Indonesia Aims for 42% Renewable Energy by 2040, Reducing Coal Power to 33%

Indonesia’s Energy Transition Plan

On November 22, 2024, Indonesia announced a major shift in its energy strategy. The government plans to reduce coal-fired power generation to 33 percent of the total energy mix. In contrast, renewable energy’s contribution is set to increase to 42 percent by the end of 2040. This change aims to address both environmental concerns and sustainable energy needs.

Coordinating Economic Minister Airlangga Hartarto shared these goals during the G20 meeting in Rio de Janeiro. To achieve this vision, Indonesia needs significant investments—about $235 billion. The plan includes adding 75 gigawatts of renewable energy and expanding the transmission network by 70,000 kilometers.

As the world’s fourth-largest population, Indonesia is a key player in coal exports and carbon emissions. The country’s current energy mix includes over 30 percent from oil and 16 percent from gas. President Prabowo Subianto emphasized Indonesia’s potential to meet its energy demands without fossil fuels. He mentioned at the APEC summit that the country has abundant natural resources for clean energy.

Despite these goals, Indonesia struggled to meet its previous renewables target. Last year, it fell short of the necessary 17.87 percent share of renewables in the energy mix for 2025. In response, the government and state-owned electricity firm PLN decided to manage emissions from coal plants without shutting them down early, focusing on a gradual transition to cleaner energy sources.

This commitment to clean energy signals Indonesia’s readiness to move away from reliance on fossil fuels and invest in a more sustainable future. The success of this plan will rely on substantial investment and a clear strategy for enhancing renewable energy production.