Indonesia’s state utility, Perusahaan Listrik Negara (PLN), is planning to increase its renewable energy capacity by 32 gigawatts (GW) and invest in grid infrastructure to support more renewable power sources. This initiative aims to accelerate the adoption of renewable energy and reduce the country’s reliance on coal, which currently accounts for approximately half of Indonesia’s power generation.
PLN is in the process of revising its power supply master plan to incorporate a greater share of renewables, according to CEO Darmawan Prasodjo. Under the existing plan for 2021-2030, the company aimed to expand renewable power capacity by 20.9 GW, representing 51% of its total new additional power generation capacity for the period.
Darmawan Prasodjo stated that with the accelerated development of renewable energy, 75% of PLN’s additional generation capacity would be derived from renewables, with the remaining 25% coming from gas-based sources. Currently, around 14% of Indonesia’s power is generated from renewable sources.
PLN also intends to upgrade its grid infrastructure to facilitate the integration of more renewable energy into its electricity networks. This will enable PLN to increase its variable power load from renewable sources to 28 GW, up from the current 5 GW.
The Indonesian government hopes that funds pledged under the Just Energy Transition (JETP) initiative will help finance PLN’s grid installation efforts, as mentioned by senior cabinet minister Luhut Pandjaitan. The JETP was discussed during a bilateral meeting between U.S. Vice President Kamala Harris and Indonesian President Joko Widodo at ASEAN regional bloc meetings.
Addressing the challenges faced by JETP investment plans, Fabby Tumiwa, executive director at the Institute for Essential Services Reform and a member of the JETP working group, emphasized the need for a comprehensive overhaul of power tariff policies to encourage wider adoption of renewables.
Furthermore, the Indonesian government has revised local content rules for solar panels to attract more investment. The requirement for 60% of solar panel components to be locally sourced has been pushed back to 2025, allowing the domestic industry to develop and meet the local content requirements.