Indonesia is estimated to hold significant technical renewable energy potential, surpassing 3,686GW, a recent analysis conducted by the Institute for Essential Services Reform (IESR) has highlighted.
The study identified 1,500 suitable locations for renewable energy projects in Indonesia with a total technical renewable energy potential of 548.5GW.
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Upon assessing the viability of these projects, IESR identified 333GW across 632 utility-scale renewable energy project locations as financially viable, based on prevailing tariff regulations and commonly used project financing structures in Indonesia.
The capacity includes 165.9GW of ground-mounted solar power, 167GW of onshore wind power, and 0.7GW of thermal power.
This renewable energy is vital for boosting the nation’s renewable energy share beyond 23%, with the possibility of achieving 50% by 2030, the study found.
IESR’s social, policy, and economic research coordinator Martha Jesica Mendrofa revealed six key regions identified as the most promising for renewable energy development based on economic feasibility studies.
These regions include Papua and Kalimantan for solar power plant sites; Maluku, Papua, and South Sulawesi for wind power plants; and West Sumatra and North Sumatra for mini and micro-hydro power development.
Mendrofa explained that these regions have renewable energy project sites with high equity internal rate of return (EIRR) levels, making them financially viable.
Approximately 61% of the 333GW of potential renewable energy projects, equivalent to about 206GW, have EIRR rates exceeding 10%.
This capacity surpasses Indonesia’s target in the National Electricity General Plan (RUKN), which aims for around 180GW of solar and wind power by 2060.
Mendrofa said: “This vast potential can be maximised through technological innovation and the development of a more flexible and modern electricity grid capable of supporting renewable energy integration.
“The government must also establish clear regulations and streamline the licensing process. These factors can enhance the attractiveness of renewable energy projects for investors.”
Pintoko Aji, research coordinator of IESR’s Data and Modeling Group, stated that the findings led to several key recommendations for policymakers, Indonesia’s state-owned electricity company PLN, lenders, and renewable energy project developers.
Indonesia is also in talks with the US and Russia to acquire nuclear power technology to operate nuclear power plants by 2036 to reduce its dependence on fossil fuels.
