Indonesia's Big Green Energy Challenge

Indonesia has a huge task ahead. It needs to change how it makes power for its industries. This is called the captive power sector. Right now, most of this power comes from coal. But Indonesia wants to switch to cleaner energy. A recent study says this will cost a lot of money. By 2030, Indonesia needs $31 billion. By 2050, that number jumps to $92 billion. The captive power sector is big in Indonesia. It's especially important in places where nickel is processed. In 2024, this sector had 25. 9 GW of power capacity. Most of that, over 75%, comes from coal. There are even more coal projects in the works. Almost 11 GW of new capacity is being developed. The plan is to use more renewable energy. Solar power and hydropower are expected to lead the way. The study suggests using gas in some cases too. This will make the system more efficient. It will also help integrate more renewables. By 2030, renewables could make up 34% of captive generation. That's a big jump from the 9% in 2024.But there are challenges. The U. S. recently pulled out of its deals with Indonesia under the Just Energy Transition Partnership (JETP). This is a funding initiative to help countries cut carbon emissions. Indonesia has secured over $20 billion under JETP, but the money isn't flowing fast enough. The study says more funding is needed from different sources. Indonesia is a big coal producer. It also has a main electricity sector that needs cleaning up. The JETP Secretariat estimates that will cost $97 billion by 2030. The captive sector was initially left out of Indonesia's decarbonisation plans. But now, it's clear that it's a big part of the challenge.