Indonesia Accelerates Energy Transition Amidst Global Instability, Eyes Renewable Exports
Jakarta, Indonesia – Indonesia is intensifying efforts to shift away from fossil fuel dependence and bolster energy security, driven by escalating global tensions and a commitment to sustainable economic growth. Despite being a major coal producer, the nation remains a net importer of oil and gas, a vulnerability highlighted by recent geopolitical instability. A new strategy focusing on electrification, renewable fuels, and international partnerships aims to rapidly accelerate this transition.
Indonesia’s reliance on fossil fuel imports stems from growing domestic energy demand outpacing indigenous supply, especially for transportation and power generation. This dependence exposes the country to price volatility and supply disruptions exacerbated by conflicts and geopolitical maneuvering. To address this, the Indonesian government is prioritizing a three-pronged approach.
firstly, accelerating electrification across all sectors is a key focus. Secondly, the country is actively advancing the production and adoption of renewable fuels, including sustainable Aviation fuel (SAF). Pertamina recently supplied SAF to Virgin Australia during the Bali International air Show in September 2024, demonstrating progress in this area. Indonesia is strengthening multilateral cooperation to attract investment and expertise.
Notable funding is being sought through partnerships with the quad coalition (Australia, India, Japan, and the United States), the International Energy Agency (IEA), the asian development Bank (ADB), and the World Bank, designed to ease the flow of foreign capital into renewable energy projects.
A landmark agreement to export 3.4 GW of clean electricity to Singapore by 2035, backed by US$30-50 billion in solar investments and an additional US$2.7 billion for solar panel and battery manufacturing, is projected to generate US$4-6 billion in annual foreign exchange revenue. This initiative represents a major step towards becoming a regional clean energy exporter.
According to researchers at UNSW Sydney and institut Teknologi Bandung, these combined efforts present a major chance to fast-track Indonesia’s energy transition and build a more resilient and sustainable energy future. Stronger energy security, thay argue, will protect Indonesia from global shocks and lay the foundation for long-term economic prosperity.