The GSI program of work for Indonesia undertakes research and policy engagement on subsidies for fuel consumers and producers, as well as breaking down barriers to renewable energy and ensuring long-term, sustainable reform processes.
Indonesia’s Ministry of Energy and Mineral Resources estimates that around six million households are still without access to electricity, and large investments are needed to supply reliable power across the country.
Coal is a central focus in this quest, and the Indonesian government expects it to continue to play a significant role in the decades to come. However, coal has harmful environmental and health impacts, while cleaner, renewable energy alternatives are becoming increasingly cost-competitive.
This policy brief presents and discusses the most recent energy policy developments in Indonesia. It also considers measures designed to mitigate the economic and social impacts of the COVID-19 pandemic crisis implemented up to May 2020.
COVID-19 and low global energy prices have hit Indonesia’s fossil fuel sector hard. The country's stimulus has focused on public health and social safety nets; its energy sector, meanwhile, is receiving tax incentives.
While solar energy has exploded in India and the Gulf Cooperation Council region, it has lagged significantly in Indonesia. This report examines why this has been the case and what Indonesia can do to catch up to others in growing the renewable energy sector in the country.