What is Indonesia's pathway to limit global warming to 1.5°C?
Power
Decarbonising the power sector
Indonesia’s power sector is the most carbon-intensive in Southeast Asia and is the region’s largest coal-fired power producer and the world’s fourth largest.1 In 2022, two-thirds of electricity came from coal, 16% from oil and gas, and only 18% from renewables.2 Coal power has quadrupled since 2010, driven by increasing demand and abundant resources, the Domestic Market Obligation, and the 2015–2019 35 GW Plan, causing sectoral emissions to more than double.3 Despite vast renewable potential, deployment has been limited by local content rules and the power market structure.4
Indonesia's power mix
terawatt-hour per year
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Graph description
Power energy mix composition in generation (TWh) and capacities (GW) for the years 2030, 2040 and 2050 based on selected IPCC AR6 global least costs pathways. Selected countries include the Stated Policies Scenario from the IEA's World Energy Outlook 2023.
Methodology
Data References
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Under the Deep Electrification pathway, which assumes extensive electrification of end-use sectors, renewables would reach 88% of the power mix by 2030 and 98% by 2040, and coal and gas is phased out by 2040. Slow renewable deployment—reflected in the lowered 2025 target to 17–19% and the plan to delay emissions peaking by five years to 2035 (to be announced at COP30)—raises doubts about the government’s climate ambition and its ability to meet long-term goals.5
The Just Energy Transition Partnership’s Comprehensive Investment and Policy Plan (2023) targets an on-grid power sector emissions peak of 250 MtCO₂ by 2030, with renewables reaching 44% of the power mix. The plan aims to achieve net zero power sector emissions by 2050.6 In 2024, Indonesia pledged to phase out fossil-fuelled power plants by 2040 and build 75 GW of renewables, which would increase renewables to 65% of the mix by 2040.7,8 While these steps reflect rising ambition, they fall far short of 1.5°C compatible pathways, which require renewables to supply at least 75% of power by 2030 and 98% by 2040.
Policy implementation remains a challenge. Presidential Regulation 112/2022 restricts new power plants but exempts industrial projects and those already in the pipeline. Indonesia’s ten-year power grid plan the Electricity Supply Business Plan (RUPTL) 2021–2030 still assume coal will provide 64% of electricity by 2030. The new draft RUPTL 2025–2034 continues the rapid expansion of fossil power generation with a less ambitious 2030 renewables capacity target than its predecessor.9 To align with 1.5°C pathways, Indonesia must accelerate coal phase-out and significantly scale up renewables.
Indonesia's power sector emissions and carbon intensity
MtCO₂/yr
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Graph description
Emissions and carbon intensity of the power sector in selected 1.5°C compatible pathways.
Methodology
Data References
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Power capacity investments
Under the Net Zero Commitments pathway, 94 GW of solar power and 51 GW of wind power would be deployed by 2030 and 285 GW of solar and 119 GW of wind by 2040, up from 0.3 and 0.2 GW in 2021. These figures far exceed Indonesia’s existing targets. The upper bound assumed by the JETP Comprehensive Investment and Policy Plan would lead to 32 GW of solar and 8 GW of wind power installed by 2030, while for 2040 Indonesia has pledged 75 GW renewable capacity.
Installing the level of renewable capacity in the Net Zero Commitments pathway would entail average annual investments of USD 25 bn between 2026–2030, a 25% increase from the initial USD 20 bn pledge between 2023–2027 under the JETP, and USD 18 bn annually between 2031–2040. This represents a significant increase from the total realised investment of USD 1.5 bn in 2023.10
Achieving the Net-Zero Commitments pathway would reduce power sector emissions by over 80% by 2030 compared to 2022. Such a rollout could be unlocked by addressing the barriers hindering clean energy sources deployment, such as the impact of the local content requirements on input costs and the artificial inflation of coal’s competitiveness due to the Domestic Market Obligation.11
In the Deep Electrification pathway, which assumes extensive economy-wide electrification, total renewable capacity reaches 1520 GW by 2050, backed by average annual investments of USD 43.5 bn between 2026–2030, USD 38 bn 2031–2040, and USD 24 bn 2041–2050. Solar power accounts for more than three-quarters of this renewable capacity by the middle of the century. Across all illustrative pathways, there is a consistently large investment gap between the current and the 1.5°C-compatible investment levels which is crucial to bridge.
Indonesia will also need further modernisation and development of its grid infrastructure, the costs of which go beyond the investment figures presented in the assessed pathways.
Both capacity additions and grid upgrades require significant levels of international support.12 Indonesia can enhance incentives and remove barriers which hinder foreign direct investment, such as the restrictions on the transfer of ownership risks. Targeted policy can unlock the investments needed to align with 1.5°C compatible pathways.13
Indonesia's renewable electricity investments and capacities
Billion USD / yr
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Graph description
Average annual investments in power sector renewable electricity capacity and cumulative installed power capacities across time under 1.5°C compatible pathways downscaled at country levels.
Methodology
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1.5°C compatible power sector benchmarks
Carbon intensity, renewable generation share, and fossil fuel generation share from illustrative 1.5°C pathways for Indonesia
| Indicator |
2022
|
2030
|
2035
|
2040
|
2050
|
Power sector decarbonised by
|
|---|---|---|---|---|---|---|
|
Carbon intensity of power
gCO₂/kWh
|
787
|
57 to
114
|
10 to
22
|
2 to
2
|
-1 to
0
|
2038 to
2040
|
|
Relative to reference year in %
|
-93 to
-86%
|
-99 to
-97%
|
-100 to
-100%
|
-100 to
-100%
|
| Indicator |
2022
|
2030
|
2035
|
2040
|
2050
|
|---|---|---|---|---|---|
|
Share of unabated coal
%
|
66
|
2 to
3
|
0 to
0
|
0 to
0
|
0 to
0
|
|
Share of unabated gas
%
|
14
|
9 to
21
|
2 to
5
|
0 to
1
|
0 to
0
|
|
Share of renewable energy
%
|
18
|
75 to
88
|
93 to
97
|
98 to
99
|
98 to
100
|
BECCS are the only Carbon Dioxide Removal (CDR) technologies considered in these benchmarks
All values are rounded
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Methodology
Data References
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