Indonesia’s energy transition has long been state-driven, but the complexity of the archipelago demands a decentralized, multi-stakeholder model. Experience from islands such as Sumba and Lombok shows that when local communities are empowered to manage energy resources, sustainability improves significantly.
PELAKITA.ID – Indonesia’s path toward energy transition represents both a national necessity and a global responsibility.
Guided by Law No. 30/2007 on Energy, the government has placed strong emphasis on accelerating the adoption of New and Renewable Energy (NRE) to reduce dependence on fossil fuels, increase the share of renewables in the national energy mix, and achieve Net Zero Emissions by 2060.
Yet, the scale and geography of Indonesia—17,508 islands, a sea area of 6.4 million km², and highly uneven infrastructure—pose unique challenges for transforming ambition into action.
1. Context and Economic Landscape
By 2024, Indonesia maintained steady economic growth of 5.03%, with a GDP of Rp 22,139 trillion (USD 4,960 per capita). Although the poverty rate decreased to 9.03% and the Gini ratio stood at 0.379, inequality and uneven access to basic services remain persistent barriers to inclusive development. Addressing these disparities is essential, as the transition to renewable energy is not only a technological and economic shift but also a social transformation affecting livelihoods across the archipelago.
2. National Energy Framework
The government’s strategic framework for renewable energy rests upon a robust legal and regulatory foundation. Government Regulation No. 40/2025 on National Energy Policy and Presidential Regulation No. 109/2025 on Waste-to-Energy Management provide overarching direction.
These are supported by sectoral regulations, such as ESDM No. 2/2024 on Rooftop Solar PV, ESDM No. 11/2024 on Local Content (TKDN), and ESDM No. 5/2025 on Renewable Power Purchase Agreements, among others.
Together, these policies aim to mainstream renewable technologies, encourage local innovation, and attract both domestic and international investment.
However, despite a national renewable potential of 3,687 GW—primarily from solar (3,294 GW), wind (155 GW), and hydro (95 GW)—only 0.4% has been utilized. As of 2025, the national energy mix still consists of 38% coal, 29.4% oil, 16.6% gas, and only 16% renewables. This slow progress underscores the urgent need for structural reform in financing, technology transfer, and governance.
3. The Paradox of Resource Wealth
Indonesia’s role as the world’s largest nickel producer highlights a paradox in its energy transition narrative. Around 300 mining companies and 33 active smelters, concentrated in Sulawesi and Maluku, produce critical materials for electric vehicle (EV) batteries and stainless steel. Yet, this sector faces increasing scrutiny over environmental degradation and inequitable benefit-sharing. The challenge is not whether Indonesia can lead in global EV supply chains, but whether it can do so sustainably and inclusively—balancing industrial growth with environmental and social justice.
4. Lessons from Sulawesi and the Islands
Sulawesi, with a renewable potential of 216.53 GW (including 60.38 GW in South Sulawesi), illustrates both the promise and pitfalls of clean energy development.
The province has emerged as a model for Eastern Indonesia, integrating solar, wind, and hydro resources through inter-island transmission networks and energy storage systems. Yet, the experience also reveals systemic weaknesses: limited investment, inadequate grid capacity for intermittent power, uncertain regulatory frameworks, and weak local ownership.
For instance, in 2020, the installation of 60 integrated solar units in South Sulawesi demonstrated technical success but struggled with long-term sustainability due to limited community engagement and maintenance capacity.
As one case in Tanakeke Island shows, each household contributed a nominal Rp 10,000 per month, yet the system’s continuity faltered not because solar power failed, but because social, institutional, and financial ecosystems were fragile.
The key lesson is clear: renewable energy systems cannot thrive on technology alone—they require social preparation, institutional ownership, and local participation. Projects designed top-down often underperform, while community-based approaches, though slower, tend to generate stronger accountability and resilience.
5. From Centralization to Collaboration
Indonesia’s energy transition has long been state-driven, but the complexity of the archipelago demands a decentralized, multi-stakeholder model. Experience from islands such as Sumba and Lombok shows that when local communities are empowered to manage energy resources, sustainability improves significantly. However, capacity gaps remain, and policy inconsistencies often deter private investment.
A successful transition therefore depends on five interlinked principles:
Decentralization – Aligning strategies with the archipelagic geography to ensure equitable access.
Local Ownership – Encouraging community responsibility and transparency.
Triple Helix Partnerships – Strengthening collaboration among government, private sector, and academia for innovation.
Inclusive Governance – Integrating civil society and NGOs to enhance accountability.
Regulatory Consistency – Building investor confidence through stable, predictable frameworks.
6. The Path Forward
The path ahead must blend ambition with pragmatism: Government should reinforce enabling regulations (e.g., B35 biofuel policy, Rooftop Solar Program, Energy Villages).
Private sector actors must lead investment and job creation, following examples like Coca-Cola’s 7.13 MWp Solar Plant in Bekasi. Academia can drive innovation and workforce readiness through initiatives like the Gerilya Academy. Media and NGOs must amplify public awareness, as seen in campaigns like SAFE 2024 and the Access Project for energy inclusion.
Moreover, Indonesia can benefit from knowledge exchange with Latin American and European countries, learning from their experiences in decentralized energy systems and just transition frameworks.
7. Conclusion
Indonesia’s renewable energy journey stands at a critical crossroads.
The nation possesses abundant potential, yet progress remains constrained by systemic barriers—financial, institutional, and social. Sulawesi and other islands demonstrate that with strong local leadership, community participation, and sustained collaboration, renewable energy can catalyze not only environmental sustainability but also economic transformation.
Ultimately, the energy transition is not merely about changing fuel sources; it is about redefining the nation’s future—a future rooted in independence, equity, and sustainability.
“The energy transition is not merely about changing our resources, but about redesigning our nation’s future toward independence and sustainability.”
___
Gowa, 4 November 2025
Kamaruddin Azis (daeng.nuntung@gmail.com)
