Indonesia’s Energy Transition: Navigating Ambition, Reality and Opportunity

Indonesia’s Energy Transition: Navigating Ambition, Reality and Opportunity

Indonesia’s energy transition is entering a decisive phase. The country has moved from broad pledges toward a more detailed—if occasionally inconsistent—policy framework.

With the Just Energy Transition Partnership (JETP) and Presidential Regulation 112/2022 setting the tone, Indonesia’s ambitions to raise renewable power generation to 44% by 2030 and cap power-sector emissions at 290 MtCO₂e are laudable. Yet the pathway remains uncertain, shaped by the competing demands of energy security, industrial policy, and affordability.

The mixed messages in the latest Electricity Supply Business Plan (RUPTL) 2025–2034 capture this tension: renewables feature prominently in planned new capacity, yet coal and gas remain embedded through 2034. This balancing act reflects Indonesia’s “transition trilemma”—how to decarbonise while maintaining reliability and growth.

Policy and Market Shifts

Since the 2017 National Energy General Plan (RUEN), Indonesia has pursued a 23% renewable energy share by 2025. The JETP, launched in 2022 during Indonesia’s G20 presidency, elevated this target and drew in international finance and technical partnerships. However, implementation remains patchy. Coal still provides around two-thirds of electricity, and incentives for renewables are undermined by regulatory uncertainty, complex permitting, and state-owned enterprise dominance.

Presidential Regulation 112/2022 restricts most new coal projects while creating tariff mechanisms for renewables and mandating a coal retirement roadmap. However, exceptions for “strategic” coal plants—particularly for nickel processing—reveal the competing imperatives of industrial sovereignty and climate ambition. The RUPTL’s commitment to additional coal and gas capacity further highlights this contradiction.

This inconsistency risks undermining investor confidence and the credibility of Indonesia’s climate commitments. Energy planning remains fragmented across agencies, with PLN’s financial health and the Ministry of Energy and Mineral Resources’ oversight shaping what gets built.

Lessons from Regional Peers

Across Southeast Asia, energy transitions have followed diverse paths. Vietnam’s rapid solar boom demonstrated how strong incentives can unleash private investment but also exposed the pitfalls of weak grid planning and abrupt policy changes. Thailand’s measured, long-term planning under its Alternative Energy Development Plan shows the value of policy stability, while Malaysia’s Large-Scale Solar program highlights how competitive tenders and clear governance can attract investment.

Australia, by contrast, shows what market liberalisation and grid modernisation can achieve. Its Renewable Energy Zones (REZs) integrate transmission and generation planning, ensuring that renewable projects connect efficiently to demand centres. For Indonesia, these lessons point to the need for three parallel reforms: strengthening transmission infrastructure, streamlining investment approvals, and creating bankable power purchase agreements (PPAs).

Closing the Gap Between Ambition and Implementation

Indonesia’s policy framework shows ambition, but progress depends on implementation capacity. To reach its 2030 goals, Indonesia must:

  1. Accelerate grid and transmission development – especially inter-island connections and smart grid technologies to manage variable renewable energy.
  2. Reform coal pricing and subsidies – aligning incentives toward cleaner generation and freeing fiscal space for renewables.
  3. Unlock private capital – through predictable PPAs, de-risking tools, and transparent permitting.
  4. Promote industrial decarbonisation – especially in nickel, steel, and cement, to align export competitiveness with global low-carbon standards.
Researchers looking at maps and clean energy models

Building Collaborative Capacity

The path forward requires stronger collaboration between government, industry, and academia. Despite growing interest, several knowledge gaps persist:

  • Technology–policy mismatch: Emerging solutions like hydrogen, carbon capture, and smart grids lack regulatory pilots.
  • Financing frameworks: Limited risk-sharing mechanisms deter private investment despite international funding pledges.
  • Governance disconnects: Decentralisation complicates subnational implementation and just transition planning.
  • Data deficits: Fragmented energy and emissions data hinder evidence-based policymaking and investor due diligence.

Bridging these gaps demands new platforms for co-design and innovation. Universities can play a catalytic role by linking technical research with policy design and industry needs.

The Case for an RMIT–BINUS 2025 Roundtable

RMIT University and BINUS University are uniquely positioned to convene Indonesia’s energy transition dialogue. Together, they bring complementary strengths: RMIT’s global expertise in decarbonisation, renewable systems, and workforce transformation; and BINUS’s deep local networks, policy insight, and research capacity in sustainability and innovation.

A jointly convened Indonesia Just Energy Transition Industry Roundtable was organised in Jakarta in 2025 to help create a forum for structured collaboration. The Industry Roundtable 2025 launched a series of engagements designed to shape national strategy, accelerate innovation, and mobilise sustainable investment. It concluded with the following observations.

First, Indonesia’s JET agenda faces fragmented governance, with responsibilities spread across ministries and SOEs, prompting calls for a central JET Collaboration Council to align strategy, data, and financing.

Second, universities remain underutilised despite their potential to support policy co-design, applied research, metrics development, and workforce training.

Third, a three-tier collaboration model needs to be developed, spanning scalable engagements, strategic investments, and selective pilot opportunities.

Fourth, there is an urgent need for a national Labour and Community Transition Framework to manage social and employment impacts.

Finally, stakeholders stressed the importance of integrating finance and data systems, supported by a transparent national GHG disclosure platform and strong quality assurance.

Looking Ahead

Indonesia’s energy transition is a story of both ambition and pragmatism. The targets are clear, but delivery will depend on aligning institutions, financing, and infrastructure. As the world’s fourth-largest population and a pivotal player in the global supply chain for clean energy materials, Indonesia’s transition matters far beyond its borders.

By convening expertise, evidence, and partnerships, RMIT and BINUS can help translate Indonesia’s bold commitments into credible, actionable pathways—advancing a just, secure, and sustainable energy future for the region.

 

Authors: Prem Chhetri, Yanthi R.I. Hutagaol, Marko S. Hermawan, and Yuli Suseno

18 December 2025

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18 December 2025

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