In 2019, the total energy production in Indonesia is 450.79 million tonnes of oil equivalent, with a total primary energy supply of 231.14 million tonnes of oil equivalent and electricity final consumption of 263.32 terawatt-hours. From 2000 to 2021, Indonesia's total energy supply increased by nearly 60%.
Energy use in Indonesia has been long dominated by fossil resources. Once a major oil exporter that joined OPEC in 1962, the country has since become a net oil importer despite still being in OPEC until 2008 and for a short time in 2016, making it the only net oil importer member in the organization. Indonesia is also one of the world's largest coal producers and exporters. In 2024, it was the world's third-largest coal producer, with output increasing to 836 million tonnes. In the same year, Indonesia remained the world's largest coal exporter, exporting 555 million tonnes of coal, primarily thermal coal. Indonesia's coal reserves reached 31.95 billion tonnes in 2024, according to data from the Ministry of Energy and Mineral Resources. In addition, Indonesia has abundant renewable energy potential of 417,8 gigawatt (GW), including solar, wind, hydro, geothermal energy, ocean current, and bioenergy, although only 2,5% have been utilized. Furthermore, Indonesia along with Malaysia, have two-thirds of ASEAN's gas reserves with a total annual gas production of more than 200 billion cubic meters in 2016.
The Government of Indonesia has outlined several commitments to increase clean energy use and reduce greenhouse gas emissions, among other things by issuing the National Energy General Plan (RUEN) in 2017 and joining the Paris Agreement. In the RUEN, Indonesia targets New and Renewable Energy to reach 23% of the total energy mix by 2025 and 31% by 2050. The country also commits to reduce its greenhouse gas emissions by 29% by 2030 against a business-as-usual baseline scenario, and up to 41% by international support. It also has committed to phasing out coal power by 2040s, although numerous challenges remain
Some major renewable projects in Indonesia include the 75 MW wind farm in Sidenreng Rappang Regency, another 72 MW wind farm in Jeneponto Regency, and the Cirata Floating Solar Power Plant in West Java with a capacity of 145 MW which will become the largest Floating Solar Power Plant in Southeast Asia.
Contents
Overview
According to the IEA, energy production increased 34% and export 76% from 2004 to 2008 in Indonesia. In 2017, Indonesia had 52,859 MW of installed electrical capacity, 36,892 MW of which were on the Java–Bali grid. In 2022, Indonesia had an electrical capacity of 81.2 GW with a projected capacity of 85.1 GW for 2023.
In 2021, Indonesia's total energy supply (TES) comprised 30.3% coal, 28.9% oil, and 14.4% natural gas. Renewable energy sources also added to the mix, with biofuels and waste accounting for 13.8%, wind and solar providing 11.6%, and hydro contributing 0.9%.
Energy by sources
Fossil fuel energy sources
Oil is a major sector in the Indonesian economy. During the 1980s, Indonesia was a significant oil-exporting country. Since 2000, domestic consumption has continued to rise while production has been falling, so in recent years Indonesia has begun importing increasing amounts of oil. Within Indonesia, there are considerable amounts of oil in Sumatra, Borneo, Java, and West Papua Province. There are said to be around 60 basins across the country, only 22 of which have been explored and exploited. Main oil fields in Indonesia include the following:
Minas. The Minas field, in Riau, Sumatra, operated by the US-based firm Chevron Pacific Indonesia, is the largest oil block in Indonesia. Output from the field is around 20-25% of current annual oil production in Indonesia.
Duri. The Duri field, in Bengkalis Regency, Riau, Sumatra, is operated by the US-based firm Chevron Pacific Indonesia.
Rokan. The Rokan field, Riau, Sumatra, operated by Chevron Pacific Indonesia, is a recently developed large field in the Rokan Hilir Regency.
Cepu. The Cepu field, operated by Mobil Cepu Ltd which is a subsidiary of US-based ExxonMobil, is on the border of Central and East Java near the town of Tuban. The field was discovered in March 2001 and is estimated to have proven reserves of 600 million barrels of oil and 1.7 trillion cu feet of gas. Development of the field has been subject to on-going discussions between the operators and the Indonesian government. Output is forecast to rise from around 20,000 bpd in early 2012 to around 165,000 bpd in late 2014.
Indonesia's proved natural gas reserves stood at 49.7 trillion cubic feet in 2021. There is growing recognition in Indonesia that the gas sector has considerable development potential. The Indonesian government is increasingly prioritizing investment in natural gas. However, in practice, investors, especially foreign investors, have been reluctant to invest because many of the problems that are holding back investment in the oil sector also affect investment in gas.
As of mid-2013, the main potential gas fields in Indonesia were believed to include the following:
Renewable energy sources
Indonesia aims to get 23% and 31% of its energy from renewable sources by 2025 and 2050 respectively. In 2020, renewables has a 11.2% share of the national energy mix, with hydro and geothermal power making up most of this. Despite its renewable energy potential, Indonesia is struggling to reach its renewable target. The lack of adequate regulation supports to attract the private sector and the regulation inconsistency are often cited among the main reasons for the lack of progress. One policy requires private investors to transfer their projects to PLN (the sole electricity off-taker in the country) at the end of agreement periods, which, combined with the fact that the Minister for Energy and Mineral Resources sets the consumer price of energy, has led to concern about return on investment.
Another issue is related to financing, as to achieve the 23% renewable energy target, it has been estimated that Indonesia needs to invest US$154 billion. The state is unable to raise so much capital, while there is reluctance from both potential investors and lending banks to get involved. There is also a critical challenge related to cost. Renewable energy projects is still require large up-front investment and as the electricity price has to be below the Region Generation Cost (BPP) (which is already low enough in some major areas), it renders projects economically unattractive. Indonesia also has large coal reserves and is one of the world's largest net exporters of coal, making it less urgent to develop renewable-based power plants compared to countries that depend on coal imports.
The country has been recommended to remove subsidies for fossil fuels, establish a ministry of renewable energy, improve grid management, expand its grid connections with neighboring countries through the ASEAN power grid, mobilize domestic resources to support renewable energy, and facilitate entry for international investors. Continued reliance on fossil fuels by Indonesia may leave its coal assets stranded and result in significant investments lost as renewable energy is rapidly becoming cost-efficient worldwide.
In February 2020, it was announced that the People's Consultative Assembly is preparing its first renewable energy bill.
An estimated 55% of Indonesia's population, 128 million people, primarily rely upon traditional biomass (mainly wood) for cooking. Reliance on this source of energy has the disadvantage that poor people in rural areas have little alternative but to collect timber from forests, and often cut down trees, to collect wood for cooking.
Use of energy
Transport sector
Much of the energy in Indonesia is used for domestic transportation. The dominance of private vehicles - mostly cars and motorbikes - in Indonesia has led to an enormous demand for fuel. Energy consumption in the transport sector is growing by about 4.5% every year. There is therefore an urgent need for policy reform and infrastructure investment to enhance the energy efficiency of transport, particularly in urban areas.
There are large opportunities to reduce both the energy consumption from the transport sector, for example through the adoption of higher energy efficiency standards for private cars/motorbikes and expanding mass transit networks. Many of these measures would be more cost-effective than the current transport systems. There is also scope to reduce the carbon intensity of transport energy, particularly through replacing diesel with biodiesel or through electrification. Both would require comprehensive supply chain analysis to ensure that the biofuels and power plants are not having wider environmental impacts such as deforestation or air pollution.
Electricity sector
The electricity sector in Indonesia, managed primarily by the state-owned enterprise Perusahaan Listrik Negara (PLN), faces significant challenges due to the country's archipelagic nature, which includes over 17,000 islands. By 2020, Indonesia had installed approximately 63.3 gigawatts (GW) of electrical generation capacity, producing around 275 terawatt-hours (TWh) annually, predominantly from fossil fuels such as coal, natural gas, and oil, alongside contributions from renewable sources like hydroelectric and geothermal power to align with the Paris Climate Agreement's goal of increasing renewable energy to at least 23% by 2025. Despite substantial progress in electrification, with rates increasing from 67% in 2010 to over 99% in 2020, the country still grapples with issues of reliability and service quality, mainly in remote and eastern regions where infrastructure challenges and logistical issues often result in frequent power outages and service disruptions.
Government policy
Climate policies
Indonesia aims to achieve net zero emissions by 2060 or sooner as part of its development goal to become an advanced economy by 2045. Indonesia is often classified as a laggard in terms of climate policy.
Carbon tax
Carbon tax provisions are regulated in Article 13 of Law 7/2021 in which a carbon tax is to be imposed on entities producing carbon emissions that have a negative impact on the environment. Based on Law 7/2021, the imposition of the carbon tax is to be carried out by a combination of two schemes, a carbon tax (cap and tax) and carbon trade (cap and trade).
In the carbon trade scheme, individual or company ("entities") that produce emissions exceeding the cap are required to purchase emission permit certificates ("Sertifikat Izin Emisi"/SIE) from other entities that produce emissions below the cap.
In addition, entities can also purchase emission reduction certificates ("Sertifikat Penurunan Emisi"/SPE). However, if the entity is unable to purchase SIE or SPE in full for the resulting emissions, the cap and tax scheme will apply where entities producing residual emissions that exceed the cap will be subject to carbon tax.
Indonesia implemented a carbon tax in April 2022, initially targeting the power sector with intentions to expand to other sectors by 2025, based on readiness. This tax is part of a broader approach to decarbonization, regulated under the Law of the Harmonization of Tax Regulations. It complements a domestic emissions trading system (ETS) set to become mandatory by 2024. Non-compliant installations under the ETS will incur a carbon tax, linked to the domestic carbon market price.
Renewable energy policies
Electricity generation
In Indonesia's electricity supply plan for 2021-2030 (RUPTL), the state electricity company, Perusahaan Listrik Negara (PLN), targets substantial growth in renewable energy, aiming for renewables to account for over half of the capacity additions. The plan includes 10 gigawatts (GW) of hydro and about 3 GW from geothermal, with smaller additions from wind (0.4 GW) and solar photovoltaic (PV) (4.7 GW). Coal is expected to make up one-third of additions (about 14 GW), with no new coal capacity planned post-2030. Natural gas will contribute about 14% to new additions.
Bioenergy
Indonesia's Ministry of Energy and Mineral Resources (MEMR) is advancing bioenergy utilization with initiatives like setting up waste-to-energy plants in 12 cities, implementing co-firing in coal generators, and increasing the use of liquid biofuels. The rise in palm oil production has led to a higher proportion of biofuel blending in diesel, supported by the National Energy Law of 2007, which established blending mandates and subsidy mechanisms. Since 2015, regulations have raised biodiesel's share in diesel consumption to 30% by January 2020, up from 20% in 2019. The goal for bioethanol blending is to reach 20% by 2025, starting from a 10% target in 2020. The government intends to further raise biodiesel blending to 40% (B40) and supports the construction of refineries to transform waste bioenergy into biofuels, including bio-based liquefied petroleum gas (LPG) and naphtha.
Major energy companies in Indonesia
Indonesian firms
Pertamina, the state-owned oil company
Pertamina Gas Negara, the state-owned gas company, subsidiary of Pertamina
Perusahaan Listrik Negara, the state-owned electricity company.
PT Bumi Resources owned by the Bakrie Group
PT Medco Energi International, the largest publicly listed oil and gas company in Indonesia
Adaro Energy, one of the largest coal mining companies in Indonesia
Foreign firms
US-based firm PT Chevron Pacific Indonesia [1] is the largest producer of crude oil in Indonesia; Chevron produces (2014) around 40% of the crude oil in Indonesia
Total E&P Indonesia which operates the East Mahakam field in Kalimantan and other fields
ExxonMobil [2] is one of the main foreign operators in Indonesia
Equinor, a Norwegian multinational firm, which has been operating in Indonesia Archived 29 May 2013 at the Wayback Machine since 2007, especially in Eastern Indonesia
BP which is a major LNG operator in the Tangguh gas field in West Papua.
ConocoPhillips which currently operates four production-sharing contracts including at Natuna and in Sumatra.
Greenhouse gas emissions
The CO2 emissions of Indonesia were greater than those of Italy already in 2009. Indonesia's total greenhouse gas emissions including construction and deforestation in 2005 put Indonesia among the top four in the world after China, the US and Brazil. In 2022, Indonesia ranked 7th in the world in total fossil CO2 emissions, and 88th in per capita emissions. The carbon intensity of electricity generation, at over 600 gCO2/kWh, is higher than those most other countries. Energy sector emissions in 2021 were around 600 million tonnes, making Indonesia the ninth-largest emitter globally.