Indonesia Adds 217.73 MW Of Renewable Energy Capacity, Hits Investment Milestone

The Indonesian government continues to make strides in renewable energy development, achieving notable progress in the first half of 2024. As of June, the country has added 217.73 Mega Watts (MW) of New and Renewable Energy (EBT) capacity, reaching approximately 66.6% of its annual target of 326.91 MW.

The growth in capacity has been predominantly driven by hydro and solar power plants. Hydro power plants have achieved 66.4% of their target, while solar power plants have surpassed expectations, reaching 147.02% of their goal. Despite geothermal power plants falling short of their target, other renewable sectors, including bioenergy, have shown positive advancements, with bioenergy reaching 43.2% of its target.

Energy and Mineral Resources Minister Arifin Tasrif highlighted the challenges faced in the sector, including limited infrastructure and regulatory obstacles. “We need to enhance demand through programs like accelerating Electric Vehicles (EVs) and promoting solar power for industries and housing,” Tasrif said during a media gathering at the Ministry of ESDM in Jakarta.

Investment in the renewable energy sector also continues to rise. By mid-2024, realized investments reached USD 0.565 billion, accounting for 45.9% of the annual target of USD 1.232 billion. Geothermal energy remains the largest contributor, followed by various other renewable sectors, including bioenergy.

Geothermal energy alone has contributed USD 0.64 billion to the state treasury, with other sectors such as Aneka EBT, Bioenergy, and Energy Conservation contributing USD 0.512 billion, USD 0.064 billion, and USD 0.016 billion respectively.

This surge in investment is fueled by supportive government policies, significant market potential, and growing public awareness of clean energy benefits. However, the EBT mix in Indonesia’s national energy portfolio remains slow, estimated at around 13-14% by 2025, due to infrastructural bottlenecks.

A positive development in the sector is the increase in the Domestic Component Level (TKDN) for EBT power plant components, which has reached 49.80%, nearing the target of 55.45%. This reflects efforts to boost domestic industry and reduce reliance on imports.

Additionally, the expansion of EBT power plants has contributed to a reduction of 123.22 million tons of CO2 emissions, highlighting the sector’s role in mitigating climate change through cleaner energy sources.