which was
supported by the presidential regulation no. 22 of 2017.
According to RUEN, the future direction of the energy transition will be
focused on the development of SPP where approximately 207.8 GW become the
target of development in 2050. The main reason for the development of SPP was
the reliability of SPP which aligns with the characteristics of the Republic of
Indonesia (Syahputra & Soesanti, 2021). The Implementation of Minister of
Energy and Mineral Resources (MEMR) Regulation No. 26 of 2021 is anticipated
to accelerate the growth of the rooftop solar PV market, particularly given the
National Strategic Project (PSN)'s aim of 3.6 GW of rooftop solar electricity.
However, the progress seems to have left behind the target where only 0.08% of
the target was utilized so far in 2021 (Suparwoko & Qamar, 2022).
The low utilization rate was because of the consideration of SPP as an
expensive technology. The energy cost produced by the SPP was higher compared
to the energy cost produced by the coal-based power plant. However, the
sustainability and environmental effects of coal-based power plants were never
placed in the policy decision most of the parliament only taught about the
financial advantages.
The target of 3.6 GW in 2025 and 207.8 GW in 2050 could not be achieved
if the government does not open for private or community societies. The
successful energy transition in Indonesia should begin with full support from the
local people of Indonesia where the society has a high willingness to contribute to
the energy transition for example by investing in the renewable energy sector. The
successful energy transition by society could be achieved by releasing
advantageous regulations, especially from the economic point of view. By
involving society, the energy transition could be a massive movement and make
the energy transition easier. The local people could contribute and invest their
own money in the new and renewable energy sector for example SPP.
Kalkbrenner and Roosen (2016) also reported that the social movement from
citizen participation in energy transition played an important role in the local level
energy transition (Kalkbrenner and Roosen 2016).
Furthermore, the government as the power-based regulation source should
prepare for making better regulations to cultivate the willingness of people in
Indonesia to reach the energy transition goal. Learning from another country such
as the United States, the government could regulate several advantages which
made private, or community sectors want to transform and invest in green energy
infrastructure. One of the examples is giving a tax-free or tax deduction for people
who contribute to the development of green energy systems. To be specific in the
Ian Kurniawan, Reisya Ichwani, Richa Fionasari, Aryansyah & Adri Huda : Indonesia’s
Renewable Energy Outlook: What to Expect in The Future Renewable
Energy of Indonesia. A Brief Review
Elkawnie: Journal of Islamic Science and Technology Vol. 8, No. 2, December 2022
(www.jurnal.ar-raniry.ac.id/index.php/elkawnie)
DOI: 10.22373/ekw.v8i2.18738 | 309
private sector, the government could give a regulation for the green company to
sell their green electricity to the community which provides an additional value in
the investment of SPP. The successful of cultivation green energy could reduce
the responsibility of the government of Indonesia to invest a high number of
monies in green infrastructure and on the other hand also reach the target of
energy transition in 2050.
The government of the Republic of Indonesia also revised regulations
related to the export-import subsidies from SPP. The Ministerial Regulation of the
Minister of Energy and Mineral Resource No. 49 of 2018 which only covers 65%
of total exported electricity was revised with the Ministerial Regulation of the
Minister of Energy and Mineral Resources No. 26 of 2021. In the first release,
Regulation No. 26 of 2021 would cover 100% of total exported electricity which
in the frame could stimulate the solar energy investment (EDSM, 2018).
However, the new regulation of 26 of 2021 is still on hold and several regulations
should be considered before fully implemented. One of the biggest concerns was
the elimination planning of export of the electricity which could be the most
stimulating movement of this new regulation (Dwi, 2023). The government
planned that the owner of solar panels should use all the produced electricity on
their own and not expect to sell the electricity to the government. This regulation
was opposite to the main plan of the government to boost green energy investment
and made the solar energy investment not economically feasible. The failure of
regulation potentially failed to accelerate the willingness of people in Indonesia to
contribute to installing the SPP. Thus, the target of 23% of green energy from
renewable energy could be just a statement.
Setyawati (2020) have reported that approximately 71% of 987 PLN
consumer have a high willingness to transform their electricity to SPP (Setyawati,
2020) but with better regulation, especially in the electrical export rate and an
easy protocol installation. Based on the regulation of 26 of 2021, there are lots of
steps and administrations that should be made before starting the installation of
solar panels in the house. It could be said that the installation of solar energy was
a complicated and highly costly investment. Therefore, the government needed to
redesign the better regulation especially to support the green energy investment to
stimulate the energy transition in the community. Good regulation should make
the government reach the goal easier compared to achieving it by themselves.
Conclusion
Renewable energy has shown a promising development in Indonesia where
the trend moved to a higher electrical production annually. Solar power plant
(SPP) was aimed as the main core of electrical generation based on RUEN in
2025. The better electrical export rate could be a starting point to show that the
green energy sector is profitable for everyone. However, better regulation and
clear protocol should be made to stimulate the willingness of consumers to
Ian Kurniawan, Reisya Ichwani, Richa Fionasari, Aryansyah & Adri Huda : Indonesia’s
Renewable Energy Outlook: What to Expect in The Future Renewable
Energy of Indonesia. A Brief Review
Elkawnie: Journal of Islamic Science and Technology Vol. 8, No. 2, December 2022
(www.jurnal.ar-raniry.ac.id/index.php/elkawnie)
DOI: 10.22373/ekw.v8i2.18738 | 310
participate in the renewable energy transformation in Indonesia. Regulations for
tax reductions and electricity export-import subsidies to spur the growth and
development of renewable energy in Indonesia must be established by the
Indonesian Government to accelerate investment and the energy transition.
Acknowledgements
The author acknowledges the Ministry of Energy and Mineral Resources
Republic Indonesia especially the Energy Sector of South Sumatera for providing
us with the information, data and discussion to complete this paper.
Author Contributions
I.K.: Conceptualization, Supervision, Project Administration, R.I.; Writing –
Editing, Data Analysis, Validation, R.F.; Editing, Language Improvement, A.H.;
Conceptualization, Supervision, Writing original draft, Data Visualization. All
authors have read and agreed to the published version of the manuscript.
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