Indonesia targets 73.6% of electricity supply from clean energy by 2060

Indonesia's Ministry of Energy and Mineral Resources issued a new regulation on the national power system through 2060 on March 26, which set a long-term target of having 73.6% of electricity supply come from clean energy by 2060.

Indonesia is the third-largest greenhouse gas emitter in Asia. Setting a long-term target for renewable adoption is crucial for the country to expedite the installation of renewable generation capacity and stimulate the retirement of coal-fired capacity.

Indonesia's electricity demand continues to rise, with projected consumption reaching 539 TWh, or approximately 1,893 kWh per capita, in 2025. By 2060, it is estimated to reach 5,038 kWh per capita, the ministry's data showed.

In addition to the renewable target, the ministry has also included a long-term outlook that covers various perspectives of Indonesia's power system.

The industrial sector is expected to consume the most electricity in 2060, accounting for 43% of the electricity consumption mix, followed by households at 28%, electric vehicles at 11%, businesses at 13%, and the public sector at 5%, according to the ministry.

The ministry projected that national electricity production in 2060 would reach 1,947 TWh, with the majority of supply coming from "new and renewable energy sources."

Notably, the ministry defined nuclear, hydrogen and green ammonia as "new energy sources" and solar, wind, hydropower, and geothermal as "renewable energy sources."

To reduce emissions, the government is implementing strategies such as using biomass for co-firing in coal-fired power plants and retrofitting fossil fuel power plants once they reach zero book value.

Besides co-firing coal and biomass, the ministry also highlighted the use of green ammonia in coal-fired power plants and green hydrogen in gas-fired power plants as essential decarbonization strategies.

The construction of new coal-fired power plants will be limited in accordance with the presidential regulation issued in 2022, the newly released regulation reaffirmed.

By 2060, power generation capacity is projected to reach 443 GW, with 41.5% coming from variable renewable energy (VRE) power plants supported by a 34-GW energy storage system, while the remainder will come from dispatchable non-VRE power plants, according to the ministry.

The national electricity supply mix will undergo significant changes, with the share of new and renewable energy reaching 73.6%, consisting of 24.1% new energy and 49.5% renewable energy.

Meanwhile, fossil energy that remains in use and accounts for the remaining 26.4% of electricity supplies will be equipped with carbon capture storage technology. From 2044 onward, the share of renewable energy is projected to surpass fossil energy.

To accelerate this transition, the ministry also promoted phasing out diesel, upgrading gas-fired power plants, and developing large-scale wind and solar power plants. Meanwhile, large-scale hydropower and geothermal power plants in the Papua and Kalimantan islands in Indonesia's eastern part are also prioritized.

In terms of investment, infrastructure funding for the electricity sector through 2060 is estimated to reach about $1.09 trillion or $30.33 billion/year.

Indonesia has reaffirmed its commitment at COP-21 to reduce greenhouse gas emissions by 29% from the business-as-usual scenario by 2030, or up to 41% with international assistance.

The government's commitment was elaborated in 2022, targeting reducing emissions in the energy sector by 12.5% independently and 15.5% with international support.

A recent S&P Global Commodity Insights report(opens in a new tab) showed that 54% or 26 GW of Indonesia's coal-fired generation units are under 10 years old as of 2025. Typically, a coal-fired power plant can operate for over 40 years, the report showed, adding that phasing out those plants in the near future is economically challenging.