Energy Policy and Transition Strategies in Indonesia
Summary
Indonesia’s energy policy is at a critical juncture, balancing its legacy of abundant fossil-fuel reserves against ambitious commitments to decarbonise. The government’s National Energy Policy and General Plan for National Energy set out targets to increase the share of renewables in the energy mix, in line with its Nationally Determined Contribution and net-zero pledge by 2060. Despite significant geothermal, solar, hydro and bioenergy potential, implementation has been hindered by regulatory complexity, fragmented institutional governance and limited access to international finance. Socio-economic disparities and the concentration of fossil-fuel industries in certain regions add further challenges, risking uneven development and social exclusion. Strategies to overcome these obstacles include the establishment of an independent transition body, streamlined permitting procedures, tailored carbon-pricing mechanisms and enhanced regional participation. Practical initiatives have begun to prioritise just transition principles, ensuring that workforce retraining, community empowerment and energy access are integral to decarbonisation pathways. These efforts carry global significance by demonstrating how a large emerging economy can reconcile development objectives with climate obligations, offering lessons on policy coherence, stakeholder engagement and the mobilisation of green investment.
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Energy Policy and Transition Strategies in Indonesia publication trend
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Technical terms
Nationally Determined Contribution (NDC): A nation’s self-defined plan under the Paris Agreement outlining intended greenhouse-gas reduction targets and strategies.
Just energy transition: A framework ensuring that the shift from fossil fuels to low-carbon energy is equitable, protecting livelihoods and promoting social inclusion.
Energy mix: The combination of different primary energy sources used to meet a country’s total energy demand.
Renewable energy technologies (RET): Systems and devices that convert naturally replenished resources—such as solar, wind, hydro, geothermal and biomass—into usable energy.
References
- Untangling the socio-political knots: A systems view on Indonesia's inclusive energy transitions. Energy Research & Social Science (2023).
- Reducing Fossil Fuel Dependence and Exploring Just Energy Transition Pathways in Indonesia Using OSeMOSYS (Open-Source Energy Modelling System). Climate (2024).
- Review of Renewable Energy Potentials in Indonesia and Their Contribution to a 100% Renewable Electricity System. Energies (2021).
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