Is there a Clean Energy Future for Indonesia?

With the re-election of Jokowi, infrastructure will continue to be on Indonesia's agenda albeit with a much greater focus. The President has already laid out his ambitious plans for the next five years, which will include over 16,000MW of power. This includes two 1,000MW coal-fired power plants. Indonesia lost its membership of OPEC and the oil industry faces uncertain interest from international majors. Natural gas and investments in LNG show brighter prospects.

Indonesia has been enthusiastic about renewables but the regulatory regime around PPA's and project approvals is constantly changing. Investors in renewables were initially bullish on the prospects for renewables when various programmes were announced a few years back - many of those investors have put their ambitions on hold and refocused their efforts into other countries such as Vietnam, pending a more stable and attractive platform in Indonesia for renewables.

Indonesia lends itself to renewables given its vast islands geography - a lot of power is still produced by diesel, especially in the more remote areas. 80% of power is still from fossil fuels - with 13% from renewables, mainly hydro and geothermal. There has not been any new or significant renewable projects announced in the last three years.

Will this change with the re-election of Jokowi? Are the state owned enterprises the main stumbling block? Is the coal lobby too strong? Is a hybrid approach (combination of fossil fuels and renewables) the answer for a country facing dual issue of increasing energy access and fuelling an emerging middle class?

These and other questions will be addressed by our panel of experts.

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